Form 8-K - Current report

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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 29, 2024

 

 

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: [phone]

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. ☐

 

 

 

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Item 2.02

Results of Operations and Financial Condition

On July 29, 2024, Civista Bancshares, Inc. announced preliminary unaudited earnings for the three-and six-month periods ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated herein 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 period ended June 30, 2024.

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.

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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 29, 2024		/s/ Ian Whinnem
		Ian Whinnem,
		Senior Vice President & Chief Financial Officer

Exhibit 99.1

 

Civista Bancshares, Inc. Announces Second Quarter 2024 Financial Results

Sandusky, Ohio, July 29, 2024 /PRNewswire/– Civista Bancshares, Inc. (NASDAQ:CIVB) (“Civista”) announced its unaudited financial results for the three- and six-month periods ended June 30, 2024.

Second quarter and year-to-date 2024 highlights:

 

•

Earnings per diluted share (EPS) for the quarter were $0.45, higher by $0.04, or 10%, than the prior quarter, and lower by $0.19, or 30%, from the year-ago quarter.

 

•

Net income of $7.1 million increased $0.7 million, or 11%, from the prior quarter and decreased $3.0 million, or 30%, compared to $10.0 million for the second quarter of 2023.

 

•

Cost of deposits of 210 basis points and total funding costs of 261 basis points for the quarter.

 

•

Based on the June 30, 2024 market close share price of $15.49, the $0.16 second quarter dividend is equivalent to an annualized yield of 4.13% and a dividend payout ratio of 35.6%.

CEO Commentary:

“Our second quarter earnings report shows solid loan and revenue growth compared to the last quarter, even with the higher interest expense on deposits”, said Dennis G. Shaffer, CEO and President of Civista.

“We kept our credit quality strong while funding new loans, especially in residential real estate and construction. This growth highlights our focus on expanding our lending to meet the rising demand for housing and construction financing. By offering customized loan solutions, we’ve been able to support the needs of our customers and communities.”, Shaffer commented.

 

1

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Results of Operations:

For the three-month periods ended June 30 and March 31, 2024 and June 30, 2023

Net interest income decreased $0.6 million, or 2.2%, for the second quarter of 2024 compared to the first quarter of 2024. Interest income increased $0.5 million, which was more than offset by an increase in interest expense of $1.1 million. Both increases were driven by increases in rates and volume.

Compared to the same period of 2023 net interest income decreased $3.6 million, or 11.4%, for the second quarter of 2024. The lower net interest income was primarily driven by an increase in interest expense of $9.6 million, which was partially offset by an increase in interest income of $6.0 million.

The increase in interest income from the comparable prior year quarter was due to a 27-basis point increase in yield as well as a $264.8 million increase in average earning assets. The increase in volume can be attributed to organic growth.

The increase in interest expense from the comparable prior year quarter was due to the average rate paid on interest-bearing liabilities increasing 104 basis points as well as average interest-bearing liabilities increasing $428.2 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 interest rates, continues to drive the increase in funding costs. Deposit costs have increased 118 basis points compared to a year ago. Net interest margin was 3.09% for the second quarter of 2024. It decreased 13 basis points from the first quarter of 2024, when it was 3.22%, and it decreased 66 basis points from the second quarter of 2023, when it was 3.75%.

 

2

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Average Balance Analysis

(Unaudited - Dollars in thousands)

 

		Three Months Ended June 30,
		2024												2023
		Average								Yield/				Average								Yield/
Assets:		balance				Interest				rate*				balance				Interest				rate*
Interest-earning assets:
Loans**		$	2,964,377			$	44,946				6.10	%		$	2,689,516			$	39,252				5.85	%
Taxable securities***			351,497				3,070				3.11	%			370,002				2,984				2.93	%
Non-taxable securities***			288,128				2,372				3.87	%			288,513				2,319				3.79	%
Interest-bearing deposits in other banks			15,807				205				5.22	%			6,937				54				3.12	%
Total interest-earning assets***		$	3,619,809			$	50,593				5.58	%		$	3,354,968			$	44,609				5.31	%
Noninterest-earning assets:
Cash and due from financial institutions			32,564												47,560
Premises and equipment, net			53,654												61,220
Accrued interest receivable			13,230												11,191
Intangible assets			134,473												135,669
Bank owned life insurance			61,871												53,878
Other assets			65,818												60,253
Less allowance for loan losses			(39,190	)											(34,668	)
Total Assets		$	3,942,229											$	3,690,071
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand and savings		$	1,339,503			$	3,054				0.92	%		$	1,364,648			$	1,546				0.45	%
Time			926,831				12,451				5.40	%			548,307				5,988				4.38	%
Short-term FHLB borrowings			440,670				6,078				5.55	%			242,395				3,113				5.15	%
Long-term FHLB borrowings			2,031				12				2.38	%			3,107				17				2.19	%
Other borrowings			—				—				0.00	%			109,248				1,406				5.16	%
Subordinated debentures			103,999				1,247				4.83	%			103,854				1,198				4.62	%
Repurchase agreements			—				—				0.00	%			13,234				2				0.06	%
Total interest-bearing liabilities		$	2,813,034			$	22,842				3.27	%		$	2,384,793			$	13,270				2.23	%
Noninterest-bearing deposits			703,046												904,757
Other liabilities			60,365												52,874
Shareholders’ equity			365,784												347,647
Total Liabilities and Shareholders’ Equity		$	3,942,229											$	3,690,071
Net interest income and interest rate spread						$	27,751				2.31	%						$	31,339				3.08	%
Net interest margin***											3.09	%											3.75	%

