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Five banks bid on failed Waterford

Four other banks besides Evans Bancorp submitted bids to federal regulators for the failed Waterford Village Bank last summer, but Evans' proposal was by far the "least costly" for the federal deposit insurance fund, according to new information released this week.

Clarence-based Waterford was seized by the New York State Banking Department on July 24 and turned over to the Federal Deposit Insurance Corp., which promptly sold it to Angola-based Evans Bank.

Evans Bank assumed all Waterford's deposits and purchased nearly all its assets, including maintaining the branch on Main Street in Clarence and keeping most of the employees.

Evans and the FDIC entered an agreement to share any losses, but Evans otherwise paid no premium for the deposits. And the FDIC even paid $800,000 to Evans as an "asset discount" to make up for a capital shortfall at Waterford.

Until now, however, it wasn't clear if Evans had any competition. The Buffalo News submitted a Freedom of Information Act request several months ago, seeking the names and bids of any other banks that sought to buy Waterford. But the FDIC until this week had refused to release the information, citing a concern that publicizing it might deter future bidders or hamper their ability to get the best prices.

The agency now says it will provide most of the names and purchase offers for losing bids, except that of the second-place bidder, but will not identify which bank made which offer. Details will be made available one year after a bank's failure.

According to the new summary of bids the FDIC posted online this week, M&T Bank Corp., Hornell-based Steuben Trust Co. and Lyons National Bank in Central New York all proposed to buy the defunct Waterford and assume all of its deposits, with loss-sharing agreements on assets.

The three bids, which were listed randomly and not linked to the specific banks, included discounts of $1.55 million, $4.578 million and $9.116 million. The bank that sought the $9 million payment also offered to pay a deposit premium of 0.5 percent. Neither Evans nor the other two banks proposed any premium.

e-mail: jepstein@buffnews.com

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