Attached files
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EX-99.1 - EX-99.1 - CIVISTA BANCSHARES, INC. | d659937dex991.htm |
EX-23.1 - EX-23.1 - CIVISTA BANCSHARES, INC. | d659937dex231.htm |
8-K/A - 8-K/A - CIVISTA BANCSHARES, INC. | d659937d8ka.htm |
Exhibit 99.2
PRO FORMA FINANCIAL INFORMATION
Civista Bancshares, Inc. and United Community Bancorp
Unaudited Pro Forma Condensed Combined Consolidated Financial Statements
The following Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet combines the historical Consolidated Balance Sheet of Civista Bancshares, Inc. and subsidiaries (Civista) and the historical Consolidated Balance Sheet of United Community Bancorp and subsidiaries (United Community) at June 30, 2018, giving effect to the consummation of the merger of United Community with and into Civista and as if the merger had become effective on June 30, 2018, using the purchase method of accounting and giving effect to the related pro forma adjustments described in the accompanying Notes to the Unaudited Pro Forma Condensed Combined Consolidated Financial Statements.
The following Unaudited Pro Forma Condensed Combined Statements of Income for the six months ended June 30, 2018 and the year ended December 31, 2017 combine the historical Consolidated Statements of Income of Civista and United Community giving effect to the merger as if the merger had become effective at the beginning of the periods presented, using the purchase method of accounting and giving effect to the related pro forma adjustments described in the accompanying footnotes to the Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet and the Unaudited Pro Forma Condensed Combined Consolidated Statements of Income.
Although pro forma financial information is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States of America, Civista and United Community believe that pro forma financial information is important because it gives effect to the merger as if the merger had become effective at the beginning of the period presented. The manner in which Civista and United Community calculate pro forma financial information may differ from similarly titled measures reported by other companies.
The unaudited pro forma condensed combined consolidated financial statements included herein are presented for informational purposes only. This information includes various estimates and may not necessarily be indicative of the financial position or results of operations that would have occurred if the merger had been consummated on the date or at the beginning of the period indicated or which may be obtained in the future. The unaudited pro forma condensed combined consolidated financial statements and accompanying notes should be read in conjunction with and are qualified in their entirety by reference to the historical financial statements and related notes thereto of Civista and subsidiaries included in Civistas Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and Civistas Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2018, and the historical financial statements and related notes thereto of United Community and subsidiaries filed as Exhibit 99.1 to this Current Report on Form 8-K/A.
These pro forma financial statements do not include the effects of any potential cost savings that management believes will result from operating the United Community banking business as branches and combining certain operations functions. It also does not necessarily reflect what the historical results of the combined company would have been had the companies been combined during these periods.
Civista Bancshares, Inc. and United Community Bancorp
Pro Forma Condensed Combined Consolidated Balance Sheet
(Unaudited)
At June 30, 2018 (In thousands except per share data)
Pro Forma | ||||||||||||||||||
Adjustments | ||||||||||||||||||
Civista Historical |
United Community Historical |
Increase / (Decrease) |
Footnote Reference |
Pro Forma Combined |
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Assets |
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Cash and due from banks |
$ | 41,156 | $ | 37,461 | $ | (24,761 | ) | (A)(B) | $ | 53,856 | ||||||||
Securities held to maturity |
| 41,586 | | 41,586 | ||||||||||||||
Securities available for sale |
231,920 | 126,618 | | 358,538 | ||||||||||||||
Other Investments |
14,247 | 3,527 | | 17,774 | ||||||||||||||
Loans held for sale |
4,058 | 501 | | 4,559 | ||||||||||||||
Loans |
1,180,032 | 311,317 | (10,972 | ) | (C) | 1,480,377 | ||||||||||||
Allowance for loan losses |
(12,867 | ) | (3,915 | ) | 3,915 | (D) | (12,867 | ) | ||||||||||
Premises and equipment |
17,308 | 6,319 | (907 | ) | (E) | 22,720 | ||||||||||||
Goodwill |
27,095 | 2,522 | 46,323 | (F) | 75,940 | |||||||||||||
