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Civista Bancshares to Acquire Indiana´s United Community Bancorp
Tuesday 13 March 2018

13 March 2018 - Ohio, US-based bank holding company Civista Bancshares, Inc. (NASDAQ: CIVB) and Indiana, US-based United Community Bancorp, the parent company of United Community Bank (NASDAQ: UCBA), have signed a definitive merger agreement pursuant to which Civista will acquire United, the company said.

Based on financial data as of December 31, 2017, the combined company would have total assets of USD 2.1bn, total loans of USD 1.5bn and total deposits of USD 1.7bn.

United operates an eight branch network in southeastern Indiana, five of which are located in the Cincinnati MSA.

This acquisition will allow Civista to bring its enhanced commercial lending platform to United's demographically strong markets. United will provide Civista with low cost core deposit funding and excess liquidity.

Civista currently operates branches and loan production offices from northern Ohio to Dayton, Ohio.

The acquisition of United expands Civista's community banking franchise into and around the Cincinnati MSA, which is home to over 2.1 m people. After this strategic partnership, Civista's community banking platform will operate in each of the five largest Ohio marketplaces.

Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, the consideration United shareholders will receive is equivalent to 1.027 shares of Civista common stock and USD 2.54 in cash per share of United common stock.

This implies a deal value per share of USD 26.22 or approximately USD 114.4m based on the 15-day average closing price of Civista's common stock on March 9, 2018 of USD 23.06.

Civista and United anticipate that the transaction will qualify as a tax-free reorganisation to the extent that United shareholders receive Civista common stock in the merger.

The transaction is expected to close in 3Q18, subject to each company receiving the required approval of its shareholders, receipt of all required regulatory approvals and fulfillment of other customary closing conditions.
Under terms of the agreement, the directors of Civista and the directors and executive officers of United have agreed to vote all shares that they own in their respective organisations in favor of the merger.

In addition, a total of three existing United directors will join the Civista Bank board of directors and two of those directors will join the Civista Bancshares, Inc. board of directors. E.G. McLaughlin is expected to be one of the directors to join both boards.

In preparation for the merger, extensive due diligence was performed over a multi-week period. Under the proposed merger terms, the acquisition of United is expected to be immediately accretive to Civista's earnings in 2018 and thereafter.

In addition, any tangible book value dilution created in the transaction is expected to be earned back in approximately 3.5 years after closing.

Post-closing, Civista's capital ratios are expected to continue to exceed "well-capitalized" regulatory standards.

Civista Bancshares is a USD 1.5bn financial holding company headquartered in Sandusky, Ohio. Civista's banking subsidiary, Civista Bank, operates 29 locations in Northern, Central and Southwestern Ohio.

United Community Bancorp is the parent company of United Community Bank, headquartered in Lawrenceburg, Indiana. The Bank currently operates eight offices in Dearborn and Ripley Counties, Indiana.
Date Published: 13/03/2018
Target: United Community Bank
Country: USA
Deal Size: 114.4m (USD)
Sector: Banking/Financial Services
Type: Corporate acquisition
Financing: Cash and Stock
Status: Agreed
Buyer: Civista Bancshares