 

*	- Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $631 thousand and $617 thousand for the periods ended June 30, 2024 and 2023, 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 $69.4 million and $60.4 million, respectively. These adjustments were also made when calculating the yield on earning assets and the margin.

 

3

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For the six-month periods ended June 30, 2024 and 2023

Net interest income decreased $7.8 million, or 12.2%, compared to the same period in 2023. Net interest margin decreased 71 basis points to 3.16% for the six months of 2024, compared to 3.87% for the same period a year ago.

Interest income increased $13.2 million, or 15.1%, for the first six months of 2024. Average earning assets increased $251.9 million and average yields increased 35 basis points. The increase in volume can be attributed to organic growth.

Interest expense increased $21.0 million, or 89%, for the first six months of 2024 compared to the same period of 2023. Average rates increased 121 basis points and average interest-bearing liabilities increased $419.7 million.

 

4

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Average Balance Analysis

(Unaudited - Dollars in thousands)

 

		Six Months Ended June 30,
		2024												2023
		Average								Yield/				Average								Yield/
Assets:		balance				Interest				rate*				balance				Interest				rate*
Interest-earning assets:
Loans**		$	2,922,204			$	89,431				6.15	%		$	2,669,830			$	77,036				5.82	%
Taxable securities***			351,156				6,004				3.06	%			372,413				5,818				2.85	%
Non-taxable securities***			291,758				4,747				3.86	%			284,845				4,581				3.80	%
Interest-bearing deposits in other banks			21,062				539				5.15	%			7,166				99				2.79	%
Total interest-earning assets***		$	3,586,180			$	100,721				5.62	%		$	3,334,254			$	87,534				5.27	%
Noninterest-earning assets:
Cash and due from financial institutions			31,123												44,584
Premises and equipment, net			54,317												62,002
Accrued interest receivable			12,977												10,924
Intangible assets			134,672												135,625
Bank owned life insurance			61,664												53,754
Other assets			62,414												60,478
Less allowance for loan losses			(38,273	)											(32,555	)
Total Assets		$	3,905,074											$	3,669,066
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand and savings		$	1,361,364			$	7,039				1.04	%		$	1,374,305			$	2,629				0.39	%
Time			914,637				24,452				5.38	%			429,016				8,137				3.82	%
Short-term FHLB borrowings			384,679				10,593				5.54	%			306,952				7,370				4.84	%
Long-term FHLB borrowings			2,153				25				2.34	%			3,274				37				2.28	%
Other borrowings			—				—				0.00	%			112,728				3,050				5.46	%
Subordinated debentures			103,978				2,489				4.81	%			103,834				2,367				4.60	%
Repurchase agreements			—				—				0.00	%			17,008				4				0.05	%
Total interest-bearing liabilities		$	2,766,811			$	44,598				3.24	%		$	2,347,117			$	23,594				2.03	%
Noninterest-bearing deposits			707,806												926,929
Other liabilities			62,331												50,599
Shareholders’ equity			368,126												344,421
Total Liabilities and Shareholders’ Equity		$	3,905,074											$	3,669,066
Net interest income and interest rate spread						$	56,123				2.38	%						$	63,940				3.24	%
Net interest margin***											3.16	%											3.87	%

 

*	- Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $1.3 million and $1.2 million for the periods ended June 30, 2024 and 2023, respectively.

**	- Average balance includes nonaccrual loans

***	- 2024 and 2023 average yield on investments were calculated by adjusting the average balances of taxable and nontaxable securities by unrealized losses of $64.3 million and $61.8 million, respectively. These adjustments were also made when calculating the yield on earning assets and the margin.

 

5

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Provision for credit losses for the second quarter of 2024 was $1.8 million compared to $861 thousand for the second quarter of 2023. Provision for unfunded commitments for the second quarter of 2024 was ($145) thousand compared to $264 thousand for the second quarter of 2023.

