By Niket Nishant
(Reuters) - U.S. lender NBT Bancorp (NASDAQ:NBTB) has agreed to buy Evans Bancorp (NYSE:EVBN) in a deal that values it at nearly $236 million, as it looks to expand its footprint in western New York.
Small and mid-size banks have been ramping up dealmaking to strengthen their balance sheets and compete with rivals more effectively.
As of mid-August, banks with assets between $10 billion and $100 billion had struck 38 deals compared with 29 during the same period last year, according to Dealogic data.
NBT's assets totaled $13.50 billion as of June 30, while Evans had $2.26 billion of assets at the same time.
Banks have been looking to reduce deposit concentration via mergers since a more diversified depositor base improves stability and reduces risks to profitability, said Kris Mitchener, professor of economics at the Leavey School of Business at Santa Clara University.
The latest deal will allow NBT to gain market share in Buffalo and Rochester, it said on Monday. Currently, it primarily serves customers in upstate New York areas of Norwich, Syracuse, Oneonta and others. It is also present in Pennsylvania, Vermont and Massachusetts.
NBT was formed in 1856 and is a big lender to businesses. More than half of its loan portfolio consisted of commercial and industrial, and commercial real estate loans as of the second quarter.
Under the terms of the deal, Evans' investors will get 0.91 of NBT shares for each share they own. After the deal, which is expected to close in the first half of next year, Evans' CEO David Nasca will join NBT's board.
Stephens was the financial adviser to NBT, while Piper Sandler advised Evans.