Other identified intangible assets |
1,247 | 78 | 7,330 | (G) | 8,655 | |||||||||||||
Bank owned life insurance |
25,411 | 17,121 | | 42,532 | ||||||||||||||
Accrued interest and other assets |
18,847 | 7,533 | (283 | ) | (H)(K) | 26,097 | ||||||||||||
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Total Assets |
$ | 1,548,454 | $ | 550,668 | $ | 20,645 | $ | 2,119,767 | ||||||||||
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Liabilities |
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Deposits |
$ | 1,146,172 | $ | 469,247 | $ | (249 | ) | (I) | $ | 1,615,170 | ||||||||
Securities sold under repurchase agreements |
14,230 | | | 14,230 | ||||||||||||||
FHLB borrowings |
156,200 | 6,833 | (53 | ) | (J) | 162,980 | ||||||||||||
Other borrowings |
29,427 | | | 29,427 | ||||||||||||||
Accrued expenses and other liabilities |
12,577 | 2,952 | | 15,529 | ||||||||||||||
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Total Liabilities |
1,358,606 | 479,032 | (302 | ) | 1,837,336 | |||||||||||||
Shareholders Equity |
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Preferred Stock |
13,250 | | | 13,250 | ||||||||||||||
Common Stock |
158,191 | 51,985 | 52,684 | (L)(M) | 262,860 | |||||||||||||
Retained earnings |
39,898 | 36,389 | (48,475 | ) | (A)(L) | 27,812 | ||||||||||||
Treasury stock |
(17,235 | ) | (13,701 | ) | 13,701 | (L) | (17,235 | ) | ||||||||||
Accumulated other comprehensive income |
(4,256 | ) | (3,037 | ) | 3,037 | (L) | (4,256 | ) | ||||||||||
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Total Shareholders Equity |
189,848 | 71,636 | 20,947 | 282,431 | ||||||||||||||
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Total Liabilities and Shareholders Equity |
$ | 1,548,454 | $ | 550,668 | $ | 20,645 | $ | 2,119,767 | ||||||||||
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Civista Bancshares, Inc. and United Community Bancorp
Pro Forma Condensed Combined Consolidated Statement of Income
(Unaudited)
For the six months ended June 30, 2018 (In thousands except per share data)
Historical Civista |
Historical United Community |
Pro Forma Adjustments |
Footnote Reference |
Pro Forma Combined |
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Interest income |
$ | 32,084 | $ | 8,930 | $ | 376 | (C) | $ | 41,390 | |||||||||
Interest expense |
2,546 | 1,298 | 106 | (I)(J) | 3,950 | |||||||||||||
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Net interest income |
29,538 | 7,632 | 270 | 37,440 | ||||||||||||||
Provision for loan losses |
| 66 | | 66 | ||||||||||||||
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Net interest income after provision |
29,538 | 7,566 | 270 | 37,374 | ||||||||||||||
Non-interest income |
10,006 | 2,330 | | 12,336 | ||||||||||||||
Non-interest expense |
28,133 | 8,122 | 451 | (E)(G) | 36,706 | |||||||||||||
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Income (loss) before income taxes |
11,411 | 1,774 | (181 | ) | 13,004 | |||||||||||||
Provision for income taxes (benefit) |
1,408 | 174 | (40 | ) | (N) | 1,542 | ||||||||||||
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Net Income (loss) |
$ | 10,003 | $ | 1,600 | $ | (141 | ) | $ | 11,462 | |||||||||
Preferred stock dividends |
602 | 602 | ||||||||||||||||
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Net income available to common shareholders |
$ | 9,401 | $ | 10,860 | ||||||||||||||
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Earnings Per Share: |
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Basic |
$ | 0.91 | $ | 0.39 | (O) | $ | 0.74 | |||||||||||
Diluted |
$ | 0.79 | $ | 0.38 | (P) | $ | 0.68 |
Footnotes for the June 30, 2018 pro forma information:
(A) Represents estimated gross one-time Merger costs of $12,086, consisting of the following costs:
Change of control, severance and retention payments |
$ | 4,379 | ||
Data processing, termination and conversion |
5,461 | |||
Professional fees and other expenses |
2,246 | |||
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Pre-tax merger costs |
$ | 12,086 |
(B) Represents cash consideration paid of $12,675.
(C) Represents the estimated fair value adjustment related to the loan portfolio of $11,271 and UCBs previously recorded purchase adjustment of $(299). The estimated fair value adjustment is assumed to amortize into interest income on a level yield basis over the estimated period to maturity of the portfolio, which averages 15 years.
(D) Represents the elimination of UCBs Allowance for Loan and Lease Losses.
(E) Represents the estimated fair value adjustment related to the buildings acquired $907 and is assumed to amortize into noninterest expense over 39 years.
(F) Represents the estimate of the excess of the total consideration over the estimated fair value of the net assets acquired.
