evbn-20241231x10ka

 UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 AMENDMENT NO. 1

 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended: December 31, 2024
 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from __________ to __________
 Commission file number: 001-35021
 EVANS BANCORP, INC.
 (Exact name of registrant as specified in its charter)

 New York

 16-1332767

 (State or other jurisdiction of incorporation or organization)

 (I.R.S. Employer Identification No.)

 6460 Main Street, Williamsville, New York

 14221

 (Address of principal executive offices)

 (Zip Code)

 ( 716) 926-2000

 Registrant's telephone number (including area code)

 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 LLC

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

 None

 (Title of Class)

 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 Yes

 No

 X

 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 Yes

 No

 X

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 Yes

 X

 No

 Indicate by checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 Yes

 X

 No

 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 X

 Non-accelerated filer

 Smaller reporting company

 X

 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 [ ]

 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. [ X ]

 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. [ ]

 Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). [ ]

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

 Yes

 No

 X

 On June 30, 2024, the aggregate market value of the registrant's common stock held by non-affiliates was approximately $ 149 million, based upon the closing sale price of a share of the registrant's common stock on NYSE American, LLC.

 As of March 3, 2025, 5,567,382 shares of the registrant's common stock were outstanding.

 Explanatory Note

 Item 8.

 Financial Statements and Supplementary Data

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners

 and Management and Related Stockholders Matters

 Item 13.

 Certain Relationships and Related Transactions,

 and Director Independence

 Item 14.

 Principal Accounting Fees and Services

 Item 15.

 Exhibits and Financial Statement Schedules

 EXPLANATORY NOTE

 This Amendment No. 1 to the Annual Report on Form 10-K (this "Amendment") amends the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, originally filed on March 6, 2025 (the "Original Filing") by Evans Bancorp, Inc., a New York corporation ("Evans" or the "Company"). Evans is filing this Amendment to provide the information required by Part III of Form 10-K as the Company will not file a definitive annual proxy statement within 120 days of the end of its fiscal year ended December 31, 2024.

 On September 9, 2024, the Company entered into a definitive merger agreement with NBT Bancorp, Inc. ("NBT"), pursuant to which the companies will combine in an all-stock merger. The Company and NBT have received the required regulatory approvals to consummate the proposed transaction, and the transaction was approved by the Company's shareholders on December 20, 2024. As a result, the Company does not anticipate holding an annual meeting of shareholders prior to closing.
 Additionally, this Amendment is being filed to correct a typographical error in the date of the report of our independent registered public accounting firm, Crowe LLP, included in Part II, Item 8. Financial Statements and Supplementary Data. This Amendment includes Part II, Item 8. Financial Statements and Supplementary Data, in its entirety and without change from the Original Filing other than the correction of the date of the report from March 5, 2025 to March 6, 2025.
 In addition, this Amendment includes an updated consent of Crowe LLP as Exhibit 23.1 and currently-dated certifications of the Company's principal executive officer and principal financial officer, each of which are included in Part IV, Item 15. Exhibit and Financial Statement Schedules.
 Except as described above or as expressly noted in this Amendment, no other changes have been made to the Original Filing. The Original Filing continues to speak as of the date of the Original Filing, and the Company has not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the filing of the Original Filing. This Amendment should be read in conjunction with the Original Filing.

 Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 Financial Statements and Supplementary Data consist of the financial statements as indexed and presented below.

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 Page

 Report of Independent Registered Public Accounting Firm (Crowe LLP - PCAOB ID: 173)

 Consolidated Balance Sheets – December 31, 2024 and 2023

 Consolidated Statements of Income – Years Ended December 31, 2024, 2023 and 2022

 Consolidated Statements of Comprehensive Income (Loss) – Years Ended December 31, 2024, 2023 and 2022

 Consolidated Statements of Changes in Stockholders' Equity – Years Ended December 31, 2024, 2023 and 2022

 Consolidated Statements of Cash Flows – Years Ended December 31, 2024, 2023 and 2022

 Notes to Consolidated Financial Statements

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 Stockholders and the Board of Directors
 Evans Bancorp, Inc.
 Williamsville, New York

 Opinion on the Financial Statements and Internal Control over Financial Reporting

 We have audited the accompanying consolidated balance sheets of Evans Bancorp, Inc. (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income (loss), changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.

 Explanatory Paragraph – Change in Accounting Principle

 As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for credit losses effective January 1, 2023 due to the adoption of ASC 326.

 Basis for Opinion

 The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's financial statements and an opinion on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

 Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

 Definition and Limitations of Internal Control Over Financial Reporting

 A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the

 company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 Critical Audit Matter

 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 Allowance for Credit Losses (ACL) – Loans Collectively Evaluated for Impairment

 As described in Notes 1 and 4 to the consolidated financial statements, the ACL represents management's estimate of expected credit losses over the contractual term of the loan. As of December 31, 2024, the Company's loan portfolio totaled $ 1.8 billion and the associated ACL was $24.2 million.

 Management employs a process and methodology to estimate the ACL on loans that evaluates both quantitative and qualitative factors. The methodology for evaluating quantitative factors consists of two basic components: pooling loans into portfolio segments for loans that share similar risk characteristics and identifying individually analyzed loans that do not share similar risk characteristics with loans that are pooled into portfolio segments.

 For pooled loan portfolio segments, which are collectively evaluated for impairment, the Company utilizes a discounted cash flow ("DCF") methodology to estimate credit losses over the expected life of the loan. The methodology incorporates a probability of default and loss given default framework. Loss given default is estimated based on historical credit loss experience of a peer group. Probability of default is estimated utilizing a regression model that incorporates economic factors. The model utilizes forecasted econometric factors with a one-year reasonable and supportable forecast period and one-year straight-line reversion period in order to estimate the probability of default for each loan portfolio segment. The DCF methodology combines the probability of default, the loss given default, prepayment speeds and the remaining life of the loan to estimate a reserve for each loan.

 Quantitative loss factors are also supplemented by certain qualitative risk factors reflecting management's evaluation of various conditions. Management's evaluation of these factors includes a weighted rate and risk range category assigned to each factor. The weighted rates and risk range categories vary between loan segments.

 Auditing the ACL on loans collectively evaluated for impairment was identified by us as a critical audit matter because of the extent of auditor judgment applied and significant audit effort to evaluate the significant subjective and complex judgments made by management related to the determination of both the quantitative and qualitative calculations.

 The primary procedures performed to address the critical audit matter included:

 Testing the effectiveness of management's controls addressing:
 Evaluation of the quantitative model, including the appropriateness of the DCF methodology; the relevance and reliability of data used; and the reasonableness of key assumptions and judgments related to the probability of default and loss given default frameworks.
 Evaluation of qualitative factors, including the appropriateness of the methodology; relevance and reliability of data used in determining qualitative factors; and reasonableness of weighted rate and risk range category assigned to each factor.
 Evaluation of the overall ACL calculation.

 Substantive testing included:

 Utilizing internal specialists to perform procedures to assist in evaluating the appropriateness of the quantitative DCF model; relevance and reliability of data used in quantitative model; and reasonableness of key assumptions and judgments related to the probability of default and loss given default frameworks.
 Evaluating the appropriateness of the qualitative framework, including evaluation of the relevance and reliability of data used in determining qualitative factors and reasonableness of weighted rate and risk range category assigned to each factor.
 Evaluating the reasonableness of the Company's overall ACL calculation.

 Crowe LLP

 We have served as the Company's auditor since 2020.

 Columbus, Ohio
 March 6, 2025

 CONSOLIDATED BALANCE SHEETS

 DECEMBER 31, 2024 AND DECEMBER 31, 2023

 (in thousands, except share and per share amounts)

 2024

 2023

 ASSETS

 Cash and due from banks

 $

 14,621

 $

 19,669

 Interest-bearing deposits at banks

 28,095

 3,798

 Securities:

 Available for sale, at fair value (amortized cost: $ 315,930 at December 31, 2024;

 275,680

 $ 330,725 at December 31, 2023)

 Held to maturity, at amortized cost (fair value: $ 4,241 at December 31, 2024;

 4,347

 2,059

 $ 1,988 at December 31, 2023)

 Federal Home Loan Bank common stock, at cost

 6,194

 4,914

 Federal Reserve Bank common stock, at cost

 3,697

 3,097

 Loans, net of allowance for credit losses of $ 24,176 at December 31, 2024

 and $ 22,114 at December 31, 2023

 1,759,488

 1,698,832

 Properties and equipment, net of accumulated depreciation of $ 14,126 at December 31, 2024

 and $ 12,538 at December 31, 2023

 14,152

 15,397

 Goodwill

 1,768

 1,768

 Intangible assets

 Bank-owned life insurance

 43,764

 42,758

 Operating lease right-of-use asset

 3,828

 3,781

 Other assets

 48,756

 36,816

 TOTAL ASSETS

 $

 2,187,465

 $

 2,108,663

 LIABILITIES AND STOCKHOLDERS' EQUITY

 LIABILITIES

 Deposits:

 Demand

 $

 373,240

 $

 390,238

 NOW

 399,046

 345,279

 Savings

 699,635

 649,621

 Time

 394,556

 333,623

 Total deposits

 1,866,477

 1,718,761

 Securities sold under agreement to repurchase

 6,586

 9,475

 Other borrowings

 80,000

 145,123

 Operating lease liability

 4,072

 4,063

 Other liabilities

 15,908

 21,845

 Subordinated debt

 31,279

 31,177

 Total liabilities

 2,004,322

 1,930,444

 STOCKHOLDERS' EQUITY:

 Common stock, $. 50 par value, 10,000,000 shares authorized; 5,623,197

 and 5,601,308 shares issued at December 31, 2024 and December 31, 2023,

 respectively, and 5,567,833 and 5,499,772 outstanding at December 31, 2024

 and December 31, 2023, respectively

 2,814

 2,803

 Capital surplus

 83,207

 82,712

 Treasury stock, at cost, 55,364 and 101,536 shares at December 31, 2024 and

 December 31, 2023, respectively

 ( 1,878)

 ( 3,656)

 Retained earnings

 142,943

 138,631

 Accumulated other comprehensive loss, net of tax

 ( 43,943)

 ( 42,271)

 Total stockholders' equity

 183,143

 178,219

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 $

 2,187,465

 $

 2,108,663

 CONSOLIDATED STATEMENTS OF INCOME

 (in thousands, except share and per share amounts)

 2024

 2023

 2022

 INTEREST INCOME

 Loans

 $

 98,288

 $

 87,448

 $

 70,562

 Interest bearing deposits at banks

 4,582

 Securities:

 Taxable

 6,801

 8,755

 8,037

 Non-taxable

 Total interest income

 109,918

 96,850

 79,482

 INTEREST EXPENSE

 Deposits

 42,776

 26,478

 3,589

 Other borrowings

 5,962

 6,978

 1,147

 Subordinated debt

 2,212

 2,186

 1,791

 Total interest expense

 50,950

 35,642

 6,527

 NET INTEREST INCOME

 58,968

 61,208

 72,955

 PROVISION FOR CREDIT LOSSES

 2,236

 2,739

 NET INTEREST INCOME AFTER

 PROVISION FOR CREDIT LOSSES

 56,732

 61,190

 70,216

 NON-INTEREST INCOME

 Deposit service charges

 2,774

 2,593

 2,861

 Insurance service and fees

 10,261

 10,453

 Gain on loans sold

 -

 Gain on sale of other real estate owned

 -

 -

 Loss on tax credit investment

 ( 484)

 -

 -

 Refundable NY state historic tax credit

 -

 -

 Bank-owned life insurance

 1,006

 Loss on sale of securities

 -

 ( 5,044)

 -

 Interchange fee income

 2,015

 2,047

 2,071

 Gain on sale of insurance agency

 -

 20,160

 -

 Other

 3,674

 1,794

 3,084

 Total non-interest income

 10,958

 32,922

 19,271

 NON-INTEREST EXPENSE

 Salaries and employee benefits

 30,637

 37,047

 38,854

 Occupancy

 4,357

 4,506

 4,619

 Advertising and public relations

 1,207

 1,159

 Professional services

 3,533

 3,563

 3,425

 Technology and communications

 5,984

 5,959

 5,187

 Amortization of intangibles

 Merger-related expenses

 1,673

 -

 -

 FDIC insurance

 1,315

 1,400

 1,025

 Other

 4,971

 5,333

 5,266

 Total non-interest expense

 53,422

 59,382

 59,935

 INCOME BEFORE INCOME TAXES

 14,268

 34,730

 29,552

 INCOME TAX PROVISION

 2,314

 10,206

 7,163

 NET INCOME

 $

 $

 $

 Net income per common share-basic

 $

 2.16

 $

 4.49

 $

 4.07

 Net income per common share-diluted

 $

 2.16

 $

 4.48

 $

 4.04

 Weighted average number of common shares outstanding

 5,527,422

 5,456,250

 5,495,044

 Weighted average number of diluted shares outstanding

 5,541,373

 5,471,033

 5,536,375

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 2024

 2023

 2022

 NET INCOME

 $

 $

 $

 OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX:

 Unrealized (loss) gain on available-for-sale securities:

 Unrealized (loss) gain on available-for-sale securities

 ( 1,725)

 10,340

 ( 44,188)

 Reclassification of loss on sale of securities

 -

 ( 3,733)

 -

 Total

 ( 1,725)

 6,607

 ( 44,188)

 Defined benefit pension plans:

 Amortization of prior service cost

 -

 -

 Amortization of actuarial loss

 Actuarial (losses) gains

 ( 16)

 Total

 OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX

 7,007

 COMPREHENSIVE INCOME (LOSS)

 $

 10,282

 $

 31,531

 $

 ( 21,218)

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

 (in thousands, except share and per share amounts)

 Accumulated

 Other

 Common

 Capital

 Retained

 Comprehensive

 Treasury

 Stock

 Surplus

 Earnings

 Income (Loss)

 Stock

 Total

 Balance, December 31, 2021

 $

 2,744

 $

 78,795

 $

 108,024

 $

 ( 5,671)

 $

 -

 $

 183,892

 Net Income

 Other comprehensive income

 Cash dividends ($ 1.26 per common share)

 ( 6,942)

 ( 6,942)

 Stock compensation expense

 1,206

 1,206

 Repurchased 112,068 shares of Common Stock

 ( 4,140)

 ( 4,140)

 Issued 18,844 restricted shares

 ( 9)

 -

 Reissued 7,244 restricted shares in stock option exercises

 ( 115)

 Forfeitures 2,467 shares of restricted stock

 -

 Issued 7,738 shares under Dividend Reinvestment Plan

 Issued 12,731 shares in Employee Stock Purchase Plan

 Issued 22,270 shares in stock option exercises

 Balance, December 31, 2022

 $

 2,775

 $

 81,031

 $

 123,356

 $

 ( 49,278)

 $

 ( 3,891)

 $

 153,993

 Cumulative effect of change in accounting principle— credit losses

 -

 -

 ( 2,026)

 -

 -

 ( 2,026)

 Beginning balance after cumulative effect adjustment

 2,775

 $

 81,031

 $

 121,330

 $

 ( 49,278)

 $

 ( 3,891)

 $

 151,967

 Net Income

 Other comprehensive income

 7,007

 7,007

 Cash dividends ($ 1.32 per common share)

 ( 7,223)

 ( 7,223)

 Stock compensation expense

 1,138

 1,138

 Reissued 6,228 restricted shares

 ( 235)

 -

 Issued 17,500 restricted shares, net of forfeitures

 ( 8)

 -

 Issued 15,344 shares in stock option exercises, net

 Issued 9,746 shares under Dividend Reinvestment Plan

 Issued 13,906 shares in Employee Stock Purchase Plan

 Balance, December 31, 2023

 $

 2,803

 $

 82,712

 $

 138,631

 $

 ( 42,271)

 $

 ( 3,656)

 $

 178,219

 Net Income

 Other comprehensive loss

 Cash dividends ($ 1.32 per common share)

 ( 7,288)

 ( 7,288)

 Stock compensation expense

 1,283

 1,283

 Repurchased 7,000 shares of Common Stock

 -

 ( 204)

 ( 204)

 Issued 13,610 shares in stock option exercises

 Reissued 30,474 restricted shares, net of forfeitures

 -

 ( 1,004)

 ( 170)

 1,174

 -

 Reissued 22,698 shares in stock option exercises

 -

 ( 158)

 ( 184)

 Issued 8,279 shares under Dividend Reinvestment Plan

 Balance, December 31, 2024

 $

 2,814

 $

 83,207

 $

 142,943

 $

 ( 43,943)

 $

 ( 1,878)

 $

 183,143

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2024

 2023

 2022

 OPERATING ACTIVITIES:

 Interest received

 $

 108,942

 $

 95,988

 $

 76,390

 Fees received

 8,904

 17,741

 17,958

 Interest paid

 ( 51,064)

 ( 34,465)

 ( 6,513)

 Cash paid to employees and vendors

 ( 61,062)

 ( 55,066)

 ( 58,294)

 Income tax paid

 ( 8,962)

 ( 8,681)

 ( 3,327)

 Proceeds from sale of loans held for sale

 18,988

 8,447

 4,897

 Originations of loans held for sale

 ( 18,503)

 ( 8,265)

 ( 4,704)

 Net cash (used in) provided by operating activities

 ( 2,757)

 15,699

 26,407

 INVESTING ACTIVITIES:

 Available for sales securities:

 Purchases

 ( 2,616)

 -

 ( 144,413)

 Proceeds from sales

 -

 72,827

 -

 Proceeds from maturities, calls, and payments

 17,466

 25,358

 19,066

 Held to maturity securities:

 Purchases

 ( 3,816)

 ( 1,344)

 ( 6,651)

 Proceeds from maturities, calls, and payments

 1,528

 6,225

 2,867

 Purchases of Federal Reserve Bank Stock

 ( 600)

 -

 -

 Purchases of FHLB Stock

 ( 1,280)

 -

 -

 Cash paid for bank owned life insurance

 -

 -

 ( 6,830)

 Proceeds from bank-owned life insurance claims

 -

 -

 Additions to properties and equipment

 ( 343)

 ( 517)

 ( 1,008)

 Proceeds from sales of assets

 -

 -

 Proceeds from tax credit investments

 Cash investment in tax credit

 ( 674)

 Gain on sale of other real estate owned

 -

 1,380

 Net cash from sale of subsidiary

 -

 34,249

 -

 Net increase in loans

 ( 61,759)

 ( 47,889)

 ( 101,555)

 Net cash (used in) provided by investing activities

 ( 51,109)

 89,367

 ( 236,575)

 FINANCING ACTIVITIES:

 Proceeds from Long Term Borrowings

 -

 -

 (Repayments of) proceeds of short-term borrowings, net

 ( 101,890)

 ( 31,872)

 176,236

 Repayments of long-term borrowings

 ( 6,078)

 ( 13,470)

 ( 12,598)

 Net increase (decrease) in deposits

 147,724

 ( 52,895)

 ( 165,314)

 Dividends paid

 ( 7,288)

 ( 7,223)

 ( 6,942)

 Repurchase of treasury stock

 ( 204)

 -

 ( 4,140)

 Issuance of common stock

 1,051

 Reissuance of treasury stock

 Net cash provided by (used in) financing activities

 73,115

 ( 104,653)

 ( 11,563)

 Net increase (decrease) in cash and equivalents

 19,249

 ( 221,731)

 CASH AND CASH EQUIVALENTS:

 Beginning of year

 23,467

 23,054

 244,785

 End of year

 $

 42,716

 $

 23,467

 $

 23,054

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2024

 2023

 2022

 RECONCILIATION OF NET INCOME TO NET CASH

 PROVIDED BY OPERATING ACTIVITIES:

 Net income

 $

 $

 $

 Adjustments to reconcile net income to net cash

 provided by operating activities:

 Depreciation, amortization and accretion

 1,236

 1,559

 1,647

 Deferred tax (benefit) expense

 ( 966)

 ( 900)

 Provision for credit losses

 2,236

 2,739

 Loss on tax credit investment

 -

 -

 Changes in refundable state historic tax credits

 ( 720)

 -

 -

 Net (gain) loss on sales of assets and other real estate owned

 ( 598)

 ( 196)

 Loss on sales of securities

 -

 5,044

 -

 Gain on sale of subsidiary

 -

 ( 20,160)

 -

 Gain on loans sold

 ( 483)

 ( 179)

 ( 95)

 Stock compensation expense

 1,283

 1,206

 Proceeds from sale of loans held for sale

 18,988

 8,447

 4,897

 Originations of loans held for sale

 ( 18,503)

 ( 8,265)

 ( 4,704)

 Changes in assets and liabilities affecting cash flow:

 Other assets

 ( 9,197)

 2,914

 Other liabilities

 ( 8,471)

 4,527

 ( 4,641)

 NET CASH PROVIDED BY OPERATING ACTIVITIES

 $

 ( 2,757)

 $

 15,699

 $

 26,407

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Organization and General

 Evans Bancorp, Inc. (the "Company") was organized as a New York business corporation and incorporated under the laws of the State of New York on October 28, 1988 for the purpose of becoming a bank holding company. Through August 2004, the Company was registered with the Federal Reserve Board ("FRB") as a bank holding company under the Bank Holding Company Act of 1956, as amended. In August 2004, the Company filed for, and was approved as, a Financial Holding Company under the Bank Holding Company Act. The Company currently conducts its business through its two subsidiaries: Evans Bank, N.A. (the "Bank"), a nationally chartered bank, and its subsidiary, Evans National Holding Corp. ("ENHC"); and Evans National Financial Services, LLC ("ENFS") and its subsidiary, The Evans Agency LLC ("TEA"). Unless the context otherwise requires, the term "Company" refers collectively to Evans Bancorp, Inc. and its subsidiaries. The Company conducts its business through its subsidiaries. It does not engage in any other substantial business.

 On September 9, 2024, Evans Bancorp, Inc. entered into an agreement and plan of merger with NBT Bancorp Inc. ("NBT") and NBT Bank, National Association, pursuant to which NBT will acquire Evans Bancorp, Inc. Under the terms of the merger agreement, each outstanding share of Evans common stock will be converted into the right to receive 0.91 shares of NBT common stock. On December 20, 2024, the Company held a Special Meeting of Shareholders at which the proposal of the Agreement and Plan of Merger was approved by Evans Bancorp, Inc. shareholders. In addition, the Company received regulatory approvals and waivers from the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York necessary for NBT to complete its acquisition of Evans Bancorp, Inc.

 Expenses related to the merger are included on the "merger related" expense line in the consolidated statements of income for the twelve-month period ended December 31, 2024. For further information on the merger agreement, see the Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on September 9, 2024.

 On November 30, 2023 the Company sold substantially all of the assets of TEA to Gallagher and ceased its insurance business for the Company. See Note 2 to the Company's Consolidated Financial Statements included under Item 8 of this Annual Report on Form 10-K for further information on the sale of TEA.

 Regulatory Requirements

 The Company is subject to the rules, regulations, and reporting requirements of various regulatory bodies, including the FRB, the Federal Deposit Insurance Corporation ("FDIC"), the Office of the Comptroller of the Currency ("OCC"), the New York State Department of Financial Services ("NYSDFS"), and the Securities and Exchange Commission ("SEC").

 Principles of Consolidation

 The consolidated financial statements include the accounts of the Company, the Bank, ENFS and their subsidiaries. All material inter-company accounts and transactions are eliminated in consolidation.

 Accounting Estimates

 Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and disclosure of contingent assets and liabilities in order to prepare these consolidated financial statements in conformity with U.S. generally accepted accounting principles. These estimates and assumptions are based on management's best estimates and judgment and management evaluates them on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust our estimates and assumptions when facts and circumstances dictate. As future events cannot be determined with precision, actual results could differ significantly from our estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in periods as they occur.

 Cash and Cash Equivalents

 For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks and interest-bearing deposits at banks.

 Securities

 Securities which the Bank has the positive intent and ability to hold to maturity are classified as held to maturity and are stated at cost, adjusted for discounts and premiums that are recognized in interest income over the period to the earlier of the call date or maturity using the level yield method. These securities represent debt issuances of local municipalities in the Bank's market area for which market prices are not readily available. Management periodically evaluates the financial condition of the municipalities for any indication that the Bank does not expect to recover the entire amortized cost basis of their bonds.

 Securities classified as available for sale are stated at fair value with unrealized gains and losses excluded from earnings and reported, net of deferred income taxes, in accumulated other comprehensive income or loss, a component of stockholders' equity. Gains and losses on sales of securities are computed using the specific identification method.

 In instances where fair value of an available-for-sale debt security is less than its amortized cost basis and the Company does not intend to sell the available-for-sale debt security and it is not more likely than not that the Company will be required to sell the security before recovery of the amortized cost basis, the difference between the fair value and the amortized cost basis is separated into (a) the amount representing the credit loss and (b) the amount related to all other factors. The amount related to the credit loss is recognized as an allowance for credit losses while the amount related to other factors is recognized in other comprehensive income, net of applicable income taxes. If the Company intends to sell the security or it is more likely than not to be required to sell the security before recovery of the amortized cost basis, the security is written down to fair value with the entire amount recognized in earnings. Subsequently, the Company accounts for the debt security as if the security had been purchased on the measurement date of the write down at an amortized cost basis equal to the previous amortized cost basis less the amount of the write down recognized in earnings.

 The Bank does not engage in securities trading activities.

 Federal Home Loan Bank Stock

 The Bank is a member of the Federal Home Loan Bank ("FHLB") System. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are recorded as a component of interest income.

 Federal Reserve Bank Stock

 The Bank is a member of the FRB. FRB stock is carried at cost, classified as a restricted security. Both cash and stock dividends are recorded as a component of interest income.

 Loan Servicing Assets

 Servicing assets are related to residential mortgage loans sold and are recognized at the time of sale when servicing is retained with the income statement effect recorded in gains on loans sold. Servicing assets are initially recorded at fair value based on the present value of the contractually specified servicing fee, net of estimated servicing costs, over the estimated life of the loan. The servicing assets are subsequently amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. The Company periodically evaluates servicing assets for impairment based upon the fair value of the assets as compared to their carrying amount.

 Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been legally isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets.

 Loans

 Loans that management has the intent and ability to hold for the foreseeable future, or until maturity or pay-off, generally are reported at their outstanding unpaid principal balances adjusted for unamortized deferred fees or costs. Interest income is accrued on the unpaid principal balance and is recognized using the interest method. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the effective yield method of accounting for amortizing loans and straight line over an estimated life for lines of credit.

 Loans become past due when the payment date has been missed. If payment has not been received within 30 days, then the loan is delinquent. Delinquent loans are placed into three categories; 30-59 days past due, 60-89 days past due, or 90+ days past due. Loans 90 or more days past due are considered non-performing.

 The accrual of interest on loans is discontinued at the time the loan is 90 days delinquent, unless the credit is well secured and in process of collection. If the credit is not well secured and in the process of collection, the loan is placed on non-accrual status and is subject to charge-off if collection of principal or interest is considered doubtful. A loan can also be placed on nonaccrual before it is 90 days delinquent if management determines that it is probable that the Bank will be unable to collect principal or interest due according to the contractual terms of the loan.

 All interest due but not collected for loans that are placed on non-accrual status or charged off is reversed against interest income. The interest on these loans is accounted for on the cost-recovery method, until it again qualifies for an accrual basis. Any cash receipts on non-accrual loans reduce the carrying value of the loans. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current, the adverse circumstances which resulted in the delinquent payment status are resolved, and payments are made in a timely manner for a period of time sufficient to reasonably assure their future dependability.

 Loans placed on non-accrual status are individually assessed for impairment. Loan impairment is measured based on the present value of expected cash flows discounted at the loan's effective interest rate or, as a practical expedient, at the loan's observable market price or the fair value of the collateral, less costs to sell, if the loan is collateral dependent. Appraised and reported values may be discounted based on management's historical knowledge, changes in market conditions from the time of valuation, estimated costs to sell, and/or management's expertise and knowledge of the client and the client's business. The Company has an appraisal policy in which appraisals are obtained upon a loan being downgraded on the Company's internal loan rating scale to special mention or substandard depending on the amount of the loan, the type of loan and the type of collateral. All individually evaluated loans are either graded special mention or substandard on the internal loan rating scale. Subsequent to the downgrade, if the loan remains outstanding and individually evaluated for at least one year more, management may require another follow-up appraisal. Between receipts of updated appraisals, if necessary, management may perform an internal valuation based on any known changing conditions in the marketplace such as sales of similar properties, a change in the condition of the collateral, or feedback from local appraisers.

 The Bank monitors the credit risk in its loan portfolio by reviewing certain credit quality indicators ("CQI"). The primary CQI for its commercial mortgage and commercial and industrial ("C&I") portfolios is the individual loan's credit risk rating. The following list provides a description of the credit risk ratings that are used internally by the Bank when assessing the adequacy of its allowance for credit losses:

 Acceptable or better: Credits with a slight risk of loss. The loan is secured by collateral of sufficient value to cover the loan by an acceptable margin. The financial statements of the company demonstrate sufficient net worth and repayment ability. The company has established an acceptable credit history with the bank and typically has a proven track record of performance. Management is experienced, and has an at least average ability to manage the company. The industry has an average or less than average susceptibility to wide fluctuations in business cycles.

 Watch: Credits are generally acceptable but warrant greater attention than those rated acceptable or better. Temporary performance issues, if left unresolved, may result in above average risk. The borrower's financial position is not typically strong. Earnings, while still positive, may be inconsistent. Industry issues or external events (such as possible litigation exposure) may cause concern. Although ability to repay is not an immediate concern, more regular monitoring may be necessary as a result of the short-term performance issues or sensitivities to external events that may result in a weakening condition. Any perceived weaknesses are acceptable when viewed against the overall credit and collateral risks assumed. Borrowers are likely fully leveraged when compared to others in a similar industry and their ability to raise capital may be limited.

 Special Mention: Credits that have potential weaknesses that warrant management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution's credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

 Borrowers in this category may be experiencing adverse operating trends (declining revenues or margins) or an ill proportioned balance sheet. Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a special mention rating. Nonfinancial reasons for rating a credit exposure as special mention include management problems, pending litigation, stale financial statements, an ineffective loan agreement or other material structural weakness, and any other significant deviation from prudent lending practices.

 Potential weaknesses in commercial real estate loans may include, construction delays, changes in concept or project plan, slow leasing, rental concessions, deteriorating market conditions, impending expiry of a major lease, or other adverse events that do not currently jeopardize repayment.

 Substandard: Credits that are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility of loss if the deficiencies are not corrected.

 Substandard assets have a high probability of payment default, or they have other well-defined weaknesses. They are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization. Repayment may depend on collateral or other credit risk mitigants. Although substandard assets in the aggregate will have distinct potential for loss, an individual asset's loss potential does not have to be distinct for the asset to be rated substandard.

