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Civista Bancshares Closes United Community Bancorp Buyout

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In sync with its expansion strategy, Civista Bancshares, Inc. (CIVB - Free Report) has completed the acquisition of Lawrenceburg, IN-based United Community Bancorp for nearly $119 million. The cash-cum-stock deal was announced in March.

As part of the deal agreement, for each share of United Community Bancorp, Civista issued 1.027 company shares and paid $2.54 in cash. This is the biggest buyout for Civista in terms of deal value and the first outside the state of Ohio.

Dennis G. Shaffer, president and CEO of Civista said, “We look forward to collaborating with United Community's team to grow and enhance their banking platform while maintaining strong ties to their communities.  We believe the long-term growth potential of this partnership offers substantial upside for shareholders of both organizations.”


The deal is expected to be immediately accretive to Civista’s earnings in 2018 as well as to its 2019 earnings by 9.3%. Further, it will result in 12% cost savings this year and 41% in 2019. Notably, the acquisition will likely result in one-time pre-tax integration charges of $11 million.

The deal provides Civista with low-cost deposits through Southeastern Indiana, where United Bancorp has eight branches. Given that five such branches of United Bancorp are located in the Cincinnati MSA, this transaction will help Civista expand its community banking franchise into and around the area.

Furthermore, based on Jun 30, 2018 information, Civista now holds total assets worth around $2.1 billion.

Going Ahead

Civista’s expansion strategy is mostly driven by the company’s organic growth plan. Prior to the above-mentioned deal, the bank had acquired TCNB Financial Corporation in 2015. However, now with changes in regulatory requirements and policy changes, the company may go in for more acquisitions in the future.

Strong liquidity position and solid capital ratios are anticipated to support Civista’s expansion plans. In addition, analysts seem to be bullish on the stock. Over the past 60 days, the Zacks Consensus Estimate has moved 2.4% and 2.1% upward for 2018 and 2019, respectively.

Also, shares of Civista have rallied 11.2%, so far this year, outperforming 9.8% growth of its industry.

Currently, Civista carries a Zacks Rank #2 (Buy).

Other Stocks Worth a Look

A few other stocks from the same space worth considering are German American Bancorp, Inc. (GABC - Free Report) , Enterprise Financial Services Corp. (EFSC - Free Report) and Macatawa Bank Corporation (MCBC - Free Report) . All these stocks have a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

German American Bancorp’s Zacks Consensus Estimate for earnings for 2018 has been revised marginally upward in the last 60 days. Also, its share price has increased 5.9% in the past 12months.

Enterprise Financial’s current-year earnings estimates have been revised 3.3% upward in the last 60 days. Further, the company’s shares have gained 35.3% in a year’s time.

Macatawa Bank’s earnings estimates for 2018 have been revised 4% upward, over the last 60 days. In the past year, its shares have rallied 25.6%.

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