Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 28, 2023

Civista Bancshares, Inc.

(Exact name of Registrant as specified in its charter)

Ohio

001-36192

34-1558688

(State or other jurisdiction of

incorporation or organization)

(Commission

File Number)

(IRS Employer

Identification No.)

100 East Water Street, P.O. Box 5016, Sandusky, Ohio 44870

(Address of principle executive offices)

Registrant’s telephone number, including area code: (419) 625-4121

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Act of 1934 (§240.12b-2 of this chapter)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common

CIVB

NASDAQ Capital Market

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02

Results of Operations and Financial Condition

On July 28, 2023, Civista Bancshares, Inc. announced preliminary unaudited earnings for the three and six-month periods ended June 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated here by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01

Financial Statements and Exhibits

(d) Exhibit 99.1 Press release of Civista Bancshares, Inc. reporting financial results and earnings for the three and six-month periods ended June 30, 2023.

Exhibit 104 Cover Page Interactive File-the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						Civista Bancshares, Inc.
						(Registrant)

Date: July 28, 2023						/s/ Todd A. Michel
						Todd A. Michel,
						Senior Vice President & Controller

Exhibit 99.1

LOGO

Civista Bancshares, Inc. Announces Second Quarter 2023 Financial Results

Sandusky, Ohio, July 28, 2023 /PRNewswire/– Civista Bancshares, Inc. (NASDAQ:CIVB) (“Civista”) announced its unaudited financial results for the three and six month periods ending June 30, 2023.

Second quarter and year-to-date 2023 highlights:

•

Net income of $10.0 million, or $0.64 per diluted share, for the second quarter of 2023, compared to $7.7 million, or $0.53 per diluted share, for the second quarter of 2022.

•

Net income of $22.9 million, or $1.45 per diluted share, compared to $16.2 million, or $1.10 per diluted share, for the six months ended June 30, 2023 and 2022, respectively.

•

Low cost of deposits of 107 basis points and total funding costs of 151 basis points for the quarter.

•

Based on the June 30, 2023 market close share price of $17.40, the $0.15 second quarter dividend is equivalent to an annualized yield of 3.45% and a dividend payout ratio of 23.44%.

“Our second quarter earnings were impacted by increased rate pressure on deposits and our decision to hold more of our newly originated leases on the balance sheet. Despite this, we continue to post strong profits and our earnings per share has increased 32 percent when compared to the same period a year ago”, said Dennis G. Shaffer, CEO and President of Civista.

Results of Operations:

For the three-month periods ended June 30, 2023 and 2022

Net interest income increased $7.1 million, or 29.1%, for the second quarter of 2023 compared to the same period of 2022. Interest income increased $17.3 million while interest expense increased $10.2 million. Both increases were driven by both increases in rates and increases in volumes.

Net interest margin increased 43 basis points to 3.86% for the second quarter of 2023, compared to 3.43% for the same period a year ago.

The increase in interest income was primarily due to a 164 basis point increase in asset yield, which led to $10.4 million of the increase in interest income. Additionally, a $392.4 million increase in average earning assets led to $6.9 million of the increase in interest income. The increase in volume can be attributed to both organic growth and to the acquisitions during 2022 of Comunibanc Corp (“Comunibanc”) and Vision Financial group (“VFG”).

Interest expense increased $10.2 million, or 567.9%, for the second quarter of 2023, compared to the same period last year. The average rate paid on interest-bearing liabilities increased 171 basis points, while average interest-bearing liabilities increased $458.5 million. The increase in interest-bearing liabilities was primarily in brokered time deposits and short-term borrowings to fund growth. This shift in the funding mix, as well as rising rates, is driving the increase in the funding rate. Interest-bearing deposit costs have increased 140 basis points compared to a year ago.

Average Balance Analysis

(Unaudited - Dollars in thousands)


	Three Months Ended June 30,
	2023								2022
	Average					Yield/			Average					Yield/
	balance			Interest		rate*			balance			Interest		rate*
Assets:
Interest-earning assets:
Loans**	$	2,593,286		$	37,978		5.87	%	$	2,033,378		$	21,851		4.31	%
Taxable securities ***		370,002			2,984		2.93	%		297,256			1,775		2.23	%
Non-taxable securities ***		288,513			2,319		3.79	%		259,096			1,882		3.52	%
Interest-bearing deposits in other banks		6,937			54		3.12	%		276,632			556		0.81	%

Total interest-earning assets ***	$	3,258,738		$	43,335		5.31	%	$	2,866,362		$	26,064		3.67	%

Noninterest-earning assets:
Cash and due from financial institutions		47,560								44,538
Premises and equipment, net		61,220								22,264
Accrued interest receivable		11,191								7,993
Intangible assets		135,669								84,167
Bank owned life insurance		53,878								46,966
Other assets		60,253								46,608
Less allowance for loan losses		(34,668	)							(27,174	)

