Sept 9 (Reuters) - U.S. lender NBT Bancorp ( NBTB ) has

agreed to buy Evans Bancorp ( EVBN ) in a deal that values it at

nearly $236 million, as it looks to expand its footprint in

western New York.

Small and mid-size banks have been ramping up dealmaking to

strengthen their balance sheets and compete with rivals more

effectively.

As of mid-August, banks with assets between $10 billion and

$100 billion had struck 38 deals compared with 29 during the

same period last year, according to Dealogic data.

NBT's assets totaled $13.50 billion as of June 30, while

Evans had $2.26 billion of assets at the same time.

Banks have been looking to reduce deposit concentration via

mergers since a more diversified depositor base improves

stability and reduces risks to profitability, said Kris

Mitchener, professor of economics at the Leavey School of

Business at Santa Clara University.

The latest deal will allow NBT to gain market share in

Buffalo and Rochester, it said on Monday. Currently, it

primarily serves customers in upstate New York areas of Norwich,

Syracuse, Oneonta and others. It is also present in

Pennsylvania, Vermont and Massachusetts.

NBT was formed in 1856 and is a big lender to businesses.

More than half of its loan portfolio consisted of commercial and

industrial, and commercial real estate loans as of the second

quarter.

Under the terms of the deal, Evans' investors will get 0.91

of NBT shares for each share they own. After the deal, which is

expected to close in the first half of next year, Evans' CEO

David Nasca will join NBT's board.

Stephens was the financial adviser to NBT, while Piper

Sandler advised Evans.