Year-to-date 2024 provision for credit losses was $3.8 million compared to $1.5 million for the same period of 2023. The year-to-date 2024 provision for unfunded commitments was ($195) thousand compared to $465 thousand for the same period of 2023.

The increases in provision during the second quarter and the first six months of 2024 over the comparable prior year periods were primarily attributable to funding loan growth, as well as a charge-off associated with a discrete fraud event in the second quarter of 2024.

The reserve ratio as of June 30, 2024 was 1.32%, up from 1.30% at December 31, 2023.

For the second quarter of 2024, noninterest income totaled $10.5 million, an increase of $1.4 million, or 15.2%, compared to the prior year’s second quarter.

Noninterest income

 

(unaudited - dollars in thousands)		Three months ended June 30,
		2024				2023				$ change				% change
Service charges		$	1,488			$	1,831			$	(343	)			-18.7	%
Net gain/(loss) on equity securities			74				(170	)			244				143.5	%
Net gain on sale of loans			888				615				273				44.4	%
ATM/Interchange fees			1,416				1,450				(34	)			-2.3	%
Wealth management fees			1,337				1,180				157				13.3	%
Lease revenue and residual income			3,529				2,201				1,328				60.3	%
Bank owned life insurance			367				311				56				18.0	%
Tax refund processing fees			—				475				(475	)			-100.0	%
Other			1,444				1,256				188				15.0	%
Total noninterest income		$	10,543			$	9,149			$	1,394				15.2	%

Service charges for the second quarter of 2024 decreased $343 thousand as we have eliminated our representment fee and reduced our overdraft charges, the effect of which was partially offset by an increase in service fees.

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

Lease revenue and residual income for the second quarter of 2024 increased $1.3 million due to increased income from leasing operations.

Tax refund processing fee income is now zero as we exited our relationship with a third-party processor that was in the tax refund processing business.

 

6

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For the six months ended June 30, 2024, noninterest income totaled $19.0 million, a decrease of $1.2 million, or 5.8%, compared to the same period in the prior year.

Noninterest income

 

(unaudited - dollars in thousands)		Six months ended June 30,
		2024				2023				$ change				% change
Service charges		$	2,928			$	3,604			$		(676)			-18.8	%
Net gain/(loss) on equity securities			(67	)			(238	)			171				71.8	%
Net gain on sale of loans			1,751				1,246				505				40.5	%
ATM/Interchange fees			2,799				2,803				(4	)			-0.1	%
Wealth management fees			2,613				2,373				240				10.1	%
Lease revenue and residual income			5,203				4,247				956				22.5	%
Bank owned life insurance			717				564				153				27.1	%
Tax refund processing fees			—				2,375				(2,375	)			-100.0	%
Other			3,103				3,243				(140	)			-4.3	%
Total noninterest income		$	19,047			$	20,217			$	(1,170	)			-5.8	%

Service charges for the first six months of 2024 decreased $676 thousand as we have eliminated our representment fee and reduced our overdraft charges, the effect of which was partially offset by an increase in service fees.

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

Net gain on sale of loans for the first six months of 2024 increased primarily due to an increase in volume of loans sold.

Lease revenue and residual income for the first six months of 2024 increased $956 thousand principally due to increased revenue from leasing operations.

Tax refund processing fee income is now zero as we exited our relationship with a third-party processor that was in the tax refund processing business.

 

7

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For the second quarter of 2024, noninterest expense totaled $28.6 million, an increase of $866, or 3.1%, compared to the first quarter of 2024, and an increase of $906 thousand, or 3.3%, compared to the prior year’s second quarter.

Noninterest expense

 

(unaudited - dollars in thousands)		Three months ended June 30,
		2024				2023				$ change				% change
Compensation expense		$	15,740			$	14,978			$	762				5.1	%
Net occupancy and equipment			3,732				4,135				(403	)			-9.7	%
Contracted data processing			559				559				—				0.0	%
Taxes and assessments			1,027				1,183				(156	)			-13.2	%
Professional services			1,249				1,239				10				0.8	%
Amortization of intangible assets			366				399				(33	)			-8.3	%
ATM/Interchange expense			632				615				17				2.8	%
Marketing			445				540				(95	)			-17.6	%
Software maintenance expense			1,176				1,059				117				11.0	%
Other			3,629				2,942				687				23.4	%
Total noninterest expense		$	28,555			$	27,649			$	906				3.3	%

Compensation expense for the second quarter of 2024 increased primarily due to annual merit increases, employee insurance and other payroll related expenses.

The decrease in occupancy and equipment expense for the second quarter of 2024 was primarily due to a decrease in equipment depreciation from leasing operations as operating leases mature.

