Evans Bancorp, Inc. (AMEX:EVBN) signed a definitive merger agreement to acquire FSB Bancorp, Inc. (NasdaqCM:FSBC) for $35.9 million on December 19, 2019. 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, resulting in Evans acquiring FSB for $17.80 per share. At the 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. There will be no change to the bank branch locations. The agreement provides certain termination rights for both Evans and FSB and further provides that a termination fee of $1.4 will be payable by FSB, upon termination of the agreement under certain circumstances. There will be some overlap in job functions that will result in some staff consolidation. The transaction will not impact the vast majority of other Evans positions.

The transaction is subject to the satisfaction of customary closing conditions, the FSB stockholder approval, the effectiveness of the registration statement, the approval of the listing on NYSE of the Evans common stock to be issued pursuant to the merger and approval of OCC, NYDFS, the FDIC, and any other regulatory authority. The Boards of Directors of each company approved the transaction unanimously. As of March 12, 2020, FSB Bancorp reported to hold a special meeting of shareholders on April 20, 2020, to approve the transaction. As of April 17, 2020, the transaction received the requisite regulatory approvals or waivers for the consummation of the merger from the Board of Governors of the Federal Reserve System, the New York State Department of Financial Services and the Office of the Comptroller of the Currency. Also, Evans announced the election deadline for the shareholders of FSB is April 24, 2020. As of April 20, 2020, shareholders of FSB Bancorp approved the transaction. The FSB Board of Directors established a Mergers and Acquisitions Committee, consisting of Dana Gavenda, Lowell Patric, and Kevin Maroney, to oversee the strategic alternatives process and make recommendations to the FSB Board of Directors. The transaction is expected to close in the second quarter of 2020. As of April 17, 2020, the merger is expected to close on May 1, 2020. Evans' management expects this transaction will be 4.7% accretive to 2021 earnings with tangible book value earn back of approximately 3.5 years.

Joe Moeller of Keefe, Bruyette & Woods, Inc. acted as financial advisor to Evans and Christopher J. DeCresce, Frank M. Conner III and Michael P. Reed of Covington & Burling LLP acted as its legal advisors. Sandler O'Neill + Partners, L.P. acted as financial advisor and fairness opinion provider to FSB and Eric Luse, Benjamin M. Azoff and Jeffrey M. Cardone of Luse Gorman, PC acted as its legal advisors. Sandler O'Neill will receive a fee for such services in an amount equal to 1.25% of the aggregate merger consideration. At the time of announcement of the merger Sandler O'Neill's fee was approximately $435,000. Sandler O'Neill also received a $75,000 fee from FSB upon rendering Sandler O'Neill's opinion. EQ Proxy Services acted as proxy solicitor to FSB and FSB paid fee of $6,000 to EQ Proxy Services.

Evans Bancorp, Inc. (AMEX:EVBN) completed the acquisition of FSB Bancorp, Inc. (NasdaqCM:FSBC) on May 1, 2020. Following the acquisition, FSB Bancorp, Inc. was merged with and into Evans Bancorp, Inc., with Evans Bancorp, Inc. continuing as the surviving corporation. Fairport Savings Bank was merged with and into Evans Bank, with Evans Bank continuing as the surviving bank. Fairport customer relationships will continue business as usual until the banks' systems are integrated and Fairport banking offices are rebranded as Evans Bank, which is anticipated to occur in August 2020. The team members of FSB will join Evans Bancorp. Pursuant to the terms of the agreement, the Evans Board of Directors increased the number of Directors that comprised the Board to 14 Directors, an increase of one. In accordance with the merger agreement, Kevin D. Maroney, formerly President and Chief Executive Officer and a Director of FSB Bancorp has been appointed to the Board of Directors of Evans. In connection with such appointment, Maroney has been appointed to the Audit Committee and the Enterprise Risk Committee. Nasdaq has filed with the SEC a notification of removal from listing and registration of FSB common stock on to effect the delisting of all shares of FSB Common Stock from Nasdaq and the deregistration of all shares of FSB common stock.