Total Assets	$	3,593,841							$	3,091,724


Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand and savings	$	1,364,648		$	1,546		0.45	%	$	1,401,351		$	247		0.07	%
Time		548,307			5,988		4.38	%		228,733			463		0.81	%
Short-term FHLB borrowings		242,395			3,113		5.15	%		75,000			193		1.03	%
Long-term FHLB borrowings		3,107			17		2.19	%		—			—		0.00	%
Other borrowings		13,018			132		4.07	%		—			—		0.00	%
Subordinated debentures		103,854			1,198		4.62	%		103,714			890		3.44	%
Repurchase agreements		13,234			2		0.06	%		21,291			3		0.06	%

Total interest-bearing liabilities	$	2,288,563		$	11,996		2.10	%	$	1,830,089		$	1,796		0.39	%

Noninterest-bearing deposits		904,757								894,887
Other liabilities		52,874								53,476
Shareholders’ equity		347,647								313,272

Total Liabilities and Shareholders’ Equity	$	3,593,841							$	3,091,724

Net interest income and interest rate spread				$	31,339		3.22	%				$	24,268		3.28	%

Net interest margin ***							3.86	%							3.43	%

* -	Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $617 thousand and $501 thousand for the periods ended June 30, 2023 and 2022, respectively.

** -	Average balance includes nonaccrual loans

*** -

Average yield on investments were calculated by adjusting the average balances of taxable and nontaxable securities by unrealized losses of $60.4 million and $34.3 million, respectively. These adjustments were also made when calculating the yield on earning assets and the margin.

For the six-month periods ended June 30, 2023 and 2022

Net interest income increased $16.7 million, or 35.5%, compared to the same period in 2022.

Interest income increased $34.1 million, or 67.3%, for the six months of 2023. Average earning assets increased $394.8 million, resulting in an increase in interest income of $14.2 million. Average yields increased 162 basis points, resulting in an increase in interest income of $19.9 million. The increase in volume can be attributed to both organic growth and to the acquisitions during 2022 of Comunibanc and VFG.

Interest expense increased $17.4 million, or 493.0%, for the six months of 2023 compared to the same period of 2022. Average rates increased 149 basis points compared to 2022, resulting in $8.9 million of the increase in interest expense. Average interest-bearing liabilities increased $419.1 million, resulting in $8.5 million of the increase in interest expense.

Net interest margin increased 59 basis points to 3.99% for the six months of 2023, compared to 3.40% for the same period a year ago.

Average Balance Analysis

(Unaudited - Dollars in thousands)


	Six Months Ended June 30,
	2023								2022
	Average					Yield/			Average					Yield/
	balance			Interest		rate*			balance			Interest		rate*
Assets:
Interest-earning assets:
Loans **	$	2,571,020		$	74,376		5.83	%	$	2,020,254		$	42,889		4.28	%
Taxable securities ***		372,413			5,818		2.85	%		305,827			3,495		2.21	%
Non-taxable securities ***		284,845			4,581		3.80	%		259,976			3,671		3.59	%
Interest-bearing deposits in other banks		7,166			99		2.79	%		254,562			675		0.53	%

Total interest-earning assets ***	$	3,235,444		$	84,874		5.27	%	$	2,840,619		$	50,730		3.65	%

Noninterest-earning assets:
Cash and due from financial institutions		44,584								133,452
Premises and equipment, net		62,002								22,292
Accrued interest receivable		10,924								7,577
Intangible assets		135,625								84,270
Bank owned life insurance		53,754								46,847
Other assets		60,478								41,838
Less allowance for loan losses		(32,555	)							(26,976	)

Total Assets	$	3,570,256							$	3,149,919

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand and savings	$	1,374,305		$	2,629		0.39	%	$	1,392,411		$	481		0.07	%
Time		429,016			8,137		3.82	%		234,640			934		0.80	%
Short-term FHLB borrowings		306,952			7,370		4.84	%		178			—		0.00	%
Long-term FHLB borrowings		3,274			37		2.28	%		75,000			383		1.03	%
Other borrowings		13,918			390		5.66	%		—			—		0.00	%
Subordinated debentures		103,834			2,367		4.60	%		103,713			1,726		3.36	%
Repurchase agreements		17,008			4		0.05	%		23,249			6		0.05	%

Total interest-bearing liabilities	$	2,248,307		$	20,934		1.88	%	$	1,829,191		$	3,530		0.39	%

Noninterest-bearing deposits		926,929								914,163
Other liabilities		50,599								76,372
Shareholders’ equity		344,421								330,193

Total Liabilities and Shareholders’ Equity	$	3,570,256							$	3,149,919

Net interest income and interest rate spread				$	63,940		3.39	%				$	47,200		3.26	%

Net interest margin ***							3.99	%							3.40	%

* -	Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $1.2 million and $977 thousand for the periods ended June 30, 2023 and 2022, respectively.

