For Evans Bancorp in Williamsville, New York,
"The board was pretty courageous in thinking strategically about the catalyst for the future and where we want to be long term in taking care of the community, our clients, our associates," said Nasca, who has served as Evans' president and CEO since December 2006.
Once the decision to sell was made, Nasca's role was to identify potential acquirers. It didn't take him long to settle on the $13.5 billion-asset NBT as the prime candidate. "This is the partner we wanted," he said. The $236 million all-stock deal, announced Sept. 9, "is a chance for us, working with a very [similar] partner — and I mean culture, values, humanity — to really power up…This was very strategic for us."
Acquiring the $2.3 billion-asset Evans gives NBT, whose franchise is centered in central New York and eastward in the Capital Region and the Hudson Valley, a ready-made franchise on the state's western end. "We don't do deals frequently," CEO Scott Kingsley said in an interview. "We still strive to grow organically, but when you get an opportunity to move forward in a geography with a high-quality partner, I think you have to evaluate it and say this is definitely worth the investment."
Tough times
Evans' decision to sell wasn't prompted by its performance, Nasca said. Profits through the first six months of 2024 totaled $5.3 million. Meanwhile the
But while Evans' second-quarter earnings included healthy increases in loans and deposits, a smaller proportion of that production was dropping to its bottom line. "We're doing more business in this environment and making less money," Nasca said.
Evans' $2.9 million net income declined 40% from the second quarter of 2023. The drop-off was due in part to the reduction in noninterest income resulting from the insurance sale, but it also reflected the tough conditions that confront community banks generally, Nasca said.
"Smaller banks are really challenged to be able to go it alone … with increasing regulatory burdens and the increased cost from the technology needed to meet consumers' demands," he said. "While companies can do well and we were doing very well, [merging with NBT] was a chance for us to really strengthen the franchise on both sides."
Analyst Jake Civiello, who covers NBT for Janney Montgomery Scott, labeled the deal "a classic strategic merger" in a research note. "Our initial reaction … is positive," Civiello wrote. "Evans customers and shareholders should benefit from greater scale, while NBT stakeholders see opportunity for targeted expansion in under-penetrated markets."
Not a line of business
Though the transaction with Evans follows closely on its
NBT's courtship technique is considerably softer.
The Salisbury purchase, which closed in August 2023, was the company's first in a decade. The combination with Evans came after decades of close association between the two management teams that paved the way for NBT to step forward quickly and seamlessly when Evans sought a partner.
"You get an understanding of people's culture, you get an understanding of how people go to market, you understand the competitive dynamics of the markets they're participating in because you just have natural dialogue," Kingsley said. "The reality of M&A in any industry is quantitatively it will always be competitive … We just want to position ourselves qualitatively."
Evans and NBT are targeting a close in the second quarter of 2025. "We have a great regulator in the OCC," Kingsley said. Evans "has the same regulator. We do business a lot alike. We have no overlap in our franchise. It would seem to be something that could work through the regulatory approval process very quickly."
Upon closing, Nasca will join the combined company's board. After four decades as a day-to-day banker, Nasca is ready to make the move to full-time governance.
"I'm okay with that. It was time," said Nasca, who is 66. "I'm excited for the next chapter."
