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Monday's Bank Stocks: Civista sinks nearly 6% after deal announcement

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Monday's Bank Stocks: Civista sinks nearly 6% after deal announcement

Civista Bancshares Inc.'s sizable bid for core deposits led to a drop in its share price Monday, March 12.

On Monday, Sandusky, Ohio-based Civista announced that it agreed to acquire Lawrenceburg, Ind.-based United Community Bancorp in a deal valued at $114.4 million. Civista President and CEO Dennis Shaffer said 95% of United Community's $462 million deposit franchise consists of core deposits. Even so, Civista's shares dropped 6.05% to $22.53 — perhaps as investors worried about full pricing and an extended earnback period — while United Community's rose 23.27% to $24.90.

The companies estimated the deal to be 161% of United Community's tangible book value and 24.4x its estimated 2018 earnings per share. Tangible book value dilution from the transaction is anticipated to be earned back in 3.5 years using the crossover method, or 4.1 years using the simple method.

There was little to move broader markets during the day. The Dow Jones Industrial Average declined 0.62% to 25,178.61, the S&P 500 fell 0.13% to 2,783.02 and the Nasdaq Composite Index grew 0.36% to 7,588.32.

As of 5:30 p.m. ET, the SNL U.S. Bank Index declined 0.23% to 657.40, and the SNL U.S. Thrift Index added 0.21% to 986.20.

For the big banks, JPMorgan Chase & Co. fell 0.31% to $117.66, Citigroup Inc. slipped 0.12% to $76.02, Wells Fargo & Co. dropped 0.38% to $58.17 and Bank of America Corp. expanded 0.37% to $32.84.

For movers, Heritage Financial Corp. jumped 3.21% to $32.20, Meta Financial Group Inc. increased 2.83% to $116.20 and BofI Holding Inc. improved 2.41% to $42.04. Popular Inc. fell 0.43% to $44.42, while Seacoast Banking Corp. of Florida lost 2.04% to $27.80.

S&P Dow Jones Indices and S&P Global Market Intelligence are owned by S&P Global Inc.

Market prices and index values are current as of the time of publication and are subject to change.