** -	Average balance includes nonaccrual loans

*** -

2023 and 2022 average yield on investments were calculated by adjusting the average balances of taxable and nontaxable securities by unrealized losses of $61.8 million and $13.4 million, respectively. These adjustments were also made when calculating the yield on earning assets and the margin.

Provision for credit losses for the second quarter of 2023 was $861 thousand compared to $400 thousand for the second quarter of 2022, primarily related to loan and lease growth.

On January 1, 2023, Civista adopted CECL, which resulted in an adjustment to the reserve of approximately $4.3 million. For the six months ended June 30, 2023, provision for credit losses was $1.5 million, compared to $700 thousand for the same period of 2022. The reserve ratio increased to 1.33% as of June 30, 2023 from 1.12% at December 31, 2022.

The adoption of CECL also resulted in an additional $3.4 million reserve for unfunded commitments, which is reflected as a liability in the consolidated financial statements. Provision for unfunded commitments for the second quarter of 2023 was $264 thousand and $465 thousand for the six months ended June 30, 2023. There was no provision for unfunded commitments during the first six months of 2022.

For the second quarter of 2023, noninterest income totaled $9.1 million, an increase of $3.5 million, or 62.4%, compared to the prior year’s second quarter.

Noninterest income

(unaudited - dollars in thousands)


	Three months ended June 30,
	2023			2022		$change			% change
Service charges	$	1,831		$	1,540	$	291			18.9	%
Net gain on sale of securities		—			6		(6	)		-100.0	%
Net gain/(loss) on equity securities		(170	)		39		(209	)		-535.9	%
Net gain on sale of loans		615			573		42			7.3	%
ATM/Interchange fees		1,450			1,355		95			7.0	%
Wealth management fees		1,180			1,228		(48	)		-3.9	%
Lease revenue and residual income		2,201			—		2,201			0.0	%
Bank owned life insurance		311			233		78			33.5	%
Tax refund processing fees		475			475		—			0.0	%
Other		1,256			186		1,070			575.3	%

Total noninterest income	$	9,149		$	5,635	$	3,514			62.4	%

Service charges increased due to a $169 thousand, split between increases on personal and business deposit accounts. Overdraft fees also increased by $122 thousand.

Net gain/loss on equity securities change was the result of a market valuation adjustment.

Lease revenue and residual income increased $2.2 million due to the acquisition of VFG during 2022.

Other income increased as result of a $553 thousand increase related to the timing of claims at our risk management subsidiary, $354 thousand of interim rent at VFG, and $116 thousand increase in swap fee income.

For the six months ended June 30, 2023, noninterest income totaled $20.2 million, a decrease of $6.9 million, or 52.3%, compared to the same period in the prior year.

Noninterest income

(unaudited - dollars in thousands)


	Six months ended June 30,
	2023			2022		$change			% change
Service charges	$	3,604		$	3,119	$	485			15.5	%
Net gain on sale of securities		—			6		(6	)		-100.0	%
Net gain/(loss) on equity securities		(238	)		89		(327	)		-367.4	%
Net gain on sale of loans		1,246			1,509		(263	)		-17.4	%
ATM/Interchange fees		2,803			2,596		207			8.0	%
Wealth management fees		2,373			2,505		(132	)		-5.3	%
Lease revenue and residual income		4,247			—		4,247			0.0	%
Bank owned life insurance		564			477		87			18.2	%
Tax refund processing fees		2,375			2,375		—			0.0	%
Other		3,243			602		2,641			438.7	%

Total noninterest income	$	20,217		$	13,278	$	6,939			52.3	%

Service charges increased due to a $273 thousand, split between increases on personal and business deposit accounts. Overdraft fees also increased by $212 thousand.

Net gain/loss on equity securities change was the result of a market valuation adjustment.

Net gain on sale of loans decreased primarily due to a decrease in volume of loans sold.

Lease revenue and residual income increased $4.20 million due to the acquisition of VFG during 2022.

Other income increased as result of a $1.5 million fee collected associated with the renewal of the company’s contract with MasterCard. Other income also increased as result of a $361 thousand increase related to the timing of claims at our risk management subsidiary, $581 thousand in interim rent at VFG, and $177 thousand increase in swap fee income.

For the second quarter of 2023, noninterest expense totaled $27.9 million, an increase of $7.5 million, or 37.0%, compared to the prior year’s second quarter.

