Evans Bancorp and FSB Bancorp jointly announced the execution of a definitive merger agreement whereby Evans will acquire FSB for $17.80 per share for total consideration of approximately $34.7 million. The transaction is proposed to be comprised of 50% stock and 50% cash. Unanimously approved by the Boards of Directors of each company, the transaction is expected to close in the second quarter of 2020, subject to the satisfaction of customary closing conditions, including regulatory approval and FSB stockholder approval. An investor presentation summarizing the transaction is available at www.evansbancorp.com.
“FSB has a long-established presence and respected legacy in an attractive market. By combining our organizations, we are advancing our growth objectives and strategy to build the premier community financial institution in the markets we serve by expanding our geographic footprint and diversifying our client base. Expanding to Rochester had been prioritized as part of our strategic planning and is accelerated by this opportunity,” said David J. Nasca, President and CEO of Evans. “We are very excited to welcome the team members of FSB and to continue to provide customers with the relationship service they know and desire.”
Kevin D. Maroney, FSB’s President and CEO, commented, “This mutually beneficial partnership will combine two community banks with very similar cultures and core values. The combined organization will be able to offer top of line products and exceptional service to our customers in Rochester and surrounding markets. In addition to providing our customers with enhanced and expanded products and services, our employees will also benefit from broader opportunities in a larger organization with strong growth potential.”
Under the terms of the merger agreement, FSB stockholders will have the right to receive at their election either 0.4394 shares of Evans common stock or $17.80 in cash for each share of FSB common stock, subject to possible adjustment and 50/50 proration. This transaction will qualify as a tax-free reorganization for those FSB stockholders who receive Evans common stock in the transaction. The merger consideration represents an 8% premium to FSB’s tangible book value as of September 30, 2019, and a 5.9% premium to FSB’s closing share price on December 18, 2019. Evans’ management expects this transaction will be 4.7% accretive to 2021 earnings with tangible book value earn back of approximately 3.5 years.
Based on information as of September 30, 2019, the combined company will have 20 financial centers with approximately $1.8 billion in total assets, $1.5 billion in total deposits and $1.5 billion in total loans. Completion of the transaction is subject to customary closing conditions, including the receipt of regulatory approvals and the approval of FSB stockholders. Under the terms of the merger agreement, at closing of the transaction, FSB and its wholly-owned bank subsidiary, Fairport Savings Bank, will be merged with and into Evans Bancorp and its subsidiary bank, Evans Bank.