 A well-defined weakness may manifest itself via:
 • significant deterioration in financial condition of the borrower;
 • impairment of primary repayment source;
 • material deviation from planned absorption of rental or sales units; or
 • material deterioration in market conditions.

 Commercial real estate credits evidencing one or more of the following characteristics are evaluated for a possible substandard classification:
 • slower than projected leasing or sales activity that threatens to result in protracted repayment or default;
 • lower than projected lease rates or sales prices that jeopardize repayment capacity;
 • changes in concept or plan due to unfavorable market conditions;
 • construction or tax liens;
 • inability to obtain necessary zoning or permits necessary to develop the project as planned;
 • a diversion of needed cash from an otherwise viable property to satisfy the demands of a troubled borrower or guarantor;
 • material imbalances in the construction budget;
 • significant construction delays;
 • expiration of a major lease or default by a major tenant;
 • poorly structured of overly liberal repayment terms.

 When a project has slowed or stalled and the guarantor is providing some support but the loan has not been restructured, unless the guarantor is providing support of principal payments sufficient to retire the debt under reasonable terms, a substandard classification is typically warranted. If the guarantor is keeping interest payments current and shows a documented willingness and capacity to do so in the future, and collateral values protect against loss, the loan should generally be left on accrual. This level of support; however, does not fully mitigate the well-defined weaknesses in the credit and does not preclude a substandard classification.

 Doubtful: Credits that have all the weaknesses inherent in one classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. A doubtful asset has a high probability of total or substantial loss but because of specific pending events that may strengthen the assets, its classification as loss is deferred. Borrowers in this category are usually in default, lack adequate liquidity or capital and lack the resources necessary to remain an operating entity. Because of high probability of loss, nonaccrual accounting treatment is required for doubtful assets.

 Circumstances that might warrant a doubtful classification for commercial real estate loans could include collateral values that are uncertain due to a lack of comparisons in an inactive market, impending changes such as zoning classification, environmental issues, or the pending resolution of legal issues that may affect the realization of value in a sale.

 Loss: Credits that are considered uncollectable and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. Borrowers in this category are often in bankruptcy, have formally suspended debt repayments, or have otherwise ceased normal business operations. The Company does not maintain an asset on the balance sheet if realizing its value would require long-term litigation or other lengthy recovery efforts.

 The Company's consumer loans, including residential mortgages and home equities, are not individually risk rated or reviewed in the Company's loan review process. Consumers are not required to provide the Company with updated financial information as is a

 commercial customer. Consumer loans also carry smaller balances. Given the lack of updated information since the initial underwriting of the loan and small size of individual loans, the Company does not have credit risk ratings for consumer loans and instead uses delinquency status as the credit quality indicator for consumer loans. However, once a consumer loan is identified as individually evaluated, it is measured for impairment.

 Loans acquired in a business combination are recorded at fair value with no carry-over of an acquired entity's previously established allowance for credit losses. Purchased credit deteriorated loans represent specifically identified loans with evidence of credit deterioration for which it was probable at acquisition that the Company would be unable to collect all contractual principal and interest payments. For purchased credit deteriorated loans, the excess of cash flows expected at acquisition over the estimated fair value of acquired loans is recognized as interest income over the remaining lives of the loans. Subsequent decreases in the expected principal cash flows require the Company to evaluate the need for additions to the Company's allowance for credit losses. Subsequent improvements in expected cash flows result first in the recovery of any related allowance for credit losses and then in recognition of additional interest income over the then remaining lives of the loans. For all other acquired loans, the difference between the fair value and outstanding principal balance of the loans is recognized as an adjustment to interest income over the lives of those loans.

 Allowance for Credit Losses

 The provision for credit losses represents the amount charged against the Bank's earnings to maintain an allowance level deemed necessary based on management's evaluation of expected credit losses at the balance sheet date. In estimating expected losses in the loan portfolio, borrower-specific financial data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period.

 On a quarterly basis, management of the Bank meets to review and determine the adequacy of the allowance for credit losses. In making this determination, the Bank's management analyzes the ultimate collectability of the loans in its portfolio by incorporating feedback provided by the Bank's internal loan staff, an independent internal loan review function and information provided by examinations performed by regulatory agencies.

 The analysis of the allowance for credit losses is composed of two components: individually analyzed loans and pooled loan portfolio allocation. Each individually analyzed loan includes a detailed review and an allocation is made based on this analysis. Factors may include the appraisal value of the collateral, the age of the appraisal, the type of collateral, the performance of the loan to date, the performance of the borrower's business based on financial statements, and legal judgments involving the borrower. For pooled portfolio loans that share similar risk characteristics, the Bank utilizes statistically developed models to estimate amounts and timing of expected future cash flows, correlations of credit losses with various macroeconomic assumptions including unemployment and gross domestic product, as well as other factors used to determine the borrowers' abilities to repay obligations.

 For both the criticized and non-criticized loans in the pooled loan portfolio allocation, additional qualitative factors are applied. The qualitative factors applied to the pooled loan portfolio allocation reflect management's evaluation of various conditions. The conditions evaluated include the following: levels and trends in delinquencies, non-accruals, and criticized loans; trends in volume and terms of loans; effects of any changes in lending policies and credit quality underwriting standards; experience, ability, and depth of management; national and economic trends and conditions; changes in the quality of the loan review system; concentrations of credit risk; changes in collateral value; and large loan risk.

 The total possible qualitative allocation is the difference between the maximum loss rate and the quantitative model loss rate. Management uses the same model to calculate the maximum loss rates and expected loss rates for each segment by stressing the model to worse-case economic environment scenarios. The economic forecasts in the maximum loss rate calculation reflect the worst economic environment observed for each economic factor. In addition, prepayment and curtailment rate speeds are adjusted to the 10 th percentile, slowest observation. The resulting maximum loss rate calculation represents a lifetime reserve and is inputted into the qualitative framework within the current calculation. The difference between the quantitative model and the maximum model results are then allocated based on weight and risk assignments.

 Foreclosed Real Estate

 Foreclosed real estate is initially recorded at fair value (net of costs of disposal) at the date of foreclosure. Costs relating to development and improvement of property are capitalized, whereas costs relating to the holding of property are expensed. Assessments are periodically performed by management, and an allowance for losses is established through a charge to operations if the carrying value of a property exceeds fair value.

 Operating Leases

 The Company determines if an arrangement is a lease at inception by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset for a period of time in exchange for consideration. Operating leases

 with a term of more than one year are included in operating lease Right-of-Use ("ROU") assets and operating lease liabilities. The Company made a policy election to apply the short-term lease exemption to any operating leases with an original term of less than 12 months, therefore no ROU asset or lease liability is recorded for these operating leases.

 ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized on the lease commencement date based on the present value of lease payments over the lease term. The Company uses the incremental borrowing rate commensurate with the lease term based on the information available at the lease commencement date in determining the present value of lease payments.

 Insurance Service and Fees

 Commission revenue from selling commercial and personal property and casualty insurance on behalf of the insurance carriers is recognized at the time of the sale of the policy or when a policy renews. Commission revenue from selling benefit plans to commercial customers on behalf of the insurance carriers is recognized each month when the customer continues with the benefit plan. The Company also receives contingent commissions from insurance companies which are based on the overall profitability of their relationship based primarily on the loss experience of the insurance placed by the Company. Contingent commissions from insurance companies are accrued throughout the year based on recent historical results. As loss events occur and overall performance becomes known, accrual adjustments are recorded until the cash is ultimately received. Financial services commissions and insurance claims services revenue are recognized when the services are rendered. Information on insurance service and fee revenue is included in Note 15 to these Consolidated Financial Statements, "Revenue Recognition of Non-interest Income."

 Goodwill and Other Intangible Assets

 The Company records the excess of the cost of acquired entities over the fair value of identifiable tangible and intangible assets acquired, less liabilities assumed, as goodwill. The Company does not amortize goodwill and any acquired intangible asset with an indefinite useful economic life, but reviews them for impairment at a reporting unit level on an annual basis, or when events or changes in circumstances indicate that the carrying amounts may be impaired. The Company has selected December 31 as the date to perform the annual impairment test. A reporting unit is defined as any distinct, separately identifiable component of one of our operating segments for which complete, discrete financial information is available and reviewed regularly by the segment's management. Goodwill is the only intangible asset with an indefinite life on the Company's balance sheet. The Company amortizes acquired intangible assets with definite useful economic lives, consisting of core deposit intangibles, customer relationships and trade names, over their useful economic lives, which range from 5 to 10 years, utilizing the straight-line method.

 Business Combinations

 The company accounts for business combinations under the acquisition method of accounting. Upon obtaining control of the acquired entity, the Company records all identifiable assets and liabilities at their estimated fair values. Goodwill is recorded when the consideration paid for an acquired entity exceeds the estimated fair value of the net assets acquired. Changes to the acquisition date fair values of assets acquired and liabilities assumed may be made as adjustments to goodwill over a 12-month measurement period following the date of acquisition. Such adjustments are attributable to additional information obtained related fair value estimates of the assets acquired and liabilities assumed. Certain costs associated with business combinations are expensed as incurred.

 Subordinated Debt

 Long-term borrowings are carried at cost, adjusted for amortization of premiums and accretion of discounts, which are recognized in interest expense using the interest method. Debt issuance costs are recognized in interest expense over the life of the instrument.

 Bank-Owned Life Insurance

 The Bank has purchased insurance on the lives of Company directors and certain members of the Company's management. The policies accumulate asset values to meet future liabilities, including the payment of employee benefits, such as retirement benefits. Increases in the cash surrender value are recorded as other income in the Company's Consolidated Statements of Income.

 Properties and Equipment

 Land is carried at cost. Properties and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 3 to 39 years. Impairment losses on properties and equipment are realized if the carrying amount is not recoverable from its undiscounted cash flows and exceeds its fair value.

 Income Taxes

 Deferred tax assets and liabilities are recognized for the future tax effects attributable to differences between the financial statement value of existing assets and liabilities and their respective tax bases and carryforwards. Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the periods in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through income tax expense.

 Earnings Per Share

 Earnings per common share is determined by dividing net income by the weighted average number of shares outstanding during the period. Diluted earnings per common share is based on increasing the weighted-average number of shares of common stock by the number of shares of common stock that would be issued assuming the exercise of stock options. Such adjustments to weighted-average number of shares of common stock outstanding are made only when such adjustments are expected to dilute earnings per common share. Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive and are not included in calculating diluted earnings per share. There were 71,910, 82,979 and 55,555 anti-dilutive shares in 2024, 2023 and 2022, respectively.

 Comprehensive Income (Loss)

 Comprehensive income (loss) includes both net income and other comprehensive income (loss), including the change in unrealized gains and losses on securities available for sale, and the change in the liability related to pension costs, net of tax.

 Employee Benefits

 The Bank maintains a non-contributory, qualified, defined benefit pension plan (the "Pension Plan") that covered substantially all employees before it was frozen on January 31, 2008. All benefits eligible participants had accrued in the Pension Plan until the freeze date have been retained. Employees have not accrued additional benefits in the Pension Plan from that date. The actuarially determined pension benefit in the form of a life annuity is based on the employee's combined years of service, age and compensation. The Bank's policy is to fund the minimum amount required by government regulations. Employees are eligible to receive these benefits at normal retirement age.

 The Bank maintains a defined contribution 401(k) plan and accrues contributions due under this plan as earned by employees. In addition, the Bank maintains a non-qualified Supplemental Executive Retirement Plan for certain members of senior management, a non-qualified Deferred Compensation Plan for directors and certain members of management, and a non-qualified Executive Incentive Retirement Plan for certain members of management, as described more fully in Note 12 to these Consolidated Financial Statements, "Employee Benefits and Deferred Compensation Plans."

 Stock-based Compensation

 Stock-based compensation expense is recognized over the requisite service period of the stock-based grant based on the estimated grant date value of the stock-based compensation that is expected to vest. The Company accounts for forfeitures of stock awards when they occur. When stock awards are granted, the Company assumes that the service condition will be achieved when determining the initial amount of compensation cost recognized. Information on the determination of the estimated value of stock-based awards used to calculate stock-based compensation expense is included in Note 13 to these Consolidated Financial Statements, "Stock-Based Compensation."

 Loss Contingencies

 Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.

 Financial Instruments with Off-Balance Sheet Risk

 In the ordinary course of business, the Bank has entered into off-balance sheet financial arrangements consisting of commitments to extend credit and standby letters of credit. The Bank provides guarantees in the form of standby letters of credit, which represent an irrevocable obligation to make payments to a third party if the borrower defaults on its obligation under a borrowing or other contractual arrangement with the third party. The Bank could potentially be required to make payments to the extent of the amount guaranteed by the standby letters of credit based on the terms of the agreement. There were no liabilities recorded on the Consolidated Balance Sheets related to standby letters of credit as of December 31, 2024 and 2023, reflecting management's assessment of the value of the guarantee given the lack of historical activity and the likelihood of current customers to draw on the letters of credit. The Bank has not incurred any losses on its commitments during the past three years and has not recorded a reserve for its commitments.

 Fair Value of Assets and Liabilities

 Fair value estimates involve uncertainties and matters of significant judgement regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

 Advertising Costs

 Advertising costs are expensed as incurred.

 RECENT ACCOUNTING PRONOUNCEMENTS AND DEVELOPMENTS

 The FASB establishes changes to U.S. GAAP in the form of accounting standards updates ("ASUs") to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs when they are issued by FASB. Effective January 1, 2024, the Company adopted ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. Excluding that ASU, the Company did not adopt any accounting pronouncements during its current fiscal year that had a material impact on the Company's consolidated financial position, results of operations, cash flows or disclosures.

 ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures – The Company adopted this ASU effective January 1, 2024. The updated accounting guidance requires expanded reportable segment disclosures, primarily related to significant segment expenses which are regularly provided to the company's Chief Operating Decision Maker. The adoption of ASU 2023-07 did not have a material impact on the Company's financial condition, results of operations or cash flows, but did affect the financial statement disclosures

 Accounting standards that have been recently issued but not yet required to be adopted as of December 31, 2024, to the extent management believes their adoption will have not have a material impact on the Company's financial condition, results of operations, cash flows or disclosures, are discussed below.

 In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The updated accounting guidance requires expanded income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024. Prospective application is required, with retrospective application permitted. The Company is currently evaluating the effect the updated guidance will have on the Company's financial statement disclosures.

 2. DIVESTITURE

 On November 30, 2023, the Company completed the sale of significantly all of the assets of TEA to Arthur J. Gallagher & Co. and Arthur J. Gallagher Risk Management Services, LLC and ceased insurance related activities for the Company. Pursuant to the terms and conditions of the purchase agreement, as amended, at the closing of the transaction, Gallagher distributed $ 37.6 million in cash to TEA, of which $ 2.0 million was placed in a third party escrow account as security for the indemnification obligations of the Company and TEA relating to the representations and warranties included in the purchase agreement, and retained an additional $ 2.4 million to be payable to TEA at the end of a two year period based on the performance of certain customer accounts.

 The purchase agreement contains customary representations and warranties regarding the parties. The purchase agreement provides that, for a period of five years following the closing of the transaction, the Company and its subsidiaries will not, subject to certain limited exceptions, engage in a business that is competitive with Gallagher's business.

 TEA recorded insurance revenue of $ 9.7 million in 2023 and $ 9.8 million in 2022. Total net income for 2023 and 2022 was $ 15.7 million and $ 1.5 million, respectively. TEA's 2023 net income included a pretax gain of $ 20.2 million and income tax expense of $ 6.6 million related to the sale. There was no activity in 2024 related to the operations of TEA. Details of the pretax gain on the sale is summarized below:

 Gross purchase price pursuant to Asset Purchase Agreement

 $

 Transaction costs

 ( 3,775)

 Working capital adjustment settled at closing

 ( 60)

 Contingent Consideration

 ( 2,377)

 Contractual adjustment of other assets & liabilities

 ( 1,929)

 Write-off of goodwill & intangibles

 ( 11,699)

 Gain on sale of insurance agency

 $

 20,160

 Prior to the sale of TEA, management evaluated the accounting treatment of the potential sale as it relates to held-for-sale and any succeeding discontinued operations financial impact. Based on management's review of ASC 205-20-45-1E it was determined not to have met all necessary criteria to be considered discontinued operations.

 3.SECURITIES

 The amortized cost of securities and their approximate fair value at December 31 were as follows:

 2024

 Amortized

 Fair

 Cost

 Gains

 Value

 Available for Sale:

 U.S. treasuries and government agencies

 $

 109,364

 $

 -

 $

 ( 18,009)

 $

 5,495

 ( 197)

 5,299

 Total debt securities

 $

 114,859

 $

 $

 ( 18,206)

 $

 96,654

 Mortgage-backed securities:

 FNMA

 $

 62,388

 $

 $

 ( 12,019)

 $

 50,372

 FHLMC

 35,855

 ( 5,873)

 29,984

 GNMA

 38,391

 ( 8,117)

 30,276

 SBA

 18,876

 -

 ( 2,326)

 16,550

 CMO

 45,561

 -

 ( 10,720)

 34,841

 Total mortgage-backed securities

 $

 201,071

 $

 $

 ( 39,055)

 $

 162,023

 Total securities designated as available for sale

 $

 315,930

 $

 $

 ( 57,261)

 $

 Held to Maturity:

 Debt securities

 $

 4,347

 $

 $

 ( 110)

 $

 4,241

 Total securities designated as held to maturity

 $

 4,347

 $

 $

 ( 110)

 $

 4,241

 2023

 Amortized

 Fair

 Cost

 Gains

 Value

 Available for Sale:

 U.S. government agencies

 $

 114,152

 $

 -

 $

 ( 17,912)

 $

 96,240

 6,258

 ( 231)

 6,029

 Total debt securities

 $

 120,410

 $

 $

 ( 18,143)

 $

 102,269

 Mortgage-backed securities:

 FNMA

 $

 66,262

 $

 $

 ( 11,294)

 $

 54,970

 FHLMC

 36,743

 -

 ( 5,569)

 31,174

 GNMA

 38,793

 -

 ( 7,683)

 31,110

 SBA

 20,776

 -

 ( 2,291)

 18,485

 CMO

 47,741

 -

 ( 10,069)

 37,672

 Total mortgage-backed securities

 $

 210,315

 $

 $

 ( 36,906)

 $

 173,411

 Total securities designated as available for sale

 $

 330,725

 $

 $

 ( 55,049)

 $

 275,680

 Held to Maturity:

 Debt securities

 $

 2,059

 $

 $

 ( 72)

 $

 1,988

 Total securities designated as held to maturity

 $

 2,059

 $

 $

 ( 72)

 $

 1,988

 At year-end 2024 and 2023, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10 % of shareholders' equity.

 Available for sale securities with a total fair value of $ 120 million and $ 172 million were pledged as collateral to secure public deposits and for other purposes required or permitted by law at December 31, 2024 and 2023, respectively.

 The scheduled maturity of debt and mortgage-backed securities at December 31, 2024 is summarized below. All maturity amounts are contractual maturities. Actual maturities may differ from contractual maturities because certain issuers have the right to call or prepay obligations with or without call premiums.

 Amortized

 Estimated

 cost

 fair value

 Debt securities available for sale:

 Due in one year or less

 $

 1,168

 $

 1,155

 Due after one year through five years

 46,544

 43,062

 Due after five years through ten years

 43,151

 35,825

 Due after ten years

 23,996

 16,612

 114,859

 96,654

 Mortgage-backed securities

 available for sale

 201,071

 162,023

 Total

 $

 315,930

 $

 Debt securities held to maturity:

 Due in one year or less

 $

 2,751

 $

 2,755

 Due after one year through five years

 Due after five years through ten years

 1,128

 1,034

 Due after ten years

 -

 -

 Total

 $

 4,347

 $

 4,241

 Contractual maturities of the Company's mortgage-backed securities generally exceed ten years; however, the effective lives may be significantly shorter due to prepayments of the underlying loans and due to the nature of these securities.

 There were no realized gains or losses from sales of securities in 2024 or 2022. The Company realized gross losses on sales of securities of $ 5 million, in 2023. The proceeds from the sale was $ 73 million. There were no realized gains in 2023.

 Information regarding unrealized losses within the Company's available for sale securities at December 31, 2024 and 2023 for which an allowance for credit losses has not been recorded is summarized below. The securities are primarily U.S. government sponsored entities securities or municipal securities. All unrealized losses are related to market interest rate fluctuations.

 2024

 Less than 12 months

 12 months or longer

 Total

 Fair

 Fair

 Fair

 Value

 Value

 Value

 Available for Sale:

 U.S. government agencies

 $

 -

 $

 -

 $

 $

 ( 18,009)

 $

 $

 ( 18,009)

 -

 -

 4,619

 ( 197)

 4,619

 ( 197)

 Total debt securities

 $

 -

 $

 -

 $

 95,974

 $

 ( 18,206)

 $

 95,974

 $

 ( 18,206)

 Mortgage-backed securities:

 FNMA

 $

 $

 -

 $

 50,037

 $

 ( 12,019)

 $

 50,038

 $

 ( 12,019)

 FHLMC

 1,318

 ( 18)

 28,315

 ( 5,855)

 29,633

 ( 5,873)

 GNMA

 1,247

 ( 17)

 28,895

 ( 8,100)

 30,142

 ( 8,117)

 SBA

 -

 -

 16,550

 ( 2,326)

 16,550

 ( 2,326)

 CMO

 -

 -

 34,841

 ( 10,720)

 34,841

 ( 10,720)

 Total mortgage-backed securities

 $

 2,566

 $

 ( 35)

 $

 158,638

 $

 ( 39,020)

 $

 161,204

 $

 ( 39,055)

 Held to Maturity:

 $

 1,015

 $

 ( 50)

 $

 $

 ( 60)

 $

 1,486

 $

 ( 110)

 Total securities

 $

 3,581

 $

 ( 85)

 $

 255,083

 $

 ( 57,286)

 $

 258,664

 $

 ( 57,371)

 2023

 Less than 12 months

 12 months or longer

 Total

 Fair

 Fair

 Fair

 Value

 Value

 Value

 Available for Sale:

 U.S. government agencies

 $

 -

 $

 -

 $

 95,240

 $

 ( 17,912)

 $

 95,240

 $

 ( 17,912)

 ( 2)

 4,194

 ( 229)

 5,072

 ( 231)

 Total debt securities

 $

 $

 ( 2)

 $

 99,434

 $

 ( 18,141)

 $

 100,312

 $

 ( 18,143)

 Mortgage-backed securities:

 FNMA

 $

 -

 $

 -

 $

 54,831

 $

 ( 11,294)

 $

 54,831

 $

 ( 11,294)

 FHLMC

 -

 -

 31,174

 ( 5,569)

 31,174

 ( 5,569)

 GNMA

 -

 -

 31,110

 ( 7,683)

 31,110

 ( 7,683)

 SBA

 -

 -

 18,485

 ( 2,291)

 18,485

 ( 2,291)

 CMO

 -

 -

 37,674

 ( 10,069)

 37,674

 ( 10,069)

 Total mortgage-backed securities

 $

 -

 $

 -

 $

 173,274

 $

 ( 36,906)

 $

 173,274

 $

 ( 36,906)

 Held to Maturity:

 $

 $

 ( 1)

 $

 $

 ( 71)

 $

 1,087

 $

 ( 72)

 Total securities

 $

 1,322

 $

 ( 3)

 $

 273,351

 $

 ( 55,118)

 $

 274,673

 $

 ( 55,121)

 Management has assessed the securities available for sale in an unrealized loss position at December 31, 2024 and determined that it expected to recover the amortized cost basis of its securities. As of December 31, 2024, the Company does not intend to sell nor is it anticipated that it would be required to sell any of its impaired securities before recovery of their amortized cost. Management believes the decline in fair value is primarily related to market interest rate fluctuations and not to the credit deterioration of the individual issuers. As a result, the Company does no t hold an allowance for credit losses relating to securities. The Company holds

 no securities backed by sub-prime or Alt-A residential mortgages or commercial mortgages and also does not hold any trust-preferred securities.

 The creditworthiness of the Company's portfolio is largely reliant on the ability of U.S. government agencies such as the Federal Home Loan Bank ("FHLB"), Federal National Mortgage Association ("FNMA"), and the Federal Home Loan Mortgage Corporation ("FHLMC"), and municipalities throughout New York State to meet their obligations. In addition, dysfunctional markets could materially alter the liquidity, interest rate, and pricing risk of the portfolio. The stable past performance is not a guarantee for similar performance going forward.

 4. LOANS AND THE ALLOWANCE FOR CREDIT LOSSES

 Major categories of loans at December 31, 2024 and 2023 are summarized as follows:

 Mortgage loans on real estate:

 Residential mortgages

 $

 438,779

 $

 443,788

 Commercial and multi-family

 858,745

 854,565

 Construction-Residential

 5,559

 3,255

 Construction-Commercial

 142,097

 114,623

 78,666

 81,412

 Total real estate loans

 1,523,846

 1,497,643

 Commercial and industrial loans

 260,182

 223,100

 Consumer and other loans

 1,066

 Unaccreted yield adjustments*

 ( 1,094)

 ( 863)

 Total gross loans

 1,783,664

 1,720,946

 Allowance for credit losses

 ( 24,176)

 ( 22,114)

 Loans, net

 $

 1,759,488

 $

 1,698,832

 *Includes net premiums and discounts on acquired loans and net deferred fees and costs on loans originated.

 The outstanding principal balance and the carrying amount of acquired credit-deteriorated loans both totaled $ 0.7 million at December 31, 2024, compared with $ 0.8 million and $ 0.7 million, respectively at December 31, 2023. There were no valuation allowances for specifically identified impairment attributable to acquired credit-deteriorate loans at December 31, 2024 or 2023.

 There were $ 933 million and $ 566 million in residential and commercial mortgage loans pledged to FHLBNY to serve as collateral for potential borrowings as of December 31, 2024 and 2023, respectively.

 Residential Mortgages, including Construction: The Company originates adjustable-rate and fixed-rate, one-to-four-family residential real estate loans for the construction, purchase, or refinancing of a mortgage. These loans are collateralized by owner-occupied properties located in the Company's market area and are amortized over a period of 10 to 30 years. Loans on one-to-four-family residential real estate are mostly originated in amounts of no more than 80 % of the property's appraised value or have private mortgage insurance. Mortgage title insurance and hazard insurance are normally required. Construction loans have a unique risk, because they are secured by an incomplete dwelling.

 The Company, in its normal course of business, sells certain residential mortgages which it originates and sells to FNMA, FHLMC and FHLB while maintaining the servicing rights for those mortgages. The Bank determines with each origination of residential real estate loans which desired maturities, within the context of overall maturities in the loan portfolio, provide the appropriate mix to optimize the Bank's ability to absorb the corresponding interest rate risk within the Company's tolerance ranges. This practice allows the Company to manage interest rate risk, liquidity risk, and credit risk. At December 31, 2024 and 2023, the Company's loan servicing portfolio principal balances was $ 119 million and $ 113 million, respectively, upon which it earned servicing fees. For the years ended December 31, 2024 and 2023, the Company sold $ 18.5 million and $ 8.3 million, respectively, in loans to FNMA and FHLB and realized gains on those sales of $ 0.5 million and $ 0.2 million, respectively. Gains or losses recognized upon the sale of loans are determined on a specific identification basis. No loans were sold to FHLMC by the Company during the years 2024 and 2023.

 The Company had a related asset carried at fair value of approximately $ 1.2 million and $ 1.1 million for the servicing portfolio rights at December 31, 2024 and 2023, respectively. There were no residential mortgages held for sale at December 31, 2024 and December 31, 2023.

 Commercial and Multi-Family Mortgages and Commercial Construction Loans: Commercial real estate loans are made to finance the purchases of real estate with completed structures or in the midst of being constructed. These commercial real estate loans are secured by first liens on the real estate, which may include apartments, hotels, retail stores or plazas, healthcare facilities, and other non-owner-occupied facilities. These loans are generally less risky than commercial and industrial loans since they are secured by real estate and buildings. The Company offers commercial mortgage loans with up to an 80 % LTV ratio for up to 20 years on a variable and fixed rate basis. Many of these mortgage loans either mature or are subject to a rate call after three to five years. The Company's underwriting analysis includes credit verification, independent appraisals, a review of the borrower's financial condition, and the underlying cash flows. Construction loans have a unique risk, because they are secured by an incomplete dwelling.

 Home Equities: The Company originates home equity lines of credit and second mortgage loans (loans secured by a second lien position on one-to-four-family residential real estate). These loans carry a higher risk than first mortgage residential loans because they are in a second position with respect to collateral. Risk is reduced through underwriting criteria, which include credit verification, appraisals, a review of the borrower's financial condition, and personal cash flows. A security interest, with title insurance when necessary, is taken in the underlying real estate.

 Commercial and Industrial Loans: These loans generally include term loans and lines of credit. Such loans are made available to businesses for working capital (including inventory and receivables), business expansion (including acquisition of real estate, expansion, and improvements) and equipment purchases. As a general practice, a collateral lien is placed on equipment or other assets owned by the borrower. These loans generally carry a higher risk than commercial real estate loans based on the nature of the underlying collateral, which can be business assets such as equipment and accounts receivable. To reduce the risk, management also attempts to secure real estate as collateral and obtain personal guarantees of the borrowers. To further reduce risk and enhance liquidity, these loans generally carry variable rates of interest, re-pricing in three - to five -year periods, and have a maturity of five years or less. Lines of credit generally carry floating rates of interest (e.g. prime plus a margin).

 Consumer Loans: The Company funds a variety of consumer loans, including direct automobile loans, recreational vehicle loans, boat loans, home improvement loans, and personal loans (collateralized and uncollateralized). Most of these loans carry a fixed rate of interest with principal repayment terms typically ranging up to five years, based upon the nature of the collateral and the size of the loan. The majority of consumer loans are underwritten on a secured basis using the underlying collateral being financed. A minimal amount of loans are unsecured, which carry a higher risk of loss. These loans included overdrawn deposit accounts classified as loans of $ 0.1 million at December 31, 2024 and 2023.

 Credit Quality Indicators

 The Company monitors the credit risk in its loan portfolio by reviewing certain credit quality indicators ("CQI"). The primary CQI for the commercial mortgage and commercial and industrial portfolios is the individual loan's credit risk rating. The following list provides a description of the credit risk ratings that are used internally by the Bank when assessing the adequacy of its allowance for credit losses:
 Acceptable or better
 Watch
 Doubtful
 Loss

 "Special mention" and "substandard" loans are weaker credits with a higher risk of loss and are categorized as "criticized" assets.

 The Company's consumer loans, including residential mortgages and home equities, are not individually risk rated or reviewed in the Company's loan review process. Unlike commercial customers, consumer loan customers are not required to provide the Company with updated financial information. Consumer loans also carry smaller balances. Given the lack of updated information after the initial underwriting of the loan and small size of individual loans, the Company uses delinquency status as the primary credit quality indicator for consumer loans. However, once a consumer loan is identified as individually evaluated, it is individually measured for impairment.