Noninterest expense

(unaudited - dollars in thousands)


	Three months ended June 30,
	2023		2022		$change		% change
Compensation expense	$	14,978	$	11,947	$	3,031		25.4	%
Net occupancy and equipment		4,135		1,588		2,547		160.4	%
Contracted data processing		559		433		126		29.1	%
Taxes and assessments		1,183		823		360		43.7	%
Professional services		1,239		1,209		30		2.5	%
Amortization of intangible assets		399		217		182		83.9	%
ATM/Interchange expense		615		542		73		13.5	%
Marketing		540		380		160		42.1	%
Software maintenance expense		1,059		790		269		34.1	%
Other		3,206		2,450		756		30.9	%

Total noninterest expense	$	27,913	$	20,379	$	7,534		37.0	%

Compensation expense increased primarily due to $2.3 million of salaries related to the acquisition of Comunibanc and VFG. The quarter-to-date average full time equivalent (FTE) employees were 532 at June 30, 2023, an increase of 80 FTEs over the same period in 2022. Annual merit increases, employee insurance and other payroll related expenses also increased.

The increase in occupancy and equipment expense is primarily due to a $2.0 million increase in equipment depreciation related to the acquisition of VFG. Additionally, equipment expense increased related to the acquisition of Comunibanc.

Contracted data processing fees increased due to an increase in monthly process fees.

Taxes and assessments increased due to an increase in the FDIC assessment rate charged.

The increase in amortization expense is due to $188 thousand related to the core deposit intangible associated with the acquisition of Comunibanc.

Marketing expense increased due to a general increase in marketing and increase marketing efforts in newly acquired markets related to the Comunibanc and VFG acquisitions.

The increase in software maintenance expense is due to both increases in software maintenance contracts as well as the implementation of the new digital banking platform.

The increase in other operating expense is primarily due to a $264 thousand provision for credit losses on unfunded commitments. Travel & entertainment, donations, bad check loss and education & training all increased as well.

The efficiency ratio was 67.9% for the quarter ended June 30, 2023, compared to 67.0% for the quarter ended June 30, 2022. The change in the efficiency ratio is primarily due to an increase in noninterest expense, partially offset by an increase in net interest income.

Civista’s effective income tax rate for the second quarter 2023 was 14.3% compared to 15.6% in 2022.

For the six months ended June 30, 2023, noninterest expense totaled $55.5 million, an increase of $14.9 million, or 36.7%, compared to the same period in the prior year.

Noninterest expense

(unaudited - dollars in thousands)


	Six months ended June 30,
	2023		2022		$change		% change
Compensation expense	$	30,083	$	24,170	$	5,913		24.5	%
Net occupancy and equipment		8,255		3,233		5,022		155.3	%
Contracted data processing		1,079		1,053		26		2.5	%
Taxes and assessments		1,957		1,617		340		21.0	%
Professional services		2,794		2,258		536		23.7	%
Amortization of intangible assets		797		434		363		83.6	%
ATM/Interchange expense		1,195		1,055		140		13.3	%
Marketing		1,045		697		348		49.9	%
Software maintenance expense		1,937		1,498		439		29.3	%
Other		6,404		4,622		1,782		38.6	%

Total noninterest expense	$	55,546	$	40,637	$	14,909		36.7	%

Compensation expense increased primarily due to $4.4 million of salaries related to the acquisition of Comunibanc and VFG. The year-to-date average full time equivalent (FTE) employees were 532 at June 30, 2023, an increase of 84 FTEs over the same period in 2022. Employee insurance and other payroll related expenses also increased.

The increase in occupancy and equipment expense is primarily due to a $4.1 million increase in equipment depreciation related to the acquisition of VFG. Additionally, Equipment expense increased related to the acquisition of Comunibanc.

Professional services primarily increased due to advisory fees for the company’s MasterCard contract of $400 thousand. Recruiter fees also increased $169 thousand.

The increase in amortization expense is due to $377 thousand related to the core deposit intangible associated with the acquisition of Comunibanc.

Marketing expense increased due to a general increase in marketing and increase marketing efforts in newly acquired markets related to the Comunibanc and VFG acquisitions.

The increase in software maintenance expense is due to both increases in software maintenance contracts as well as the implementation of the new digital banking platform.

The increase in other operating expense is primarily due to a $465 thousand provision for credit losses on unfunded commitments. Business promotion, travel & entertainment, donations, bad check loss and education & training all increased as well.

The efficiency ratio was 65.1% for the six months ended June 30, 2023 compared to 66.1% for the six months ended June 30, 2022. The change in the efficiency ratio is primarily due to an increase in noninterest expense, partially offset by an increase in net interest income.

Civista’s effective income tax rate was 15.5% for the six months of both 2023 and 2022.

Balance Sheet

Total assets increased $78.2 million, or 2.2%, from December 31, 2022 to June 30, 2023, primarily due to growth in the loan portfolio.

