NBT Bancorp Expands Operations with Evans Bancorp Acquisition

NBT Bancorp's Strategic Move into Expansion

NBT Bancorp (NASDAQ: NBTB) has made an impressive strategic decision to acquire Evans Bancorp (NYSE: EVBN) for a notable sum of $236 million. This acquisition is a significant step for NBT as it seeks to broaden its reach in western New York.

The Current Landscape for Mid-size Banks

In recent times, small and middle-sized banks have been actively pursuing mergers and acquisitions as a method to enhance their financial strength and maintain competitiveness in an increasingly crowded market. The number of deals in the banking sector is on the rise, with mid-sized institutions leading the charge.

Deal Statistics and Recent Trends

As of mid-August, banks within the $10 billion to $100 billion asset range reported 38 deals completed, a notable increase compared to 29 during the previous year, according to insights from Dealogic.

Assets and Financial Positioning

NBT Bancorp reported its assets totaled approximately $13.50 billion by June 30, whereas Evans Bancorp had about $2.26 billion in assets at the same time. This merger will further diversify NBT's asset base, contributing to its resilience in profitability.

Benefits of the Merger

Industry experts, including Kris Mitchener from the Leavey School of Business, highlight the trend of banks seeking to mitigate deposit concentration by merging. A more diverse depositor base enhances stability and reduces risks associated with profitability fluctuations.

Market Share Expansion

The acquisition will strategically position NBT to bolster its market share in significant urban areas like Buffalo and Rochester. Currently, NBT serves a variety of customers in upstate New York regions such as Norwich, Syracuse, Oneonta, and it also has operations in Pennsylvania, Vermont, and Massachusetts.

Loan Portfolio and Commercial Lending Focus

Founded in 1856, NBT Bancorp has established itself as a substantial lender, particularly focusing on the commercial segment. By the end of the most recent quarter, more than half of NBT's loan portfolio consisted of commercial and industrial loans, along with commercial real estate loans.

Details of the Acquisition

Under the agreement, Evans Bancorp’s shareholders will receive 0.91 shares of NBT for each share they currently possess. This deal is anticipated to finalize in the first half of the upcoming year. Following the closure of the deal, Evans’ CEO David Nasca is set to join the board of NBT, further facilitating integration between the two institutions.

Financial Advisement for the Transaction

The financial dynamics of this transaction involved guidance from two notable financial advisory entities; Stephens provided advice to NBT while Piper Sandler advised Evans, ensuring both parties were well-equipped during the negotiation process.

Frequently Asked Questions

What is the value of the NBT Bancorp and Evans Bancorp deal?

The acquisition deal is valued at approximately $236 million, marking a strategic expansion for NBT Bancorp.

What are the expected benefits of the merger for NBT Bancorp?

The merger is designed to increase NBT's market presence, stabilize its deposit base, and enhance its competitive positioning in the banking sector.

When is the acquisition expected to close?

The deal is projected to close in the first half of the next fiscal year, pending the necessary approvals.

Who will join NBT’s board after the acquisition?

After the merger's completion, David Nasca, the CEO of Evans Bancorp, will become a member of NBT Bancorp’s board.

How did NBT Bancorp perform financially before the acquisition?

NBT Bancorp's assets were reported at around $13.50 billion as of June 30, showing a strong financial position leading up to the acquisition.

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