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) February 8, 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: (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 February 8, 2024, Civista Bancshares, Inc. announced preliminary unaudited earnings for the three and twelve-month periods ended December 31, 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 twelve-month periods ended December 31, 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: February 8, 2024						/s/ Todd A. Michel
						Todd A. Michel,
						Senior Vice President & Controller

Exhibit 99.1

LOGO

Civista Bancshares, Inc. Announces Fourth Quarter and Year-to-date 2023 Financial Results

Sandusky, Ohio, February 8, 2024 /PRNewswire/– Civista Bancshares, Inc. (NASDAQ:CIVB) (“Civista”) announced its unaudited financial results for the three and twelve month periods ending December 31, 2023.

Fourth quarter and year-to-date 2023 highlights:

•

Net income of $9.7 million, or $0.62 per diluted share, for the fourth quarter of 2023, compared to $12.1 million, or $0.77 per diluted share, for the fourth quarter of 2022.

•

Net income of $43.0 million, or $2.73 per diluted share, compared to $39.4 million, or $2.60 per diluted share, for the twelve months ended December 31, 2023 and 2022, respectively.

•

Cost of deposits of 179 basis points and total funding costs of 219 basis points for the quarter.

•

Based on the December 29, 2023 market close share price of $18.44, the $0.16 fourth quarter dividend is equivalent to an annualized yield of 3.47% and a dividend payout ratio of 25.81%.

“Overall, another solid quarter as we grew loans by $45.8 million. We also increased noninterest income and decreased our noninterest expense when compared to the linked quarter. This helped offset continued net interest margin pressure and allowed us to beat analyst’s consensus by four cents for the quarter” said Dennis G. Shaffer, CEO and President of Civista.

Results of Operations:

For the three-month periods ended December 31, 2023 and 2022

Net interest income decreased $2.5 million, or 7.7%, for the fourth quarter of 2023 compared to the same period of 2022. Interest income increased $9.2 million while interest expense increased $11.7 million. The increase in interest income was driven by both increases in rates and increases in volume. The increase in interest expense was driven by rate and volume as well, but also by a shift in the mix of funding sources.

Net interest margin decreased 57 basis points to 3.44% for the fourth quarter of 2023, compared to 4.01% for the same period a year ago.

The increase in interest income was due to increases in both yield and in asset volume. The 68 basis point increase in yield led to a $5.6 million increase in interest income, while the $249.7 million increase in average earning assets led to a $3.6 million increase in interest income. The increase in volume can be attributed to organic growth.

Interest expense increased $11.7 million, or 171.4%, for the fourth quarter of 2023, compared to the same period last year. The average rate paid on interest-bearing liabilities increased 167 basis points, while average interest-bearing liabilities increased $329.2 million. The increase in interest-bearing liabilities was primarily in brokered time deposits and short-term FHLB borrowings to fund growth. The increase in funding cost, as well as the shift in the funding mix, are driving the increase in interest.

Average Balance Analysis

(Unaudited - Dollars in thousands)


	Three Months Ended December 31,
	2023								2022
	Average balance			Interest		Yield/ rate*			Average balance			Interest			Yield/ rate*
Assets:
Interest-earning assets:
Loans and leases**	$	2,805,995		$	43,172		6.10	%	$	2,559,114		$	34,495			5.35	%
Taxable securities ***		352,186			2,901		2.85	%		365,258			2,692			2.61	%
Non-taxable securities ***		275,046			2,365		3.79	%		264,869			2,190			3.65	%
Interest-bearing deposits in other banks		16,117			161		3.96	%		10,394			22			0.84	%

Total interest-earning assets ***	$	3,449,344		$	48,599		5.52	%	$	3,199,635			39,399			4.84	%

Noninterest-earning assets:
Cash and due from financial institutions		26,221								16,435
Premises and equipment, net		58,576								64,952
Accrued interest receivable		12,455								10,385
Intangible assets		134,867								132,516
Bank owned life insurance		55,441								53,378
Other assets		67,544								67,557
Less allowance for loan losses		(35,802	)							(28,025	)

Total Assets	$	3,768,646							$	3,516,833

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand and savings	$	1,345,199		$	2,873		0.85	%	$	1,449,412		$	582			0.16	%
Time		817,961			10,532		5.11	%		260,607			907			1.38	%
Short-term FHLB borrowings		276,949			3,877		5.55	%		258,254			2,517			3.87	%
Long-term FHLB borrowings		2,458			14		2.26	%		5,694			(5	)		-0.35	%
Other borrowings		543			8		5.85	%		116,683			1,749			5.94	%
Subordinated debentures		103,927			1,243		4.75	%		103,784			1,081			4.13	%
Repurchase agreements		—			—		0.00	%		23,429			3			0.05	%

