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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 Civista’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and Civista’s 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
 

Assets

          

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  
  

 

 

   

 

 

   

 

 

     

 

 

 

Total Assets

   $ 1,548,454     $ 550,668     $ 20,645       $ 2,119,767  
  

 

 

   

 

 

   

 

 

     

 

 

 

Liabilities

          

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  
  

 

 

   

 

 

   

 

 

     

 

 

 

Total Liabilities

     1,358,606       479,032       (302       1,837,336  

Shareholders’ Equity

          

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
  

 

 

   

 

 

   

 

 

     

 

 

 

Total Shareholders’ Equity

     189,848       71,636       20,947         282,431  
  

 

 

   

 

 

   

 

 

     

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 1,548,454     $ 550,668     $ 20,645       $ 2,119,767  
  

 

 

   

 

 

   

 

 

     

 

 

 


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
 

Interest income

   $ 32,084      $ 8,930      $ 376     (C)   $ 41,390  

Interest expense

     2,546        1,298        106     (I)(J)     3,950  
  

 

 

    

 

 

    

 

 

     

 

 

 

Net interest income

     29,538        7,632        270         37,440  

Provision for loan losses

     —          66        —           66  
  

 

 

    

 

 

    

 

 

     

 

 

 

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  
  

 

 

    

 

 

    

 

 

     

 

 

 

Income (loss) before income taxes

     11,411        1,774        (181       13,004  

Provision for income taxes (benefit)

     1,408        174        (40   (N)     1,542  
  

 

 

    

 

 

    

 

 

     

 

 

 

Net Income (loss)

   $ 10,003      $ 1,600      $ (141     $ 11,462  

Preferred stock dividends

     602               602  
  

 

 

           

 

 

 

Net income available to common shareholders

   $ 9,401             $ 10,860  
  

 

 

           

 

 

 

Earnings Per Share:

            

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  
  

 

 

 

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 UCB’s 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 UCB’s 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 UCB’s 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
 

Interest income

   $ 58,594      $ 17,010      $ 714     (C)   $ 76,318  

Interest expense

     4,092        2,328        169     (I)(J)     6,589  
  

 

 

    

 

 

    

 

 

     

 

 

 

Net interest income

     54,502        14,682        545         69,729  

Provision for loan losses

     —          46        —           46  
  

 

 

    

 

 

    

 

 

     

 

 

 

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  
  

 

 

    

 

 

    

 

 

     

 

 

 

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  
  

 

 

    

 

 

    

 

 

     

 

 

 

Net Income (loss)

   $ 15,872      $ 3,284      $ (239     $ 18,917  

Preferred stock dividends

     1,244               1,244  
  

 

 

           

 

 

 

Net income available to common shareholders

   $ 14,628             $ 17,673  
  

 

 

           

 

 

 

Earnings Per Share:

            

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 UCB’s 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.