The increase in software maintenance expense for the second quarter of 2024 was due to an increase in software maintenance contracts, including investments in digital banking.

Other expenses include expenses for the SBA, CDARS and ICS programs and additional ATM/Debit card losses.

 

8

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The efficiency ratio was 72.6% for the quarter ended June 30, 2024, compared to 66.0% for the quarter ended June 30, 2023. The increase in the efficiency ratio was driven largely as a result of the decrease in net interest income.

For the six months ended June 30, 2024, noninterest expense totaled $56.2 million, an increase of $1.2 million, or 2.1%, compared to the same period in the prior year.

Noninterest expense

 

(unaudited - dollars in thousands)		Six months ended June 30,
		2024				2023				$ change				% change
Compensation expense		$	31,197			$	30,083			$	1,114				3.7	%
Net occupancy and equipment			7,635				8,255				(620	)			-7.5	%
Contracted data processing			1,104				1,079				25				2.3	%
Taxes and assessments			1,996				1,957				39				2.0	%
Professional services			2,398				2,794				(396	)			-14.2	%
Amortization of intangible assets			757				797				(40	)			-5.0	%
ATM/Interchange expense			1,257				1,195				62				5.2	%
Marketing			924				1,045				(121	)			-11.6	%
Software maintenance expense			2,365				1,937				428				22.1	%
Other			6,611				5,939				672				11.3	%
Total noninterest expense		$	56,244			$	55,081			$	1,163				2.1	%

Compensation expense for the first six months of 2024 increased primarily due to annual merit increases, employee insurance and other payroll related expenses. The year-to-date average full time equivalent (FTE) employees were 538 at June 30, 2024, an increase of 6 FTEs over the same period in 2023.

The decrease in occupancy and equipment expense for the first six months of 2024 was primarily due to a decrease in equipment depreciation from leasing operations as operating leases mature.

Professional services for the first six months of 2024 decreased primarily due to advisory fees in 2023 for the company’s MasterCard contract of $400 thousand.

The increase in software maintenance expense for the first six months of 2024 was due to an increase in software maintenance contracts, including on new software related to digital banking investments.

Other expenses include expenses for the SBA, CDARS and ICS programs and ATM/Debit card losses.

The efficiency ratio was 72.5% for the first six months ended June 30, 2024 compared to 63.4% for the first six months ended June 30, 2023. The increase in the efficiency ratio was driven largely as a result of the decrease in net interest income and the reduction in non-interest income related to the exit from the tax refund processing business.

 

9

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Income Taxes

Civista’s effective income tax rate for the second quarter 2024 was 12.6% compared to 14.3% in 2023. The effective income tax rate for the six months ended June 30, 2024 was 12.1% compared to 15.5% for the six months ended June 30, 2023.

Balance Sheet

Total assets increased $131.7 million, or 3.4%, from March 31, 2024 to June 30, 2024, primarily due to growth in the loan portfolio.

Total assets increased $150.5 million, or 3.9%, from December 31, 2023 to June 30, 2024, and $303.8 million, or 8.2% from June 30, 2023 to June 30, 2024.

End of period loans and leases:

 

(unaudited - dollars in thousands)
		June 30, 2024				December 31, 2023				$ Change				% Change
Commercial and Agriculture			$ 318,499				$ 304,793				$ 13,706				4.5	%
Commercial Real Estate:
Owner Occupied			377,308				377,322				(14	)			0.0	%
Non-owner Occupied			1,213,341				1,161,893				51,448				4.4	%
Residential Real Estate			729,213				659,841				69,372				10.5	%
Real Estate Construction			283,446				260,409				23,037				8.8	%
Farm Real Estate			24,376				24,771				(395	)			-1.6	%
Lease financing receivable			53,461				54,642				(1,181	)			-2.2	%
Consumer and Other			15,352				18,056				(2,704	)			-15.0	%
Total Loans		$	3,014,996			$	2,861,727			$	153,269				5.4	%

Loan and lease balances increased $153.3 million, or 5.4% since December 31, 2023. Commercial Real Estate loans continued to grow due to consistent demand in the Non-owner Occupied category, especially in multi-family in the major Ohio metropolitan areas. Real Estate Construction loans have increased with consistent demand for more projects across our footprint. The undrawn construction availability continues to be near all-time highs. Residential Real Estate loans have grown primarily due to more home construction loans and continued new production in our Community Reinvestment Act (“CRA”) product.

 

10

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Deposits

Total deposits decreased $3.1 million or 0.1%, from March 31, 2024 to June 30, 2024.

Total deposits increased $34.8 million or 1.2%, from June 30, 2023 to June 30, 2024 and decreased $7.4 million, or 0.2%, from December 31, 2023 to June 30, 2024.