Total interest-bearing liabilities	$	2,547,037		$	18,547		2.89	%	$	2,217,863			6,834			1.22	%

Noninterest-bearing deposits		814,642								939,736
Other liabilities		69,101								59,725
Shareholders’ equity		337,866								299,509

Total Liabilities and Shareholders’ Equity	$	3,768,646							$	3,516,833

Net interest income and interest rate spread				$	30,052		2.63	%				$	32,565			3.61	%
Net interest margin ***							3.44	%								4.01	%

* -	Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $629 thousand and $582 thousand for the periods ended December 31, 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 $91.0 million and $80.8 million, respectively. These adjustments were also made when calculating the yield on earning assets and the margin.

For the twelve-month periods ended December 31, 2023 and 2022

Net interest income increased $15.3 million, or 13.9%, compared to the same period in 2022.

Interest income increased $56.6 million, or 44.8%, for the twelve months of 2023. Average earning assets increased $351.6 million, resulting in an increase in interest income of $23.2 million. Average yields increased 119 basis points, resulting in an increase in interest income of $33.4 million. The increase in volume can be attributed to both organic growth and to the acquisitions during 2022 of Comunibanc Corp (“Comunibanc”) and Civista Leasing and Financing (“CLF”), formerly known as Vision Financial group (“VFG”).

Interest expense increased $41.3 million, or 258.8%, for the twelve months of 2023 compared to the same period of 2022. Average rates increased 159 basis points compared to 2022, resulting in $26.3 million of the increase in interest expense. Average interest-bearing liabilities increased $399.0 million, resulting in $15.0 million of the increase in interest expense.

Net interest margin increased 5 basis points to 3.70% for the twelve months of 2023, compared to 3.65% for the same period a year ago.

Average Balance Analysis

(Unaudited - Dollars in thousands)


	Twelve Months Ended December 31,
	2023								2022
	Average					Yield/			Average					Yield/
	balance			Interest		rate*			balance			Interest		rate*
Assets:
Interest-earning assets:
Loans**	$	2,722,797		$	160,755		5.90	%	$	2,286,928		$	108,053		4.72	%
Taxable securities ***		363,972			11,718		2.88	%		341,600			9,123		2.49	%
Non-taxable securities ***		282,678			9,282		3.79	%		263,981			7,859		3.56	%
Interest-bearing deposits in other banks		21,551			979		4.54	%		146,849			1,120		0.76	%

Total interest-earning assets ***	$	3,390,998		$	182,734		5.35	%	$	3,039,358			126,155		4.16	%

Noninterest-earning assets:
Cash and due from financial institutions		39,219								84,777
Premises and equipment, net		58,456								34,577
Accrued interest receivable		11,499								8,650
Intangible assets		133,626								96,492
Bank owned life insurance		54,211								50,076
Other assets		63,152								50,765
Less allowance for loan losses		(33,814	)							(27,721	)

Total Assets	$	3,717,347							$	3,336,974

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand and savings	$	1,356,789		$	7,689		0.57	%	$	1,423,134		$	1,442		0.10	%
Time		578,243			26,066		4.51	%		253,399			2,398		0.95	%
Short-term FHLB borrowings		280,887			14,493		5.16	%		66,875			2,566		3.84	%
Long-term FHLB borrowings		2,909			66		2.27	%		45,325			510		1.13	%
Other borrowings		74,269			4,071		5.50	%		91,985			5,243		5.70	%
Subordinated debentures		103,873			4,849		4.67	%		103,741			3,781		8.37	%
Repurchase agreements		8,685			4		0.05	%		22,293			11		0.05	%

Total interest-bearing liabilities	$	2,405,655		$	57,238		2.38	%	$	2,006,752			15,951		0.79	%

Noninterest-bearing deposits		917,005								937,890
Other liabilities		50,963								76,189
Shareholders’ equity		343,724								316,143

Total Liabilities and Shareholders’ Equity	$	3,717,347							$	3,336,974

Net interest income and interest rate spread				$	125,496		2.97	%				$	110,204		3.37	%
Net interest margin ***							3.70	%							3.65	%

* -	Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $2.5 million and $2.1 million for the periods ended December 31, 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 $71.0 million and $39.8 million, respectively. These adjustments were also made when calculating the yield on earning assets and the margin.