 The following tables summarize the amortized cost of loans by year of origination and internally assigned credit grades:

 Term Loans Amortized Cost Basis by Origination Year

 As of December 31, 2024

 2024

 2023

 2022

 2021

 2020

 Prior

 Revolving Loans Amortized Cost Basis

 Total

 Commercial and industrial loans

 Risk rating

 Pass

 $

 53,499

 $

 25,213

 $

 21,934

 $

 15,999

 $

 6,030

 $

 9,125

 $

 91,728

 $

 223,528

 6,499

 -

 17,859

 26,444

 2,261

 6,779

 10,205

 Doubtful/Loss

 -

 -

 -

 -

 -

 -

 -

 -

 Total

 $

 60,061

 $

 25,998

 $

 24,950

 $

 16,366

 $

 6,267

 $

 10,169

 $

 116,366

 $

 260,177

 $

 -

 $

 $

 -

 $

 -

 $

 -

 $

 $

 -

 $

 Commercial real estate mortgages

 Risk rating

 Pass

 $

 128,691

 $

 150,285

 $

 186,261

 $

 118,259

 $

 90,052

 $

 275,697

 $

 -

 $

 949,245

 2,688

 -

 1,504

 -

 14,141

 -

 18,712

 -

 2,414

 5,808

 16,709

 -

 7,499

 -

 32,430

 Doubtful/Loss

 -

 -

 -

 -

 -

 -

 -

 -

 Total

 $

 131,379

 $

 152,699

 $

 193,573

 $

 135,347

 $

 90,052

 $

 297,337

 $

 -

 $

 1,000,387

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 $

 $

 $

 $

 $

 $

 $

 -

 -

 -

 -

 -

 -

 -

 -

 Total

 $

 $

 $

 $

 $

 $

 $

 $

 $

 $

 $

 -

 $

 -

 $

 -

 $

 $

 -

 $

 Residential mortgages

 $

 34,646

 $

 37,524

 $

 67,959

 $

 90,801

 $

 63,209

 $

 144,973

 $

 -

 $

 439,112

 -

 3,352

 -

 5,364

 Total

 $

 34,646

 $

 37,822

 $

 68,485

 $

 91,748

 $

 63,450

 $

 148,325

 $

 -

 $

 444,476

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 3,239

 $

 5,435

 $

 2,176

 $

 $

 $

 2,053

 $

 63,300

 $

 77,008

 -

 -

 -

 -

 Total

 $

 3,239

 $

 5,477

 $

 2,214

 $

 $

 $

 2,053

 $

 63,868

 $

 77,656

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 Term Loans Amortized Cost Basis by Origination Year

 As of December 31, 2023

 2023

 2022

 2021

 2020

 2019

 Prior

 Revolving Loans Amortized Cost Basis

 Total

 Commercial and industrial loans

 Risk rating

 Pass

 $

 24,338

 $

 42,967

 $

 21,614

 $

 12,174

 $

 5,686

 $

 6,539

 $

 86,459

 $

 199,777

 1,955

 2,739

 1,867

 11,705

 19,054

 -

 -

 2,955

 4,258

 Doubtful/Loss

 -

 -

 -

 -

 -

 -

 -

 -

 Total

 $

 24,348

 $

 44,924

 $

 24,356

 $

 13,144

 $

 5,954

 $

 9,244

 $

 101,119

 $

 223,089

 $

 -

 $

 -

 $

 -

 $

 -

 $

 $

 $

 -

 $

 Commercial real estate mortgages

 Risk rating

 Pass

 $

 132,525

 $

 194,197

 $

 169,943

 $

 95,264

 $

 66,243

 $

 263,628

 $

 -

 $

 921,800

 -

 6,634

 9,988

 8,094

 -

 25,974

 -

 -

 11,737

 -

 6,733

 3,617

 -

 22,087

 Doubtful/Loss

 -

 -

 -

 -

 -

 -

 -

 -

 Total

 $

 132,525

 $

 200,831

 $

 182,077

 $

 96,125

 $

 82,964

 $

 275,339

 $

 -

 $

 969,861

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 $

 $

 $

 $

 $

 $

 $

 -

 -

 -

 -

 -

 -

 -

 -

 Total

 $

 $

 $

 $

 $

 $

 $

 $

 $

 $

 $

 $

 -

 $

 -

 $

 $

 -

 $

 Residential mortgages

 $

 37,536

 $

 72,624

 $

 100,308

 $

 69,454

 $

 17,829

 $

 144,499

 $

 -

 $

 442,250

 3,044

 -

 4,601

 Total

 $

 37,692

 $

 72,894

 $

 100,884

 $

 69,805

 $

 18,033

 $

 147,543

 $

 -

 $

 446,851

 $

 -

 $

 -

 $

 -

 $

 $

 -

 $

 -

 $

 -

 $

 $

 7,833

 $

 2,768

 $

 $

 $

 $

 2,126

 $

 65,165

 $

 79,641

 -

 -

 -

 -

 -

 Total

 $

 7,833

 $

 2,768

 $

 $

 $

 $

 2,127

 $

 65,679

 $

 80,156

 $

 -

 $

 -

 $

 -

 $

 -

 $

 -

 $

 $

 -

 $

 Past Due Loans

 The following tables provide an analysis of the age of the amortized cost of loans that are past due and nonaccrual as of the dates indicated:

 2024

 Current

 Non-accruing

 Total

 Balance

 30-59 days

 60-89 days

 90+ days

 Loans

 Balance

 $

 255,565

 $

 2,894

 $

 -

 $

 $

 1,498

 $

 260,177

 421,602

 8,786

 3,042

 5,363

 438,914

 5,562

 -

 -

 -

 -

 5,562

 831,546

 14,005

 -

 -

 12,393

 857,944

 138,101

 4,342

 -

 -

 -

 142,443

 75,154

 1,461

 -

 77,656

 -

 -

 Total Loans

 $

 1,728,473

 $

 31,510

 $

 3,438

 $

 $

 19,902

 $

 1,783,664

 2023

 Current

 Non-accruing

 Total

 Balance

 30-59 days

 60-89 days

 90+ days

 Loans

 Balance

 $

 220,602

 $

 $

 $

 -

 $

 1,839

 $

 223,089

 437,471

 1,173

 -

 4,602

 443,587

 3,264

 -

 -

 -

 -

 3,264

 831,375

 4,360

 -

 19,000

 854,869

 110,727

 2,326

 -

 1,268

 114,992

 77,080

 1,906

 -

 80,156

 -

 -

 Total Loans

 $

 1,681,478

 $

 10,310

 $

 1,800

 $

 $

 27,224

 $

 1,720,946

 Allowance for Credit Losses

 Effective January 1, 2023 the Company adopted ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which requires an allowance for credit losses be deducted from the amortized cost basis of financial assets to present the net carrying value at the amount that is expected to be collected over the contractual term of the asset. In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. The Company utilizes discounted cash flow models considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount to project principal balances over the remaining contractual lives of the loan portfolios and to determine estimated credit losses through a reasonable and supportable forecast period. The models have been statistically developed based on historical correlations of credit losses with prevailing economic metrics, including unemployment and gross domestic product. The Company utilizes a reasonable and supportable forecast period of one year. Subsequent to this forecast period the Company reverts, on a straight-line basis over a one-year period, to historical loss experience to inform its estimate of losses for the remaining contractual life of each portfolio. Model forecasts may be adjusted for inherent limitations of biases that have been identified through independent validation and back-testing of model performance to actual realized results. The Company also considered the impact of qualitative factors, including portfolio concentrations, changes in underwriting practices, imprecision in its economic forecasts, geopolitical conditions and other risk factors that might influence its loss estimation process.

 The Company also estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes and includes all loans on nonaccrual status. The amounts of individually analyzed losses are determined through a loan-by-loan analysis. Such loss estimates are typically based on expected future cash flows, collateral values and other factors that may impact the borrower's ability to pay. To the extent that those loans are collateral-dependent, they are evaluated based on recent estimations of the fair value of the loan's collateral. In those cases where current appraisals may not yet be available, prior appraisals are utilized with adjustments, as deemed necessary, for estimates of subsequent declines in values as determined by line of business and/or loan workout personnel. Those adjustments are reviewed and assessed for reasonableness by the Company's credit risk personnel. Accordingly, for real estate collateral securing larger nonaccrual commercial loans and commercial real estate loans, estimated collateral values are based on current appraisals and estimates of value. For non-real estate loans, collateral is assigned a discounted estimated liquidation value and, depending on the nature of the collateral, is verified through field exams or other procedures. In assessing collateral, real estate and non-real estate values are reduced by an estimate of selling costs. Charge-offs are based on recent indications of value from external parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that file for bankruptcy are generally charged-off to estimated net collateral value shortly after the Company is notified of such filings. When evaluating individual home equity loans and lines of credit for charge off and for purposes of estimating losses in determining the allowance for credit losses, the Company considers the required repayment of any first lien positions related to collateral property.

 The following tables present the activity in the allowance for credit losses according to portfolio segment for the periods ended December 31, 2024, 2023 and 2022.

 2024

 Commercial and Industrial

 Commercial Real Estate Mortgages*

 Consumer and Other

 Residential Mortgages*

 Home Equities

 Total

 Allowance for credit losses:

 Beginning balance

 $

 5,241

 $

 12,548

 $

 $

 3,883

 $

 $

 22,114

 Charge-offs

 ( 72)

 -

 ( 222)

 -

 -

 ( 294)

 Recoveries

 -

 -

 Provision (Credit)

 2,236

 Ending balance

 $

 5,550

 $

 13,298

 $

 $

 4,831

 $

 $

 24,176

 Allowance for credit

 losses:

 Ending balance:

 Individually evaluated

 -

 -

 1,141

 Collectively evaluated

 5,342

 12,372

 4,824

 23,035

 Total

 $

 5,550

 $

 13,298

 $

 $

 4,831

 $

 $

 24,176

 Loans:

 Ending balance:

 Individually evaluated

 1,857

 14,450

 -

 5,946

 1,005

 23,258

 Collectively evaluated

 258,325

 986,392

 438,392

 77,661

 1,761,500

 Total

 $

 260,182

 $

 1,000,842

 $

 $

 444,338

 $

 78,666

 $

 1,784,758

 * includes construction loans

 2023

 Commercial and Industrial

 Commercial Real Estate Mortgages*

 Consumer and Other

 Residential Mortgages*

 Home Equities

 Total

 Allowance for credit losses:

 Beginning balance

 $

 4,980

 $

 11,595

 $

 $

 2,102

 $

 $

 19,438

 Adoption of new accounting

 standard

 1,145

 ( 147)

 1,618

 ( 205)

 2,735

 Beginning balance after

 cumulative effect adjustment

 $

 5,304

 $

 12,740

 $

 $

 3,720

 $

 $

 22,173

 Charge-offs

 ( 7)

 -

 ( 165)

 ( 1)

 ( 25)

 ( 198)

 Recoveries

 -

 Provision (Credit)

 ( 139)

 ( 192)

 Ending balance

 $

 5,241

 $

 12,548

 $

 $

 3,883

 $

 $

 22,114

 Allowance for credit

 losses:

 Ending balance:

 Individually evaluated

 $

 -

 -

 -

 Collectively evaluated

 5,205

 11,829

 3,883

 21,359

 Total

 $

 5,241

 $

 12,548

 $

 $

 3,883

 $

 $

 22,114

 Loans:

 Ending balance:

 Individually evaluated

 $

 1,869

 23,044

 -

 5,146

 30,820

 Collectively evaluated

 221,231

 946,144

 1,066

 441,897

 80,651

 1,690,989

 Total

 $

 223,100

 $

 969,188

 $

 1,066

 $

 447,043

 $

 81,412

 $

 1,721,809

 * includes construction loans

 2022

 Commercial and Industrial

 Commercial Real Estate Mortgages*

 Consumer and Other

 Residential Mortgages*

 Home Equities

 Total

 Allowance for credit

 losses:

 Beginning balance

 $

 3,309

 $

 12,367

 $

 $

 2,127

 $

 $

 18,438

 Charge-offs

 ( 1,546)

 -

 ( 170)

 ( 125)

 ( 30)

 ( 1,871)

 Recoveries

 -

 -

 -

 Provision (Credit)

 3,103

 ( 772)

 2,739

 Ending balance

 $

 4,980

 $

 11,595

 $

 $

 2,102

 $

 $

 19,438

 * includes construction loans

 The Company's reserve for off-balance sheet credit exposures was not material at December 31, 2024 and 2023.

 Nonaccrual Loans

 The following tables provide amortized costs, at the class level, for nonaccrual loans as of the dates indicated:

 Year Ended

 Amortized Cost with Allowance

 Amortized Cost without Allowance

 Total

 $

 $

 1,204

 $

 1,498

 $

 5,211

 5,363

 -

 -

 -

 -

 4,957

 7,436

 12,393

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Total nonaccrual loans

 $

 5,403

 $

 14,499

 $

 19,902

 $

 Year Ended

 Amortized Cost with Allowance

 Amortized Cost without Allowance

 Total

 $

 $

 1,766

 $

 1,839

 $

 -

 4,602

 4,602

 -

 -

 -

 -

 6,568

 12,432

 19,000

 1,268

 -

 1,268

 -

 -

 -

 -

 -

 -

 Total nonaccrual loans

 $

 7,909

 $

 19,315

 $

 27,224

 $

 The following table provides data, at the class level, as of December 31, 2022.

 2022

 Average Recorded Investment

 With no related allowance recorded:

 $

 2,654

 $

 4,522

 -

 -

 7,928

 3,715

 -

 -

 Total impaired loans

 $

 19,597

 $

 2022

 Average Recorded Investment

 With a related allowance recorded:

 $

 -

 $

 -

 -

 -

 -

 -

 -

 1,360

 -

 -

 -

 Total impaired loans

 $

 1,477

 $

 2022

 Average Recorded Investment

 Total:

 $

 2,654

 $

 4,581

 -

 -

 7,928

 5,075

 -

 -

 Total impaired loans

 $

 21,074

 $

 Collateral-dependent loans are loans that we expect the repayment to be provided substantially through the operation or sale of the collateral of the loan and we have determined that the borrower is experiencing financial difficulty. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for selling costs. As of December 31, 2024 and December 31, 2023 there were $ 19 million and $ 27 million, respectively, of collateral-dependent loans secured mainly by real estate and equipment.

 Modifications to Borrowers Experiencing Financial Difficulty

 The Company adopted Accounting Standards Update ("ASU") 2022-02, Financial Instruments – Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02") effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measure of troubled debt restructurings and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty.

 The tables below detail the amortized cost of gross loans held for investment made to borrowers experiencing financial difficulty that were modified during the twelve months ended December 31, 2024 and December 31, 2023.

 Term Extension

 Total Class of Receivable

 $

 -

 -

 %

 0.22

 -

 -

 5,289

 0.53

 -

 -

 -

 -

 -

 -

 -

 Total nonaccrual loans

 $

 6,258

 0.35

 %

 Term Extension

 Total Class of Receivable

 $

 0.20

 %

 0.15

 -

 -

 6,817

 0.70

 -

 -

 -

 -

 -

 -

 -

 Total nonaccrual loans

 $

 7,954

 0.46

 %

 The financial impacts of residential mortgage loan modifications made to borrowers experiencing financial difficulty during the twelve months ended December 31, 2024 were maturity extensions ranging from six months to 360 months. Commercial real estate loan modifications made to borrowers experiencing financial difficulty, included in the table above, was a maturity extension of nine

 months. Commercial and industrial loan modifications made to borrowers experiencing financial difficulty during the twelve months ended December 31, 2023 was a maturity extension of six months. Residential mortgage loan modifications made to borrowers experiencing financial difficulty during that same period were ranging from six months to 164 months. Commercial real estate loan modifications made to borrowers experiencing financial difficulty ranged from six to seven months during the twelve months ended December 31, 2023.

 The company has no t committed to lend any additional amounts to the borrowers included in the previous table.

 As of December 31, 2024 and 2023, the Company did no t have any loans made to borrowers experiencing financial difficulty that were modified during 2024 and 2023, respectively, that subsequently defaulted. Payment default is defined as movement to nonperforming status, foreclosure or charge-off, whichever occurs first.

 The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The payment status of all loans modified to borrowers experiencing financial difficulties were current during the twelve months ending 2024 and 2023.

 5. PROPERTIES AND EQUIPMENT

 Properties and equipment at December 31 were as follows:

 2024

 2023

 Land

 $

 $

 Buildings and improvements

 17,828

 17,813

 Furniture, fixtures, and equipment

 9,605

 9,277

 28,278

 27,935

 Less accumulated depreciation

 ( 14,126)

 ( 12,538)

 Properties and equipment, net

 $

 14,152

 $

 15,397

 Depreciation expense totaled $ 1.5 million in 2024, $ 1.7 million in 2023, and $ 1.7 million in 2022.

 6. LEASES

 The Company's leases, consisting of property leases for certain bank branches, are classified as operating leases. Operating lease Right of Use ("ROU") assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets were $ 3.8 million as of December 31, 2024 and 2023. Lease liabilities were $ 4.1 million as of December 31, 2024 and 2023. As these leases do not provide an implicit rate, we use our incremental borrowing rate in determining the present value of lease payments. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

 Lease expense is recognized on a straight-line basis over the lease term. Operating lease expenses were $ 1.1 million during each of the years ended December 31, 2024, 2023 and 2022, and are included in occupancy expense on the consolidated statement of income. Cash paid for amounts included in the measurement of lease liabilities were $ 1.0 million and $ 1.1 million during the years ended December 31, 2024 and 2023, respectively, and are included in cash flows from operating activities on the consolidated statement of cash flows. The weighted average discount rate related to the Company's leases were 3.0 %, and 2.8 % as of December 31, 2024 and December 31, 2023, respectively. The weighted average remaining lease term related to the Company's leases was 5.5 years and 6.0 years as of December 31, 2024 and 2023, respectively. Future minimum lease payments under non-cancellable leases as of December 31, 2024 were as follows:

 Year Ending December 31,

 2025

 $

 1,011

 2026

 2027

 2028

 2029

 Thereafter

 Total future minimum lease payments

 4,440

 Less imputed interest

 Total

 $

 4,072

 ROU assets obtained in exchange for lease obligations were $ 1.0 million and $ 0.4 million during the years ended December 31, 2024 and 2023, respectively.

 7. GOODWILL AND INTANGIBLE ASSETS

 Assets and liabilities acquired in a business combination are recorded at their estimated fair values as of the acquisition date. The excess of the purchase price of the acquisition over the fair value of net assets acquired is recorded as goodwill. The Company had $ 1.8 million in goodwill at December 31, 2024 and 2023.

 On November 30, 2023 the Company wrote-off $ 10.9 million of goodwill and $ 0.8 million of intangible assets in connection with the sale of TEA. See Note 2 to the Company's Consolidated Financial Statements included under Item 8 of this Annual Report on Form 10-K for more information on the sale of TEA.

 Goodwill of $ 1.8 million at December 31, 2024 relates to the banking activities segment of the Company. There were no additions to goodwill during 2024 or 2023.

 Goodwill is evaluated for impairment on an annual basis, or whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying value. The Company measures the fair value of its reporting unit annually, as of December 31. There was no impairment of goodwill recognized during 2024 or 2023.

 There were no additions to intangible assets during 2024 or 2023. The gross carrying amount and accumulated amortization of other intangible assets at December 31, 2024 and December 31, 2023 were as follows:

 2024

 2024

 Gross Carrying Amount

 Accumulated Amortization

 Gross Carrying Amount

 Accumulated Amortization

 Amortized intangible asset:

 Core deposit intangibles

 $

 ( 88)

 $

 ( 72)

 Total

 $

 ( 88)

 $

 ( 72)

 Core deposit intangibles have an estimated remaining life of 5.3 years. Amortization expense related to intangibles for the years ended December 31, 2024, 2023, and 2022 were less than $ 0.1 million, $ 0.4 million, and $ 0.4 million, respectively. Amortization expense of $ 0.3 million recorded during 2023 included amortization of other insurance intangibles through November 30, 2023. There was no impairment of intangible assets recognized during 2024 or 2023.

 Estimated amortization expense for core deposit intangibles for each of the five succeeding fiscal years is as follows:

 Year Ending December 31

 2025

 $

 2026

 2027

 2028

 2029

 Thereafter

 $

 8.DEPOSITS

 Time deposits of $250 thousand and over, excluding brokered deposits, totaled $ 78.3 million and $ 74.6 million at December 31, 2024 and 2023, respectively. Brokered time deposits totaled $ 67 million at December 31, 2024. There were no brokered time deposits at December 31, 2023.

 At December 31, 2024, the scheduled maturities of all time deposits were as follows:

 2025

 $

 361,584

 2026

 27,210

 2027

 2,661

 2028

 1,099

 2029

 2,002

 $

 394,556

 9.BORROWED FUNDS AND SUBORDINATED DEBT

 Other borrowings at December 31, 2024 consisted of FHLB overnight line of credit advance of $ 40 million, and FHLB advances of $ 40 million.

 The maturities and weighted average rates of other borrowed funds at December 31, 2024 are as follows:

 Maturities

 Weighted Average Rate

 2025

 $

 4.61

 %

 2026

 -

 -

 %

 2027

 4.68

 %

 Total

 $

 80,000

 4.65

 %

 The Bank has the ability to borrow additional funds from the FHLB based on the securities or real estate loans that can be used as collateral and to purchase additional federal funds through one of the Bank's correspondent banks. Given the current collateral available, additional advances of up to $ 381 million can be drawn on the FHLB via the Bank's Overnight Line of Credit Agreement. There were $ 933 million and $ 566 million in residential and commercial mortgage loans pledged to FHLBNY to serve as collateral for potential borrowings as of December 31, 2024 and 2023, respectively.

 As a member of the Federal Home Loan Bank System, the Bank is required to hold stock in FHLBNY. The Bank held FHLBNY stock with a carrying value of $ 6.2 million and $ 4.9 million as of December 31, 2024 and December 31, 2023, respectively.

 The Bank has the ability to borrow from the Federal Reserve. At December 31, 2024 the Bank had $ 96 million in additional availability to borrow against collateral. By placing sufficient collateral in safekeeping at the Federal Reserve Bank, the Bank could borrow at the discount window.

 The amounts and interest rates of other borrowed funds, excluding purchased discounts of less than $ 0.1 million at December 31, 2024 and 2023 and $ 0.3 million at December 31, 2022, were as follows:

 FHLB Overnight Line of Credit

 FHLB Advances

 FRB Borrowings

 Total Other Borrowings

 At December 31, 2024

 Amount outstanding

 $

 $

 $

 -

 $

 80,000

 4.61

 %

 4.68

 %

 -

 %

 4.65

 %

 For the year ended December 31, 2024

 Highest amount at a month end

 $

 59,000

 $

 43,000

 $

 88,000

 Daily average amount outstanding

 $

 10,250

 $

 32,218

 $

 73,333

 $

 115,801

 5.97

 %

 4.54

 %

 5.10

 %

 5.02

 %

 At December 31, 2023

 Amount outstanding

 $

 53,000

 $

 6,077

 $

 86,000

 $

 145,077

 5.64

 %

 3.11

 %

 5.28

 %

 5.32

 %

 For the year ended December 31, 2023

 Highest amount at a month end

 $

 168,000

 $

 19,346

 $

 126,000

 Daily average amount outstanding

 $

 62,217

 $

 8,853

 $

 74,182

 $

 145,252

 5.33

 %

 3.00

 %

 4.61

 %

 4.82

 %

 At December 31, 2022

 Amount outstanding

 $

 173,200

 $

 19,547

 $

 -

 $

 192,747

 4.61

 %

 2.77

 %

 -

 %

 4.42

 %

 For the year ended December 31, 2022

 Highest amount at a month end

 $

 173,200

 $

 31,756

 $

 -

 Daily average amount outstanding

 $

 24,519

 $

 23,721

 $

 -

 $

 48,240

 3.96

 %

 2.72

 %

 -

 %

 3.35

 %

 Subordinated debt comprised $ 20.0 million of subordinated notes and $ 11.3 million of trust preferred capital securities at December 31, 2024 and 2023.

 On July 9, 2020, the Company issued $ 20.0 million of fixed to floating rate subordinated notes. The subordinated notes have an initial fixed interest rate of 6.00 % to, but excluding, July 15, 2025, payable semi-annually in arrears. From and including July 15, 2025 but excluding the maturity date or early redemption date, the interest rate will reset quarterly to an interest rate per annum initially equal to the then-current three-month Secured Overnight Financing Rate provided by the Federal Reserve Bank of New York plus 590 basis points, payable quarterly in arrears. The subordinated notes mature on July 15, 2030. The Company is entitled to redeem the notes, in whole or in part, at any time on or after July 15, 2025, and to redeem the subordinated notes at any time in whole upon certain other events.

 On October 1, 2004, Evans Capital Trust I, a statutory business trust wholly-owned by the Company (the "Trust"), issued $ 11.0 million in aggregate principal amount of floating rate preferred capital securities due November 23, 2034 to various investors (the "Capital Securities") and $ 0.3 million of common securities to the Company (the "Common Securities"). The Capital Securities represent preferred undivided interests in the assets of the Trust. The Common Securities represent the initial capital contribution of the Company to the Trust, which have not been consolidated and are included in "Other Assets" on the Company's consolidated balance sheet. Under the Federal Reserve Board's current risk-based capital guidelines, the Capital Securities are includable in the Company's Tier 1 (Core) capital. The Common Securities are wholly-owned by the Company and are the only class of the Trust's securities possessing general voting powers.

 The Capital Securities have a distribution rate of three-month SOFR plus 2.65 %, and the distribution dates are February 23, May 23, August 23, and November 23. The distribution rate was 7.43 % at December 31, 2024.

 The proceeds from the issuances of the Capital Securities and Common Securities were used by the Trust to purchase $ 11.3 million in aggregate liquidation amount of floating rate junior subordinated deferrable interest debentures ("Junior Subordinated Debentures") of the Company, due October 1, 2037.

 The Junior Subordinated Debentures represent the sole assets of the Trust, and payments under the Junior Subordinated Debentures are the sole source of cash flow for the Trust. The interest rate payable on the Junior Subordinated Debentures was 7.43 % at December 31, 2024.

 Holders of the Capital Securities receive preferential cumulative cash distributions on each distribution date at the stated distribution rate, unless the Company exercises its right to extend the payment of interest on the Junior Subordinated Debentures for up to twenty quarterly periods, in which case payment of distributions on the respective Capital Securities will be deferred for comparable periods. During an extended interest period, in accordance with terms as defined in the indenture relating to the Capital Securities, the Company may not pay dividends or distributions on, or repurchase, redeem, or acquire any shares of its capital stock. The agreements governing the Capital Securities, in the aggregate, provide a full, irrevocable, and unconditional guarantee by the Company of the payment of distributions on, the redemption of, and any liquidation distribution with respect to the Capital Securities. The obligations under such guarantee and the Capital Securities are subordinate and junior in right of payment to all senior indebtedness of the Company.

 The Capital Securities will remain outstanding until the Junior Subordinated Debentures are repaid at maturity, are redeemed prior to maturity, or are distributed in liquidation to the Trust. The Capital Securities are mandatorily redeemable in whole, but not in part, upon repayment at the stated maturity dates of the Junior Subordinated Debentures or the earlier redemption of the Junior Subordinated Debentures in whole upon the occurrence of one or more events ("Events") set forth in the indentures relating to the Capital Securities, and in whole or in part at any time contemporaneously with the optional redemption of the related Junior Subordinated Debentures in whole or in part. The Junior Subordinated Debentures are redeemable prior to their stated maturity dates at the Company's option: (i) on or after the stated optional redemption dates, in whole at any time, or in part from time to time; or (ii) in whole, but not in part, at any time within 90 days following the occurrence and during the continuation of one or more of the Events, in each case subject to possible regulatory approval. The redemption price of the Capital Securities and the related Junior Subordinated Debentures upon early redemption would be at the liquidation amount plus accumulated but unpaid distributions.

 10.SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

 The Bank enters into agreements with customers to sell securities owned by the Bank to the customers and repurchase the identical security, within one business day. No physical movement of the securities is involved. The Bank had $ 6.6 million and $ 9.5 million in securities sold under agreement to repurchase at December 31, 2024 and December 31, 2023, respectively.

 11.COMPREHENSIVE INCOME (LOSS)

 The following tables display the components of other comprehensive income (loss), net of tax:

 Balance at December 31, 2023

 Net Change

 Balance at December 31, 2024

 Net unrealized loss on investment securities

 $

 ( 40,741)

 $

 ( 1,725)

 $

 ( 42,466)

 Net defined benefit pension plan adjustments

 ( 1,530)

 ( 1,477)

 Total

 $

 ( 42,271)

 $

 $

 ( 43,943)

 Balance at December 31, 2022

 Net Change

 Balance at December 31, 2023

 Net unrealized loss on investment securities

 $

 ( 47,348)

 $

 6,607

 $

 ( 40,741)

 Net defined benefit pension plan adjustments

 ( 1,930)

 ( 1,530)

 Total

 $

 ( 49,278)

 $

 7,007

 $

 ( 42,271)

 Balance at December 31, 2021

 Net Change

 Balance at December 31, 2022

 Net unrealized loss on investment securities

 $

 ( 3,160)

 $

 ( 44,188)

 $

 ( 47,348)

 Net defined benefit pension plan adjustments

 ( 2,511)

 ( 1,930)

 Total

 $

 ( 5,671)

 $

 $

 ( 49,278)

 2024

 Before-Tax Amount

 Income Tax (Provision) Benefit

 Net-of-Tax Amount

 Unrealized loss on investment securities:

 Unrealized loss on investment securities

 $

 ( 2,208)

 $

 $

 ( 1,725)

 Defined benefit pension plans adjustments:

 Net actuarial (loss) gain

 $

 ( 21)

 $

 $

 ( 16)

 Reclassifications from accumulated other

 comprehensive income for gains (losses)

 Amortization of prior service cost

 -

 -

 -

 Amortization of actuarial loss

 ( 30)

 Net change

 ( 25)

 Other Comprehensive Loss

 $

 ( 2,130)

 $

 $

 2023

 Before-Tax Amount

 Income Tax (Provision) Benefit

 Net-of-Tax Amount

 Unrealized gain on investment securities:

 Unrealized gain on investment securities

 $

 13,890

 $

 ( 3,550)

 $

 10,340

 Reclassification from accumulated other

 comprehensive income for losses

 ( 5,044)

 1,311

 ( 3,733)

 Net change

 8,846

 ( 2,239)

 6,607

 Defined benefit pension plans adjustments:

 Net actuarial gain (loss)

 $

 $

 ( 110)

 $

 Reclassifications from accumulated other

 comprehensive income for gains (losses)

 Amortization of prior service cost

 -

 -

 -

 Amortization of actuarial loss

 ( 28)

 Net change

 ( 138)

 Other Comprehensive Income

 $

 9,384

 $

 ( 2,377)

 $

 7,007

 2022

 Before-Tax Amount

 Income Tax (Provision) Benefit

 Net-of-Tax Amount

 Unrealized loss on investment securities:

 Unrealized loss on investment securities

 $

 ( 59,621)

 $

 15,433

 $

 ( 44,188)

 Defined benefit pension plans adjustments:

 Net actuarial loss gain

 $

 $

 ( 122)

 $

 Reclassifications from accumulated other

 comprehensive income for gains (losses)

 Amortization of prior service cost

 ( 9)

 Amortization of actuarial loss

 ( 74)

 Net change

 ( 205)

 Other Comprehensive Loss

 $

 ( 58,835)

 $

 15,228

 $

 12.EMPLOYEE BENEFITS AND DEFERRED COMPENSATION PLANS

 Employees' Pension Plan
 The Bank has a defined benefit pension plan that covered substantially all employees of the Company and its subsidiaries (the "Pension Plan"). The Pension Plan provides benefits that are based on the employees' compensation and years of service. The Bank uses an actuarial method of amortizing prior service cost and unrecognized net gains or losses which result from actual experience and assumptions being different than those that are projected. The amortization method the Bank uses recognizes the prior service cost and net gains or losses over the average remaining service period of active employees which exceeds the required amortization. The Pension Plan was frozen effective January 31, 2008. Under the freeze, eligible employees will receive the benefits already earned through January 31, 2008 at retirement, but will not be able to accrue any additional benefits. As a result, service cost will no longer be incurred.