End of period deposit balances

 

(unaudited - dollars in thousands)
		June 30, 2024				December 31, 2023				$ Change				% Change
Noninterest-bearing demand		$	691,203			$	771,699			$	(80,496	)			-10.4	%
Interest-bearing demand			409,848				449,449				(39,601	)			-8.8	%
Savings and money market			940,312				863,067				77,245				9.0	%
Time deposits			936,254				900,813				35,441				3.9	%
Total Deposits		$	2,977,617			$	2,985,028			$	(7,411	)			-0.2	%

The $80.5 million decrease in noninterest-bearing demand deposits from December 31, 2023 was primarily due to a $49.0 million decrease in noninterest-bearing business accounts and a $24.8 million decrease in noninterest-bearing accounts related to the former tax refund processing program.

The $39.6 million decrease from December 31, 2023 in interest-bearing demand deposits was primarily due to a $17.2 million decrease in interest-bearing personal accounts, a $8.5 million decrease in Jumbo NOW accounts, and a $5.8 million decrease in interest-bearing business accounts.

The $77.2 million increase from December 31, 2023 in savings and money market was primarily due to a $54.1 million increase in brokered money market accounts, and a $6.8 million increase in business money market accounts.

The increase in time certificates from December 31, 2023 was primarily due to a $17.3 million increase in Jumbo time certificates, and a $18.3 million increase in retail time certificates, partially offset by a $19.3 million decrease in brokered time deposits.

FHLB overnight advances totaled $500.5 million on June 30, 2024, up from $338.0 million on December 31, 2023. FHLB term advances totaled $1.8 million on June 30, 2024, down from $2.4 million on December 31, 2023.

Stock Repurchase Program

On April 18, 2024, Civista announced a new common share repurchase program pursuant to which the Company was authorized to repurchase a maximum aggregate value of $13,500,000 of its outstanding common shares through April 15, 2025. As of June 30, 2024, no common shares had been repurchased under this common share repurchase program. During January 2024, a total of 8,262 shares (valued at $18.38 per share) were surrendered by employees to satisfy tax obligations stemming from vesting of restricted shares.

 

11

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Shareholders’ Equity

Total shareholders’ equity at June 30, 2024 increased $3.8 million, or 1.0% from March 31, 2024, primarily due to a $4.5 million, or 2.4% increase in retained earnings, partially offset by a $0.6 million, or 1.1%, increase in accumulated other comprehensive loss.

Total shareholders’ equity at June 30, 2024 increased $1.8 million from December 31, 2023, primarily due to an $8.4 million increase in retained earnings, partially offset by an additional accumulated other comprehensive loss of $6.8 million.

Total shareholders’ equity at June 30, 2024 increased $23.9 million, or 6.8%, from June 30, 2023, due to increased retained earnings of $23.4 million, or 13.9%, and an additional accumulated other comprehensive loss of $1.4 million.

Asset Quality

Civista recorded net charge-offs of $1.1 million for the first six months of 2024 compared to net charge-offs of $36 thousand for the same period of 2023. The allowance for credit losses to loans ratio was 1.32% at June 30, 2024 and 1.30% at December 31, 2023. The increase in charge-offs was partially attributable to a $500 thousand charge-off on a commercial and industrial loan related to a fraud.

 

Allowance for Credit Losses
(dollars in thousands)
		June 30, 2024				June 30, 2023
January 1		$	37,160			$	28,511
CECL adoption adjustments			—				5,193
Charge-offs			(1,538	)			(189	)
Recoveries			455				153
Provision			3,842				1,481
End of period		$	39,919			$	35,149
Allowance for Unfunded Commitments
(dollars in thousands)
		June 30, 2024				June 30, 2023
January 1		$	3,901			$	—
CECL adoption adjustments			—				3,386
Charge-offs			—				—
Recoveries			—				—
Provision			(195	)			465
End of period		$	3,706			$	3,851

 

12

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Non-performing assets at June 30, 2024 were $17.1 million, a 13%, or $1.9 million increase from December 31, 2023. The non-performing assets to total assets ratio was 0.37% at June 30, 2024 and 0.39% at December 31, 2023, a decrease of 0.02%. The allowance for credit losses to non-performing loans was 233.47% at June 30, 2024, a decrease from 245.66% at December 31, 2023 and 327.05% at June 30, 2023.