Provision for credit losses for the fourth quarter of 2023 was $2.3 million compared to $752 thousand for the fourth 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 twelve months ended December 31, 2023, provision for credit losses was $4.4 million, compared to $1.8 million for the same period of 2022. The reserve ratio increased to 1.30% as of December 31, 2023 from 1.08% 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 fourth quarter of 2023 was ($80) thousand and $515 thousand for the twelve months ended December 31, 2023. There was no provision for unfunded commitments during the twelve months of 2022.

For the fourth quarter of 2023, noninterest income totaled $8.8million, a decrease of $1.2 million, or 12.3%, compared to the prior year’s fourth quarter.

Noninterest income

(unaudited - dollars in thousands)


	Three months ended December 31,
	2023		2022		$ change			% change
Service charges	$	1,749	$	2,070	$	(321	)		-15.5	%
Net gain/(loss) on equity securities		147		162		(15	)		-9.3	%
Net gain on sale of loans and leases		875		1,251		(376	)		-30.1	%
ATM/Interchange fees		1,654		1,509		145			9.6	%
Wealth management fees		1,197		1,189		8			0.7	%
Lease revenue and residual income		1,436		2,310		(874	)		-37.8	%
Bank owned life insurance		282		252		30			11.9	%
Swap fees		475		247		228			92.3	%
Other		1,008		1,074		(66	)		-6.1	%

Total noninterest income	$	8,823	$	10,064	$	(1,241	)		-12.3	%

The decrease in service charge income of $321 thousand is primarily made up of a $249 thousand decrease in other business service charges related to our tax processing program as well as a $76 thousand decrease in consumer overdraft charges.

The net gain on sale of loans and leases decreased by $376 thousand compared to the same period last year. CLF generated a $579 thousand gain on the sale of $13.3 million in commercial loans and leases compared to a $923 thousand gain on the sale of $28 million for the same period last year. The sale of mortgage loans generated a $296 thousand gain on the sale of $14.3 million compared to a $328 thousand gain on the sale of $20.2 million for the same period in 2022.

Lease revenue and residual income contributed $1.4 million to noninterest income compared to $2.3 million for the same period of 2022, a decrease of $874 thousand. The decrease in lease revenue and residual income is attributable to a decrease in operating lease revenue.

Swap fees increased $228 thousand for the three months ended December 31, 2023 compared to the same period of 2022. The increase was due to an increase in volume driven by the rate environment.

For the twelve months ended December 31, 2023, noninterest income totaled $37.2 million, an increase of $8.1 million, or 27.8%, compared to the same period in the prior year.

Noninterest income

(unaudited - dollars in thousands)


	Twelve months ended December 31,
	2023			2022		$ change			% change
Service charges	$	7,206		$	7,074	$	132			1.9	%
Net gain on sale of securities		—			10		(10	)		-100.0	%
Net (loss) on equity securities		(21	)		118		(139	)		-117.8	%
Net gain on sale of loans and leases		2,908			3,397		(489	)		-14.4	%
ATM/Interchange fees		5,880			5,499		381			6.9	%
Wealth management fees		4,767			4,902		(135	)		-2.8	%
Lease revenue and residual income		7,595			2,310		5,285			228.8	%
Bank owned life insurance		1,112			984		128			13.0	%
Tax refund processing fees		2,375			2,375		—			0.0	%
Swap fees		673			247		426			172.5	%
Other		4,668			2,160		2,508			116.1	%

Total noninterest income	$	37,163		$	29,076	$	8,087			27.8	%

The net gain on sale of loans and leases decreased by $489 thousand compared to the same period last year. CLF generated a $1.7 million gain on the sale of $46.2 million in commercial loans and leases as compared to a $923 thousand gain on the sale of $28 million during the fourth quarter of 2022. The sale of mortgage loans generated a $1.2 million gain on the sale of $56.8 million, compared to a $2.473 million gain on $127.8 million in volume for the same period of 2022.

Lease revenue and residual income increased $5.3 million due to the acquisition of CLF during the fourth quarter of 2022.

Swap fees increased $426 thousand compared to the same period of 2022. The increase was due to an increase in volume driven by the rate environment.

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 $629 thousand in other noninterest income generated by the acquisition of Civista Leasing and Finance primarily attributable to interim rent.

For the fourth quarter of 2023, noninterest expense totaled $25.3 million, a decrease of $2.0 million, or 7.3%, compared to the prior year’s fourth quarter.