End of period loan and lease balances

(unaudited - dollars in thousands)


	June 30,		December 31,
	2023		2022		$ Change			% Change
Commercial and Agriculture	$	292,091	$	278,595	$	13,496			4.8	%
Commercial Real Estate:
Owner Occupied		367,797		371,147		(3,350	)		-0.9	%
Non-owner Occupied		1,063,263		1,018,736		44,527			4.4	%
Residential Real Estate		589,066		552,781		36,285			6.6	%
Real Estate Construction		234,261		243,127		(8,866	)		-3.6	%
Farm Real Estate		24,123		24,708		(585	)		-2.4	%
Lease financing receivable		46,553		36,797		9,756			26.5	%
Consumer and Other		19,126		20,775		(1,649	)		-7.9	%

Total Loans	$	2,636,280	$	2,546,666	$	89,614			3.5	%

Loan and lease balances increased $89.6 million, or 3.5% since December 31, 2022. Commercial revolving lines of credit balances continue to be less than forty percent advanced. Commercial growth is attributable to increased leasing production. Commercial Real Estate continued to grow due to consistent demand in the Non-owner Occupied category, especially in the multi-family area in the major Ohio metropolitan areas. Real Estate Construction diminished slightly with the caveat that undrawn construction availability continues to be near all-time highs. Residential Real Estate has grown with new production in our Community Reinvestment Act (“CRA”) product, more home construction loans, and more ARM products in this higher rate environment.

Deposits

Total deposits increased $322.8 million, or 12.3%, from December 31, 2022 to June 30, 2023.

End of period deposit balances

(unaudited - dollars in thousands)


	June 30,		December 31,
	2023		2022		$ Change			% Change
Noninterest-bearing demand	$	1,002,461	$	896,333	$	106,128			11.8	%
Interest-bearing demand		503,726		527,879		(24,153	)		-4.6	%
Savings and money market		854,231		876,427		(22,196	)		-2.5	%
Time deposits		582,356		319,345		263,011			82.4	%

Total Deposits	$	2,942,774	$	2,619,984	$	322,790			12.3	%

The increase in noninterest-bearing demand of $106.1 million was primarily due to a $179.3 million increase in balances related to the tax refund processing program, which is a seasonal increase. This seasonal increase was partially offset by a $59.9 million decrease in noninterest-bearing business accounts and $26.4 million noninterest-bearing personal accounts. The $24.1 million decrease in interest-bearing demand deposits was spread across personal, business, and public fund accounts. The decrease in savings and money market was primarily due to a $39.7 million decrease in statement savings, a $26.4 million decrease in personal money markets, partially offset by a $40.0 million increase in brokered money market accounts. The increase in time certificates was primarily due to a $202.5 million increase in brokered time deposits. Jumbo time certificates also increased $44.2 million.

FHLB overnight advances totaled $142.0 million on June 30, 2023, down from $393.7 million on December 31, 2022. FHLB term advances totaled $2.9 million on June 30, 2023, down from $3.6 million on December 31, 2022.

Stock Repurchase Program

So far in 2023, Civista has not repurchased any shares, leaving the entire $13.5 million of the current repurchase authorization remaining. The current repurchase plan will expire in May 2024. In January, Civista liquidated 5,620 shares held by employees, at $21.52 per share, to satisfy tax obligations stemming from vesting of restricted shares.

Shareholders’ Equity

Total shareholders’ equity increased $15.0 million from December 31, 2022 to June 30, 2023, primarily due to a $12.3 million increase in retained earnings and a decrease in accumulated other comprehensive loss of $2.3 million.

Asset Quality

Civista recorded net losses of $36 thousand for the six months of 2023 compared to net recoveries of $94 thousand for the same period of 2022. The allowance for credit losses to loans ratio was 1.33% at June 30, 2023 and 1.12% at December 31, 2022.

Allowance for Credit Losses

(dollars in thousands)


	June 30,			June 30,
	2023			2022
Beginning of period	$	28,511		$	26,641
CECL adoption adjustments		5,193			—
Charge-offs		(189	)		(90	)
Recoveries		153			184
Provision		1,481			700

End of period	$	35,149		$	27,435

Allowance for Unfunded Commitments

(dollars in thousands)


	June 30,		June 30,
	2023		2022
Beginning of period	$	—	$	—
CECL adoption adjustments		3,386
Charge-offs		—		—
Recoveries		—		—
Provision		465		—

End of period	$	3,851	$	—

Non-performing assets at June 30, 2023 were $10.7 million, a 1.4% decrease from December 31, 2022. The non-performing assets to assets ratio was 0.30% at June 30, 2023 and 0.31% at December 31, 2022. The allowance for credit losses to non-performing loans increased from 261.45% at December 31, 2022 to 327.05% at June 30, 2023.