 

Non-performing Assets:
(dollars in thousands)		June 30, 2024				December 31, 2023
Non-accrual loans		$	15,209			$	12,467
Restructured loans			1,889				2,659
Total non-performing loans			17,098				15,126
Other Real Estate Owned			—				—
Total non-performing assets		$	17,098			$	15,126

Conference Call and Webcast

Civista Bancshares, Inc. will host a conference call to discuss the Company’s financial results for the second quarter of 2024 at 1:00 p.m. ET on Monday, July 29, 2024. 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 800-836-8184 and ask to be joined into the Civista Bancshares, Inc. second quarter 2024 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

 

13

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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, 2023, 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 $4.0 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 Civista Leasing and Finance Division (formerly Vision Financial Group, Inc.), headquartered 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

 

14

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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,
		2024				2023				2024				2023
Interest income		$	50,593			$	44,609			$	100,721			$	87,534
Interest expense			22,842				13,270				44,598				23,594
Net interest income			27,751				31,339				56,123				63,940
Provision for credit losses			1,655				1,125				3,647				1,946
Net interest income after provision			26,096				30,214				52,476				61,994
Noninterest income			10,543				9,149				19,047				20,217
Noninterest expense			28,555				27,649				56,244				55,081
Income before taxes			8,084				11,714				15,279				27,130
Income tax expense			1,020				1,680				1,855				4,208
Net income			7,064				10,034				13,424				22,922
Dividends paid per common share		$	0.16			$	0.15			$	0.32			$	0.29
Earnings per common share
Basic
Net income		$	7,064			$	10,034			$	13,424			$	22,922
Less allocation of earnings and dividends to participating securities			266				374				492				831
Net income available to common shareholders - basic		$	6,798			$	9,660			$	12,932			$	22,091
Weighted average common shares outstanding			15,729,049				15,775,812				15,712,499				15,754,072
Less average participating securities			591,712				588,715				576,528				570,897
Weighted average number of shares outstanding used to calculate basic earnings per share			15,137,337				15,187,097				15,135,971				15,183,175
Earnings per common share
Basic		$	0.45			$	0.64			$	0.85			$	1.45
Diluted			0.45				0.64				0.85				1.45
Selected financial ratios:
Return on average assets			0.72	%			1.12	%			0.69	%			1.29	%
Return on average equity			7.77	%			11.58	%			7.33	%			13.42	%
Dividend payout ratio			35.63	%			23.58	%			37.46	%			19.93	%
Net interest margin (tax equivalent)			3.09	%			3.75	%			3.16	%			3.87	%
Effective income tax rate			12.6	%			14.3	%			12.1	%			15.5	%

 

15

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Selected Balance Sheet Items

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

 

		June 30, 2024				December 31, 2023
		(unaudited)				(unaudited)
Cash and due from financial institutions		$	55,760			$	60,406
Investment in time deposits			1,450				1,225
Investment securities			611,866				620,441
Loans held for sale			5,369				1,725
Loans			3,014,996				2,861,728
Less: allowance for credit losses			(39,919	)			(37,160	)
Net loans			2,975,077				2,824,568
Other securities			37,615				29,998
Premises and equipment, net			52,142				56,769
Goodwill and other intangibles			134,227				135,028
Bank owned life insurance			63,367				61,335
Other assets			75,041				69,923
Total assets		$	4,011,914			$	3,861,418
Total deposits		$	2,977,616			$	2,985,028
Federal Home Loan Bank advances - short term			500,500				338,000
Federal Home Loan Bank advances - long term			1,841				2,392
Subordinated debentures			104,026				103,943
Other borrowings			7,156				9,859
Securities purchased payable			—				—
Tax refunds in process			—				2,885
Accrued expenses and other liabilities			46,967				47,309
Total shareholders’ equity			373,808				372,002
Total liabilities and shareholders’ equity		$	4,011,914			$	3,861,418
Shares outstanding at period end			15,737,222				15,695,424
Book value per share		$	23.75			$	23.70
Equity to asset ratio			9.32	%			9.63	%
Selected asset quality ratios:
Allowance for credit losses to total loans			1.32	%			1.30	%
Non-performing assets to total assets			0.43	%			0.39	%
Allowance for credit losses to non-performing loans			233.47	%			245.67	%
Non-performing asset analysis
Nonaccrual loans		$	15,209			$	12,467
Troubled debt restructurings			1,889				2,659
Other real estate owned			—				—
Total		$	17,098			$	15,126

 

16

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Supplemental Financial Information

(Unaudited - dollars in thousands except share data)

 

