Evans Bancorp in Williamsville, New York, agreed to sell its insurance unit to Arthur J. Gallagher & Co. for $40 million.
The $2.2 billion-asset bank said the sale of the Evans Agency is expected to close in the current quarter.
Evans Bancorp estimated a net gain on sale, after taxes, of $15.1 million. The company said it could invest the proceeds into lending and other core banking operations.
"This transaction realizes a significant valuation premium and is immediately accretive to Evans' capital, tangible book value and liquidity," Evans Bancorp President and CEO David Nasca said in a press release Tuesday.
The Evans Agency offers life insurance, employee benefits, and property and casualty insurance in New York and across the Northeast.
"For 23 years, the insurance business has been an integral part of Evans Bank. During that time, the bank acquired over 15 agencies and successfully built a customer-centric, high-performing operation with strong values," Nasca said.
He added, however, that the bank had determined it could now fetch a premium price for the operation. "The additional capital provides flexibility to evaluate and pursue various strategic initiatives to redeploy capital in support of our core banking business," Nasca said.
The Evans Agency's president, Aaron Whitehouse, and its team would report to Patrick Kennedy, head of Gallagher's Northeast region retail property and casualty brokerage operations.
Piper Sandler and Luse Gorman advised Evans Bancorp.
Evans is the