Non-performing Assets

(dollars in thousands)


	June 30,		December 31,
	2023		2022
Non-accrual loans	$	7,972	$	7,890
Restructured loans		2,775		3,015

Total non-performing loans		10,747		10,905
Other Real Estate Owned		—		—

Total non-performing assets	$	10,747	$	10,905

Conference Call and Webcast

Civista Bancshares, Inc. will also host a conference call to discuss the Company’s financial results for the second quarter of 2023 at 1:00 p.m. ET on Friday, July 28, 2023. Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company’s website, www.civb.com. Participants can also listen to the conference call by dialing 855-238-2712 and ask to be joined into the Civista Bancshares, Inc. second quarter 2023 earnings call. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

An archive of the webcast will be available for one year on the Investor Relations section of the Company’s website (www.civb.com).

Forward Looking Statements

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Civista. For these statements, Civista claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Civista, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Civista’ reports filed with the Securities and Exchange Commission, including those described in “Item 1A Risk Factors” of Part I of Civista’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and any additional risks identified in the Company’s subsequent Form 10-Q’s. Undue

reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Civista does not undertake, and specifically disclaims any obligation, to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Civista Bancshares, Inc., is a $3.6 billion financial holding company headquartered in Sandusky, Ohio. Its primary subsidiary, Civista Bank, was founded in 1884 and provides full-service banking, commercial lending, mortgage, and wealth management services. Today, Civista Bank operates 43 locations across Ohio, Southeastern Indiana and Northern Kentucky. Civista Bank also offers commercial equipment leasing services for businesses nationwide through its subsidiary, Vision Financial Group, Inc., centered in Pittsburgh, Pennsylvania. Civista Bancshares’ common shares are traded on the NASDAQ Capital Market under the symbol “CIVB”. Learn more at www.civb.com.

For additional information, contact:

Dennis G. Shaffer

CEO and President

Civista Bancshares, Inc.

888-645-4121

Civista Bancshares, Inc.

Financial Highlights

(Unaudited, dollars in thousands, except share and per share amounts)

Consolidated Condensed Statement of Income


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Interest income	$	43,335		$	26,064		$	84,874		$	50,730
Interest expense		11,996			1,796			20,934			3,530

Net interest income		31,339			24,268			63,940			47,200
Provision for credit losses		861			400			1,481			700

Net interest income after provision		30,478			23,868			62,459			46,500
Noninterest income		9,149			5,635			20,217			13,278
Noninterest expense		27,913			20,379			55,546			40,637

Income before taxes		11,714			9,124			27,130			19,141
Income tax expense		1,680			1,423			4,208			2,974

Net income		10,034			7,701			22,922			16,167

Dividends paid per common share	$	0.15		$	0.14		$	0.29		$	0.28

Earnings per common share
Basic
Net income	$	10,034		$	7,701		$	22,922		$	16,167

Less allocation of earnings and dividends to participating securities		374			39			831			71

Net income available to common shareholders - basic	$	9,660		$	7,662		$	22,091		$	16,096

Weighted average common shares outstanding		15,775,812			14,615,154			15,754,072			14,761,363
Less average participating securities		588,715			74,286			570,897			65,146

Weighted average number of shares outstanding used to calculate basic earnings per share		15,187,097			14,540,868			15,183,175			14,696,217

Earnings per common share
Basic	$	0.64		$	0.53		$	1.45		$	1.10
Diluted		0.64			0.53			1.45			1.10

Selected financial ratios:
Return on average assets		1.12	%		1.00	%		1.29	%		1.04	%
Return on average equity		11.58	%		9.86	%		13.42	%		9.87	%
Dividend payout ratio		23.58	%		26.57	%		19.93	%		25.57	%
Net interest margin (tax equivalent)		3.86	%		3.43	%		3.99	%		3.40	%

Selected Balance Sheet Items

(Dollars in thousands, except share and per share amounts)


	June 30,			December 31,
	2023			2022
	(unaudited)			(unaudited)
Cash and due from financial institutions	$	41,354		$	43,361
Investment in time deposits		1,719			1,477
Investment securities		619,250			617,592
Loans held for sale		3,014			683
Loans		2,636,280			2,546,666
Less: allowance for credit losses		(35,149	)		(28,511	)

Net loans		2,601,131			2,518,155
Other securities		28,449			33,585
Premises and equipment, net		60,899			64,018
Goodwill and other intangibles		135,406			133,528
Bank owned life insurance		53,787			53,543
Other assets		70,971			71,888

Total assets	$	3,615,980		$	3,537,830

Total deposits	$	2,942,774		$	2,619,984
Federal Home Loan Bank advances - short term		142,000			393,700
Federal Home Loan Bank advances - long term		2,859			3,578
Securities sold under agreements to repurchase		6,788			25,143
Subordinated debentures		103,880			103,799
Other borrowings		12,568			15,516
Securities purchased payable		—			1,338
Tax refunds in process		7,208			278
Accrued expenses and other liabilities		48,027			39,658
Total shareholders’ equity		349,876			334,836