 Selected Financial Information for the Pension Plan is as follows:

 2024

 2023

 Change in benefit obligation:

 Benefit obligation at the beginning of the year

 $

 4,734

 $

 4,912

 Interest cost

 Assumption change

 ( 256)

 Actuarial loss

 Settlements

 -

 ( 263)

 Benefits paid

 ( 271)

 ( 258)

 Benefit obligation at the end of the year

 4,455

 4,734

 Change in plan assets:

 Fair value of plan assets at the beginning of year

 4,980

 4,998

 Actual return on plan assets

 Benefits paid

 ( 271)

 ( 521)

 Fair value of plan assets at the end of year

 4,894

 4,980

 Funded status

 $

 $

 Amount recognized in the Consolidated Balance Sheets consist of:

 Accrued benefit liabilities

 $

 $

 Amount recognized in the Accumulated Other Comprehensive Loss consists of:

 Net actuarial loss

 $

 1,634

 $

 1,879

 Prior service cost

 -

 -

 Net amount recognized in equity - pre-tax

 $

 1,634

 $

 1,879

 Accumulated benefit obligation at year end

 $

 4,455

 $

 4,734

 Assumptions used by the Bank in the determination of Pension Plan information consisted of the following:

 2024

 2023

 2022

 Discount rate for projected benefit obligation

 5.57

 %

 5.00

 %

 5.22

 %

 Discount rate for net periodic pension cost

 5.00

 %

 5.22

 %

 2.77

 %

 Expected long-term rate of return of plan assets

 5.50

 %

 5.50

 %

 5.50

 %

 The components of net periodic benefit cost consisted of the following:

 2024

 2023

 2022

 Interest cost

 $

 $

 $

 Expected return on plan assets

 ( 266)

 ( 259)

 ( 353)

 Net amortization and deferral

 Settlement cost

 -

 -

 Net periodic benefit cost

 $

 $

 $

 ( 77)

 The components of net periodic benefit cost are included in the line item "other expense" in the income statement.

 The Company did not contribute to the Pension Plan in 2024 and expects that it will no t contribute to the Pension Plan in 2025.

 The expected long-term rate of return on Pension Plan assets assumption was determined based on historical returns earned by equity and fixed income securities, adjusted to reflect future return expectations based on plan targeted asset allocation. Equity and fixed income securities were assumed to earn returns in the ranges of 4.5 % to 11 % and 4 % to 5 %, respectively. When these overall return expectations are applied to the Pension Plan's targeted allocation, the expected rate of return was determined to be 5.50 %, which is within the range of expected return. The Company's management will continue to evaluate its actuarial assumptions, including the expected rate of return, at least annually, and will adjust as necessary.

 The weighted average asset allocation of the Pension Plan at December 31, 2024 and 2023, the Pension Plan measurement date, was as follows:

 Asset Category:

 2024

 2023

 Equity mutual funds

 31.00

 %

 35.39

 %

 Fixed income mutual funds

 66.99

 %

 62.05

 %

 Cash/Short-term investments

 2.01

 %

 2.56

 %

 100.00

 %

 100.00

 %

 The portfolio is invested in accordance with sound investment practices. Consistent with this approach, the investment strategy is to diversify the portfolio in order to reduce risk and to maintain sufficient liquidity to meet the obligations of the Plan. The Plan's long-term asset allocation under normal market conditions is 31 % equity investment and 69 % fixed income assets and other short term investments and cash equivalents. The investment objective of the allocation in equity investments emphasizes long term capital appreciation. These equity investments are diversified across market capitalization, industries, style and geographical location. The investment objective of the fixed income allocation is to generally provide a diversified source of income with an awareness of capital preservation. The primary objective of the investment philosophy is capital preservation.

 The major categories of assets in the Bank's Pension Plan as of year-end are presented in the following table. Assets are segregated according to their investment objective by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (see Note 20 – Fair Value of Financial Instruments).

 2024

 2023

 Level 1:

 Cash

 $

 -

 $

 -

 Mutual funds:

 Short-term investments:

 Money market

 Fixed Income:

 3,279

 3,225

 Equities:

 Small cap

 Mid-Cap

 Large cap

 International large cap

 $

 4,894

 $

 4,980

 The mutual funds are actively traded with market quotes available on at least a daily basis. Therefore, they are Level 1 assets.

 The discount rate utilized by the Company for determining future pension obligations is based on a review of long-term bonds that receive one of the two highest ratings given by a recognized rating agency. The discount rate determined on this basis increased from 5.00 % at December 31, 2023 to 5.57 % at December 31, 2024 for the Company's Pension Plan.

 Expected benefit payments under the Pension Plan over the next ten years at December 31, 2024 are as follows:

 2025

 $

 2026

 2027

 2028

 2029

 Year 2030 - 2034

 1,661

 Supplemental Executive Retirement Plans
 The Bank also maintains a non-qualified supplemental executive retirement plan (the "SERP") covering certain members of the Company's senior management. The SERP was amended during 2003 to provide a benefit based on a percentage of final average earnings, as opposed to the fixed benefit that was provided for in the superseded plan.
 On April 8, 2010, the Compensation Committee of the Board of Directors of the Company approved the adoption of the Evans Bank, N.A. Supplemental Executive Retirement Plan for Senior Executives ("the Senior Executive SERP"). The "old" SERP plan will keep its participants at the time of the creation of the Senior Executive SERP, but any future executives identified by the Board of Directors as eligible for SERP benefits will participate in the Senior Executive SERP. A participant is generally entitled to receive a benefit under the Senior Executive SERP upon a termination of employment, other than for "cause", after the participant has completed 10 full calendar years of service with the Bank. No benefit is payable under the Senior Executive SERP if the participant's employment is terminated for "cause" or if the participant voluntarily terminates before completing 10 full calendar years of service with the Bank. In addition, the payment of benefits under the Senior Executive SERP is conditioned upon certain agreements of the participant related to confidentiality, cooperation, non-competition, and non-solicitation. A participant will be entitled to a retirement benefit under the Senior Executive SERP if his or her employment with the Bank terminates other than for "cause". The "accrued benefit" is based on a percentage of the participant's final average earnings, which is determined based upon the participant's total annual compensation over the highest consecutive five calendar years of the participant's employment with the Bank, accrued over the participant's "required benefit service". The percentages and years of service requirements are set forth in each participant's Participation Agreement, and range from 25 % to 35 % and from 15 to 20 years.
 The obligations related to the two SERP plans are indirectly funded by various life insurance contracts naming the Bank as beneficiary. The Bank has also indirectly funded the SERPs, as well as other benefits provided to other employees, through bank-owned life insurance. The Bank uses an actuarial method of amortizing unrecognized net gains or losses which result from actual experience and assumptions being different than those that are projected. The amortization method the Bank is using recognizes the net gains or losses over the average remaining service period of active employees, which exceeds the required amortization.

 Selected financial information for the two SERP plans is as follows:

 2024

 2023

 Change in benefit obligation:

 Benefit obligation at the beginning of the year

 $

 4,969

 $

 5,048

 Service cost

 Interest cost

 Actuarial gain

 ( 188)

 Benefits paid

 ( 285)

 ( 285)

 Benefit obligation at the end of the year

 5,223

 4,969

 Change in plan assets:

 Fair value of plan assets at the beginning of year

 -

 -

 Actual return on plan assets

 -

 -

 Employer contributions

 Benefits paid

 ( 285)

 ( 285)

 Fair value of plan assets at the end of year

 -

 -

 Funded status

 $

 ( 5,223)

 $

 ( 4,969)

 Amount recognized in the Consolidated Balance Sheets consist of:

 Accrued benefit liabilities

 $

 ( 5,223)

 $

 ( 4,969)

 Amount recognized in the Accumulated Other Comprehensive Loss consists of:

 Net actuarial loss

 $

 $

 Prior service cost

 -

 -

 Net amount recognized in equity - pre-tax

 $

 $

 Accumulated benefit obligation at year end

 $

 5,152

 $

 4,842

 Assumptions used by the Bank in the determination of SERP information consisted of the following:

 2024

 2023

 2022

 Discount rate for projected benefit obligation

 5.33

 %

 4.89

 %

 5.10

 %

 Discount rate for net periodic pension cost

 4.89

 %

 5.10

 %

 2.23

 %

 Salary scale

 3.00

 %

 3.00

 %

 3.00

 %

 The discount rate utilized by the Company for determining future pension obligations is based on a review of long-term bonds that receive one of the two highest ratings given by a recognized rating agency. The discount rate determined on this basis increased from 4.89 % at December 31, 2023 to 5.33 % at December 31, 2024 (i.e. the measurement date) for the SERP.

 The components of net periodic benefit cost consisted of the following:

 2024

 2023

 2022

 Service cost

 $

 $

 $

 Interest cost

 Net amortization and deferral

 -

 -

 Net periodic benefit cost

 $

 $

 $

 Expected benefit payments under the SERP over the next ten years at December 31, 2024 are as follows:

 2025

 $

 3,007

 2026

 2027

 2028

 2029

 Year 2030 - 2034

 1,226

 Other Compensation Plans

 The Company has a non-qualified deferred compensation plan whereby directors and certain officers may defer a portion of their base pre-tax compensation. Additionally, the Company has a non-qualified executive incentive retirement plan, whereby the Company defers on behalf of certain officers a portion of their base compensation until retirement or termination of service, subject to certain vesting arrangements. Aggregate expense under these plans was approximately $ 0.1 million in 2024 and 2023, and $ 0.2 million in 2022. The benefit obligation, included in other liabilities in the Company's consolidated balance sheets, was $ 1.8 million at December 31, 2024 and December 31, 2023.

 These benefit plans are indirectly funded by bank-owned life insurance contracts with a total aggregate cash surrender value of approximately $ 43.8 million and $ 42.8 million at December 31, 2024 and 2023, respectively. Increases in cash surrender value are included in other non-interest income on the Company's Consolidated Statements of Income. Endorsement split-dollar life insurance benefits have also been provided to directors and certain officers of the Bank and its subsidiaries during employment.

 The Company acquired a deferred compensation plan from Fairport Savings Bank during 2020 which requires the Company to make scheduled payments to the participants. At December 31, 2024, this plan consisted of one participant that receives $ 5 thousand in monthly payments through June 2033. The benefit obligation, included in other liabilities in the Company's consolidated balance sheets, was $ 0.5 million at December 31, 2024.

 The Company also has a defined contribution retirement and thrift 401(k) Plan (the "401(k) Plan") for its employees who meet certain length of service and age requirements. The provisions of the 401(k) Plan allow eligible employees to contribute a portion of their annual salary, up to the IRS statutory limit. The 401(k) plan includes a Qualified Automatic Contribution Arrangement ("QACA"). This arrangement features automatic deferred contributions with annual escalation, a QACA matching contribution, and an additional matching contribution. Employees vest in employer contributions over six years. The Company's expense under the 401(k) Plan was approximately $ 1.0 million in 2024 and $ 1.4 million in each of 2023 and 2022.

 13. STOCK-BASED COMPENSATION

 At December 31, 2024, the Company had two stock-based compensation plans, which are described below. The compensation cost charged against income for those plans was $ 1.0 million in 2024, and $ 0.9 million in 2023 and 2022, and is included in "Salaries and Employee Benefits" in the Company's Consolidated Statements of Income. All stock option and restricted stock expense is recorded on a straight-line basis over the requisite service period. In addition, expenses for director stock-based compensation were recognized to reflect $ 0.3 million in each of 2024, 2023 and 2022, as part of "Other" expense in the Company's Consolidated Statements of Income.

 2019 Long-Term Equity Incentive Plan

 Under the Company's 2019 Long-Term Equity Incentive Plan (the "2019 Plan") and, prior to the adoption of the 2019 Plan by shareholders in April 2019, under the Company's 2009 Long-Term Incentive Plan (the "2009 Plan" and together with the 2019 Plan, the "Equity Plans"), the Company has granted options or restricted stock to officers, directors and key employees of the Company and its subsidiaries. Under the Equity Plans, the Company was authorized to issue up to 603,883 shares of common stock. Under the Equity Plans, the exercise price of each option is not to be less than 100 % of the market price of the Company's stock on the date of grant and an option's maximum term is ten years. If available, the Company normally issues shares out of its treasury for any options exercised or restricted shares issued. The options have vesting schedules from 12 months through 5 years. At December 31, 2024, there were a total of 157,236 shares available for grant under the 2019 Plan. The Company may no longer make grants under the 2009 Plan.

 There were no options granted as part of the 2024, 2023 and 2022 compensation plan.

 Stock options activity for 2024 was as follows:

 Options

 Weighted Average Exercise Price

 Weighted Average Remaining Contractual Term (years)

 Aggregate Intrinsic Value

 Balance, December 31, 2023

 155,360

 $

 32.25

 Granted

 -

 -

 Exercised

 ( 72,147)

 28.88

 Expired

 ( 6,710)

 30.67

 Forfeited

 -

 -

 Balance, December 31, 2024

 76,503

 $

 35.41

 3.60

 $

 Exercisable, December 31, 2024

 67,112

 $

 36.07

 3.24

 $

 Future compensation cost expected to be expensed over the weighted average remaining contractual term for remaining outstanding options is less than $ 0.1 million. The unrecognized compensation cost is scheduled to be recognized as follows:

 2025

 $

 Restricted stock award, unit, and performance unit activity for 2024 was as follows:

 Shares

 Weighted Average Grant Date Fair Value

 Balance, December 31, 2023

 57,258

 $

 35.85

 Granted

 54,544

 28.97

 Vested

 ( 30,386)

 34.24

 Forfeited

 ( 2,172)

 32.55

 Balance, December 31, 2024

 79,244

 $

 31.83

 As of December 31, 2024, there was $ 1.3 million in unrecognized compensation cost related to restricted share-based compensation arrangements granted under the Equity Plans. The unrecognized compensation cost is scheduled to be recognized as follows:

 2025

 $

 2026

 2027

 2028

 During fiscal years 2024, 2023, and 2022, the following activity occurred under the Company's plans:

 2024

 2023

 2022

 Total intrinsic value of stock options exercised

 $

 $

 $

 Total fair value of restricted stock awards vested

 $

 1,092

 $

 $

 Employee Stock Purchase Plan

 Prior to the expiration of the Employee Stock Purchase Plan (the "Purchase Plan") on December 31, 2023, there were 34,175 shares of common stock available to issue to full-time employees of the Company and its subsidiaries. Under the terms of the Purchase Plan, employees could choose each year to have up to 15 % of their annual base earnings withheld to purchase the Company's common stock. Employees could purchase stock only on June 30 and December 31 each year during the term of the Purchase Plan for 85 % of the price on the purchase date. Under the Purchase Plan, the Company issued 13,906 and 12,731 shares to employees in 2023 and 2022, respectively. Compensation cost is calculated by the value of the 15% discount only. The compensation cost that was charged against income for the Purchase Plan was less than $ 0.1 million in 2023 and 2022.

 14.INCOME TAXES

 The components of the provision for income taxes were as follows:

 2024

 2023

 2022

 Current federal tax expense

 $

 2,773

 $

 8,462

 $

 5,472

 Current state tax expense

 2,644

 1,440

 Total current tax expense

 3,280

 11,106

 6,912

 Deferred federal tax (benefit) expense

 $

 ( 814)

 $

 ( 702)

 $

 Deferred state tax (benefit) expense

 ( 152)

 ( 198)

 Total deferred tax (benefit) expense

 ( 966)

 ( 900)

 Total income tax provision

 $

 2,314

 $

 10,206

 $

 7,163

 The Company's provision for income taxes differs from the amounts computed by applying the federal income tax statutory rates to income before income taxes. A reconciliation of the differences is as follows:

 2024

 2023

 2022

 Percent

 Percent

 Percent

 Tax provision at statutory rate

 $

 2,996

 %

 $

 7,293

 %

 $

 6,206

 %

 Change in taxes resulting from:

 Tax-exempt income

 ( 272)

 ( 2)

 ( 257)

 ( 1)

 ( 224)

 ( 1)

 Historic tax credit

 ( 76)

 ( 1)

 -

 -

 -

 -

 State taxes, net of federal benefit

 1,933

 1,215

 Gain on disposition of TEA

 -

 -

 1,177

 -

 -

 Other items, net

 ( 614)

 ( 4)

 ( 34)

 -

 Income tax provision

 $

 2,314

 %

 $

 10,206

 %

 $

 7,163

 %

 Other items typically include provision to return adjustments.

 At December 31, 2024 and 2023 the components of the net deferred tax asset were as follows:

 2024

 2023

 Deferred tax assets:

 Pension and SERP plans

 $

 1,378

 $

 1,383

 Allowance for credit losses

 6,198

 5,700

 Deferred compensation

 Stock options granted

 State tax credit carryforward

 Lease liabilities

 1,051

 1,056

 State net operating loss

 Net unrealized losses on securities

 14,785

 14,304

 Fair value adjustments of business combinations

 Other

 Gross deferred tax assets

 $

 25,402

 $

 24,299

 Deferred tax liabilities:

 Depreciation and amortization

 $

 $

 Right of use assets

 Prepaid expenses

 Gain on investment in tax credit

 -

 Deferred loan fees and costs

 -

 Mortgage servicing asset

 Other

 Gross deferred tax liabilities

 $

 1,895

 $

 2,216

 Net deferred tax asset

 $

 23,507

 $

 22,083

 The net deferred tax asset at December 31, 2024, 2023 and 2022 is included in "other assets" in the Company's consolidated balance sheets.

 In assessing the ability of the Company to realize the benefit of the deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized, including assessing all positive and negative evidence and the weight of such evidence. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, availability of operating loss carrybacks, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income, the opportunity for net operating loss carrybacks, and projections for future taxable income over the periods which deferred tax assets are deductible, management believes it is more likely than not that the Company will generate sufficient taxable income to realize the benefits of these deductible differences at December 31, 2024.

 The state tax credit carryforward has an indefinite life with no expiration date in which to utilize the credit.

 The Company did no t have any unrecognized tax benefits for the years ended December 31, 2024, 2023, and 2022.

 Accrued penalties and interest were immaterial at December 31, 2024, 2023 and 2022.

 The Company is subject to routine audits of its tax returns by the Internal Revenue Service ("IRS") and various state taxing authorities. The tax years 2021 - 2023 remain subject to examination by the IRS.

 15. REVENUE RECOGNITION OF NON-INTEREST INCOME

 Insurance Service and Fees earned in 2024: Insurance services revenue relates to services provided by the Bank.

 Insurance Service and Fees earned in 2023 and 2022: Insurance services revenue relates to various revenue streams from services provided by TEA and the Bank. As a result of the sale of TEA on November 30, 2023, insurance service and fees revenue reflects eleven months of TEA activity as well as the full year of the Banks' wealth management activity. See Note 2 to the Company's Consolidated Financial Statements included under Item 8 of this Annual Report on Form 10-K for more information on the sale of TEA.

 A description of the Company's material revenue streams in non-interest income accounted for under ASC 606 follows:

 Financial services commission revenue from the Bank related to wealth management such as life insurance, annuities, and mutual funds sales is included in the "insurance service and fees" line of the income statement.

 The Company earns wealth management fees from its contracts with customers for certain financial services. Fees that are transaction-based are recognized at the point in time that the transaction is executed. Other related services provided include financial planning services and the fees the Bank earns are recognized when the services are rendered.

 TEA earned commission revenue from selling commercial and personal property and casualty ("P&C") insurance as well as employee benefits ("EB") solutions to commercial customers.

 TEA had agreements with various insurance companies to sell policies to customers on behalf of the carriers. The performance obligation for TEA is to sell annual P&C policies to commercial customers and consumers. This performance obligation is met when a new policy is sold or when an existing policy renews. The policies are generally one year terms. In the agreements with the respective insurance companies, a commission rate is agreed upon. The commission is recognized at the time of the sale of the policy or when a policy renews.

 TEA has signed contracts with insurance carriers that enable TEA to sell benefit plans to commercial customers on behalf of the insurance carriers. The performance obligation for TEA is to sell the plans to commercial customers. After the initial sale when the customer signs an agreement to purchase the offered benefit plan, the performance obligation is met each month when a customer continues utilizing benefit plans from the carrier. The customer does not commit to a specific length of time with the carrier. In the agreements with the respective insurance companies, a commission rate is agreed upon. Revenue is recognized each month when the customer continues with the benefit plan sold by TEA.

 TEA also earned contingent profit sharing revenue. The insurance companies measure the loss ratio for TEA's customers and pay TEA according to how profitable TEA customers are.

 TEA has signed written agreements with insurance carriers that document payouts to TEA based on the loss ratios of its customers. The performance obligation for TEA is to maintain a customer base with loss ratios below the agreed upon thresholds. In the contracts with the insurance companies, payout rates based on loss ratios are documented. The consideration is variable as loss ratios vary based on customer experience. TEA's performance obligation is over the course of the year as its customers' performance with insurance carriers is measured throughout the year as losses occur. Due to the variable nature of contingent profit sharing revenue, TEA accrued contingent profit sharing revenue throughout the year based on recent historical results. As loss events occur and overall performance becomes known to TEA, accrual adjustments were made until the cash was ultimately received.

 A disaggregation of the total insurance service and other fees at December 31, 2024, 2023, and 2022:

 2024

 2023

 2022

 Commercial property and casualty insurance commissions

 $

 -

 $

 4,232

 $

 4,308

 Personal property and casualty insurance commissions

 -

 3,328

 3,363

 Employee benefits sales commissions

 -

 Profit sharing and contingent revenue

 -

 1,198

 1,164

 Wealth management and other financial services

 Insurance claims services revenue

 -

 -

 -

 Other insurance-related revenue

 -

 Total insurance service and other fees

 $

 $

 10,261

 $

 10,453

 Service charges on deposit accounts
 The Company earns fees from its deposit customers for transaction-based, account maintenance and overdraft. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Similarly, overdraft fees are recognized at the point in time that the overdraft occurs as this corresponds with the Company's performance obligation. Service charges on deposit accounts are withdrawn from the customer's account balance.
 Interchange fee income
 The Company earns interchange fees from cardholder transactions conducted through the Mastercard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized concurrent with the transaction processing services provided to the cardholder. Interchange income is presented on the Consolidated Statements of Income net of expenses.

 16.RELATED PARTY TRANSACTIONS

 The Bank has entered into loan transactions with certain directors, executive officers, significant shareholders and their affiliates (related parties) in the ordinary course of its business. The aggregate outstanding principal balance of loans to such related parties on December 31, 2024 and 2023 was $ 0.2 million and $ 0.3 million, respectively. During 2024, there were $ 0.1 million of advances and new loans to such related parties, and repayments amounted to $ 0.2 million. Deposits from related parties were $ 1.2 million and $ 1.3 million as of December 31, 2024 and 2023, respectively.

 17.CONTINGENT LIABILITIES AND COMMITMENTS

 The Company's consolidated financial statements do not reflect various commitments and contingent liabilities which arise in the normal course of business and which involve elements of credit risk, interest rate risk, and liquidity risk. These commitments and contingent liabilities are commitments to extend credit and standby letters of credit. The Company's commitments to extend credit are mostly variable rate loans. Commitments to extend credit are generally made for periods of 180 days or less. A summary of the Bank's commitments and contingent liabilities at December 31, 2024 and 2023 is as follows:

 2024

 2023

 Commitments to extend credit

 $

 435,370

 $

 431,085

 Standby letters of credit

 2,652

 3,883

 Total

 $

 438,022

 $

 434,968

 Commitments to extend credit and standby letters of credit all include exposure to some credit loss in the event of non-performance of the customer. The Bank's credit policies and procedures for credit commitments and financial guarantees are the same as those for extensions of credit that are recorded on the Consolidated Balance Sheets. Because these instruments have fixed maturity dates, and because they may expire without being drawn upon, they do not necessarily represent cash requirements to the Bank. The Bank has no t incurred any losses on its commitments during the past three years.

 The Company has entered into contracts with third parties, some of which include indemnification clauses. Examples of such contracts include contracts with third-party service providers, brokers and dealers, correspondent banks, and purchasers of residential mortgages. Additionally, the Company has bylaws, policies, and agreements under which it agrees to indemnify its officers and directors from liability for certain events or occurrences while the directors or officers are, or were, serving at the Company's request in such capacities. The Company indemnifies its officers and directors to the fullest extent allowed by law. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is unlimited, but would be affected by all relevant defenses to such claims, as well as directors' and officers' liability insurance maintained by the Company. Due to the nature of these indemnification provisions, it is not possible to quantify the aggregate exposure to the Company resulting from them.

 Certain lending commitments for construction residential mortgage loans are considered derivative instruments under the guidelines of GAAP. The changes in the fair value of these commitments, due to interest rate risk, are not recorded on the consolidated balance sheets as the fair value of these derivatives is not considered to be material.

 The Company leases certain offices, land and equipment under long-term operating leases. The aggregate minimum annual rental commitments under these leases total approximately $ 1.0 million in 2025, $ 0.9 million in 2026, $ 0.7 million in 2027, $ 0.5 million in 2028, $ 0.4 million in 2029 and $ 0.9 million thereafter. The rental expense under operating leases contained in the Company's Consolidated Statements of Income was $ 1.1 million in each of the years ended December 31, 2024, 2023, and 2022.

 18. CONCENTRATIONS OF CREDIT

 All of the Bank's loans, commitments, and standby letters of credit have been granted to customers in the Bank's primary market areas of the Western New York and the Finger Lakes Region of New York State. Investments in state and municipal securities also involve governmental entities within the Bank's primary market area. The concentrations of credit by type of loan are set forth in Note 4 to these Consolidated Financial Statements, "Loans and the Allowance for Credit Losses." The distribution of commitments to extend credit approximates the distribution of loans outstanding. Standby letters of credit were granted to commercial borrowers. The Bank, as a matter of policy, does not extend credit to any single borrower or group in excess of 15 % of capital.

 19. SEGMENT INFORMATION

 The Company conducts operations through a single business segment throughout Western New York and Finger Lakes Region, which derives interest and fee income. The Bank earns interest income on loans as well as fee income from the origination of loans and from fees charged on deposit accounts. Lending activities include loans to individuals, which primarily consist of home equity lines of credit, residential real estate loans, and consumer loans, and loans to commercial clients, which include commercial loans and commercial real estate loans. Residential real estate loans are either kept in our loan portfolio or sold to FNMA, FHLMC or FHLB, with gains or losses from the sales being recognized. In addition, the Bank offers non-deposit investment products, such as annuities and mutual funds. All sources of segment specific revenues and expenses contributed to management's definition of net income.

 Pursuant to FASB Accounting Standards Codification ("ASC") 280, Segment Reporting, operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in determining how to allocate resources and in assessing performance.

 For the first eleven months of 2023 the Company was comprised of two primary business segments: banking activities and insurance agency activities. On November 30, 2023 the Company sold significantly all of the assets of the insurance agency to Gallagher, and ceased insurance related activities for the Company. As a result of the sale, insurance revenue and expenses reported within this Annual Report on Form 10-K reflect the first eleven months of 2023. See Note 2 to the Company's Consolidated Financial Statements included under Item 8 of this Annual Report on Form 10-K for more information on the sale of TEA.

 While the operating segments were separately managed, the chief operating decision maker, our President and Chief Executive Officer, used and continues to use consolidated net income to assess performance by comparing to and monitoring against budget and prior year results. This information is used to manage resources to drive business and net earnings growth, including investment in key strategic priorities, as well as determine the Company's ability to return capital to shareholders.

 Prior to the sale, insurance agency activities included the selling of various premium-based insurance policies on a commission basis, including business and personal insurance, employee benefits, surety bonds, risk management, life, disability and long-term care coverage, as well as providing claims adjusting services to various insurance companies.

 Revenues from transactions between the two segments during 2023 and 2022 were not significant.

 The Evans Agency was sold in 2023. As a result, the following table presents financial information solely for the banking segment for the year ended December 31, 2024. Segment information for the years ended December 31, 2023 and 2022 have been recast to conform to the presentation required by ASU 2023-07.

 The following table set forth information regarding banking activities for the years ended December 31, 2024, 2023, and 2022.

 Banking Activities

 2024

 2023

 2022

 Net interest income

 $

 58,968

 $

 61,208

 $

 72,955

 Provision for credit losses

 2,236

 2,739

 Net interest income after

 provision for credit losses

 56,732

 61,190

 70,216

 Loss on sale of securities

 -

 ( 5,044)

 -

 Other non-interest income

 10,958

 8,095

 9,434

 Amortization expense

 Other non-interest expense

 53,405

 52,644

 52,119

 Income before income taxes

 14,268

 11,580

 27,512

 Income tax provision

 2,314

 2,799

 6,636

 Net income

 $

 $

 8,781

 $

 20,876

 2024

 2023

 Identifiable Assets, Net

 Banking activities

 $

 2,187,465

 $

 2,106,632

 Insurance agency activities

 -

 2,031

 Consolidated Total Assets

 $

 2,187,465

 $

 2,108,663

 20. FAIR VALUE OF ASSETS AND LIABILITIES

 Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

 There are three levels of inputs to fair value measurements:
 Level 1 inputs are quoted prices for identical instruments in active markets;
 Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
 Level 3 inputs are unobservable inputs.

 Observable market data should be used when available.

 ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

 The following table presents for each of the fair-value hierarchy levels as defined in this footnote, those assets and liabilities which are measured at fair value on a recurring basis at December 31, 2024 and 2023:

 Level 1

 Level 2

 Level 3

 Fair Value

 Securities available-for-sale:

 US treasuries and government agencies

 $

 -

 $

 $

 -

 $

 -

 5,299

 -

 5,299

 Mortgage-backed securities

 -

 162,023

 -

 162,023

 Mortgage servicing rights

 -

 -

 1,190

 1,190

 Securities available-for-sale:

 US treasuries and government agencies

 $

 -

 $

 96,240

 $

 -

 $

 96,240

 -

 6,029

 -

 6,029

 Mortgage-backed securities

 -

 173,411

 -

 173,411

 Mortgage servicing rights

 -

 -

 1,061

 1,061

 Securities available for sale

 Fair values for available for sale securities are determined using independent pricing services and market-participating brokers. The Company utilizes a third-party for these pricing services. The third-party utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information for structured securities, cash flow and, when available, loan performance data. Because many fixed income securities do not trade on a daily basis, the third-party service provider's evaluated pricing applications apply information as applicable through processes, such as benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations. In addition, our third-party pricing service provider uses model processes, such as the Option Adjusted Spread model, to assess interest rate impact and develop prepayment scenarios. The models and the process take into account market convention. For each asset class, a team of evaluators gathers information from market sources and integrates relevant credit information, perceived market movements and sector news into the evaluated pricing applications and models. The third-party, at times, may determine that it does not have sufficient verifiable information to value a particular security.

 On a quarterly basis the Company reviews changes, as submitted by our third-party pricing service provider, in the market value of its securities portfolio. Individual changes in valuations are reviewed for consistency with general interest rate movements and any known credit concerns for specific securities. Additionally, on a quarterly basis the Company has its entire securities portfolio priced by a second pricing service to determine consistency with another market evaluator. If, on the Company's review or in comparing with another servicer, a material difference between pricing evaluations were to exist, the Company may submit an inquiry to our third-party pricing service provider regarding the data used to value a particular security. If the Company determines it has market information that would support a different valuation than our third-party service provider's evaluation it can submit a challenge for a change to that security's valuation. There were no material differences in valuations noted in 2024 or 2023.

 Securities available for sale are classified as Level 2 in the fair value hierarchy as the valuation provided by the third-party provider uses observable market data.

 ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A NONRECURRING BASIS

 The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements.

 The following table presents for each of the fair-value hierarchy levels as defined in this footnote, those assets and liabilities which are measured at fair value on a nonrecurring basis at December 31, 2024 and 2023:

 Level 1

 Level 2

 Level 3

 Fair Value

 Collateral dependent individually analyzed loans

 $

 -

 $

 -

 $

 4,680

 $

 4,680

 Collateral dependent individually analyzed loans

 $

 -

 $

 -

 $

 7,147

 $

 7,147

 The following table presents qualitative information about Level 3 fair value measurements for financial instruments which are measured at fair value on a nonrecurring basis at December 31, 2024 and December 31, 2023:

 (In thousands)

 Fair Value

 Valuation Technique

 Unobservable Input(s)

 Range

 (Weighted Average)

 Individually evaluated collateral dependent loans:

 Commercial Real Estate

 $

 4,032

 Income approach

 Capitalization rate

 8.00 %

 8.00 %

 $

 Cost approach

 Book value

 50.00 %

 50.00 %

 Residential Real Estate

 $

 Sales comparison approach

 Adjustment to comparables

 ( 14 %) - 1 %

 - 8.70 %

 (In thousands)

 Fair Value

 Valuation Technique

 Unobservable Input

 Range

 (Weighted Average)

 Individually evaluated collateral dependent loans:

 Commercial Real Estate

 $

 7,110

 Sales comparison approach

 Adjustment to comparables

 ( 0.6 %) - 16 %

 8.82 %

 Income approach

 Capitalization rate

 8.50 %

 8.50 %

 $

 Sales comparison approach

 Adjustment to comparables

 N/A

 N/A

 Individually evaluated collateral dependent loans

 When a loan is individually evaluated, it is valued at the lower of cost or fair value. Collateral dependent loans which are individually evaluated and carried at fair value have been partially charged off or receive provisions in the allowance for credit losses. For collateral dependent loans, fair value is generally based on appraisal values performed by licensed appraisers, except for certain circumstances in which book value is used. Appraisals have multiple valuation methodologies to arrive at the fair value, these methodologies include the sales comparison approach, cost approach, and the income capitalization approach. The methodology chosen is reliant on the data available, and adjustments are made by independent appraisers to reflect differences between the asset valued and the comparable data used. These adjustments result in Level 3 classification for determining fair value. Collateral may be adjusted or discounted based on management's historical knowledge, changes in market conditions, management's expertise, and knowledge of the customer and related business. Individually analyzed loans are evaluated on a quarterly basis for additional impairment, and valuations for collateral dependent loans are updated by a new independent appraisal or a validation of the existing appraisal by an internal licensed appraiser, in accordance with Company policy. Appraisals are obtained upon a commercial loan being downgraded on the Company's internal loan rating scale to a special mention or a substandard depending on the amount of the loan, the type of loan and the type of collateral. All individually analyzed commercial loans are graded substandard or worse on the internal loan rating scale. For consumer loans, the Company obtains appraisals when a loan becomes 90 days past due or is determined to be individually analyzed, whichever occurs first. Subsequent to the downgrade or reaching 90 days past due, if the loan remains outstanding and individually analyzed for at least one year or more, management may require another follow-up appraisal. Between receipts of updated appraisals, if necessary, management may perform an internal valuation based on any known changing conditions in the marketplace such as sales of similar properties, a change in the condition of the collateral, or feedback from local appraisers.

 Three types of valuation techniques generally used: 1. Income approach valuations typically use the net operating income of the business divided by the capitalization rate as determined by the appraiser. Management applies a 10 % discount to income approach values which management expects will cover disposition costs, including selling costs. 2. Sales comparison approach valuations typically use the values of similar sales of listings in the market area, adjusted for differences in the assets sold as determined by the appraiser. Management applies a 10 % discount to income approach values which management expects will cover disposition costs, including selling costs. 3. Cost comparison approach valuations are based on either the existing book value in which appraisals are not obtained, or the cost necessary to replace or reproduce the asset based on current prices. Management applies a discount dependent on the underlying asset, according to policy which ranges from 10 %- 50 %.

 Collateral dependent individually evaluated loans had a gross value of $ 6.1 million, with an allowance for credit loss of $ 1.1 million, at December 31, 2024 compared with $ 7.9 million and $ 0.8 million, respectively, at December 31, 2023.

 At December 31, 2024 and 2023, the estimated fair values of the Company's financial instruments, including those that are not measured and reported at fair value on a recurring basis or nonrecurring basis, were as follows:

 Carrying

 Fair

 Carrying

 Fair

 Value

 Value

 Financial assets:

 Level 1:

 Cash and cash equivalents

 $

 42,716

 $

 42,716

 $

 23,467

 $

 23,467

 Level 2:

 Available for sale securities

 275,680

 275,680

 FHLB and FRB stock

 9,891

 N/A

 8,011

 N/A

 Level 3:

 Held to maturity securities

 4,347

 4,241

 2,059

 1,988

 Loans, net

 1,759,488

 1,674,236

 1,698,832

 1,606,666

 Financial liabilities:

 Level 1:

 Demand deposits

 $

 373,240

 $

 373,240

 $

 390,238

 $

 390,238

 NOW deposits

 399,046

 399,046

 345,279

 345,279

 Savings deposits

 699,635

 699,635

 649,621

 649,621

 Level 2:

 Securities sold under agreement to

 repurchase

 6,586

 6,586

 9,475

 9,475

 Other borrowed funds

 80,000

 80,242

 145,123

 145,055

 Subordinated debt

 31,279

 30,487

 31,177

 29,563

 Level 3:

 Time deposits

 394,556

 393,789

 333,623

 331,675

 The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value.

 FHLB and FRB stock

 The carrying value of FHLB and FRB stock, which are non-marketable equity investments, approximates fair value.

 Loans

 Fair value for pooled loans is estimated using discounted cash flow analyses.

 Deposits

 The fair value of demand deposits, NOW accounts, muni-vest accounts and regular savings accounts is the amount payable on demand at the reporting date. The fair value of time deposits is estimated using the rates currently offered for deposits of similar remaining maturities.

 Borrowed Funds and Securities Sold Under Agreement to Repurchase

 The fair value of securities sold under agreement to repurchase approximates its carrying value. The fair value of other borrowed funds was estimated using a discounted cash flow analysis based on the Company's current incremental borrowing rates for similar types of borrowing arrangements.

 Subordinated Debt

 Subordinated debt consists of subordinated notes and trust preferred capital securities. There is no active market for the Company's trust preferred capital securities and there have been no issuances of similar instruments in recent years. The Company looked at a market bond index to estimate a discount margin to value the debentures. The discount margin was very similar to the spread to LIBOR established at the issuance of the debentures. As a result, the Company determined that the fair value of the adjustable-rate debentures approximates their face amount. The Company utilizes active markets with similar assets to determine the fair value of the subordinated notes.

 Pension Plan Assets

 Refer to Note 12 to these Consolidated Financial Statements, "Employee Benefits and Deferred Compensation Plans" for the fair value analysis of the Pension Plan assets.

 21. REGULATORY MATTERS

 Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table that follows) of Common Equity Tier I, Total Capital, and Tier I Capital (as defined in FRB regulations) to risk-weighted assets (as defined in FRB regulations), and of Tier I capital (as defined in FRB regulations) to average assets (as defined in FRB regulations). Management believes that as of December 31, 2024 and 2023 the Bank met all capital adequacy requirements to which they are subject.

 The most recent notification from their regulators categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum Common Equity Tier I, total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank's category rating.

 The Bank's actual capital amounts and ratios were as follows:

 Bank

 Minimum for Capital Adequacy Purposes

 Minimum to be Well Capitalized Under Prompt Corrective Action Provisions

 Ratio

 Ratio

 Ratio

 Common Equity Tier I

 $

 252,841

 14.57

 %

 $

 78,071

 4.5

 %

 $

 112,770

 6.5

 %

 Total Capital

 $

 274,558

 15.83

 %

 $

 138,793

 8.0

 %

 $

 173,492

 10.0

 %

 Tier I Capital

 $

 252,841

 14.57

 %

 $

 104,095

 6.0

 %

 $

 138,793

 8.0

 %

 Tier I Capital

 (to Average Assets)

 $

 252,841

 11.09

 %

 $

 91,185

 4.0

 %

 $

 113,981

 5.0

 %

 Bank

 Minimum for Capital Adequacy Purposes

 Minimum to be Well Capitalized Under Prompt Corrective Action Provisions

 Ratio

 Ratio

 Ratio

 Common Equity Tier I

 $

 239,167

 14.33

 %

 $

 75,080

 4.5

 %

 $

 108,449

 6.5

 %

 Total Capital

 $

 260,038

 15.59

 %

 $

 133,476

 8.0

 %

 $

 166,845

 10.0

 %

 Tier I Capital

 $

 239,167

 14.33

 %

 $

 100,107

 6.0

 %

 $

 133,476

 8.0

 %

 Tier I Capital

 (to Average Assets)

 $

 239,167

 10.84

 %

 $

 88,258

 4.0

 %

 $

 110,322

 5.0

 %

 Dividends are paid as declared by the Board of Directors. Under New York law, the Company may pay dividends only if it is solvent and would not be rendered insolvent by the dividend payment and only from unrestricted and unreserved earned surplus, or if there is no surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

 The Company and the Bank are subject to dividend restrictions imposed by the FRB and the OCC, respectively. In general, it is the policy of the FRB that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the holding company is consistent with the organization's capital needs, asset quality and overall financial condition. Dividends may be paid by the Bank only if it would not impair the Bank's capital structure, if the Bank's surplus is at least equal to its common capital and if the dividends declared in any year do not exceed the total of retained net profits in that year combined with retained profits of the preceding two years.

 22.PARENT COMPANY ONLY FINANCIAL INFORMATION

 Parent company (Evans Bancorp, Inc.) only condensed financial information is as follows:

 CONDENSED BALANCE SHEETS

 2024

 2023

 ASSETS

 Cash

 $

 4,587

 $

 15,822

 Other assets

 Investment in subsidiaries

 210,726

 200,126

 Total assets

 $

 215,890

 $

 216,474

 LIABILITIES AND STOCKHOLDERS' EQUITY

 LIABILITIES:

 Subordinated debt

 $

 31,279

 $

 31,177

 Other liabilities

 1,468

 7,078

 Total liabilities

 32,747

 38,255

 STOCKHOLDERS' EQUITY

 Total Stockholders' Equity

 $

 183,143

 $

 178,219

 Total liabilities and stockholders' equity

 $

 215,890

 $

 216,474

 CONDENSED STATEMENTS OF INCOME

 2024

 2023

 2022

 Dividends from subsidiaries

 $

 3,000

 $

 42,746

 $

 11,500

 Income

 -

 -

 -

 Expenses

 ( 3,688)

 ( 8,776)

 ( 2,497)

 Income before equity in undistributed

 earnings of subsidiaries

 ( 688)

 33,970

 9,003

 Equity in undistributed earnings of subsidiaries

 12,642

 ( 9,446)

 13,386

 Net income

 $

 $

 $

 Comprehensive income (loss)

 $

 10,282

 $

 31,531

 $

 ( 21,218)

 CONDENSED STATEMENTS OF CASH FLOWS

 Year Ended

 2024

 2023

 2022

 Operating Activities:

 Net income

 $

 $

 $

 Adjustments to reconcile net income to

 net cash provided by operating activities:

 Undistributed earnings of subsidiaries

 ( 12,642)

 9,446

 ( 13,386)

 Changes in assets and liabilities affecting cash flow:

 Other assets

 ( 51)

 ( 8)

 ( 56)

 Other liabilities

 ( 5,610)

 6,032

 ( 147)

 Other

 Net cash provided (used) by operating activities

 ( 5,985)

 40,109

 9,152

 Investing Activities:

 Investment in subsidiaries

 1,391

 ( 19,000)

 -

 Net cash provided by (used in) investing activities

 1,391

 ( 19,000)

 -

 Financing Activities:

 Proceeds from issuance of common stock

 1,051

 Cash dividends paid

 ( 7,288)

 ( 7,223)

 ( 6,942)

 Repurchase of treasury stock

 ( 204)

 -

 ( 4,140)

 Reissuance of treasury stock

 -

 -

 Net cash (used in) provided by financing activities

 ( 6,641)

 ( 6,416)

 ( 9,887)

 Net increase (decrease) in cash

 ( 11,235)

 14,693

 ( 735)

 Cash beginning of year

 15,822

 1,129

 1,864

 Cash ending of year

 $

 4,587

 $

 15,822

 $

 1,129

 ITEM 10. Directors, Executive Officers and Corporate Governance
 Evans's Board of Directors currently consists of 12 members and is divided into three classes, with one class of directors elected each year. Each of the 12 members also serves as a director of Evans Bank.
 The Company's goal is to have a Board of Directors whose members have diverse professional backgrounds and have demonstrated professional achievement with the highest personal and professional ethics and integrity and whose values are compatible with those of Evans. In addition to a deep understanding of the banking industry and the communities served by Evans Bank, important factors considered in the selection of nominees for director include experience in positions that develop good business judgement, which demonstrate a high degree of responsibility and independence and that show the individual's ability to commit adequate time and effort to serve as a director.
 Directors and Executive Officers of Evans Bancorp
 The following table states our directors' names, their ages as of March 15, 2024, the years when they began serving as directors of Evans and when their current terms expire.

 Name

 Age

 Position

 Director Since

 Term to Expire

 2016

 2026

 2023

 2027

 2023

 2026

 Jody L. Lomeo

 2017

 2026

 2018

 2027

 Director, President and Chief Executive Officer of the Company

 2006

 2025

 2018

 2027

 2014

 2025

 2011

 2027

 2013

 2026

 1998

 2025

 2011

 2025

 Treasurer of the Company

 ---

 Executive Vice President and Chief Growth Officer

 ---

 of Evans Bank, N.A.

 Executive Officer

 The following information describes the business experience of each of Evans Bancorp's directors.
 Mr. Battle has been a partner of the Washington, DC office of Barnes & Thornburg LLP, specializing in white collar criminal defense, as a member of the firm's Litigation Department since April 2016. Mr. Battle's practice focuses on commercial and civil litigation, white collar criminal matters, and appeals. Prior to his role with Barnes & Thornburg, Mr. Battle was a senior partner of Schlam, Stone & Dolan LLP from 2010 – April 2016 and was a partner of Fulbright & Jaworski LLP from 2007 – 2010. He was Director of the Executive Office for United States Attorneys from 2005 – 2007, providing administrative oversight of all 93 United States Attorneys and serving as a liaison between the United States Attorneys and the Justice Department and other federal agencies. Mr. Battle served as United States Attorney with the United States Attorney's Office, Western District of New York, from 2002 – 2005. From 1996 – 2002, he was appointed by Governor George Pataki (and subsequently elected) to serve as Judge for Erie County Family Court, providing rulings in thousands of family-law and matrimonial cases. Mr. Battle served as Attorney in Charge with the New York State Attorney's Office, Buffalo Regional Office, from 1995 – 1996. He was the Assistant Federal Defender with the Federal Defender's Office, Western New York, from 1992 – 1995 and Assistant United States Attorney with the United States Attorney's Office, Western District of New York, from 1985 – 1992. Mr. Battle began his career as an Attorney with the Legal Aid Society of New York, Civil Division. We believe that Mr. Battle's wide-ranging and extensive legal and governance experience make him a valuable member of our Board of Directors and its Enterprise Risk Committee and Chair of our Corporate Governance and Nominating Committee.

 Ms. DePerrior was most recently a Managing Director, Advisory Services, for Ernst & Young. She led multiple business transformation initiatives powered by technology and aimed at improving customer experiences and business results. A lifelong digital leader, Ms. DePerrior has led all aspects of information technology, including business transformation, cyber security, digitization, data, analytics, innovation, mergers and acquisition integration, finance and strategy. Her 40-year career is defined by its breadth and depth of experiences, enabling her to bring creative ideas and inspire large teams to solve their most complex problems. Ms. DePerrior and the team she led received the University of Rochester's prestigious Meliora award for digitizing patient care delivery processes and electronic health records. She was twice recognized as one of Rochester's "Technology Women of the Year." Previously, Ms. DePerrior was a member of the board of directors for Fairport Savings Bank. We believe that Ms. DePerrior's vast knowledge and experience within information technology, cyber security, finance and strategy, and digitization, among others, qualify her to serve on our Board of Directors and its Audit Committee and Enterprise Risk Committee.

 Mr. James joined the University of Pittsburgh's School of Business as its inaugural Director of Inclusion and Engagement in February 2025. He is responsible for fostering an inclusive learning community and maximizing the University's business experience for all its members. Prior to joining the University of Pittsburgh, Mr. James served as the Chief Diversity and Strategic Growth Officer of CGT Staffing, a Pittsburgh-based staffing company with a national scope, from October 2023 to February 2025. He served as Vice President for Diversity, Equity and Inclusion Corporate Strategies for Allegheny Health Network/Highmark Health, a $24 billion national, blended health organization based in Pittsburgh, PA from January 2020 to September 2023. In this role, Mr. James was responsible for implementing and advising upon Highmark Health's non-Allegheny Health Network affiliates a comprehensive diversity, equity, and inclusion strategy. He joined Highmark in November 2015 as Supplier Diversity Program Director. Prior to joining Allegheny Health Network and Highmark Health, he served in a legal advisory role with the Office of Minority and Women Inclusion at the U.S. Securities and Exchange Commission. A practicing lawyer for more than 20 years, Mr. James spent several years facilitating Historically Black Colleges and Universities (HBCU) financings nationally for capital projects through a U.S. Department of Education program. We believe Mr. James expertise in diversity, equity, and inclusion and legal experience qualify him to serve on our Board of Directors and its Audit Committee and Human Resource and Compensation Committee.

 Mr. Lomeo retired at December 31, 2020 as the President and Chief Executive Officer of Kaleida Health, a healthcare provider in Western New York. He served as Kaleida Health's President and CEO since 2014. In addition to Kaleida Health, since 2014 he served as the President and Chief Executive Officer of the Great Lakes Health System of Western New York, the parent organization responsible for integrating the clinical activities of Kaleida Health, Erie County Medical Center Corporation (ECMC), University at Buffalo and the Center for Hospice & Palliative Care. Mr. Lomeo served as CEO of ECMC from 2009 – 2014. We believe Mr. Lomeo's significant executive experience and community leadership qualify him to serve as an integral member of our Board of Directors and its Corporate Governance and Nominating Committee, and to Chair our Human Resource and Compensation Committee.

 Ms. Minkel has been President and Executive Director of the Niagara Frontier Transportation Authority ("NFTA") since 2010. Ms. Minkel is responsible for managing a transportation system including light rail, bus, paratransit, and two airports within Western New York. She manages an annual $360 million operating and capital budget that provides efficient and professional transportation services while engaging with board members, over 1,600 employees, stakeholders, and the general public in a manner consistent with the needs of a diverse community. Before her role as President and Executive Director of the NFTA, Ms. Minkel served as Director of Risk, Health, Safety, and Environmental Quality for the NFTA. In this role, she provided functional leadership within the areas of risk management including loss control, environmental, and safety. We believe Ms. Minkel's extensive executive experience and

 community leadership qualify her to serve on our Board of Directors and its Human Resource and Compensation Committee, and to chair our Enterprise Risk Committee.

 Mr. Nasca serves as the President and Chief Executive Officer of the Company and as President and Chief Executive Officer of the Bank. He has held the position of President of the Company and the Bank since 2006, and Chief Executive Officer of the Company and the Bank since 2007. Mr. Nasca served as Chief Operating Officer of LifeStage, LLC, a health care services startup company, from October 2005 to August 2006. From June 2004 to July 2005, he served as Executive Vice President of Strategic Initiatives of First Niagara Financial Group. Mr. Nasca held the position of Executive Vice President, Consumer Banking Group, Central New York Regional Executive of First Niagara Financial Group from June 2002 through June 2004. From October 2000 to June 2002, Mr. Nasca served as President and CEO of Iroquois Financial, Inc. and Cayuga Bank which were wholly owned by First Niagara Financial Group. We believe Mr. Nasca provides our Board with information gained from hands-on management of our operations and, identifying our near-term and long-term challenges and opportunities. The Board has determined that Mr. Nasca's significant experience in the banking industry over the past 39 years, including operational, financial, and executive roles, as well as his unique perspective as leader of our management team, qualifies him for service as a member of our Board of Directors.

 Mrs. Orsi is President of the John R. Oishei Foundation, the most comprehensive private foundation in Western New York, focusing on a broad range of interrelated issues, and offering philanthropic support that goes far beyond funding. Mrs. Orsi is responsible for guiding the long-term strategic direction of the Foundation, supporting and empowering staff to respond quickly and effectively to the community's needs, and driving its mission to improve the quality of life for all Western New Yorkers. Prior to that she was the Associate Vice President of the Office of Economic Development for the University at Buffalo ("UB") since 2015. In this role, Mrs. Orsi led UB's Business and Entrepreneur Partnership with a focus on connecting business with UB faculty for collaboration on research and development; enabling business access to programs like START UP NY to help companies grow in New York State; and supporting the commercialization of faculty inventions to move them from idea to market. From 2007-2015, she was the Executive Director of the Regional Economic Development Council and Regional Director for Western New York for the Empire State Development Corporation. In this role, Mrs. Orsi provided strategic direction for the Regional Economic Development Council, established collaboration among diverse leaders throughout Buffalo Niagara, and led implementation of the Buffalo Billion Investment Strategy. We believe that Mrs. Orsi's extensive knowledge of economic development programs, private sector policy issues, and government agencies at the state, regional, and municipal levels qualify her to serve on our Board of Directors and its Corporate Governance and Nominating Committee and Human Resource and Compensation Committee.

 Mr. Pfalzgraf has been a Managing Partner of Rupp, Pfalzgraf LLC, a law firm specializing in private business enterprises ranging from closely-held family businesses to multi-national corporations, since April 2000. Mr. Pfalzgraf leads the firm's corporate practice group, working primarily with private business enterprises ranging from closely-held family businesses to multi-national corporations. He assists clients with all corporate needs including business formations, restructurings, mergers and acquisitions, financing and investment, development, labor and employment issues, and commercial transactions. We believe Mr. Pfalzgraf's extensive legal and business experience makes him a valuable member of our Board of Directors, and to serve as a member of the Corporate Governance and Nominating Committee and the Human Resource and Compensation Committee

 Mr. Rogers is a certified public accountant in New York State and the managing member of a real estate development company, Oakgrove Development, LLC, a position he has held since 2009. Mr. Rogers was the Executive Vice President and Chief Financial Officer of Great Lakes Bancorp, Inc., the parent company of Greater Buffalo Savings Bank, from 2006 to 2008. From 2004 to 2006, he worked as an independent consultant, principally on Sarbanes-Oxley initiatives and business rationalization reviews. Mr. Rogers worked at KPMG LLP, a leading accounting firm, from 1984 to 2004, serving as an audit partner from 1995 to 2004. In his role as an auditor at KPMG LLP, Mr. Rogers worked on several engagements for financial institutions, particularly banks. We believe Mr. Rogers' many years of experience have provided him with a very strong knowledge base of the banking industry. His previous roles as an audit partner, SEC reviewing partner, and CFO also demonstrate his high level of competence in the areas of finance and accounting in general, and SEC reporting in particular, and qualify him to be our Audit Committee Chair and a member of the Board's Enterprise Risk Committee, and provides the Board of Directors an additional expert on these matters in an increasingly complex regulatory environment.

 Ms. Sullivan is President of Sullivan Capital Partners, a financial services company providing investment banking and consulting services to closely-held private businesses. Ms. Sullivan focuses on strategic planning, mergers and acquisitions, and governance matters. Prior to founding Sullivan Capital Partners in 2004, she worked for Citigroup Private Bank from 2000 to 2004, providing wealth management and private equity services to high-net-worth clients. From 1995 to 1999, Ms. Sullivan was Executive Vice President of Rand Capital Corporation, a publicly traded closed-end investment management company providing capital and managerial expertise to small and mid-size businesses. She began her career in the legal profession where she held various positions with significant legal responsibility and acquired a solid foundation in corporate related matters and business transactions. She is currently and has been a member of the board of directors of several privately held businesses, working closely with fellow board members, management, and ownership on strategic planning initiatives, developing exit strategies and implementing sound governance practices. We believe Ms. Sullivan's unique combination of legal experience and financial services expertise qualifies her

 to serve on our Board of Directors and its Audit Committee, Corporate Governance and Nominating Committee, and Enterprise Risk Committee.

 Mr. Waring is the sole and managing member of STW Southwest, LLC which employes Mr. Waring to provide professional services to Note Advisors, LLC and GCW Risk and Benefit Solutions, LLC. Mr. Waring is a principal and co-owner of Note Advisors, LLC, a fee-only independent registered investment advisory entity formed in August 2014 and registered with the SEC. Mr. Waring's financial services experience and business consulting provides the Board with a deeper understanding of the products and services which the Company needs to provide in the marketplace to remain competitive, as well as the delivery of those products and services. Mr. Waring frequently advises high net worth individuals, family business owners and closely-held business owners. He is experienced in providing strategic planning and development advice, including designing and implementing executive and key employee benefits. We believe that Mr. Waring's qualifications to serve on our Board of Directors and as a member of the Board's Corporate Governance and Nominating Committee and Human Resource and Compensation Committee include his extensive sales and marketing experience with a financial services company, as well as his executive leadership and management experience.

 Mr. Wortham has been a Partner and COO at Barrantys LLC, a consultant and service provider to wealthy families and family offices, since 2007. Prior to his role with Barrantys, Mr. Wortham was an Executive Vice President of First Niagara Financial Group from 2005 to 2007, where his responsibilities included wealth management, risk management, and corporate marketing. From 1999 to 2005, he was the Executive Vice President of Global Private Client Services, Product Development, and Central Operations for The Bank of New York. Mr. Wortham held several positions at Chase Manhattan Bank and Chemical Bank (currently JP Morgan Chase & Co.) from 1985 to 1999, including leading the Global Private Bank's activities in Europe, the Middle East, and Africa while based in London, England. He started his career at M&T Bank in retail banking from 1980 to 1985. We believe Mr. Wortham's extensive experience in the financial services industry makes him a valuable member of our Board of Directors and its Audit, Corporate Governance and Nominating, Enterprise Risk, and Human Resource and Compensation Committees. His expertise has been valuable in helping the Board evaluate the Company's strategies to diversify its product offerings and revenue streams as a growing and competitive financial institution.

 In addition to Mr. Nasca, whose qualifications are listed above, the following describes the business experience of each of the Company's Executive Officers.
 Mr. Connerton was appointed Treasurer of the Company and Chief Financial Officer of the Bank on November 30, 2015. Prior to his appointment as Treasurer of the Company, he served as Principal Accounting Officer of the Company between 2002 and 2010 and again between 2013 and 2015. He has also served as Executive Vice President and Treasurer of the Bank since 2010. Prior to joining the Company, Mr. Connerton was a Senior Auditor specializing in auditing and consulting for banking, healthcare and manufacturing clients at Deloitte & Touche LLP.

 Mr. Pawlak was appointed Executive Vice President and Chief Growth Officer of the Bank on February 6, 2023, and is currently responsible for leading the sales, relationship management, and marketing functions. He joined the Company in 2017 as Executive Vice President and Chief Commercial Banking Officer. Prior to joining the Company, Mr. Pawlak served as Administrative Vice President, Credit Risk Manager – Business Banking at M&T Bank from 2014 until 2016.

