Evans Bancorp in Williamsville, N.Y., has agreed to sell its insurance business to Arthur J. Gallagher & Co. for $40 million.
The $2.2 billion-asset company said in a press release that the sale of the Evans Agency should close in the fourth quarter. Evans said it could invest the after-tax proceeds of $15.1 million 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,” David Nasca, Evans’ president and CEO, said in the release.
“The additional capital provides flexibility to evaluate and pursue various strategic initiatives to redeploy capital in support of our core banking business,” Nasca added.
Evans was advised by Piper Sandler and Luse Gorman.
Several banks, including Cadence Bank, Eastern Bankshares and Premier Financial, have sold their insurance subsidiaries in recent months, taking advantage of high valuations for those businesses.