Total liabilities and shareholders’ equity	$	3,615,980		$	3,537,830

Shares outstanding at period end		15,780,227			15,728,234

Book value per share	$	22.17		$	21.29
Equity to asset ratio		9.68	%		9.46	%

Selected asset quality ratios:
Allowance for loan losses to total loans		1.33	%		1.12	%
Non-performing assets to total assets		0.30	%		0.31	%
Allowance for loan losses to non-performing loans		327.05	%		261.45	%

Non-performing asset analysis
Nonaccrual loans	$	7,972		$	7,890
Restructured loans		2,775			3,015
Other real estate owned		—			—

Total	$	10,747		$	10,905

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)


End of Period Balances	June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
Assets
Cash and due from banks	$	41,354		$	52,723		$	43,361		$	40,914		$	233,281
Investment in time deposits		1,719			1,721			1,477			1,479			1,236
Investment securities		619,250			629,829			617,592			604,074			531,978
Loans held for sale		3,014			1,465			683			3,491			4,167
Loans		2,636,280			2,580,066			2,546,666			2,328,614			2,064,221
Allowance for credit losses		(35,149	)		(34,196	)		(28,511	)		(27,773	)		(27,435	)

Net Loans		2,601,131			2,545,870			2,518,155			2,300,841			2,036,786
Other securities		28,449			35,383			33,585			18,578			18,511
Premises and equipment, net		60,899			61,895			64,018			30,168			24,151
Goodwill and other intangibles		135,406			135,808			136,454			113,206			84,021
Bank owned life insurance		53,787			53,796			53,543			53,291			47,118
Other assets		70,971			66,068			68,962			75,677			57,850

Total Assets	$	3,615,980		$	3,584,558		$	3,537,830		$	3,241,719		$	3,039,099


Liabilities
Total deposits	$	2,942,774		$	2,843,516		$	2,619,984		$	2,708,253		$	2,455,502
Federal Home Loan Bank advances - short term		142,000			212,000			393,700			55,000			—
Federal Home Loan Bank advances - long term		2,859			3,361			3,578			6,723			75,000
Securities sold under agreement to repurchase		6,788			15,631			25,143			20,155			17,479
Subordinated debentures		103,880			103,841			103,799			103,778			103,737
Other borrowings		12,568			13,938			15,516			—			—
Securities purchased payable		—			—			1,338			2,611			15,025
Tax refunds in process		7,208			5,752			278			2,709			39,448
Accrued expenses and other liabilities		48,027			38,822			39,658			39,888			30,846

Total liabilities		3,266,104			3,236,861			3,202,994			2,939,117			2,737,037

Shareholders’ Equity
Common shares		310,784			310,412			310,182			299,515			278,240
Retained earnings		168,777			161,110			156,493			146,546			137,592
Treasury shares		(73,915	)		(73,915	)		(73,794	)		(73,641	)		(67,528	)
Accumulated other comprehensive loss		(55,770	)		(49,910	)		(58,045	)		(69,818	)		(46,242	)

Total shareholders’ equity		349,876			347,697			334,836			302,602			302,062

Total Liabilities and Shareholders’ Equity	$	3,615,980		$	3,584,558		$	3,537,830		$	3,241,719		$	3,039,099


Quarterly Average Balances
Assets:
Earning assets	$	3,258,738		$	3,211,902		$	3,099,501		$	3,002,256		$	2,866,362
Securities		658,515			655,987			630,127			622,924			556,352
Loans		2,593,286			2,548,518			2,458,980			2,289,588			2,033,378
Liabilities and Shareholders’ Equity
Total deposits	$	2,817,712		$	2,654,356		$	2,649,755		$	2,719,014		$	2,524,971
Interest-bearing deposits	$	1,912,955			1,692,470			1,710,019			1,738,015			1,630,084
Other interest-bearing liabilities		375,608			515,122			407,710			155,077			200,005
Total shareholders’ equity		347,647			341,159			299,509			305,134			313,272

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)


	Three Months Ended
Income statement	June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022
Total interest and dividend income	$	43,335	$	41,539	$	37,990	$	32,533	$	26,064
Total interest expense		11,996		8,938		5,425		2,094		1,796

Net interest income		31,339		32,601		32,565		30,439		24,268
Provision for loan losses		861		620		752		300		400
Noninterest income		9,149		11,068		10,064		5,734		5,635
Noninterest expense		27,913		27,633		27,301		22,555		20,379

Income before taxes		11,714		15,416		14,576		13,318		9,124
Income tax expense		1,680		2,528		2,428		2,206		1,423

