CVB Financial, Community Bank to merge in $878.3M deal
CVB Financial (CVBF) and Community Bank announced that they have entered into an agreement and plan of reorganization and merger, pursuant to which Community will merge with and into Citizens in a stock and cash transaction valued at approximately $878.3M, based on CVBF’s closing stock price of $23.37 on February 23, 2018.
The merger will increase Citizens’ total assets to approximately $12B on a pro forma basis as of December 31, 2017.
CVBF expects the merger to result in approximately 12% earnings per share accretion in 2019, excluding one-time transaction costs. CVBF anticipates the merger to be approximately 11% dilutive to tangible book value per share at closing with an earn back period of approximately 4.9 years and an internal rate of return of greater than 15%.
Additionally, at closing, Marshall V. Laitsch, Chairman of the Board of Community, will join the Board of CVBF. Community Bank, headquartered in Pasadena, California, had approximately $3.7B in total assets, $2.7B in gross loans and $2.9B in total deposits as of December 31, 2017.
Community has sixteen branch locations throughout the greater Los Angeles and Orange County areas. Pursuant to the Agreement, each share of Community common stock, including unvested restricted stock units, will receive a fixed consideration consisting of 9.4595 shares of CVBF common stock and $56.00 per share in cash.
CVBF will pay aggregate consideration of approximately 30.0 million shares of CVBF common stock and $177.5M in cash, subject to purchase price adjustment provisions and other terms set forth in the Agreement.
Giving effect to the merger, Community shareholders would hold, in aggregate, approximately 21.4% of CVBF’s outstanding common stock following the merger. Upon completion of the merger, Community will operate as Citizens Business Bank and will continue to deliver the high-touch level of service that its customers expect, with an expanded branch and ATM network and a broad range of products and services, including expertise in personal, small business, private and corporate banking, as well as treasury management and trust services.
The boards of directors of Community, CVBF and Citizens have approved the proposed merger.
The closing of the merger is subject to customary regulatory approvals and the approval of CVBF and Community shareholders, and is anticipated to occur in the third quarter of 2018.
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