 Corporate Governance
 Independence of Directors - A substantial majority of the Board of Directors, and all members of the Audit, Human Resource and Compensation, and Corporate Governance and Nominating Committees are independent, as affirmatively determined by the Board, consistent with the criteria established by NYSE American and as required by our bylaws.
 The Board has conducted an annual review of director independence for all directors. During this review, the Board considered transactions and relationships during the prior year between each director or any member of his or her immediate family and the Company and its subsidiaries, affiliates and principal shareholders, including those of the type described below under "Transactions with Related Persons." The Board also examined transactions and relationships between directors or their affiliates and members of senior management or their affiliates. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent.
 As a result of this review, the Board affirmatively determined that Michael A. Battle, Dawn DePerrior, Robert A. James, Jody L. Lomeo, Kimberley A. Minkel, Christina P. Orsi, David R. Pfalzgraf, Jr., Michael J. Rogers, Nora B. Sullivan, Thomas H. Waring, Jr., and Lee C. Wortham meet the Company's standard of independence. As an executive officer of the Company, David J. Nasca has been determined not to be independent.
 Leadership Structure. Lee C. Wortham has served as Chairman of the Company's Board of Directors since April 2018. In his capacity as Chairman, Mr. Wortham chairs meetings of the Board and executive sessions of the Board, coordinates the activities of the other independent directors, and performs such other duties and responsibilities as the Board of Directors may determine. These duties also include chairing meetings of the Company's shareholders, overseeing the preparation of agendas for meetings of the Board, keeping

 directors informed through the timely distribution of information and reports, maintaining contact with the Company's CEO between meetings to stay current on developments and to determine when it may be appropriate to alert the Board to significant pending developments, serving as a liaison between independent directors and the CEO with respect to sensitive issues, and other matters.
 The positions of Chairman and CEO have been separated since 2001. While the separation of these positions is not required by our bylaws, we believe that it is the most appropriate leadership structure for us at this time. We believe that it is advantageous to separate the two positions in order to provide for independent director control over the Board agenda and information flow, encourage open and lively communication between the independent directors and management, and to help balance the leadership of the Board.
 Director Majority Voting Policy. The Board believes that each director of the Company should have the confidence and support of the Company's shareholders and, to this end, in January 2023, the Board unanimously adopted a majority voting policy for the election of directors in uncontested elections. For the purposes of this policy, an "uncontested election" means an election of directors where the only nominees are those individuals recommended by the Board. Pursuant to the policy, in an uncontested election, any incumbent director nominee who receives a greater number of votes "WITHHELD" than votes cast "FOR" their election at a shareholder meeting shall promptly tender their resignation to the Board for consideration.
 The Corporate Governance and Nominating Committee (excluding any member that has submitted their resignation) will consider the resignation and recommend to the Board whether to accept the resignation or take other action, including rejecting the resignation and addressing any apparent underlying causes of the failure of the director to obtain a majority of votes "FOR" their election. When considering the resignation and making its recommendation, the committee will consider all factors deemed relevant by its members including, without limitation, any underlying reasons for "WITHHELD" votes (to the extent ascertainable), the length of service and qualifications of the director, the director's contributions to the Company, and whether the acceptance or rejection of the resignation will have any adverse effect on the Company's compliance with any applicable law, rule, listing requirement, regulation or governing document. The Board will act on the committee's recommendation no later than its next regularly scheduled meeting and will publicly disclose its decision with respect to the resignation. Any director who tenders their resignation will not participate in the committee's or full Board's deliberations and decision regarding the resignation. However, during the review period, any such director will remain a director of the Company and shall otherwise discharge their duties and responsibilities as director or committee member.
 If a majority of the members of the Corporate Governance and Nominating Committee are required to tender a resignation at the same election, then the other independent directors of the Board will appoint a special Board committee solely for the purpose of considering the resignations and making a recommendation to the full Board.
 Board of Directors Stock Ownership. Upon his or her first election or appointment to the Board of Directors, a new director must hold, or must obtain within 60 calendar days after such election or appointment, not less than $10,000 aggregate market value of the Company's common stock, based on the trailing 365-day average price. A new director has a period of 5 years from the beginning of such director's term of office to obtain the required $50,000 aggregate market value of the Company's common stock. The value of a new director's qualifying shares at the beginning of his or her term in office will be determined as of the date purchased or the date on which the individual becomes a director, whichever value is greater. As of the date of this Proxy Statement, all directors are in compliance with the Board of Directors stock ownership requirements. Our Insider Trading Policy prohibits directors, officers and employees from engaging in any hedging or monetization transactions involving Evans Bancorp securities.
 Oversight of Risk Management. Our Enterprise Risk Committee ("ERC") is responsible for overseeing and approving company-wide risk management practices. See the discussion of the ERC committee's roles and responsibilities under the Board of Director's Committees section.
 Compensation Risk. The Human Resource and Compensation Committee, along with the ERC, considers risk and its influence on the Company's compensation programs. This Committee reviews each compensation element individually and in the aggregate to ensure that the overall compensation program provides a balanced perspective that ultimately aligns pay with performance while also ensuring bonus / incentive programs do not motivate inappropriate risk-taking. Equity award levels and practices are set to foster shared interests between management and shareholders, but are not considered by the Committee to be at levels that would drive inappropriate behavior. In the Committee's judgment, the compensation policies and practices of the Company do not give rise to material risks.

 In addition, the Company is subject to interagency guidance issued by the FDIC, the FRB and the OCC designed to ensure that incentive compensation arrangements at banking organizations appropriately tie rewards to longer-term performance and do not undermine the safety and soundness of the organizations or create undue risks to the financial system. This guidance embodies three core principles, which are: (1) incentive compensation arrangements at a banking organization should provide employees incentives that appropriately balance risk and financial results in a manner that does not encourage employees to expose their organizations to imprudent risks; (2) these arrangements should be compatible with effective controls and risk management, and (3) these arrangements should be supported by strong corporate governance, including active and effective oversight by the organization's board of directors. We believe that our incentive compensation program satisfies the principles of this guidance.

 Policy for Director Attendance at Annual Meeting. It is the policy of the Company that all directors be present at the Annual Meeting, barring unforeseen or extenuating circumstances. All directors who were then serving were present at the Company's 2024 Annual Meeting, with the exception of Robert A. James.
 Shareholder Communications with the Board of Directors. Shareholders and other parties interested in communicating directly with the Company's Board of Directors may do so by writing to the Evans Bancorp, Inc. Board of Directors, 6460 Main Street, Williamsville, NY 14221. All correspondence received under this process is compiled and summarized by the Corporate Secretary of the Company and presented to the Board of Directors in accordance with our Policy for Communication to the Board of Directors. Concerns relating to accounting, internal controls or auditing matters are handled in accordance with procedures established by the Audit Committee, as set forth in our Employee Complaint Procedure for Accounting and Auditing Matters. Each of these policies is available in the Governance Documents section of the Company's website ( which can be found by clicking on "Governance", then "Governance Documents".
 Code of Ethics for Chief Executive Officer and Principal Financial Officers. The Company has a "Chief Executive Officer/Treasurer/Controller Code of Ethics," which is applicable to the Company's principal executive officer, principal financial officer, and principal accounting officer. The "Chief Executive Officer/Treasurer/Controller Code of Ethics" is available in the Governance Documents section of the Company's website ( which can be found by clicking on "Governance", then "Governance Documents". The Company intends to post amendments to or waivers from its code of ethics at this location on its website.
 Insider Trading Policy. The Company has adopted an Insider Trading Policy, which is filed as an exhibit to our Annual Report on Form 10-K, which consists of policies and procedures that govern the purchase, sale, and other dispositions of Company securities by directors, officers and employees and are designed to promote compliance with insider trading laws, rules and regulations and applicable listing standards.
 Board Meetings and Attendance at Board of Director and Committee Meetings. The Company's Board of Directors met eleven times during fiscal 2024. Each incumbent director attended at least 75% of the aggregate of: (1) all meetings of the Company's Board of Directors (held during the period for which he or she served as a director) and (2) all meetings held by the committees of the Company's Board of Directors on which he or she served (during the periods that he or she served).
 Availability of Committee Charters and Other Corporate Governance Documents. Current copies of the written charters for the Audit Committee, the Human Resource and Compensation Committee, and the Corporate Governance and Nominating Committee, copies of the Company's "Chief Executive Officer/Treasurer/Controller Code of Ethics" and the "Code of Conduct," the "Policy for Communication to the Board of Directors," and the "Employee Complaint Procedure for Accounting and Auditing Matters" are available in the Governance Documents section of the Company's website ( which can be found by clicking on "Governance", then "Governance Documents".
 Data Protection and Cybersecurity. Our Chief Information Security Officer ("CISO") team has developed and implemented policies, procedures and controls throughout our organization that seeks data security, while allowing speed and flexibility for our customers and associates. During 2024, we conducted numerous information security training programs for our associates, as well as targeted exercises to reinforce the importance of information security. When appropriate, we educate our customers about emerging cyber security threats to prevent fraud or data loss. The CISO team has established controls and standards consistent with National Institute of Standards and Technology ("NIST"). NIST is a unit of the U.S. Commerce Department that promotes and maintains measurement standards. It also has active programs for encouraging and assisting industry and science to develop and use these standards. Our cybersecurity environment is evaluated annually using the Federal Financial Institution Examination Council's Cybersecurity Assessment Tool to assess our risk.

 Board of Director Committees
 The Company's Board of Directors has four standing committees: Audit Committee, Corporate Governance and Nominating Committee, Human Resource and Compensation Committee and Enterprise Risk Committee. The members of each committee have been nominated by the Chairman of the Board of Directors and approved by the full Board. The names of the members of the Audit Committee, Human Resource and Compensation Committee, Corporate Governance and Nominating Committee, and Enterprise Risk Committee, together with a brief description of their functions, are set forth below.

 Audit Committee:

 Michael J. Rogers, Chair

 The Audit Committee met five times during fiscal 2024. The Audit Committee is responsible for reviewing the financial information of the Company that will be provided to shareholders and others, overseeing the systems of internal controls which management and the Board of Directors have established, selecting and monitoring the performance of the Company's independent auditors, and overseeing the Company's audit and financial reporting processes. The Board of Directors has determined that Michael J. Rogers, Nora B. Sullivan and Lee C. Wortham each qualify as an "audit committee financial expert" as defined in Item 407(d) of Regulation S-K. Each member of the Audit Committee is an "independent director" in accordance with applicable NYSE American listing requirements, including the heightened independence requirements applicable to Audit Committee members, and Rule 10A-3(b)(1) under the Exchange Act. The Board of Directors has adopted an Audit Committee Charter, which is available in the Governance Documents section of the Company's website at ( which can be found by clicking on "Governance", then "Governance Documents".

 Audit Committee Report
 The information contained in this Audit Committee Report shall not be deemed to be "soliciting material" or "filed" or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act of 1933 or the Exchange Act.
 The Audit Committee has reviewed and discussed with the Company's management and Crowe LLP, the Company's independent registered public accounting firm, the audited consolidated financial statements of the Company contained in the Company's Annual Report on Form 10-K for the 2024 fiscal year. The Audit Committee has also discussed with Crowe LLP the matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board.
 The Audit Committee has received and reviewed the written disclosures and the letter from Crowe LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding Crowe LLP's communications with the Audit Committee concerning independence and has discussed with Crowe LLP its independence from the Company.
 Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company's Annual Report on Form 10-K for its 2024 fiscal year for filing with the SEC.
 Submitted by the Audit Committee,
 Michael J. Rogers, Chairman

 Corporate Governance and Nominating Committee:

 Michael A. Battle, Chair

 Jody Lomeo

 Christina P. Orsi, Vice Chair

 The Corporate Governance and Nominating Committee met four times during fiscal 2024. Its purpose is to assist the Board in developing and implementing corporate governance guidelines for the Company, and to provide oversight of the corporate governance affairs of the Company, including strategic planning. It is also charged with the responsibility of identifying and recommending to the Board candidates for director nominees to be presented to the shareholders for their consideration at the Annual Meetings of Shareholders, and to fill vacancies on the Board of Directors. The Board of Directors has determined that each of the members of the Corporate Governance and Nominating Committee is an "independent director," in accordance with applicable NYSE American listing requirements. The Board of Directors has adopted a Corporate Governance and Nominating Committee Charter, which is available in the Governance Documents section of the Company's website at ( which can be found by clicking on "Governance", then "Governance Documents".
 The Company's bylaws set out the procedure to be followed by shareholders desiring to nominate directors for consideration at an annual meeting of shareholders. Under the Company's bylaws, shareholder director nominations must be submitted to the Secretary of the Company in writing not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of shareholders of the Corporation; provided, however, that if the date of the annual meeting is advanced or delayed more than 30 days from the anniversary date of the preceding year's annual meeting, notice by the shareholder to be timely must be so delivered not later than the close of business on the 10th day following the day on which public announcement of the date of such meeting is first made. Such notification shall contain the following information: (a) name and address of each proposed nominee; (b) the principal occupation of each proposed nominee; (c) the name and residence address of the notifying shareholder; (d) the number of shares of capital stock of the Corporation beneficially owned by the notifying shareholder and each nominee; and (e) any other information relating to each such nominee or the proposal that is required to be disclosed in solicitations of proxies pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including, but not limited to, information required to be disclosed by Items 4, 5, 6 and 7 of Schedule 14A to be filed with the Securities and Exchange Commission (or any successors of such items or schedule). Nominations or other business not made in accordance herewith may, in his or her discretion, be disregarded by the presiding officer of the meeting, and upon his or her instruction, the vote tellers may disregard all votes cast for each such nominee. In the event the same person is nominated by more than one shareholder, the nomination shall be honored, and all shares of capital stock of the Corporation shall be counted if at least one nomination for that person complies herewith. Candidates for nomination to the Board of Directors shall meet such criteria as may be established from time to time by the Board of Directors or a duly authorized committee thereof.
 The process whereby the Corporate Governance and Nominating Committee identifies director candidates may include identification of individuals well-known in the community in which the Company operates and individuals recommended to the Corporate Governance and Nominating Committee by current directors or officers who know those individuals through business or other professional relationships, as well as recommendations of individuals to the Corporate Governance and Nominating Committee by shareholders and customers. The Company has not historically received director candidate recommendations from its shareholders; however, the Corporate Governance and Nominating Committee will consider qualified nominees recommended by shareholders, and there is no difference in the manner in which the Corporate Governance and Nominating Committee will evaluate director candidates recommended by shareholders as opposed to director candidates presented for consideration to the Corporate Governance and Nominating Committee by directors, officers or otherwise. The Corporate Governance and Nominating Committee, in conjunction with the CEO, maintains a list of potential director candidates based upon community reputation and contacts, record of accomplishments, and skill set. Additionally, the Corporate Governance and Nominating Committee reviews committee and Board assessments for competencies and needs and seeks to identify candidates that will assist in the continued development and enhancement of the Board of Directors. In its evaluation of prospective director candidates, the Corporate Governance and Nominating Committee considers an individual's independence (as defined in the listing rules of the NYSE American), as well as his or her skills and experience relative to the needs of the Company. Director candidates meet personally with the members of the Corporate Governance and Nominating Committee and are interviewed to determine their satisfaction of the criteria referred to above. Although the Company has no policy regarding diversity, the charter of the Corporate Governance and Nominating Committee provides that diversity is one of the criteria it may consider when selecting individuals to recommend for Board membership, together with independence, sound judgment, skill, integrity, willingness to make the required time commitment, understanding of financial

 statements and knowledge of and experience in the Company's and its subsidiaries' businesses, and the interplay of a candidate's experience with the experience of other members of the Board of Directors.

 Enterprise Risk Committee:

 Kimberley A. Minkel, Chair

 Consistent with guidance from our primary regulator, our Board delegated oversight of enterprise risk management to an Enterprise Risk Committee ("ERC") comprised of seven Directors. The ERC meets at least monthly throughout the year and reports its findings and observations to the full Board on an ongoing basis. We also have a Risk and Controls Manager, who reports on matters involving enterprise risk to the ERC.
 The ERC is responsible for overseeing and approving company-wide risk management practices throughout the Company, overseeing management's risk assessment process and risk management infrastructure, reviewing management's risk-management framework in the context of the Company's size and business activities, and advising on risks that the Company may face. The ERC will review and discuss with management, at least annually, the Company's risk governance structure and the Company's risk management and risk assessment guidelines and policies regarding market, credit, operations, liquidity, funding, reputation, cybersecurity and franchise risk, and the Company's risk tolerance. The ERC will review at least quarterly the major risk exposures of the Company and its business units against established risk management methodologies and targets. The Board's role in the Company's risk oversight process includes receiving reports, at least quarterly, from members of senior management on areas of material risk to the Company, including operational, financial, credit, liquidity, legal and regulatory, and strategic and reputational risks. The full Board (or the appropriate committee in the case of risks that are under the purview of a particular committee) receives these reports from the appropriate "risk owner" within the organization to enable it to understand our risk identification, risk management and risk mitigation strategies. When a committee receives the report, the chairman of the relevant committee reports on the discussion to the full Board during the committee reports portion of the next Board meeting. This enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships. The Board's role in the Company's risk oversight process has not directly impacted its leadership structure.

 Human Resource and Compensation Committee:

 Jody Lomeo, Chair

 The Human Resource and Compensation Committee met five times during fiscal 2024. The Human Resource and Compensation Committee is responsible for administering the Company's 2019 Long-Term Equity Incentive Plan and awarding new grants and performance measures thereunder, for administering the Evans Excels Performance Incentive Plan, the Employee Stock Purchase Plan, the Executive Severance Plan, the SERP Plans (defined below), the Deferred Compensation Plan, and the Executive Incentive Retirement Plan, for making such determinations and recommendations as the Human Resource and Compensation Committee deems necessary or appropriate regarding the remuneration and benefits of employees of the Company and its subsidiaries, and, in addition, for reviewing with management the Compensation Discussion and Analysis and providing a report recommending to the Board of Directors whether the Compensation Discussion and Analysis should be included in the Proxy Statement.

 The Human Resource and Compensation Committee has the authority to act on behalf of the Board of Directors in setting compensation policy, administering Board or shareholder-approved compensation plans, approving benefit programs and making decisions for the Board with respect to compensation of senior management. Except as otherwise required by the applicable rules of the SEC or the NYSE American, the Human Resource and Compensation Committee may delegate any of its responsibilities to a subcommittee comprised of one or more members of the Human Resource and Compensation Committee, the Board or members of management. As discussed in more detail below under "Compensation Discussion and Analysis," the Company's executive officers may attend Human Resource and Compensation Committee meetings to present data and analysis and to make recommendations regarding compensation, benefit plans and promotions for executive officers other than the President and CEO. The Human Resource and Compensation Committee, on an annual basis, reviews and approves corporate goals and objectives relevant to CEO and other officer compensation, evaluates the performance of the CEO and the other executive officers in light of those goals and objectives, and determines and recommends compensation levels for the CEO and the other executive officers to the full Board of Directors based on this evaluation.

 The Human Resource and Compensation Committee also has the authority to review and recommend to the full Board for approval director compensation, including board fees, committee fees and additional compensation, and awards of restricted stock.
 In carrying out its duties, the Human Resource and Compensation Committee has the authority to retain, at the Company's expense, to oversee the work of, and to terminate, a compensation consultant. The Human Resource and Compensation Committee also has the authority to retain independent counsel and other advisors at the Company's expense. During 2024, the Human Resource and Compensation Committee engaged McLagan of Aon Plc ("McLagan"), an independent firm, for one engagement to analyze the Company's salary, short-term and long-term incentive spend against peer bank information. The details of this engagement are discussed within the Executive Compensation section of this document and include material elements of the instructions given to the compensation consultant, and its recommendations.
 The Human Resource and Compensation Committee reviews and re-approves, on an annual basis, its committee charter and the Company's executive compensation philosophy, which is described in greater detail below. The Human Resource and Compensation Committee also conducts an annual self-assessment to confirm the Human Resource and Compensation Committee's satisfactory completion of its responsibilities under its committee charter.
 The Board of Directors has determined that each of the members of the Human Resource and Compensation Committee is an "independent director," in accordance with applicable NYSE American listing requirements, including the heightened independence requirements applicable to compensation committee members. The Board of Directors has adopted a Human Resource and Compensation Committee Charter, which is available on the Company's website at ( by clicking on "Governance", then "Governance Documents".
 Human Resource and Compensation Committee Interlocks and Insider Participation
 The members of the Human Resource and Compensation Committee during 2024 were: Jody L. Lomeo (Chair), Robert A. James, Kimberley A. Minkel, Christina P. Orsi, David R. Pfalzgraf, Jr., Thomas H. Waring, Jr., and Lee C. Wortham. None of the members of the Human Resource and Compensation Committee was, during fiscal 2024 or previously, an officer or employee of the Company or any of its subsidiaries, and no member had a relationship requiring disclosure under "Transactions with Related Persons," below.
 During fiscal 2024, none of the Company's executive officers served on the compensation committee (or equivalent) or on the board of directors of another entity with "interlocking" relationships requiring disclosure under applicable SEC rules.

 Item 11. Executive Compensation
 Director Compensation. The Company's director compensation program is designed to provide a compensation amount and structure that will attract and retain highly competent, skilled and engaged individuals for Board service. To ensure that its director compensation program remains competitive but appropriate, the Human Resource and Compensation Committee reviews director compensation, on an annual basis, against the same proxy peer group as that used in the review of executive compensation, as described below under "Executive Compensation – Compensation Discussion and Analysis." The desired total director compensation is at the 50th percentile of the proxy peer group and is delivered in both cash and equity. The Human Resource and Compensation Committee believes that using a mix of cash and equity compensation aligns director compensation with long term shareholder value, while at the same time providing directors with an appropriate compensation for their service.

 Director Fees. Each director of the Company also serves as a member of the Board of Directors of the Bank. Non-employee directors do not receive compensation for attending meetings of the Bank's Board but do receive committee meeting fees. It is the policy of the Board that employee directors are not paid for their service on the Company's or the Bank's Board of Directors in addition to their regular employee compensation.

 During fiscal 2024:
 • Non-employee directors were paid a retainer at the rate of $1,708 in cash, payable on a monthly basis, and $1,708 per month in shares of restricted stock payable as a lump sum grant equal to $20,500 at the January board meeting. The number of shares of restricted stock awarded is calculated by dividing $20,500 by the closing price for a share of the Company's common stock on the NYSE American LLC on the date of grant. In January 2024, each non-employee director received a grant of 679 shares of restricted stock, at a grant date fair value of $30.21 per share, for service during 2024. Each restricted stock grant vests 100% on the first anniversary of the grant date, subject to full acceleration of vesting upon an individual's death, disability, retirement or involuntary termination in connection with a change in control of the Company. Vesting of restricted stock grants is accelerated on a pro-rated basis upon the individual's resignation.
 • Non-employee directors were paid an annual cash retainer fee per committee meeting as follows, with the fee paid over the course of the year in 12 equal monthly installments. In recognition of their heightened responsibilities, each committee chairperson is entitled to an annual retainer as described below. Members of the Enterprise Risk Committee did not receive an annual retainer and instead were paid per meeting attended, as set forth below.
 • Audit Committee: Chairperson $6,750, Member $3,750
 • Human Resources and Compensation Committee: Chairperson $4,750, Member $3,150
 • Corporate Governance and Nominating Committee: Chairperson $3,350, Member $2,150
 • Enterprise Risk Committee: Chairperson $800 per meeting, Member $600 per meeting
 • In addition to the annual service fee described above and Board meeting fees, the individual serving as Chairman of the Company's Board of Directors and the Bank's Board of Directors is entitled to receive an annual fee of $40,000. He or she does not receive committee meeting fees while serving as Chairman.
 • In addition to the annual service fee described above and Board and committee meeting fees, the individual serving as Vice Chairman of the Company's Board of Directors and the Bank's Board of Directors is entitled to receive an annual fee of $10,000.

 The following table provides information with regard to the compensation paid to the Company's non-employee directors for their service during the fiscal year ended December 31, 2024. Mr. Nasca, President and Chief Executive Officer of the Company and Bank, is not paid any additional compensation for his service on the Board.

 Name

 Fees Earned or Paid in Cash
 (1)

 Stock Awards
 (2)(3)

 Change in Pension Value and Non-qualified Deferred Compensation Earnings
 (4)

 Total

 $ 31,050

 -

 $ 51,563

 $ 30,850

 -

 $ 51,363

 $ 27,400

 -

 $ 47,913

 Jody L. Lomeo

 $ 27,400

 -

 $ 47,913

 $ 32,250

 -

 $ 52,763

 $ 25,800

 -

 $ 46,313

 $ 25,800

 -

 $ 46,313

 $ 45,050

 -

 $ 65,563

 $ 35,200

 -

 $ 55,713

 $ 25,800

 $ 930

 $ 47,243

 $ 60,500

 -

 $ 81,013

 (1)Includes the aggregate amount of the cash retainer, plus all committee and/or chairmanship fees and meeting fees paid to each director for service in 2024.
 (2)Reflects the fair value of the awards at grant date, in accordance with FASB ASC Topic 718 for financial statement reporting purposes. For additional information as to the assumptions made in valuation, see Note 14 to the financial statements filed with the SEC in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Amounts shown in the table are based on the Company's accounting expense for these awards, and do not necessarily correspond to the actual value that may be realized by the directors.
 (3)The following reflects all equity awards granted to each director that were outstanding as of December 31, 2024:

 Name

 Stock Awards (#)

 James E. Biddle, Jr.

 Jody L. Lomeo

 Equity awards granted to each existing director at January 23, 2024 had a grant date fair value of $30.21.
 (4)The Company maintains a non-qualified deferred compensation plan whereby the directors may elect to defer 1% to 100% of their fees until retirement or termination of service. The Company credits such deferrals at a rate determined at the beginning of each plan year equal to 1% over the prime rate as of each January 1st. This column reflects amounts credited under the deferred compensation plan during 2024 at interest rates greater than 120% of the applicable federal long-term rate then in effect. Only the above-market portion of interest credited to the participating directors' accounts has been reported.
 Compensation Discussion and Analysis

 The following discussion provides an overview of the Company's executive compensation program, including its philosophy and objectives, and the rationale for the Human Resources and Compensation Committee's compensation decisions related to the following executives referred to in this discussion as "Named Executive Officers" ("NEOs") for 2024:

 Name

 Title

 President and Chief Executive Officer of the Company and the Bank

 Treasurer of the Company and Executive Vice President and Chief Financial Officer of the Bank (principal financial officer)

 Executive Vice President and Chief Growth Officer of the Bank

 Executive Summary
 The Company's performance during 2024 was characterized by resiliency. The Evans team was able to protect and serve client relationships and maintain funding and liquidity while battling interest rate pressure and macro-economic factors such as inflation. During 2024, the Company benefited from continued commercial loan growth, and the execution of a strategic sale of the Company.

 The Company seeks to align the interests of its NEOs with the interests of its shareholders. The Company's executive compensation program is designed to reflect and further the Company's Strategic Plan objectives and reward executives for performance as measured against short-term goals, long-term sustained results to the Company's shareholders, and the Company's core values. The Company continues to design and monitor its compensation programs to further ensure that those programs are aligned with these objectives and reflect emerging best practices while at the same time avoiding the encouragement of excessive or unnecessary risk taking.
 Key features of the Company's executive compensation program are:
 • A substantial percentage of short-term and long-term incentive compensation is tied to key corporate and individual performance goals established by the Human Resource and Compensation Committee to align the interests of NEOs with those of the Company's shareholders.
 • Compensation criteria are structured so that achievement of corporate and individual goals does not encourage excessive risk-taking through the use of guardrails, which provide a top and bottom metric to monitor performance, and a mix of performance metrics, which reduce the risk associated with any single performance metric.
 • Performance-based compensation paid to our executive officers is subject to a "clawback" policy, providing for the return of incentive compensation in the event of a restatement of our financial statements due to material noncompliance with any financial reporting requirement.
 • No tax "gross-ups" resulting from, but not limited to, a change in control, are provided in any employment or other agreement with our NEOs.
 • Limited perquisites and personal benefits which are in place only when supporting a demonstrated business purpose. No excessive perquisites are provided to NEOs.
 • Change in control provisions in the Company's and the Bank's employment agreement and change in control agreements with its NEOs provide for payment of severance benefits only upon termination of employment without cause or voluntarily resignation due to job diminishment in connection with a change in control (a so-called "double-trigger" event).
 • Except for certain corporate transactions described in section 4.4 of the 2019 Long-Term Equity Incentive Plan, and reductions of the exercise price of a stock option approved by the Company's shareholders, neither the Committee nor the Board have the right or authority to make any adjustment or amendment that reduces or would have the effect of reducing the exercise price of a stock option granted under the Plan.
 • Our Insider Trading Policy prohibits directors and executive officers, including NEOs, from engaging in any hedging or monetization transactions involving the Company's securities.
 Compensation Program Objectives and Overview. The objective of the Company's executive compensation programs is to attract, develop and retain executive officers capable of effectively leading the Company and maximizing performance for the benefit of the Company's stakeholders.
 Role of the Human Resource and Compensation Committee. The Committee is composed solely of independent directors of the Company. It is responsible for all policies, practices and governance related to director and executive compensation and oversees the executive compensation program for our NEOs. As part of this responsibility, the Committee, on an annual basis, reviews and approves corporate goals and objectives relevant to executive compensation, and reviews and evaluates the performance of each of the senior executive officers, including the NEOs, in respect to those goals and objectives. Compensation for the NEOs is reviewed and

 approved by the Committee during the first quarter of each year based on performance during the prior year and review of peer group comparative information. Base salary is reviewed a second time, typically during the third fiscal quarter, to determine whether an individual's performance merits a further increase, or to address other competitive changes that occur later in the fiscal year. The Committee administers, and makes grants under, the Company's equity incentive plans. The Committee meets at least quarterly.
 The decisions made regarding senior executive compensation, including NEO compensation, are based primarily upon the Committee's assessment of each executive's leadership and operational performance, and his or her potential to contribute to the long-term success and sound operation of the Company and to enhance long-term shareholder value. While the Committee establishes objective performance measures, such as those under the cash bonus incentive plan, it primarily makes subjective assessments of each individual's performance, rather than solely utilizing rigid formulas or short-term changes in business performance, to determine the amount and mix of compensation elements and whether each particular payment or award provides an appropriate incentive and reward for performance sustaining and enhancing long-term shareholder value. Key factors affecting the Committee's subjective assessment of performance include the executive's performance compared to the financial, leadership, culture, operational, and strategic goals established by the Board of Directors at the beginning of each fiscal year; contribution to the Company's financial results, particularly with respect to key metrics such as asset growth, disciplined investment; and organizational excellence to increase shareholder value. Additionally, the Committee assesses each executive's presence in and commitment to the community.
 Role of Executive Officers. Although the Committee is ultimately responsible for designing our executive compensation program, input from the Company's President and Chief Executive Officer ("CEO") is critical in ensuring the Committee has appropriate information to make informed decisions. In particular, the CEO attends committee meetings to present data and analysis and to formulate recommendations regarding compensation for executive officers, benefit plans, and promotions. The CEO does not attend portions of Committee meetings during which the performance of the CEO is being evaluated or the compensation of the CEO is being determined.
 Role of Compensation Consultant. Periodically, the Committee engages a compensation consultant to review the Company's compensation programs and provide recommendations. In 2023, the Committee retained Aon McLagan to provide insight on industry compensation trends, including with respect to the cash bonus incentive plan, events within the banking industry during the first two quarters of the year with respect to rising interest rates, and industry compensation trends with respect to the treatment of significant, strategic one-time events impacting net income, and the Committee determined not to engage a compensation consultant in 2024.
 The Committee considered the independence of Aon McLagan in light of SEC rules and New York Stock Exchange corporate governance listing standards, and received a report from Aon McLagan addressing the independence of the firm and its consultants, which included the following factors: (1) that no other services were provided to the Company; (2) fees paid by the Company as a percentage of the firm's total revenue; (3) policies or procedures maintained by the firm that are designed to prevent a conflict of interest; (4) that there were no business or personal relationships between the firm and its consultants and any member of the Committee; (5) any company stock owned by the firm and its consultants; and (6) that there were no business or personal relationships between the Company's executive officers and the firm and its consultants. The Committee discussed these considerations and concluded that the work performed by Aon McLagan and its consultants involved in the engagement did not raise any conflict of interest and concluded that they were independent Compensation Committee consultants.
 Executive Compensation
 Benchmark Analysis. The base salaries, short-term and long-term incentives provided to the NEOs are compared to a "benchmark" established using relevant industry compensation surveys and compensation information derived from proxy statements filed by other publicly held companies in the banking industry. The Committee considers the compensation data and financial performance of the financial institutions included in those surveys and filings. For this analysis, the Committee also considers data from its proxy peer group. The 2024 Proxy Peer Group was compiled after the Committee reviewed the recommendations by the compensation consultant in 2020. The Committee concluded to include financial institutions with assets ranging from approximately 50% to 200% of the Company's asset size, with return on assets, return on average equity and earnings per share similar to or better than the Company's. The Committee also strived to include peers that had a comparable customer composition and geography. Based upon the Committee's review and discussion, the 2024 Proxy Peer Group consists of 22 companies with no changes from the prior 3 years. The 2024 Proxy Peer Group is as follows:

