NORWICH, N.Y. (AP) — The community bank NBT Bancorp Inc. said Monday that it plans to buy one of its smaller competitors, Alliance Financial Corp., for about $233 million in stock in a deal that would broaden its holding in central New York.
The news sent shares of Alliance up almost 17 percent in morning trading. NBT shares fell more than 3 percent.
NBT, based in Norwich, N.Y., has roughly 135 locations across New York, Pennsylvania, Vermont, Massachusetts and New Hampshire. Alliance, based in Syracuse, N.Y., has 28 locations, all in central New York.
In a statement, both banks said their boards had unanimously approved the deal. For NBT, the purchase represents the chance to secure a foothold in the "demographically attractive" New York counties of Cortland, Madison, Oneida, Onondaga and Oswego.
Alliance shareholders will get roughly 2.2 shares of NBT for each share of Alliance. That means Alliance shareholders will get shares worth about $48 per share, based on NBT's average closing price of $22.04 for the week before the deal was announced.
Alliance shares jumped $6.61, or 16.8 percent, to $46.02 in morning trading Monday. NBT shares fell 70 cents, or 3.2 percent, to $21.45.
Jack Webb, the Alliance CEO, will join NBT as an executive vice president and serve on the board of directors. The NBT board will also add two other Alliance board members.
The banks expect the deal to close around spring of next year. It still needs approval from regulators and both banks' shareholders.