(G) Represents the establishment of the estimated core deposit intangible in the amount of $7,408, which is assumed to amortize into noninterest expense on an accelerated basis over 10 years and the elimination of UCB intangible assets on a historical basis.
(H) Represents deferred taxes related to estimated purchase accounting adjustments.
(I) Represents the estimated fair market value adjustment related to time deposits and is assumed to amortize into interest expense on a level yield basis over the estimated remaining maturity of the deposits, which averages 16 months.
(J) Represents the estimated fair value adjustment related to FHLB advances and is assumed to amortize into interest expense on a level yield basis over the estimated remaining maturity of the advances, which averages 26 months.
(K) Represents the deferred tax liability related to UCBs BOLI policies.
(L) Represents the elimination of UCB equity on a historical basis.
(M) Represents the issuance of an estimated 4,277,430 shares of Civista Bancshares, Inc. based on an exchange multiple of 1.027.
(N) Represents the income tax effect of the estimated purchase accounting adjustments using an effective tax rate of 21%.
(O) Basic pro forma earnings per share for the six months ended June 30, 2018 have been computed based on 14,620,193 weighted average shares outstanding.
(P) Diluted pro forma earnings per share for the six months ended June 30, 2018 have been computed based on 16,883,845 weighted average shares outstanding.
Civista Bancshares, Inc. and United Community Bancorp
Pro Forma Condensed Combined Consolidated Statement of Income
(Unaudited)
For the year ended December 31, 2017 (In thousands except per share data)
Historical Civista |
Historical United Community |
Pro Forma Adjustments |
Footnote Reference |
Pro Forma Combined |
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Interest income |
$ | 58,594 | $ | 17,010 | $ | 714 | (C) | $ | 76,318 | |||||||||
Interest expense |
4,092 | 2,328 | 169 | (I)(J) | 6,589 | |||||||||||||
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Net interest income |
54,502 | 14,682 | 545 | 69,729 | ||||||||||||||
Provision for loan losses |
| 46 | | 46 | ||||||||||||||
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Net interest income after provision |
54,502 | 14,636 | 545 | 69,683 | ||||||||||||||
Non-interest income |
16,334 | 4,448 | | 20,782 | ||||||||||||||
Non-interest expense |
48,604 | 14,175 | 848 | (E)(G) | 63,627 | |||||||||||||
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Income (loss) before income taxes |
22,232 | 4,909 | (303 | ) | 26,838 | |||||||||||||
Provision for income taxes (benefit) |
6,360 | 1,625 | (64 | ) | (N) | 7,921 | ||||||||||||
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Net Income (loss) |
$ | 15,872 | $ | 3,284 | $ | (239 | ) | $ | 18,917 | |||||||||
Preferred stock dividends |
1,244 | 1,244 | ||||||||||||||||
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Net income available to common shareholders |
$ | 14,628 | $ | 17,673 | ||||||||||||||
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Earnings Per Share: |
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Basic |
$ | 1.48 | $ | 0.80 | (O) | $ | 1.24 | |||||||||||
Diluted |
$ | 1.28 | $ | 0.80 | (P) | $ | 1.13 |
Footnotes for the December 31, 2017 pro forma information:
(C) Represents the estimated fair value adjustment related to the loan portfolio of $10,708 and UCBs previously recorded purchase adjustment of $(299). The estimated fair value adjustment is assumed to amortize into interest income on a level yield basis over the estimated period to maturity of the portfolio, which averages 15 years.
(E) Represents the estimated fair value adjustment related to the buildings acquired $907 and is assumed to amortize into noninterest expense over 39 years.
(G) Represents the establishment of the estimated core deposit intangible in the amount of $7,294, which is assumed to amortize into noninterest expense on an accelerated basis over 10 years.
(I) Represents the estimated fair market value adjustment related to time deposits and is assumed to amortize into interest expense on a level yield basis over the estimated remaining maturity of the deposits, which averages 16 months.
(J) Represents the estimated fair value adjustment related to FHLB advances and is assumed to amortize into interest expense on a level yield basis over the estimated remaining maturity of the advances, which averages 26 months.
(N) Represents the income tax effect of the estimated purchase accounting adjustments using an effective tax rate of 21%.
(O) Basic pro forma earnings per share for the twelve months ended December 31, 2017 have been computed based on 14,238,351 weighted average shares outstanding.
(P) Diluted pro forma earnings per share for the twelve months ended December 31, 2017 have been computed based on 16,684,111 weighted average shares outstanding.