 1st Constitution Bancorp

 Mid Penn Bank

 Chemung Canal Trust Company

 NorthWest Indiana Bancorp

 ChoiceOne Financial Services

 Old Second Bancorp

 Cordorus Valley

 Orrstown Bank

 Enterprise Bank & Trust Company

 Peoples Financial

 Farmers & Merchants Bancorp

 Pioneer Bancorp

 First Savings Financial

 QNB Corp

 FNCB Bancorp

 The Bank of Greene County

 LCNB Corp

 The Farmers National Bank of Canfield

 Level One Bancorp

 Unity Bancorp

 Macatawa Bank Corp

 Western New England Bancorp

 The Committee also reviewed industry compensation data published by Aon McLagan, by both asset size and geographic region. While the 2024 Proxy Peer Group reflected financial institutions that are the most similarly situated to the Company, the Committee believes that it is useful to examine the "best practices" of a broader group of companies, and that multiple sources of compensation data assist the Company in designing pay programs that are both contemporary and relevant. The Aon McLagan compensation survey report for 2024 consisted of thirty (30) financial institutions in economic regions in the United States similar to the Company's and also segregated by asset size between $1 billion to $4 billion.
 Compensation Recovery Policy. The Company's Incentive Plan Clawback Policy was revised in 2023 to comply with the Securities and Exchange Commission ("SEC")'s final rule and the New York Stock Exchange (NYSE) American LLC listing standards. The policy provides for the recovery of certain incentive compensation in the event of an accounting restatement and was adopted as a supplement to any other clawback policies or provisions in effect now or in the future at the Company. The amount of incentive-based compensation subject to the policy is the amount of incentive-based compensation received that exceeds the amount of the incentive-based compensation that otherwise would have been received had it been determined based on the restated amounts in the Company's financial statements without regard to any taxes paid.
 Elements of Executive Total Compensation. The following discussion describes the key elements of the Company's NEO compensation program and the actions taken with respect to each element for 2024. The Committee reviewed the various elements of executive compensation provided by the Company during 2024 with a view toward aligning executive interests with those of the Company's shareholders and the long-term interests of the Company. The Committee determines the allocation of compensation among base salary, and short-term and long-term incentives by reviewing data from the Company's Proxy Peer Group (described above), as well as using salary surveys and review of industry trends. The elements of the Company's NEO compensation program include the following:

 Compensation

 Fixed/

 Element

 Description or Purpose

 Performance-Based

 Short-Long-Term

 Base Salary

 Attract and retain executives

 Fixed

 Short-Term

 Annual Cash Incentives

 Drive performance achievement and create shareholder value

 Performance-Based

 Short-Term

 Equity Incentives

 Aligns interests with shareholders and serves as a retention tool through multi-year vesting

 Performance-Based

 Long-Term

 Benefits

 Supplemental Retirement and Defined Contribution Plan

 Fixed

 Long-Term

 Other Compensation

 Retirement plans and health and welfare benefits on the same basis as other employees. Limited perquisites

 Fixed

 Short- and Long- Term

 1. Base Salary. Base salary is determined by individual factors, such as the employee's role in the organization, scope and complexity of responsibility of the position, the market value of his or her job, the level of an individual's expertise in the role and his or her performance in the position, as well as Company performance factors, such as Company financial performance, including earnings per share and growth in net income. Annual individual performance is measured for the CEO through a formal annual review by the Chairman of the Board of Directors and the Chairman of the Human Resource and Compensation Committee. Their review and recommendations are then shared and discussed with the full board (absent the CEO) prior to making a final determination. For other NEOs, individual performance is reviewed monthly with the CEO. During these monthly meetings, any performance concerns are shared with the executive, and corrective measures (if needed) are outlined. Based on these monthly meetings and the CEO's evaluation of each individual's performance, the CEO makes recommendations to the Committee regarding annual adjustments to base salary for each of the other NEOs. In determining base salary, the Committee also considers the level of achievement of corporate strategic and operational objectives established by the Committee as described above under "Compensation Discussion and Analysis – Role of the Human Resource and Compensation Committee." The Committee also utilizes the compensation surveys and the Proxy Peer Group data as sources of information in determining base salary for Messrs. Nasca and Connerton. The Committee generally targets the 50th to the 75th percentile of the Proxy Peer Group for the base salary of Messrs. Nasca and Connerton. The base salary of Mr. Pawlak is compared to data from the salary surveys, but not to Proxy Peer Group data due to a lack of comparable data for his position. As a result, Mr. Pawlak's compensation was generally determined based upon individual performance as compared to annual goals, including the achievement of corporate strategic and operational objectives. For Messrs. Nasca and Connerton, the Committee uses the survey and peer group data as a point of reference and comparison only, for purposes of establishing certain target percentiles, but does not use the data to set a specific level of compensation to be achieved.

 For 2024, the Committee approved the following base salary for the NEOs:

 Name

 2024 Salary

 2023 Salary

 % Change

 $

 605,000

 $

 583,500

 3.7%

 $

 300,000

 $

 275,000

 9.1%

 $

 285,000

 $

 270,000

 5.6%

 Mr. Nasca's salary increase was in relation to his contributions in enterprise leadership, delivering the goals of the Strategic Plan, and the financial performance of the Company. Mr. Connerton's salary was increased in recognition of his leadership in balance sheet management, company financial performance and overall finance team performance. Mr. Pawlak's salary increase reflects his leadership in all Company efforts related to growing customers and relationships in addition to effective leadership of the Commercial Banking division and overall company financial performance. The 2024 base salary for Messrs. Nasca, Connerton and Pawlak was 110%, 103% and 86%, respectively, of the weighted average base salary at the 50th percentile, as reported in the 2024 compensation surveys, and 2024 Proxy Peer Group data for Messrs. Nasca and Connerton, utilized by the Committee as described above.
 2.Annual Cash Incentive Compensation. The Company's Excels Performance Incentive Plan ("the Company's Excels Plan") is a short-term (annual) cash incentive compensation plan intended to reward performance of officers of the Bank, including the NEOs. The plan is designed to motivate employees to attain desired objectives and to encourage teamwork and collaboration while aligning compensation with overall Company performance. The plan is a key element of the total compensation provided to the NEOs and allows the Company to remain competitive with the market by providing an opportunity for the NEOs to receive significant cash incentives. The design of the plan is intended to ensure that benefits paid to NEOs and other officers are in alignment with both the Company's strategic plan and the achievement of individual performance goals. The award opportunities are linked to specific target and range of performance results for multiple performance measures and are calculated as a percentage of base salary in effect on the last day of the calendar during the relevant performance period, which runs from January 1st to December 31st. The Company typically makes payments in February of the year immediately following the end of the annual performance period. The following table illustrates the cash incentive opportunity for 2024 that would be payable to each of our NEOs if all individual goals were met at the specified level of performance (assuming no Committee discretionary override).

 Annual Cash Incentive as a % of Base Salary

 NEO

 Threshold

 Target

 Stretch

 11.81%

 23.63%

 33.75%

 9.45%

 18.90%

 27.00%

 9.45%

 18.90%

 27.00%

 The Committee determined these percentages by reviewing proxy peer group and compensation survey data and by aligning incentive levels with the goals of the Company's Strategic Plan. The Committee shifted the incentive levels down a level for 2024 due to compressed net interest margin caused by the continued high-interest rate environment of 2024. For example, Mr. Nasca's regular target incentive would have been 33.75% of his base salary if the target goals were achieved. For 2024, the Committee used the threshold incentive level of 23.63% to recognize target goals being met. Mr. Connerton and Mr. Pawlak's regular target incentive would have been 27.00% of their base salary if target goals were achieved in past years. For 2024, the Committee used the threshold incentive level of 18.90% to recognize target goals being achieved. Thus, reducing the short-term incentive cost while retaining an annual cash incentive to recognize strong expense management and improving performance in the compressed margin environment.
 For 2024, the Committee utilized the Company's annual adjusted net income, on a consolidated basis, as the performance metric for determining the Company's performance under the Evans Excels Plan for Messrs. Nasca, Connerton and Pawlak. The Committee selected adjusted net income as a performance metric since the Committee believes it provides a reasonable balance between shareholder value and appropriate employee motivation and
 reward. Adjusted net income is a non-GAAP financial measure and is defined as net income (GAAP) as reported in the Company's financial statements excluding the short-term cash incentive payment, which is calculated net of any tax impact associated with the short-term cash incentive payment. The goals set for 2024 and the actual results, as derived from GAAP net income, were as follows:

 Threshold

 Target

 Stretch

 Actual

 Net Income (GAAP)

 $

 6,557,190

 $

 12,000,000

 $

 13,200,000

 $

 11,954,105

 Evans Excels Plan payments

 1,095,197

 2,191,834

 3,172,807

 1,798,541

 Merger Related Expense

 -

 -

 -

 1,673,356

 Tax Effect

 (284,751)

 (569,877)

 (824,930)

 (902,693)

 Adjusted Net Income

 $

 7,367,636

 $

 13,621,957

 $

 15,547,877

 $

 14,523,309

 The Committee sets both Company and individual NEO goals each year in reviewing the Board-approved Strategic Plan and aligns Board-approved business targets and associated desired metric results within the calendar year. The Company performance goals for each fiscal year are set in the fourth quarter of the year prior to the annual performance period, and individual performance goals are set in the first quarter of the relevant annual performance period.
 The individual performance measures established by the Committee are a combination of financial and operational goals derived from the Company's Strategic Plan objectives. Each corporate and individual performance measure receives a weighting, which represents its relative importance to the achievement of the particular goals in the Company's Strategic Plan, and the NEO's ability to influence these goals. For each individual performance measure, the Committee establishes a "target", "threshold" and "stretch" standard.

 The table below shows the performance measures and relative weightings of the various performance measures utilized for each NEO for 2024. A performance measure requiring an NEO to deliver on a specified Strategic Plan goal will be broken down into

 several specific goals/action items, and whether the NEO achieves that goal at threshold, target or stretch level (or not at all) will be determined by the Committee based on the extent to which the NEO achieved meaningful results toward those specific goals/action items. Under the terms of the Evans Excels Plan, an individual must be employed by the Company on the payment date to receive payment thereunder.

 The Evans Excels Plan allows the Committee to eliminate, adjust or grant an NEO's incentive payout regardless of the individual or Company performance. Net income met target performance for 2024 as a result of diligent performance efforts by associates and management throughout the year consisting of loan growth, margin improvement, cost containment and client retention.

 The total short-term incentive achievement level for each NEO in the 2024 plan year is listed in the table below.

 NEO

 Total Short Term Incentive Award as Percentage of Base Salary

 23.63%

 18.90%

 18.90%

 The amounts paid under the plan to each NEO for 2024 are set forth in the Summary Compensation Table that follows this Compensation Discussion and Analysis.

 3. Equity Incentives. The Company's shareholder-approved 2019 Long-Term Equity Incentive Plan (the "2019 Equity Plan") is designed to provide key employees with a reward opportunity that aligns the interests of the participants with those of the Company's shareholders by focusing on our Company's performance over a longer period of time. The types of awards granted under the 2019 Equity Plan include restricted stock units and restricted stock awards. The 2019 Equity Plan both links the size of awards granted to the NEOs to the past performance of the Company and ties the ultimate realizable value of those awards to the future value of the Company's common stock, thereby aligning the NEOs' interests with those of the Company's shareholders, encouraging a balance between growth and prudent risk-taking.

 A consistent approach to granting equity on an annual basis exists with grant guidelines and a formal award structure, providing a framework for annual decisions surrounding long term incentive (LTI) awards. The LTI awards align with Company performance, enhance consistency with market practices and allow for efficiency and simplicity of administration. The LTI awards incorporate both time- and performance- vest shares with the total award value split across two weighted categories at the time of grant for the NEO participants. Each participant's award value is defined as a percentage of salary through a tiered structure shown below.

 -Tier 1, CEO, Target Award Level % of Salary: 30%
 -Tier 2, Executive Vice President, Target Award Level % of Salary: 25%
 -Tier 3, Senior Vice President, Target Award Level % of Salary: 20%

 The LTI awards include restricted stock units which have a retentive effect because they vest over a period of time, typically three years from the date of grant. Vesting of the outstanding restricted stock units may be accelerated under certain circumstances, such as the executive's death, disability or retirement, or if an executive's employment is terminated in connection with a change in control of the Company. Holders of restricted stock units do not receive dividends if and when dividends are paid on the Company's common stock during the restrictive period, and do not have voting rights during the restriction period.
 The Committee may also grant awards of stock appreciation rights, stock options and restricted stock awards under the 2019 Equity Plan, but it has not historically granted stock appreciation rights and ended the practice of granting stock options and restricted stock awards to NEOs in 2021. Restricted stock awards remain an incentive program for high performing, non-executive leaders within the company.

 The Committee believes that the Evans Excels Plan and 2019 Equity Plan together create an appropriate balance between short-term and long-term performance goals and encourage appropriate risk-taking.

 The Committee exercises its discretion in determining when to grant equity incentive awards, as well as the size and nature of the awards. Equity awards are typically granted on an annual basis, during the first quarter of the fiscal year, for a forward-looking incentive program with performance and metric-based elements. But may under certain circumstances be granted at other times during the year, for example, in connection with a new hire or a change in position within the Company. Specifically, the Committee reviews the performance of the Company, the number of shares remaining available for issuance under the plan, the market price for the Company's common stock, and forward-looking performance goals.

 The Committee awarded an equity grant to executive officers in March 2023. A target award opportunity was defined as a percentage of salary through a tiered structure based on title. Formal forward-looking performance-based criteria was incorporated while also allowing for some discretion. Both time- and performance- vested shares were utilized with the total award value split across two weighted categories at the time of grant:

 a)50% Performance-Vested Units: Units were granted in March 2024 at target with equal weightings across two performance goals. Units become earned and vested contingent on performance over the subsequent 3-year performance period (2024 – 2026). Earned units can range from 0% to 150% of the number granted.
 b)50% Time-Vested Restricted Units: Units were discretionarily granted in March 2024 within a range around the defined target level and vest ratably, 33% per year over three years. While the target level of equity is established for each individual, actual awards can range from 75% to 125% of target to modify the program at grant.
 The grant utilizes two performance goals: Pre-Tax Pre-Provision Net Income (PTPPNI) and Return on Average Tangible Common Shareholders' Equity (ROATCE). PTPPNI is measured on an absolute basis which is relative to internal budgets or targets, while ROATCE is a relative goal which is a percentile ranking compared to the Company's proxy peer group.
 During 2024, the Committee approved the following equity awards (for more detail on the awards granted to the Company's NEOs, see the "Summary Compensation Table" and "Grants of Plan-Based Awards" table below):

 • Restricted Units – during 2024, a total of 10,833 shares of restricted units were granted to our NEOs as part of the program detailed above.

 The Committee awarded Mr. Nasca and Mr. Connerton, 6,961 and 3,480 additional restricted time-based units also in March 2024 in recognition of their efforts with the divestiture of The Evans Agency in the fall of 2023.

 With this additional grant, the total number of restricted units granted to NEOs during 2024, equal 21,274 shares.

 4.Supplemental Executive Retirement Plan ("SERP"). Mr. Nasca is the sole participant in the Evans Bank, N.A. Supplemental Executive Retirement Plan for Senior Executives ("Senior Executive SERP"), which increases his retirement benefit above amounts available under the Company's tax-qualified and other pension programs. The Committee believes that this plan, and the level of benefit that is provided under this plan, is appropriate to promote retention and to recognize and reward long-term service to the Company. The Senior Executive SERP provides a benefit to Mr. Nasca of 35% of his base salary payable for a period of 15 years or the present value of which may be paid in a lump sum. Mr. Nasca has elected a present value lump sum payment. There is a 10-year vesting period with respect to Mr. Nasca's benefits payable under the Senior Executive SERP which Mr. Nasca has satisfied. The Senior Executive SERP is unfunded and is considered a non-qualified plan for tax purposes.

 5.Executive Incentive Retirement Plans. The Company provides certain key executives with a non-qualified retirement plan, the "Executive Incentive Retirement Plan," which was frozen to new participants as of December 31, 2019 ("Frozen EIRP"). Messrs. Connerton and Pawlak participate in the Frozen EIRP. Mr. Nasca does not participate in the Frozen EIRP. The Frozen EIRP is unfunded and is considered a non-qualified plan for tax purposes. As a frozen plan, new participants may not be added to the plan and participant accounts continue to earn interest at prime plus 100 basis points until a participant's account is distributed. A new EIRP was adopted, effective on January 1, 2020 (the "New EIRP"), and it implements the same provisions as the Frozen EIRP except for the following enhancements:
 • Participant eligibility criteria was increased from a minimum total cash compensation of $100,000 annually to total cash compensation of $150,000.
 • A third payout criteria was created. Specifically, the participant is entitled to receive a distribution under the New EIRP upon his or her separation from service after attaining 62 and completing at least 10 years of service with the Company.
 • The New EIRP also requires a one year non-compete and non-solicitation for consistency with the current executive severance plan and change in control agreements.
 • Payments were adjusted from having both a single lump sum payout or a 15-year equal payment installment option to 2-to-15 year annual equal installments in order to provide the Company with a clawback opportunity in the event the participant fails to comply with the one year non-compete and non-solicitation covenants.
 In May 2024, the Committee amended the New EIRP to make the following changes: (i) the non-competition restrictions were removed (however, the non-solicitation restrictions continue to remain in effect), and (ii) all references to The Evans Agency, LLC and Frontier Claim Services, Inc. were deleted.
 Messrs. Connerton and Pawlak participate in the New EIRP. Mr. Nasca does not participate in the New EIRP.

 6.Perquisites. The Company provides its NEOs with limited perquisites designed to assist the NEOs in being productive and which the Committee believes are reasonable, competitive and consistent with its overall executive compensation program. These perquisites, the aggregate cost of which is disclosed in the "Summary Compensation Table" below, generally include an auto allowance and club memberships, which the Committee believes are important to the NEOs' development of business

 relationships, an activity critical to the long-term success of the Company. The Company believes that its perquisites allow the NEOs to carry out their duties more effectively.
 Employment Agreement. The Company believes the use of clear and concise employment contracts can be an effective tool to attract and retain senior executives, as well as to protect proprietary information and customer relationships. However, in recent years and consistent with trends in corporate governance, the Committee has been limiting its use of executive employment contracts. Currently, Mr. Nasca is the only NEO covered by an employment contract. Mr. Nasca's employment agreement is discussed below under "Employment and Change in Control Agreements with our NEOs".
 Post-Termination Compensation. The Company is a party to an employment contract and post-termination compensation programs with its NEOs which provide for certain severance payments, described below under "Potential Payments Upon Termination or Change-in-Control," if the executive's employment terminates under certain circumstances. In addition, under the terms of the 2019 Long-Term Equity Incentive Plan, if there is a change in control of the Company followed by a qualifying termination of employment, an executive may be entitled to full acceleration of his or her equity-based compensation, as described above under "Elements of Executive Total Compensation – Equity Incentives." The Committee believes that these arrangements are important as a recruitment and retention device, as most of the companies with which we compete for executive talent have similar severance protections for their executives. These arrangements may help incentivize the executive to remain with the Company and to assist in any potential change in control transaction, which provides security for the executive and stability for the Company. The Committee attempts to balance protection of its executives upon a change in control with protection of the Company's interests by making accelerated vesting available upon a change in control only if the executive is involuntarily terminated or voluntarily resigns due to a job diminishment in connection with the change in control (a so-called "double-trigger"). Additionally, the Committee links severance payments to agreements by the executive not to compete with the Company, solicit the Company's employees or customers, or disclose confidential information.
 Mr. Nasca's employment agreement provides for post-termination compensation, including in connection with a change in control. Furthermore, Mr. Connerton and Mr. Pawlak are party to post-termination compensation including a rolling two-year change in control agreement with the Company. The change in control agreement provides a double-trigger benefit. The change in control agreement is described below under "Employment and Change in Control Agreements with our NEOs."
 For further information on the potential payouts under these arrangements, see "Potential Payments Upon Termination or Change-in-Control" below.
 Tax and Accounting Considerations. Section 162(m) of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act of 2017 ("TCJA"), generally denies publicly held corporations a federal income tax deduction for compensation exceeding $1,000,000 paid to the principal executive officer, principal financial officer, and the three other highest paid executive officers during any taxable year of the corporation beginning after December 31, 2016. The Committee has historically attempted to structure its compensation arrangements to achieve deductibility under Section 162(m), unless the benefit of deductibility is considered by the Committee to be outweighed by the need for flexibility or attainment of other objectives. Since compensation objectives may not always be consistent with the requirements for tax deductibility, the Committee may, when it deems appropriate, enter into compensation arrangements under which payments will not be deductible under Section 162(m) of the Code.

 Say On Pay. In past years, at our Annual Meeting of Shareholders, the Company has provided shareholders with the opportunity to cast a non-binding advisory vote on executive compensation.
 We attempt to maintain a regular dialogue with our major shareholders to discuss various corporate governance topics, including executive compensation that may be of interest to them. These discussions have provided useful guidance for the Committee as it reviews and adopts the various compensation policies and practices affecting our employees, including our NEOs. At our 2024 Annual Meeting of Shareholders, a substantial majority of our shareholders voted to approve the compensation paid to our NEOs, with 96.88% of the votes cast supporting the measure.
 In reviewing the Company's compensation programs and making decisions related to 2024 executive compensation, the Committee evaluated the results concerning the vote on the advisory resolution on executive compensation at that meeting. The Committee will continue to consider shareholder feedback when determining executive compensation.

 Risk Assessment. The Committee believes that any risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. In addition, the Committee believes that the mix and design of elements of the Company's executive compensation program do not encourage management to assume excessive risks and is evidenced through the following:
 • Each of the incentive plans establish lines of authority and risk mitigation, and are supported by strong governance, including active oversight by the Committee and the Board of Directors.
 • Performance-based compensation paid to our executive officers is subject to a "clawback" policy, providing for the return of incentive compensation in the event of a restatement of our financial statements involving fraud or illegal conduct.

 • Equity grants through the 2019 Long-Term Equity Incentive Plan are subject to multi-year vesting and performance-based elements to align interests with shareholders.
 • Our Insider Trading Policy prohibits our directors and executive officers, including NEOs, from engaging in any hedging or monetization transactions involving the Company's securities.

 Summary Compensation Table. The following table sets forth the compensation of the Company's NEOs for the fiscal years ended December 31, 2024, 2023, and 2022. The NEOs identified in the table below are the Company's Principal Executive Officer, and two other most highly compensated individuals who were serving as executive officers as of December 31, 2024 and met the applicable SEC reporting threshold.

 Name and
 Principal Position

 Year

 Salary

 Stock Awards
 (1)

 Option Awards
 (1)

 Non-Equity Incentive Plan Compensation
 (2)

 Change in Pension Value and Non-Qualified Deferred Compensation Earnings
 (3)

 All Other Compensation
 (4)

 Total

 2024

 $

 605,000

 $

 375,013

 $

 -

 $

 142,962

 $

 293,250

 $

 66,111

 $

 1,482,336

 President and CEO of the

 2023

 $

 579,577

 $

 169,926

 $

 -

 $

 202,825

 $

 17,110

 $

 72,050

 $

 1,041,488

 Company and the Bank

 2022

 $

 563,327

 $

 164,992

 $

 -

 $

 197,029

 $

 306,674

 $

 67,163

 $

 1,299,185

 (principal executive officer)

 2024

 $

 300,000

 $

 168,703

 $

 -

 $

 56,700

 $

 -

 $

 61,534

 $

 586,937

 Treasurer of the

 2023

 $

 273,060

 $

 66,615

 $

 -

 $

 76,478

 $

 -

 $

 59,899

 $

 476,052

 Company and Executive

 2022

 $

 265,097

 $

 64,696

 $

 -

 $

 76,991

 $

 -

 $

 46,626

 $

 453,410

 Vice President and CFO of the

 Bank (principal financial officer)

 2024

 $

 285,000

 $

 67,487

 $

 -

 $

 53,865

 $

 -

 $

 38,799

 $

 445,151

 Executive Vice President and

 2023

 $

 264,232

 $

 61,220

 $

 -

 $

 57,591

 $

 -

 $

 37,552

 $

 420,595

 Chief Growth Officer of the Bank

 (1)Reflects the aggregate fair value of the awards at grant date as determined in accordance with FASB ASC Topic 718 for financial statement reporting purposes. For additional information as to the assumptions made in valuation, see Note 14 to the financial statements filed with the SEC in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Amounts shown in the table do not necessarily correspond to the actual value that may be realized by the NEOs.
 (2)See "Compensation Discussion and Analysis – Elements of Executive Total Compensation – Short-Term Cash Incentive Compensation" for additional detail.
 (3)With respect to Mr. Nasca, includes the aggregate change in the accumulated benefits under the Bank's Senior Executive SERP.
 (4)For 2024, includes: 401(k) matching contributions of $17,249, $14,759, and $14,154 for Mr. Nasca, Mr. Connerton, and Mr. Pawlak respectively; club dues for Mr. Nasca and Mr. Pawlak of $21,338, and $10,190, respectively; the Company's

 contribution to the EIRP for Mr. Connerton and Mr. Pawlak of $32,971 and $21,248, respectively; the economic benefit of an endorsement split-dollar life insurance policy held by the Bank; dividends paid on unvested restricted stock awards; and auto allowances for Mr. Nasca, Mr. Connerton, and Mr. Pawlak. Other than the items for which specified dollar amounts were provided, none of the items specified in this footnote (4) exceeded $10,000 for any individual NEO.

 Grants of Plan-Based Awards. The following table reflects the terms of the compensation plan-based awards granted to Named Executive Officers in 2024.
 Grants of Plan Based Awards

 Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)

 All Other Stock Awards: Number of Shares of Stock or Units

 All Other Option Awards: Number of Securities Underlying Options

 Exercise or Base Price of Option Awards (per share)
 (2)

 Grant Date Fair Value of Stock and Option Awards
 (3)

 Name

 Grant Date

 Threshold

 Target

 Stretch

 3/19/2024

 $

 71,693

 $

 196,931

 $

 256,040

 13,053

 -

 -

 $

 375,013

 -

 -

 $

 -

 $

 -

 3/19/2024

 $

 28,350

 $

 56,700

 $

 81,000

 5,872

 -

 -

 $

 168,703

 -

 -

 $

 -

 $

 -

 3/19/2024

 $

 26,933

 $

 53,865

 $

 76,950

 2,349

 -

 -

 $

 67,487

 (1)Values reflect possible payouts assuming both Company and individual performance at the specified levels under the Evans Excels Plan.
 (2)No options were granted during 2024.
 (3)Reflects full grant date fair value in accordance with FASB ASC Topic 718 of the stock granted. For additional information as to the assumptions made in valuation, see Note 14 to the financial statements filed with the SEC in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
 The restricted stock units in 2024 were granted under the Company's 2019 Long-Term Equity Incentive Plan. 16.5% of the restricted stock units will vest each year on the anniversary of the grant date; 50% of the restricted stock units will vest on the third anniversary of the grant date depending on company performance; both time and performance restricted stock units are subject to acceleration of vesting upon the individual's death, disability, retirement, or involuntary termination in connection with a change in control. The awards shown in the table above for Messrs. Nasca, Connerton and Pawlak will be fully vested in 2027. No dividends are paid on unvested stock units when and as declared by the Board of Directors.

 Employment and Change in Control Agreements with our NEOs
 Mr. Nasca is the only NEO with an employment contract. Mr. Connerton and Mr. Pawlak are employed on an "at will" basis but are party to a change in control agreement with the Company.

