Henryk Sadura/Henryk Sadura – Fotolia
Civista Bancshares in Sandusky, Ohio, has agreed to pay $70 million in cash for a neighboring community bank with two branches and a small but liquid balance sheet.
Acquiring Spencer, Ohio-based Farmers Savings Bank would add $183 million in low-cost core deposits, cash that the $4.2 billion-asset buyer could use to drive continued growth, according to Civista. The company has grown its portfolio of loans and leases at a 12.5% compound annual growth rate since 2019.
“By combining our resources and expertise, we’re positioned to deliver greater value to our shareholders while continuing to support the individuals, families, and businesses that make Spencer, Wellington and the surrounding communities so special,” Civista President and CEO Dennis Shaffer said Thursday in a press release.
“We are confident this transition will bring expanded opportunities and enhanced resources to our customers while preserving the trusted relationships we’ve built over the years,” Farmers CEO Tom Lee said in the press release.
Though industry-wide merger-and-acquisition activity has
Civista’s deal for Farmers, which is expected to close in the fourth quarter, would give the buyer its first presence in Medina and Lorain counties, where Spencer and Wellington are located. Farmers controls about 2% of the region’s $11.5 billion deposit market, according to the Federal Deposit Insurance Corp.
Civista’s $70.2 million purchase price for Farmers amounts to approximately 138% of Farmers’ tangible book value on March 31. That premium is slightly below the 144% average price-to-tangible-book-value for deals announced in the first six months of 2025, according to the investment bank Hovde, which published a summary of first-half 2025 M&A activity on Monday.
The pro forma company would have about $3.5 billion of deposits and $3.2 billion of loans and leases on its balance sheet.
Civista, the parent company of Civista Bank, is forecasting cost savings totaling 30% of Farmers’ noninterest expenses, which totaled $4.4 million in 2024. Civista expects to achieve 10% earnings-per-share accretion once those expense cuts are fully implemented.
In tandem with the Farmers transaction, Civista plans to raise as much as $75.5 million in a stock offering led by Piper Sandler. Civista said in a Securities and Exchange Commission filing that it plans to use the added capital for general corporate purposes, including organic growth and what the company termed “strategic transactions.”
“Opportunistic M&A has always been part of our core strategy,” Shaffer said Friday on a conference call with analysts. Shaffer added that integrating Farmers won’t keep his bank from considering additional deals.
“We view this as a very logical and low-risk opportunity,” Shaffer said. “We don’t think this puts us on the sidelines at all.”
Prior to the deal for Farmers, Civista’s last M&A foray was its
Concerns about Civista’s large concentration in commercial real estate lending kept the bank on the sidelines in recent years. But the Farmers deal, along with the stock sale, will push Civista’s CRE loans below 300% of its total capital, a key regulatory threshold. That’s down from 362% on March 31.
Civista also reported selected preliminary second-quarter financial results, including net income between $10.3 million and $11.1 million, deposits of $3.2 billion and an 8.9% Tier 1 leverage ratio. The company expects to report a 23% linked-quarter decline in nonperforming assets, to $24 million.
Civista shares were trading down 12% at $21.81 Friday afternoon.
