Sandusky, Ohio based Civista Bancshares, Inc. and Comunibanc Corp., the parent company of The Henry County Bank, announced the signing of a definitive merger agreement pursuant to which Civista will acquire Comunibanc. Based on financial data as of September 30, 2021, the combined company would have total assets of approximately $3.3 billion, total net loans of approximately $2.1 billion and total deposits of approximately $2.7 billion.
The acquisition of Comunibanc will add 7 branches in Henry and Wood Counties in Northwest Ohio and approximately $276 million in low-cost core deposits. As of September 30, 2021, Comunibanc also reported total assets of $329 million and total loans of $165 million. This acquisition will allow Civista to bring its enhanced commercial lending platform to Comunibanc’s strong markets and deploy Comunibanc’s excess liquidity position with its 60% loan-to-deposit ratio. With the Northwest Ohio market, the Toledo MSA is the fifth largest market in Ohio with over $17 billion in deposits and is the second fastest growing major Ohio MSA.
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“We are very excited to welcome Comunibanc’s customers and employees to the Civista family,” said Dennis G. Shaffer, CEO and President of Civista. “We have known the Comunibanc team for a very long time and have always admired the franchise and their strong and stable presence in their local communities. We look forward to collaborating with Comunibanc’s leadership team to grow and enhance their banking platform. The current Civista team has significant experience operating in the Northwest Ohio market and are very excited to partner with Comunibanc and accelerate growth.”
“We have great admiration and respect for the Civista team and we believe this merger is a great outcome for our shareholders and positions us for continued success,” stated Bill Wendt Chairman and President of Comunibanc. “We believe partnering with Civista will provide us the enhanced capacity to deliver the products and services sought by our customers and will accelerate the commercial loan production efforts that we have undertaken in the Northwest Ohio market. Our relationship with Civista’s management team is long-dated going back nearly thirty years and we have always felt our two organizations share a similar culture and operating philosophy. This transaction represents a win-win for all of all our stakeholders.”
Subject to the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, each share of Comunibanc common stock will receive 1.1888 shares of Civista common stock and $30.13 in cash. This implies a deal value of approximately $50.2 million in the aggregate or $60.59 per Comunibanc share based on the closing price of Civista’s common stock on January 7, 2022 of $25.62. Civista and Comunibanc anticipate that the transaction will qualify as a tax-free reorganization for the portion of the merger consideration exchanged for Civista common stock. The transaction is expected to close in the second quarter of 2022, subject to the required approval of the Comunibanc shareholders, receipt of all required regulatory approvals and fulfillment of other customary closing conditions.
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Under terms of the merger agreement, the directors of Comunibanc have agreed to vote all Comunibanc shares that they own in favor of the merger. In addition, after closing one of the Comunibanc directors will join the Civista Bank Board of Directors.
In preparation for the merger, extensive due diligence was performed over a multi-week period. Under the proposed merger terms, the acquisition of Comunibanc is expected to be 10% accretive to Civista’s EPS in 2023 and thereafter. In addition, any tangible book value dilution created in the transaction is expected to be earned back in approximately 2.9 years after closing. Post-closing, Civista’s capital ratios are expected to continue to exceed “well-capitalized” regulatory standards.
Civista will host an investor conference call and webcast on January 11, 2022, at 10:00 a.m., ET, to provide an overview of the transaction and highlights. Participants may join the conference ten minutes prior to the start time by calling 1-855-238-2712 and asking for the Civista Bancshares conference. Additionally, the live webcast may be accessed from the ‘Webcasts and Presentations’ page of the Company’s website or from the ‘Upcoming Events’ tab on the CIVB mobile site.
Stephens Inc. acted as financial advisor to Civista and Dinsmore & Shohl LLP acted as its legal advisor in the transaction. ProBank Austin acted as financial advisor to Comunibanc and Shumaker, Loop & Kendrick, LLP acted as its legal advisor.
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