 The material terms of Mr. Nasca's employment contract are as follows:
 David J. Nasca – Employment Agreement, by and among Mr. Nasca, the Company and the Bank, pursuant to which Mr. Nasca serves as the President and Chief Executive Officer of the Company and the Bank. On September 21, 2020, the Committee and Mr. Nasca agreed to a first amendment of Mr. Nasca's Employment Agreement. With the first amendment, the terms of contract and non-renewal notice were updated. The sub-areas of payments upon an event of termination, disability, death or retirement; notice of termination, post-termination obligations, confidentiality, and source of payments and intended compliance were further clarified from the original agreement. The first amendment stated that Mr. Nasca's employment period, under the first amendment, began on October 27, 2019 and will continue for a period of thirty-six (36) months, that is until October 27, 2022, unless Mr. Nasca and the Committee agree that the employment period shall end on an earlier date. Also, effective as of October 27, 2022, Mr. Nasca's employment period will continue on October 27, 2022 for a period of one (1) year and renew daily so that at all times Mr. Nasca has a remaining one (1) year term, except in the case of a non-renewal notice, and the employment period would expire and the employment agreement would terminate on October 27, 2025, unless Mr. Nasca and the Committee agree that the employment period shall end on an earlier date.
 Under the first amendment, there are two methods of a non-renewal notice. Under the first method, the Committee may give Mr. Nasca written notice of non-renewal of the employment period for one (1) year term beginning on October 27, 2022 whereby the employment period shall end on the date that is one (1) year after the date of the non-renewal notice. Under the second method, Mr. Nasca may give the Committee written notice of non-renewal of the employment period for one (1) year term beginning on October 27, 2022 whereby the employment period would end on the date that is one (1) year after the date of the non-renewal notice. Both non-renewal notice situations do not render Mr. Nasca eligible in any way for a severance agreement or payment that was clarified in the first amendment and explained below.
 Mr. Nasca's employment agreement provides for an initial base salary, which is adjusted annually by the Board of Directors of Evans Bank, N.A., provided, however, that Mr. Nasca's annual salary may not be decreased. Mr. Nasca is entitled to participate in all Company and Bank cash and equity incentive programs made available to senior executives, as well as all employee benefit plans, programs, and arrangements for which he qualifies. He is entitled to five weeks paid vacation each year, plus five sick days and customary bank holidays. The Bank provides Mr. Nasca with a monthly automobile allowance of $750 and reimburses him for reasonable club dues and certain other expenses he incurs in the performance of his duties under the agreement.
 Within the first amendment, payments to Mr. Nasca upon an event of termination were clarified as stated below:
 • Effective through and including October 27, 2022, by the Company or the Bank without "cause" or by Mr. Nasca for "good reason," or under certain circumstances within two years following a "change in control" of the Company or in the event of his subsequent death, he (or his beneficiaries or estate) will be paid three times the sum of the highest base salary paid to him at any time under the employment agreement plus the average annual non-equity incentive bonus paid to Mr. Nasca in the three years prior to termination. The Company will also continue to provide amounts or benefits payable under applicable benefit plans for 36 months. Mr. Nasca's change in control benefits may be reduced by the minimum amount necessary to avoid penalties under Section 280G of the Internal Revenue Code;
 • If an Event of Termination occurs after October 27, 2022, by the Company or the Bank without "cause" or by Mr. Nasca for "good reason", he will be paid the sum of the highest base salary paid to him at any time under the employment agreement and the average annual non-equity incentive bonus paid to Mr. Nasca in the three years prior to termination. If the event of termination is made in connection with an involuntary termination of employment or voluntary resignation for "good reason" within two years after a change of control under certain conditions, then Mr. Nasca is paid two times the sum of the highest annual rate of base salary paid to him at any time under the agreement and the average annual incentive bonus paid to him during the three completed calendar years preceding the event of termination with such payment conditioned upon Mr. Nasca signing a general release acceptable to the Company. The Company will also continue to provide amounts or benefits payable under applicable benefit plans for 12 months.
 • Termination because of "disability," (i) Mr. Nasca will be entitled to participate in the short- and long-term disability plans and benefits offered by the Bank to senior executives, including long-term disability income replacement benefits and supplemental retirement benefits under a long-term disability program; and (ii) the Bank will continue to provide Mr. Nasca with certain life and medical insurance benefits under the same cost-sharing arrangement as in effect for active employees until Mr. Nasca's (A) full-time employment by another employer, (B) attaining age 65, or (C) death.

 • Termination by the Company or the Bank for "cause" or by Mr. Nasca other than for "good reason," Mr. Nasca will not be entitled to payment of any amounts or benefits, other than that portion of his annual salary accrued through the date of termination and any accrued and unpaid vacation.
 • An "event of termination" does not mean non-renewal of the employment agreement by the Committee or Mr. Nasca.
 The Company's or the Bank's obligation to make such payments to Mr. Nasca are conditioned upon this compliance with his obligations of confidentiality, non-competition and non-solicitation set forth in the employment agreement.

 John Connerton and Kenneth Pawlak: The terms of post termination compensation for Mr. Connerton and Mr. Pawlak may fall within one of two benefits depending on the conditions of the termination. In no circumstance would Mr. Connerton and Mr. Pawlak be entitled to a payment under a change in control agreement and the Executive Severance Plan. To be entitled for a payment under a Change of Control Agreement, there must be a change in control of the Company followed by a qualifying termination of employment. To be entitled to a payment under the Executive Severance Plan, there must be a qualifying termination of employment and a change in control of the Company has not occurred.
 The following is a description of the Change in Control Agreements and Executive Severance Plan.
 Change in Control Agreements. The Company entered into a two-year change in control agreement with each of Mr. Connerton and Mr. Pawlak. The agreements provide that in the event of a change in control during the term of the agreement, followed by the executive's termination without cause or voluntary termination for good reason, the executive would be entitled to: (1) a cash lump sum payment equal to two times the highest rate of gross base salary earned during the prior 12 months; and (2) continued life insurance and non-taxable medical and dental coverage (under the same cost sharing arrangement) substantially comparable to the coverage maintained by the Bank for the person as of his date of termination for 24 months thereafter.
 In May 2024, the Committee entered into an amended and restated change in control agreement with Mr. Connerton and Mr. Pawlak. The terms of the Amended Agreements are generally consistent with Messrs. Connerton and Pawlak's prior change in control agreements except that: (i) the non-competition restrictions were removed (however, the non-solicitation restrictions continue to remain in effect), (ii) the confidentiality provisions were revised, (iii) the definition of good reason was revised, and (iv) in the event of a qualifying termination of employment following a change in control, cash may be paid in lieu of continued insurance benefits in the event such insurance benefits cannot be provided.
 Executive Severance Plan. Messrs. Connerton and Pawlak are participants in the Company's Executive Severance Plan. Under the Executive Severance Plan, a participant (1) whose employment is involuntarily terminated by the Company for reasons other than for cause, as defined in the plan, (2) who is required to move employment more than 35 miles from his or her current place of employment, and who rejects the relocation and terminates employment, or (3) whose aggregate compensation is materially reduced, and who terminates employment, will be eligible for severance payments under the Executive Severance Plan. Under the plan, a participant eligible for benefits would receive 12 months of salary continuance plus the participant's short-term incentive amount at the target level, pro-rated for the time during the year in which the participant was actively employed by the Company. The severance payments will be made over the 12-month period following termination in accordance with the Company's regular payroll cycle. In addition, the Company will reimburse eligible participants for up to $5,000 in outplacement services during the 12-month period following termination (payable in a lump sum, in cash). Payments and benefits under the Executive Severance Plan are subject to the participant's compliance with one-year non-competition and non-solicitation covenants, and an employee will cease to be a participant in this plan if severance benefits are triggered under an employment contract or change in control agreement. In the event Messrs. Connerton and Pawlak are eligible for a payment under the Executive Severance Plan, the executives would not be entitled to a payment under their change in control agreements. Mr. Nasca is not a participant in the Executive Severance Plan.

 Potential Payments Upon Termination or Change-in-Control. The following table shows the potential incremental value transfer to each remaining 2024 NEO under various termination or change-in-control scenarios as of December 31, 2024, the last business day of fiscal 2024. Unvested, unexercised stock options and unvested restricted stock awards are valued at the closing market price of the Company's common stock on that date. The actual amounts to be paid out can only be determined at the time of such NEO's separation from the Company. The amounts shown in the following table do not take into account any reductions that may be required in order to avoid penalties under Section 280G of the Internal Revenue Code.

 Event

 David Nasca

 John Connerton

 Kenneth Pawlak

 Retirement or Voluntary Termination Without "Good Reason" (1)

 $

 2,376,586

 $

 274,429

 $

 103,231

 Termination for "Cause" (1)

 $

 2,376,586

 $

 274,429

 $

 103,231

 Termination Without "Cause" or for "Good Reason" (2)(5)

 $

 3,898,227

 $

 631,129

 $

 465,181

 "Change in Control" Termination (3)(5)

 $

 4,954,783

 $

 1,407,198

 $

 959,420

 Death (4)(5)

 $

 4,616,916

 $

 1,292,892

 $

 924,267

 Disability (6)

 $

 3,478,214

 $

 807,198

 $

 389,420

 (1)With respect to Mr. Nasca, reflects Senior Executive SERP actuarial present value of accumulated benefit obligation as of 12/31/24.
 With respect to Mr. Connerton, reflects Defined Benefit Pension Plan ("Pension Plan") actuarial present value of the accumulated benefit obligation as of 12/31/2024 and actuarial present value under the Executive Incentive Retirement Plan ("EIRP") based on current vested benefit.
 (2)With respect to Mr. Nasca, reflects (a) lump sum employment contract payout, (b) estimated value of healthcare benefits for 36 months, and (c) Senior Executive SERP actuarial present value of the accumulated benefit obligation as of 12/31/2024.
 With respect to Mr. Connerton, reflects (a) lump sum Executive Severance Plan payout, (b) Pension Plan actuarial present value of the accumulated benefit obligation as of 12/31/2024 and (c) EIRP actuarial present value of the accumulated benefit obligation as of 12/31/2024 based on current vested benefit.
 With respect to Mr. Pawlak, reflects (a) lump sum Executive Severance Plan payout, (b) EIRP actuarial present value of the accumulated benefit obligation as of 12/31/2024 based on current vested benefit.
 (3)With respect to Mr. Nasca, reflects (a) lump sum employment contract payout, (b) estimated value of healthcare benefits for 36 months, (c) Senior Executive SERP actuarial calculated as the projected benefit obligation and (d) value of stock awards and option awards that provide for accelerated vesting upon termination for the stated reason.
 With respect to Mr. Connerton, reflects (a) lump sum change in control agreement payout, (b) EIRP payout, including the present value of expected benefits through age 65, (c) Pension Plan actuarial present value of the accumulated benefit obligation as of 12/31/2024 and (d) value of stock awards and option awards that provide for accelerated vesting upon termination for the stated reason.
 With respect to Mr. Pawlak, (a) lump sum change in control agreement payout, (b) value of stock awards and option awards that provide for accelerated vesting upon termination for the stated reason.
 (4)With respect to Mr. Nasca, reflects (a) Executive Life Insurance Plan lump sum death benefit, (b) estimated value of healthcare benefits for 24 months, (c) Senior Executive SERP lump sum payout calculated as the accumulated benefit obligation, and (d) value of stock awards and option awards that provide for accelerated vesting upon termination for the stated reason.
 With respect to Mr. Connerton, reflects (a) Executive Life Insurance Plan lump sum death benefit, (b) EIRP actuarial present value of the accumulated benefit obligation as of 12/31/2024 based on current vested benefit, (c) Pension Plan actuarial present value of the accumulated benefit obligation as of 12/31/2024 and (d) value of stock awards and option awards that provide for accelerated vesting upon termination for the stated reason.
 With respect to Mr. Pawlak, (a) Executive Life Insurance Plan lump sum death benefit, (b) EIRP actuarial present value of the accumulated benefit obligation as of 12/31/2024 based on current vested benefit, and (c) value of stock awards and option awards that provide for accelerated vesting upon termination for the stated reason.
 (5)Payment may be postponed for a six-month period to avoid application of Section 409A of the Internal Revenue Code.
 (6)With respect to Mr. Nasca, reflects (a) estimated value of healthcare benefits for 24 months, (b) Senior Executive SERP lump sum payout calculated as the benefit obligation, and (c) value of stock awards and option awards that provide for accelerated vesting upon termination for the stated reason.
 With respect to Mr. Connerton, reflects (a) EIRP actuarial present value of the accumulated benefit obligation as of 12/31/2024 based on current vested benefit, (b) Pension Plan actuarial present value of the accumulated benefit obligation as of 12/31/2024, and (c) value of stock awards and option awards that provide for accelerated vesting upon termination for the stated reason.
 With respect to Mr. Pawlak, reflects (a) EIRP actuarial present value of the accumulated benefit obligation as of 12/31/2024 based on current vested benefit, and (b) value of stock awards and option awards that provide for accelerated vesting upon termination for the stated reason.
 All post-termination payments under Mr. Nasca's employment contract are linked to two-year confidentiality, non-competition and non-solicitation obligations. Payments under the change in control agreements with Mr. Connerton and Mr. Pawlak are linked to one-year confidentiality, and non-solicitation obligations. The events that constitute "cause," "good reason," "disability" and "change in control" are described in the employment contract or change in control agreement with each NEO. Accelerated vesting of stock options, restricted stock awards and restricted stock units assumes the awards are not converted into comparable awards with respect to voting securities of the surviving or acquiring entity upon a change in control of the Company, in accordance with the terms of the 2019 Long-Term Equity Incentive Plan.

 Outstanding Equity Awards at Fiscal Year-End. The following table provides information about unexercised stock options and unvested restricted stock outstanding for the Named Executive Officers as of December 31, 2024.

 Option Awards

 Stock Awards

 Name

 Number of Securities Underlying Unexercised Options (#) Exercisable

 Number of Securities Underlying Unexercised Options (#) Unexercisable
 (#) (1)

 Option Exercise Price

 Option Expiration Date

 Number of Shares or Units of Stock that Have Not Vested
 (#) (1) (2)

 Market Value of Shares or Units of Stock that Have Not Vested
 (3)

 2,498

 1,323

 $

 39.06

 11/16/2031

 13,053

 $

 565,195

 4,540

 2,421

 25.51

 11/17/2030

 3,990

 172,767

 3,376

 -

 36.12

 4/15/2029

 2,824

 122,279

 4,520

 -

 45.20

 3/20/2028

 34,337

 1,909

 -

 39.50

 3/22/2027

 42,001

 2,692

 -

 25.00

 3/16/2026

 -

 -

 1,434

 -

 24.72

 3/17/2025

 -

 -

 -

 -

 -

 -

 -

 -

 -

 $

 39.06

 11/16/2031

 5,872

 $

 254,258

 -

 25.51

 11/17/2030

 1,564

 67,721

 1,640

 -

 45.20

 3/20/2028

 1,107

 47,933

 -

 -

 13,423

 -

 -

 16,281

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 1,402

 $

 39.06

 11/16/2031

 2,349

 $

 101,712

 3,376

 25.51

 11/17/2030

 1,438

 62,265

 2,280

 -

 36.12

 4/15/2029

 1,000

 43,300

 1,310

 -

 45.20

 3/21/2028

 12,124

 14,635

 (1)The unexercisable options with the following expiration dates and the related unvested restricted shares will vest as indicated below:

 Expiration Date

 Vesting Schedule

 11/17/2030

 20% on November 17, 2025

 11/16/2031

 25% on November 16, 2025

 (2)Restricted units with no related option expiration date will vest 33% each on March 15, 2024, and 2025; March 21, 2024, 2025, and 2026; March 19, 2025, 2026, and 2027. Restricted performance units with no related option expiration date will vest 100% each on March 15, 2025, March 21, 2026, and March 19, 2027.

 (3)The market value of stock awards was computed by multiplying the closing market price of the Company's common stock on December 31, 2024

 Policies and Practices Related to the Grant of Certain Equity Awards

 We have not granted stock options or similar awards as part of our equity compensation programs since 2021 and we did not grant any stock options for the fiscal years ended December 31, 2024, 2023 and 2022. If stock options or similar awards are granted in the future, our policy is to not grant stock options or similar awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, such as a significant positive or negative earnings announcement, and not time the public release of such information based on stock option grant dates. In addition, it is our policy to not grant stock options or similar awards at any time during the four business days prior to or the one business day following the filing of our periodic reports or the filing or furnishing of a Form 8-K that discloses material nonpublic information. These restrictions do not apply to restricted stock awards or other types of equity awards that do not include an exercise price related to the market price of our common stock on the date of grant.

 Option Exercises and Stock Vested. The following table provides information about option exercises and the vesting of restricted stock during 2024 for the Named Executive Officers.

 Name

 Number of Shares Acquired on Exercise

 Value Realized on Exercise

 Number of Shares Acquired on Vesting

 Value Realized on Vesting (1)

 27,637

 $

 378,338

 3,266

 $

 121,402

 9,316

 $

 112,072

 1,276

 $

 47,399

 -

 $

 -

 1,154

 $

 42,835

 (1)Calculated by multiplying the closing market price of the Company's common stock on the vesting date by the number of shares vested.

 Pension Benefits. The following table sets forth the present value of the accumulated pension benefits for the Named Executive Officers as of fiscal year-end 2024.

 Name

 Plan Name

 Number of Years Credited Service

 Present Value of Accumulated Benefit (1)

 Payments During Last Fiscal Year

 Senior Executive SERP

 $

 2,376,586

 $

 -

 Defined Benefit Plan

 $

 39,549

 $

 -

 (1)The assumptions used to calculate the present value of accumulated benefits are set forth in Note 13 to the Consolidated Financial Statements of the Company in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

 The following describes the material factors necessary to understand the pension benefits that are provided to the Named Executive Officers under the Bank's defined benefit pension and supplemental executive retirement plans.

 Defined Benefit Pension Plan (Frozen). The Bank maintains a tax-qualified defined benefit pension plan (the "Pension Plan") for all eligible employees, including employees of its subsidiaries, and Mr. Connerton is the only NEO that is a participant in the Pension Plan. Effective January 31, 2008, the Pension Plan was frozen. All participants vested immediately in the Pension Plan at their then-present number of years of service, regardless of whether an employee had attained greater than five years of service on January 31, 2008. All benefits that eligible participants accrued in the Pension Plan prior to January 31, 2008 will be retained, but no additional benefits have accrued under the Pension Plan since that date. Employees will be eligible to receive accrued benefits at normal retirement age.

 Upon retirement at age 65, vested participants are entitled to receive a monthly benefit. The following table indicates the annual retirement benefit that would be payable under the Pension Plan, upon retirement at age 65 in fiscal year 2024, expressed in the form of a single life annuity for the average annual earnings and years of credited service. The benefits listed below are not subject to deduction for Social Security or other offset amounts.

 Years of Service at Normal Retirement

 Final Average Compensation

 $

 30,000

 $

 3,000

 $

 6,000

 $

 9,000

 $

 9,000

 50,000

 5,000

 10,000

 15,000

 15,000

 100,000

 10,000

 20,000

 30,000

 30,000

 150,000

 15,000

 30,000

 45,000

 45,000

 220,000

 22,000

 44,000

 66,000

 66,000

 Pension Benefit Formula: 1% of compensation times years of service, subject to a maximum of 30 years of service.

 A participant is eligible for early retirement under the Pension Plan if the participant retires before normal retirement age but after attaining age 59 and completing 5 years of service. An early retirement benefit is reduced 1/15th per year for each year that the benefit commences prior to normal retirement age. Mr. Connerton (age 57) is not eligible for early retirement.
 Benefits under the Pension Plan are funded by an irrevocable, tax-exempt trust. The Pension Plan benefits of all participants, including those benefits of NEOs, are payable from the assets held by the tax-exempt trust.
 Supplemental Executive Retirement Plan. Mr. Nasca is the only participant in the Senior Executive SERP. The Senior Executive SERP is available to senior executives deemed eligible by the Committee in its sole discretion. A participant is generally entitled to receive a benefit under the Senior Executive SERP upon a termination of employment, other than for "cause," after the participant has completed 10 full calendar years of service with the Bank. No benefit is payable under the Senior Executive SERP if the participant's employment is terminated for "cause" or if the participant voluntarily terminates before completing 10 full calendar years of service with the Bank. In addition, the payment of benefits under the Senior Executive SERP is conditioned upon certain agreements of the participant related to confidentiality, cooperation, non-competition, and non-solicitation. A participant will be entitled to a retirement benefit under the Senior Executive SERP if his or her employment with the Bank terminates other than for "cause" on or after the date the participant attains age 65. The "accrued benefit" is based on a percentage of the participant's final average earnings (defined as salary and annual short-term cash incentive bonus, including the amount of any salary deferrals into the Company's 401(k) and employee benefit plans), which is determined based upon the participant's total annual compensation over the highest consecutive five calendar years of the participant's employment with the Bank, accrued over the participant's "required benefit service". Mr. Nasca's

 benefit percentage is 35% and his required benefit service is 15 years. Mr. Nasca is currently eligible for a retirement benefit under the Senior Executive SERP.
 Upon a participant's death while employed by the Bank, the participant's designated beneficiary will be entitled to a cash lump sum equal to the present value of the participant's "accrued benefit", without any reduction for early retirement. If a participant's employment with the Bank terminates by reason of "disability", the participant is entitled to a benefit to be calculated as if he or she had attained age 65 immediately before the disability and assuming his or her base salary had increased 3% each calendar year, then discounted to the lump sum present value as of the date of disability, and paid as a cash lump sum. If a participant's employment is terminated without "cause" or the participant terminates with "good reason" (as defined in Internal Revenue Code Section 409A) within 24 months following a "change in control", the participant is entitled to a benefit to be calculated as if he or she had attained age 65 immediately before termination and assuming his or her base salary had increased 3% each calendar year, then discounted to the lump sum present value and paid as a cash lump sum.

 Executive Life Insurance Plan. The Company provides an endorsement split-dollar benefit to certain officers and directors in connection with bank-owned life insurance maintained by the Bank. This benefit does not carry into retirement. The benefit for all non-employee directors is in the amount of $200,000. The amount of the benefit for NEOs is 2.0 times base salary. For 2024, the amount of the benefits for each of Messrs. Nasca, Connerton and Pawlak was $1,210,000, $600,000 and $570,000, respectively. The participant annually pays income tax on the imputed value of annual term life insurance premiums.
 Employee Savings Plan. The Bank also maintains a tax-qualified 401(k) salary deferral plan to assist employees, including employees of its subsidiaries, in saving for retirement. All employees are eligible to participate on the first of the month following 30 days of employment. Eligible employees can contribute up to the maximum amount allowable under the Internal Revenue Code.
 For 2024, all employees, including the NEOs, received a 100% match from the Company on contributions up to 5% of base salary. This was reduced from a 6% maximum employer match prior to 2024. Employees are fully vested in these employer contributions after six years of service. Matching contributions credited to the accounts of NEOs are included in the "Summary Compensation Table," above, under "All Other Compensation."
 Individual account earnings will depend on the performance of the particular funds in which the participant invests. Specific guidelines govern adjustments to contribution levels, investment decisions and withdrawals from the plan. The benefit is paid as an annuity unless the employee elects one of the optional forms of payment available under the plan.

 Non-Qualified Deferred Compensation. The following table sets forth information for the Company's Non-Qualified Deferred Compensation Plan for fiscal 2024:

 Name

 Executive Contributions in Last Fiscal Year

 Aggregate Earnings in Last Fiscal Year

 Aggregate Withdrawals/Distributions in Last Fiscal Year

 Aggregate Balance at Last Fiscal Year End

 $

 -

 $

 $

 -

 $

 7,096

 The Company does not make contributions to the Non-Qualified Deferred Compensation Plan. The amount reported in the "Aggregate Balance at Last Fiscal Year End" column of this table for Mr. Connerton is reported as compensation in the Company's Summary Compensation Table for previous fiscal year. Mr. Connerton did not contribute to this plan in fiscal 2024. Mr. Nasca does not participate in the Non-Qualified Deferred Compensation Plan.
 The Deferred Compensation Plan allows NEOs to elect to defer 1% to 100% of their base salary until retirement or termination of service. Amounts deferred under the Deferred Compensation Plan are credited with interest at the prevailing prime rate, plus 100 basis points.
 NEOs are immediately 100% vested in their account balance under the Non-Qualified Deferred Compensation Plan, including credited interest. NEOs may choose from a 5-, 10- or 15-year payment plan or lump sum payment option. In 2016, the Non-Qualified Deferred Compensation Plan was frozen to all new entrants. Mr. Connerton, who was a participant in the Non-Qualified Deferred Compensation Plan when it was frozen to new entrants, is permitted to continue his participation in the plan, and Mr. Nasca is eligible to participate in the plan but has not elected a deferral. Any future NEOs will be eligible to participate in this plan.

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Securities Authorized for Issuance Under Equity Compensation Plans

 All equity compensation plans maintained by the Company were approved by the Company's shareholders. Shown below is certain information as of December 31, 2024 concerning the shares of the Company's common stock that may be issued under existing equity compensation plans.

 Equity Compensation Plans Approved by Security Holders

 Number of securities to be issued upon exercise of outstanding options

 Weighted-average exercise price of outstanding options

 Number of securities remaining available for future issuance under equity compensation plans (1)

 Evans Bancorp, Inc. 2019 Long-Term Equity Incentive Plan

 22,422

 $

 30.77

 157,236

 Evans Bancorp, Inc. 2009 Long-Term Equity Incentive Plan

 54,081

 $

 37.33

 -

 Total

 76,503

 $

 35.41

 157,236

 (1)This column excludes shares reflected under the column "Number of Securities to be issued upon exercise of outstanding options."

 Security Ownership of Certain Beneficial Owners and Management

 Beneficial ownership is determined under the rules of the Securities and Exchange Commission (the "SEC") and generally includes voting or investment power with respect to our securities. Except as indicated in the footnotes to this table, the persons named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned. The number of shares beneficially owned by each person as of February 24, 2025 includes shares of common stock that such person has the right to acquire on or within 60 days after February 24, 2025 upon the exercise of vested stock options and also includes shares of restricted stock that are subject to forfeiture and transfer restrictions until the vesting date thereof. For each person or group included in the table below, percentage ownership is calculated by dividing the number of shares beneficially owned by such person, calculated as described in the previous sentence, by the sum of the 5,567,833 shares of common stock outstanding on February 24, 2025 plus the number of shares of common stock that such person or group has the right to acquire on or within 60 days after February 24, 2025. Beneficial ownership representing less than one percent is denoted with an asterisk "*".

 Name of Beneficial Owner

 Number of Shares Beneficially Owned

 Percent of Class

 Directors, Director Nominees and Officers

 4,452

 *

 John B. Connerton (1)

 22,227

 *

 2,001

 *

 1,227

 *

 Jody L. Lomeo

 5,978

 *

 3,903

 *

 David J. Nasca (2)

 129,144

 2.31%

 3,843

 *

 Kenneth D. Pawlak (3)

 15,732

 *

 5,540

 *

 7,995

 *

 6,107

 *

 Thomas H. Waring, Jr. (4)

 17,956

 *

 20,538

 *

 Directors, director nominees and executive officers as a group; 14 persons (5)

 246,643

 4.40%

 PL Capital Advisors, LLC (6)

 611,759

 11.00%

 750 Eleventh Street South, Suite 202, Naples, FL 34102

 (1)Includes 3,094 shares that Mr. Connerton may acquire by exercise of options exercisable on February 24, 2025 or within 60 days thereafter and 9,229 shares of restricted stock that are subject to forfeiture and transfer restrictions until the vesting date thereof.

 (2)Includes 2,344 shares owned jointly by Mr. Nasca and his wife, 552 shares owned by Mr. Nasca's children, 24,713 shares that Mr. Nasca may acquire by exercise of options exercisable on February 24, 2025 or within 60 days thereafter and 21,630 shares of restricted stock that are subject to forfeiture and transfer restrictions until the vesting date thereof.

 (3)Includes 9,680 shares that Mr. Pawlak may acquire by exercise of options exercisable on February 24, 2025 or within 60 days thereafter and 5,405 shares of restricted stock that are subject to forfeiture and transfer restrictions until the vesting date thereof.

 (4)Includes 1,321 shares held by Mr. Waring's wife.

 (5)Includes 37,487 shares that such persons may acquire by exercise of options exercisable on February 24, 2025 or within 60 days thereafter.

 (6)Based on a Form 4 filed with the SEC on July 24, 2024 on behalf of PL Capital Advisors, LLC, Richard J. Lashley, a managing member of PL Capital Advisors, and John W. Palmer, a managing member of PL Capital Advisors. PL Capital Advisors, Richard J. Lashley, and John W. Palmer reported beneficial ownership of 611,759 shares.

 Item 13. Certain Relationships and Related Transactions, and Director Independence
 Related Party Transactions
 The Company's written policies and procedures with respect to transactions with related persons require the review and approval or ratification by the Audit Committee for any transaction in which the Company will be a participant and any related person has or will have a material interest (direct or indirect), other than transactions involving less than $5,000 when aggregated with all similar transactions. Related persons include the Company's directors, director nominees and executive officers and their immediate family members, as well as persons owning more than 5% of the Company's common stock and any immediate family member of such shareholder.
 Under the Company's Related Person Transaction Policy, a related person transaction may be consummated or continue if the Audit Committee has approved or ratified the transaction in accordance with the following guidelines: in considering whether to approve or ratify related person transactions, the Audit Committee will take into account, among other factors, (i) whether the related person transaction is on terms comparable to those that could be obtained in arm's length dealings with an unrelated third party; (ii) whether the related person transaction has been reviewed and approved by the Company's subsidiary banking institution in accordance with Federal Reserve Regulation O and the process and procedure established by such subsidiary banking institution to ensure compliance with Regulation O; (iii) whether the related person transaction is approved by the disinterested members of the Board of Directors; and (iv) whether the related person transaction involves compensation approved by the Company's Human Resource and Compensation Committee.
 The Audit Committee meets annually with management to discuss and review related person transactions for the current calendar year and the two previous calendar years, including the proposed aggregate value of such transactions. After review and discussion, the Audit Committee will determine, based on the above guidelines, whether to approve or ratify each related person transaction, and at each subsequently scheduled meeting, management will update the Audit Committee, as necessary, as to any material change to previously approved related person transactions and any proposed related person transactions.
 The Bank has had, and in the future expects to have, banking and fiduciary transactions with directors and executive officers of the Company and some of their affiliates. All such transactions have been in the ordinary course of business and on substantially the same terms (including interest rates and collateral on loans) as those prevailing at the time for comparable transactions with unrelated third parties, and do not involve more than a normal risk of collectivity or present other unfavorable features.
 Director Independence

 Information regarding director independence is set forth above under "Item 10. Directors, Executive Officers and Corporate Governance—Corporate Governance."

 Item 14. Principal Accounting Fees and Services
 Crowe LLP served as the Company's independent registered public accounting firm and conducted the audit of the Company's consolidated financial statements for the year ending December 31, 2024.
 Fees Billed by Crowe LLP. The following table shows the fees that Crowe LLP billed the Company for audit and other services provided for fiscal years 2024 and 2023. Audit fees consist of professional services rendered for the audit of the Company's annual consolidated financial statements and internal control over financial reporting, review of the Company's financial statements included in the Company's quarterly reports on Form 10-Q, and services that are normally provided by independent auditors in connection with statutory and regulatory filings, including SEC filings or engagements for fiscal years 2024 and 2023.

 2024

 2023

 Audit Fees

 $

 627,111

 $

 486,000

 Audit-Related Fees

 -

 -

 Tax Fees

 -

 -

 All Other Fees

 -

 16,935

 Total

 $

 627,111

 $

 502,935

 All fees listed in the table above were pre-approved by the Company's Audit Committee under the pre-approval policy described below.
 The Audit Committee's pre-approval policy details the types of audit, audit-related, tax and other services that have the general pre-approval of the Audit Committee, and the cost limits for those services. Unless a type of service to be provided by the independent auditors has received general pre-approval, it requires specific pre-approval by the Audit Committee. Also, any proposed services exceeding pre-approved cost levels require specific pre-approval by the Audit Committee.

 ITEM 15 - Exhibits and Financial Statement Schedules

 Exhibits

 23.1

 Independent Registered Public Accounting Firm's Consent from Crowe LLP

 31.1

 Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 31.2

 Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 32.1

 Certification of Principal Executive Officer pursuant to 18 USC Section 1350 Chapter 63 of Title 18, United States Code, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

 32.2

 Certification of Principal Financial Officer pursuant to 18 USC Section 1350 Chapter 63 of Title 18, United States Code, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

 SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 EVANS BANCORP, INC.

 Dated:

 March 27, 2025

 By:

 /s/ David J. Nasca

 President and Chief Executive Officer