End of Period Balances		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
Assets
Cash and due from banks		$	55,760			$	50,310			$	60,406			$	50,316			$	41,354
Investment in time deposits			1,450				1,450				1,225				1,472				1,719
Investment securities			611,866				608,277				620,441				595,508				619,250
Loans held for sale			5,369				3,716				1,725				1,589				3,014
Loans and leases			3,014,996				2,898,139				2,861,728				2,759,771				2,728,390
Allowance for credit losses			(39,919	)			(38,849	)			(37,160	)			(35,280	)			(35,149	)
Net Loans			2,975,077				2,859,290				2,824,568				2,724,491				2,693,241
Other securities			37,615				31,360				29,998				34,224				28,449
Premises and equipment, net			52,142				54,280				56,769				58,989				60,899
Goodwill and other intangibles			134,227				134,618				135,028				134,998				135,406
Bank owned life insurance			63,367				61,685				61,335				54,053				53,787
Other assets			75,041				75,272				69,923				82,157				70,971
Total Assets		$	4,011,914			$	3,880,258			$	3,861,418			$	3,737,797			$	3,708,090
Liabilities
Total deposits		$	2,977,616			$	2,980,695			$	2,985,028			$	2,795,743			$	2,942,774
Federal Home Loan Bank advances - short term			500,500				368,500				338,000				431,500				142,000
Federal Home Loan Bank advances - long term			1,841				2,211				2,392				2,573				2,859
Securities sold under agreement to repurchase			—				—				—				—				6,788
Subordinated debentures			104,026				103,984				103,943				103,921				103,880
Other borrowings			7,156				8,105				9,859				10,964				12,568
Secured borrowings			—				—				—				4,881				92,110
Securities purchased payable			—				—				—				1,755				—
Tax refunds in process			—				—				2,885				493				7,208
Accrued expenses and other liabilities			46,967				47,104				47,309				53,222				48,027
Total liabilities			3,638,106				3,510,599				3,489,416				3,405,052				3,358,214
Shareholders’ Equity
Common shares			311,529				311,352				311,166				310,975				310,784
Retained earnings			192,186				187,638				183,788				176,644				168,777
Treasury shares			(75,574	)			(75,574	)			(75,422	)			(75,412	)			(73,915	)
Accumulated other comprehensive loss			(54,333	)			(53,757	)			(47,530	)			(79,462	)			(55,770	)
Total shareholders’ equity			373,808				369,659				372,002				332,745				349,876
Total Liabilities and Shareholders’ Equity		$	4,011,914			$	3,880,258			$	3,861,418			$	3,737,797			$	3,708,090
Quarterly Average Balances
Assets:
Earning assets		$	3,619,809			$	3,552,552			$	3,449,344			$	3,443,226			$	3,354,968
Securities			639,625				646,203				645,202				645,202				658,515
Loans			2,964,377				2,880,031				2,805,995				2,742,736				2,689,516
Liabilities and Shareholders’ Equity
Total deposits		$	2,969,380			$	2,998,150			$	2,977,802			$	2,946,849			$	2,817,712
Interest-bearing deposits			2,266,334				2,285,667				2,163,160				1,966,014				1,912,955
Other interest-bearing liabilities			546,700				431,919				383,877				178,614				471,837
Total shareholders’ equity			365,784				370,452				337,866				348,209				347,647

 

17

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Supplemental Financial Information

(Unaudited - dollars in thousands except share data)

 

		Three Months Ended
Income statement		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
Total interest and dividend income		$	50,593			$	50,128			$	48,599			$	46,601			$	44,609
Total interest expense			22,842				21,756				18,547				15,097				13,270
Net interest income			27,751				28,372				30,052				31,504				31,339
Provision for credit losses			1,800				2,042				2,325				630				861
Provision for unfunded commitments			(145	)			(50	)			(80	)			130				264
Noninterest income			10,543				8,504				8,823				8,125				9,149
Noninterest expense			28,555				27,689				25,393				26,622				27,649
Income before taxes			8,084				7,195				11,237				12,247				11,714
Income tax expense			1,020				835				1,582				1,860				1,680
Net income		$	7,064			$	6,360			$	9,655			$	10,387			$	10,034
Per share data
Earnings per common share
Basic
Net income		$	7,064			$	6,360			$	9,655			$	10,387			$	10,034
Less allocation of earnings and dividends to participating securities			266				227				362				389				374
Net income available to common shareholders - basic		$	6,798			$	6,133			$	9,293			$	9,998			$	9,660
Weighted average common shares outstanding			15,729,049				15,695,963				15,695,978				15,735,007				15,775,812
Less average participating securities			591,712				561,344				588,625				588,715				588,715
Weighted average number of shares outstanding used to calculate basic earnings per share			15,137,337				15,134,619				15,107,353				15,146,292				15,187,097
Earnings per common share
Basic		$	0.45			$	0.41			$	0.62			$	0.66			$	0.64
Diluted		$	0.45				0.41				0.62				0.66				0.64
Common shares dividend paid		$	2,516			$	2,510			$	2,511			$	2,521			$	2,367
Dividends paid per common share			0.16				0.16				0.16				0.16				0.15

