Citizens Community buying deposit-rich bank in Wisconsin

Citizens Community Bancorp in Eau Claire, Wis., has agreed to buy United Bancorp. in Osseo, Wis.

The $940 million-asset Citizens said in a press release Wednesday that it will pay $50.7 million in cash for the parent of the $281 million-asset United Bank. The deal is expected to close in the fourth quarter.

United has $214 million in loans and $240 million in deposits.

“We are excited about this opportunity to combine two independent community banking franchises into one of the largest banks in northwest Wisconsin,” Stephen Bianchi, Citizens’ president and CEO, said in the release.

“We believe this acquisition will enhance shareholder value as we increase our franchise beyond the $1 billion threshhold in assets and continue to grow core earnings on a per share basis,” Bianchi added.

The deal is expected to be immediately accretive to Citizens’ earnings. It will take a little more than four years for Citizens to earn back the expected dilution to its tangible book value.

Citizens said it plans to cut about 40% of United’s annual operating expenses.

Trevor Bohland, United’s president and CEO, will join the senior management team of Citizens’ bank.

FIG Partners and Briggs & Morgan advised Citizens. Hovde Group and Ballard Spahr advised United.

Citizens also announced that it had agreed to sell 500,000 shares of preferred stock to institutional and other accredited investors for $65 million. FIG Partners was the senior placement agent; Hovde was co-placement agent.

A portion of the proceeds will be used to fund the United acquisition.

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