U.S. markets closed
  • S&P Futures

    3,751.25
    -5.50 (-0.15%)
     
  • Dow Futures

    29,958.00
    -24.00 (-0.08%)
     
  • Nasdaq Futures

    11,525.00
    -16.75 (-0.15%)
     
  • Russell 2000 Futures

    1,758.00
    -0.10 (-0.01%)
     
  • Crude Oil

    88.31
    -0.14 (-0.16%)
     
  • Gold

    1,718.50
    -2.30 (-0.13%)
     
  • Silver

    20.73
    +0.07 (+0.34%)
     
  • EUR/USD

    0.9811
    +0.0015 (+0.16%)
     
  • 10-Yr Bond

    3.8260
    +0.0670 (+1.78%)
     
  • Vix

    30.52
    +1.97 (+6.90%)
     
  • GBP/USD

    1.1175
    +0.0006 (+0.06%)
     
  • USD/JPY

    144.9500
    -0.1180 (-0.08%)
     
  • BTC-USD

    20,007.01
    -351.94 (-1.73%)
     
  • CMC Crypto 200

    455.12
    -8.00 (-1.73%)
     
  • FTSE 100

    6,997.27
    -55.35 (-0.78%)
     
  • Nikkei 225

    27,149.76
    -161.54 (-0.59%)
     

Civista (CIVB) Undertakes Efforts to Solidify Business Operations

·3 min read

Last week, Civista Bancshares, Inc. CIVB undertook a few strategic transactions. The efforts are not only going to strengthen its balance sheet but are also likely to improve the company’s earnings, going forward.

Here are the “three tactical transactions” that Civista Bancshares undertook:

1. It entered into an agreement to divest 7,361 shares of Visa Inc. V Class B common stock. This will result in a pre-tax gain of nearly $1.8 million. Notably, the carrying value of these shares on the bank's balance sheet was $100 as it had “no other historical cost basis in the shares.”

2. Civista Bancshares completed pre-payment of long-term Federal Home Loan Bank advances worth $50 million, which had an interest rate of 2.05% and a remaining maturity of roughly eight years. The transaction, accounted for as an early debt extinguishment, will lead to a loss of $3.7 million in the second quarter of 2021 and be reported within the non-interest expenses. Nonetheless, debt prepayment, which was funded with excess cash, will result in approximately $1.0 million of savings in annual interest expenses.

3. Civista Bancshares redeployed $100 million of excess cash into a mix of investments, which will yield 1.50% with an average duration of 5.2 years.

The company anticipates the net impact from these three transactions to be a pre-tax net loss of $1.9 million. Additionally, these will lead to 12 cents accretion to earnings per share on an annualized basis and also improve Civista Bancshares’ net interest margin by 17 basis points on an annualized basis.

At the time when all banks big and small including Civista Bancshares, Associated Banc-Corp ASB and East West Bancorp, Inc. EWBC are facing concerns related to lower interest rates and faltering loan demand, the efforts to strengthen financials is a step in right direction. This will also improve the company’s operating efficiency in the quarters ahead.

Shares of Civista Bancshares have rallied 35.1% so far this year, outperforming the industry’s growth of 26.5%.



Currently, Civista Bancshares carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

Download FREE: How to Profit from Trillions on Spending for Infrastructure >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Visa Inc. (V) : Free Stock Analysis Report

East West Bancorp, Inc. (EWBC) : Free Stock Analysis Report

Associated BancCorp (ASB) : Free Stock Analysis Report

Civista Bancshares, Inc. (CIVB) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research