 

18

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Supplemental Financial Information

(Unaudited - dollars in thousands except share data)

 

		Three Months Ended
Asset quality		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
Allowance for credit losses:
Beginning of period		$	38,849			$	37,160			$	35,280			$	35,251			$	34,196
Charge-offs			(887	)			(651	)			(577	)			(666	)			(14	)
Recoveries			157				298				132				65				208
Provision			1,800				2,042				2,325				630				861
End of period		$	39,919			$	38,849			$	37,160			$	35,280			$	35,251
Allowance for unfunded commitments:
Beginning of period		$	3,851			$	3,901			$	3,981			$	3,851			$	3,587
Charge-offs			—				—				—				—				—
Recoveries			—				—				—				—				—
Provision			(145	)			(50	)			(80	)			130				264
End of period		$	3,706			$	3,851			$	3,901			$	3,981			$	3,851
Ratios
Allowance to total loans			1.32	%			1.34	%			1.30	%			1.28	%			1.29	%
Allowance to non-performing assets			233.47	%			247.06	%			245.66	%			308.52	%			327.05	%
Allowance to non-performing loans			233.47	%			247.06	%			245.66	%			308.52	%			327.05	%
Non-performing assets to total assets			0.43	%			0.41	%			0.39	%			0.31	%			0.29	%
Non-performing assets
Non-performing loans		$	17,098			$	15,725			$	15,126			$	11,435			$	10,747
Other real estate owned			—				—				—				—				—
Total non-performing assets		$	17,098			$	15,725			$	15,126			$	11,435			$	10,747
Capital and liquidity
Tier 1 leverage ratio			8.59	%			8.62	%			8.75	%			8.73	%			8.69	%
Tier 1 risk-based capital ratio			10.63	%			10.81	%			10.72	%			10.82	%			10.71	%
Total risk-based capital ratio			14.28	%			14.53	%			14.45	%			14.60	%			14.49	%
Tangible common equity ratio (1)			6.18	%			6.28	%			6.36	%			5.49	%			6.00	%

 

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

 

19

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Reconciliation of Non-GAAP Financial Measures

(Unaudited - dollars in thousands except share data)

 

		Three Months Ended
		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
Tangible Common Equity
Total Shareholder’s Equity - GAAP		$	373,808			$	369,659			$	372,002			$	332,745			$	349,876
Less: Goodwill and intangible assets			134,227				134,618				135,028				134,998				135,406
Tangible common equity (Non-GAAP)		$	239,581			$	235,041			$	236,974			$	197,747			$	214,470
Total Shares Outstanding			15,737,222				15,727,013				15,695,424				15,695,997				15,780,227
Tangible book value per share		$	15.22			$	14.95			$	15.10			$	12.60			$	13.59
Tangible Assets
Total Assets - GAAP		$	4,011,914			$	3,880,258			$	3,861,418			$	3,737,797			$	3,708,090
Less: Goodwill and intangible assets			134,227				134,618				135,028				134,998				135,406
Tangible assets (Non-GAAP)		$	3,877,687			$	3,745,640			$	3,726,390			$	3,602,799			$	3,572,684
Tangible common equity to tangible assets			6.18	%			6.28	%			6.36	%			5.49	%			6.00	%

The efficiency ratio is noninterest expenses, less amortization of intangible assets and acquisition related costs, as a percentage of FTE net interest income plus noninterest income. The following tables reconcile the non-GAAP financial measures of the efficiency ratio to GAAP for the three and six months ended June 30, 2024 and 2023:

 

		Three Months Ended								Six Months Ended
Efficiency ratio (non-GAAP):		June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Noninterest expense (GAAP)		$	28,555			$	27,649			$	56,244			$	55,081
Less: Amortization of intangible assets expense			366				399				757				797
Less: Acquisition related expenses			—				—				—				—
Noninterest expense (non-GAAP)			28,189				27,250				55,487				54,284
Net interest income (GAAP)			27,751				31,339				56,123				63,940
Plus: Taxable equivalent adjustment			631				629				1,262				1,219
Noninterest income (GAAP)			10,543				9,149				19,047				20,217
Less: Net gains (losses) on equity securities			74				(170	)			(67	)			(238	)
Net interest income (FTE) plus noninterest income (non-GAAP)			38,851				41,287				76,499				85,614
Efficiency ratio (non-GAAP)			72.6	%			66.0	%			72.5	%			63.4	%

 

20

Document and Entity Information	Jul. 29, 2024
Cover [Abstract]
Amendment Flag	false
Entity Central Index Key	0000944745
Document Type	8-K
Document Period End Date	Jul. 29, 2024
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

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