CB Financial Services, Inc. ( CBFV Quick Quote CBFV - Free Report) and its subsidiary, Community Bank, have entered into a purchase-and-assumption agreement with Citizens Bank of West Virginia, Inc., the subsidiary of Citizens Financial Corp. Per the terms of deal, CB Financial will divest two West Virginia branches — the Buckhannon and New Martinsville.
The deal is subject to regulatory approval and the satisfaction of certain customary closing conditions. Further, the transaction, likely to close in the fourth quarter this year, is projected to result in gain on sale.
Under the terms of the transaction, certain deposit liabilities and loans, as along with cash, real property, personal property and other fixed assets related to these branches will be acquired by Citizens. As of May 31, 2021, the branches had deposit and loan balances of $101.9 million and $6.3 million, respectively. Citizens will pay a 5% deposit premium on the total deposits transferred.
CB Financial has been undertaking initiatives to streamline its operations and the divestiture of these branch locations is a continuation of the branch-optimization strategy announced this February. Apart from propelling adeptness throughout the bank and investing in technological refinements, Community Bank will be able to focus better on its core markets surrounding Southwestern Pennsylvania.
Besides, the above-mentioned branches were geographically the furthest from the company’s headquarter in Pennsylvania. Following the deal’s closure as well as the proposed consolidation of six other branches, CB Financial will operate from 14 locations in Southwestern Pennsylvania and West Virginia.
The president and CEO of CB Financial, John H. Montgomery, stated, “These West Virginia branches are much closer to Citizens’ headquarters and centralized operations. This transaction allows our Company to focus our growth on our core markets. In addition, we remain focused on increasing efficiency and investing in digital marketing and technology enhancements. We see this as an important step in our optimization efforts as we seek to improve overall profitability and deliver peer-leading returns to the Company’s shareholders."
Nathaniel S. Bonnell, president and CEO of Citizens, stated, “Citizens’ purchase of these branches provides an outstanding opportunity for us to increase our presence and commitment in the Buckhannon market as well as expand our footprint into New Martinsville. This acquisition is strategically beneficial to both Citizens and Community, and we are excited to welcome these West Virginia clients into the Citizens family.”
In the past six months, shares of CB Financial have gained 5%, underperforming 31.6% growth recorded by the
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Currently, the stock carries a Zacks Rank #3 (Hold). You can see
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