Net income	$	10,034	$	12,888	$	12,148	$	11,112	$	7,701


Per share data
Earnings per common share
Basic
Net income	$	10,034	$	12,888	$	12,148	$	11,112	$	7,701
Less allocation of earnings and dividends to participating securities		374		453		432		52		39

Net income available to common shareholders - basic	$	9,660	$	12,435	$	11,716	$	11,060	$	7,662

Weighted average common shares outstanding		15,775,812		15,732,092		15,717,439		15,394,898		14,615,154
Less average participating securities		588,715		552,882		559,596		71,604		74,286

Weighted average number of shares outstanding used to calculate basic earnings per share		15,187,097		15,179,210		15,157,843		15,323,294		14,540,868

Earnings per common share
Basic	$	0.64	$	0.82	$	0.77	$	0.72	$	0.53
Diluted		0.64		0.82		0.77		0.72		0.53

Common shares dividend paid	$	2,367	$	2,201	$	2,202	$	2,042	$	2,091

Dividends paid per common share		0.15		0.14		0.14		0.14		0.14

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)


	Three Months Ended
Asset quality	June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
Allowance for credit losses:
Beginning of period	$	34,196		$	28,511		$	27,773		$	27,435		$	27,033
CECL adoption adjustments		—			5,193			—			—			—
Charge-offs		(14	)		(175	)		(58	)		(74	)		(60	)
Recoveries		106			47			44			112			62
Provision		861			620			752			300			400

End of period	$	35,149		$	34,196		$	28,511		$	27,773		$	27,435

Allowance for unfunded commitments:
Beginning of period	$	3,587		$	—		$	—		$	—		$	—
CECL adoption adjustments		—			3,386			—			—			—
Charge-offs		—			—			—			—			—
Recoveries		—			—			—			—			—
Provision		264			201			—			—			—

End of period	$	3,851		$	3,587		$	—		$	—		$	—

Ratios
Allowance to total loans		1.33	%		1.33	%		1.12	%		1.19	%		1.33	%
Allowance to nonperforming assets		327.05	%		345.91	%		261.45	%		476.24	%		572.78	%
Allowance to nonperforming loans		327.05	%		345.82	%		261.45	%		476.24	%		572.78	%

Nonperforming assets
Nonperforming loans	$	10,747		$	9,860		$	10,905		$	5,832		$	4,790
Other real estate owned		—			26			—			—			—

Total nonperforming assets	$	10,747		$	9,886		$	10,905		$	5,832		$	4,790

Capital and liquidity
Tier 1 leverage ratio		8.86	%		8.63	%		8.92	%		9.32	%		9.87	%
Tier 1 risk-based capital ratio		10.93	%		10.80	%		10.78	%		11.62	%		13.63	%
Total risk-based capital ratio		14.83	%		14.73	%		14.52	%		15.62	%		18.24	%
Tangible common equity ratio ⁽¹⁾		6.16	%		6.14	%		5.83	%		6.05	%		7.38	%

(1)	See reconciliation of non-GAAP measures at the end of this press release.

Reconciliation of Non-GAAP Financial Measures

(Unaudited - dollars in thousands except share data)


	Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2023			2023			2022			2022			2022
Tangible Common Equity
Total Shareholder’s Equity - GAAP	$	349,876		$	347,697		$	334,835		$	302,602		$	302,062
Less: Goodwill and intangible assets		135,406			135,808			136,454			113,206			84,021

Tangible common equity (Non-GAAP)	$	214,470		$	211,889		$	198,381		$	189,396		$	218,041

Total Shares Outstanding		15,780,227			15,732,092			15,728,234			15,235,545			14,537,433

Tangible book value per share	$	13.59		$	13.47		$	12.61		$	12.43		$	15.00

Tangible Assets
Total Assets - GAAP	$	3,615,980		$	3,587,118		$	3,537,830		$	3,241,719		$	3,039,099
Less: Goodwill and intangible assets		135,406			135,808			136,454			113,206			84,021

Tangible assets (Non-GAAP)	$	3,480,574		$	3,451,310		$	3,401,376		$	3,128,513		$	2,955,078

Tangible common equity to tangible assets		6.16	%		6.14	%		5.83	%		6.05	%		7.38	%

Document and Entity Information	Jul. 28, 2023
Cover [Abstract]
Amendment Flag	false
Entity Central Index Key	0000944745
Document Type	8-K
Document Period End Date	Jul. 28, 2023
Entity Registrant Name	Civista Bancshares, Inc.
Entity Incorporation State Country Code	OH
Entity File Number	001-36192
Entity Tax Identification Number	34-1558688
Entity Address, Address Line One	100 East Water Street
Entity Address, Address Line Two	P.O. Box 5016
Entity Address, City or Town	Sandusky
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44870
City Area Code	(419)
Local Phone Number	625-4121
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Common
Trading Symbol	CIVB
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false