Noninterest expense

(unaudited - dollars in thousands)


	Three months ended December 31,
	2023			2022		$ change			% change
Compensation expense	$	14,154		$	14,407	$	(253	)		-1.8	%
Net occupancy and equipment		4,170			4,649		(479	)		-10.3	%
Contracted data processing		512			889		(377	)		-42.4	%
Taxes and assessments		679			356		323			90.7	%
Professional services		1,148			1,795		(647	)		-36.0	%
Amortization of intangible assets		384			406		(22	)		-5.4	%
ATM/Interchange expense		605			589		16			2.7	%
Marketing		(190	)		444		(634	)		-142.8	%
Software maintenance expense		1,178			993		185			18.6	%
Other		2,673			2,773		(100	)		-3.6	%

Total noninterest expense	$	25,313		$	27,301	$	(1,988	)		-7.3	%

Compensation expense decreased primarily due to reduction in expense accruals related to incentives, success sharing and SERP.

The decrease in occupancy and equipment expense is primarily due to a $192 thousand decrease in equipment depreciation and expense related to CLF. Additionally, equipment expense decreased $255 thousand due to a one-time adjustment to equipment expense in 2022.

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

Professional services decreased during the fourth quarter of 2023 compared to 2022 due to $635 thousand in acquisitions-related consulting and legal and audit fees expensed in 2022.

Marketing expense decreased $634 thousand compared to the same period in 2022 due to nonrecurring advertising and marketing efforts in new markets due to the acquisitions and the new branch opening in 2022.

The efficiency ratio was 64.1% for the quarter ended December 31, 2023, compared to 63.2% for the quarter ended December 31, 2022. The change in the efficiency ratio is primarily due to a decrease in noninterest income and in net interest income, partially offset by a decrease noninterest expense.

Civista’s effective income tax rate for the fourth quarter 2023 was 14.1% compared to 16.7% in 2022.

For the twelve months ended December 31, 2023, noninterest expense totaled $107.6 million, an increase of $17.1 million, or 18.9%, compared to the same period in the prior year.

Noninterest expense

(unaudited - dollars in thousands)


	Twelve months ended December 31,
	2023		2022		$ change			% change
Compensation expense	$	58,291	$	51,061	$	7,230			14.2	%
Net occupancy and equipment		16,480		9,771		6,709			68.7	%
Contracted data processing		2,242		2,788		(546	)		-19.6	%
Taxes and assessments		3,663		2,772		891			32.1	%
Professional services		4,952		5,388		(436	)		-8.1	%
Amortization of intangible assets		1,579		1,296		283			21.8	%
ATM/Interchange expense		2,420		2,248		172			7.7	%
Marketing		1,352		1,513		(161	)		-10.6	%
Software maintenance expense		4,167		3,433		734			21.4	%
Other		12,465		10,223		2,242			21.9	%

Total noninterest expense	$	107,611	$	90,493	$	17,118			18.9	%

Compensation expense increased primarily due to $6.2 million of expense related to the acquisition of CLF. Other increases related to salaries were a result of annual merit increases and add-to-staff positions as well as increases in employee insurance. The year-to-date average full time equivalent (FTE) employees were 531 at December 31, 2023, an increase of 50 FTEs over the same period in 2022.

The increase in occupancy and equipment expense is primarily due to a $6.1 million increase in equipment depreciation related to the acquisition of CLF.

Amortization of intangible assets increased $283 thousand in 2023 compared to 2022 related to the core deposit intangible associated with the acquisition of Comunibanc.

Software expense increased $734 thousand, primarily due to a $364 thousand increase attributable to the digital banking platform in 2023. Additionally, new software platforms, as well as other increases related to converting systems and regular increases in monthly software fees, led to an increase of $110 thousand.

The increase in other operating expense is primarily due to a $467 thousand increase in bad check loss expense, a $313 thousand provision for credit losses on unfunded commitments, and additional expenses related to CLF of $422 thousand. Business promotion, dues and subscriptions, travel & lodging and donations all increased as well.

The efficiency ratio was 65.2% for the twelve months ended December 31, 2023 compared to 64.0% for the twelve months ended December 31, 2022. The change in the efficiency ratio is primarily due to an increase in noninterest expense, partially offset by increases in net interest income and noninterest income.

Civista’s effective income tax rate was 15.1% for the twelve months ended December 31, 2023 and 16.2% for the twelve months ended December 31, 2022.

Balance Sheet

Total assets increased $222.0 million, or 6.1%, from December 31, 2022 to December 31, 2023, primarily due to growth in the loan portfolio.

End of period loan and lease balances

(unaudited - dollars in thousands)


	December 31, 2023		December 31, 2022		$ Change			% Change
Commercial and Agriculture	$	304,793	$	278,595	$	26,198			9.4	%
Commercial Real Estate:
Owner Occupied		377,322		371,148		6,174			1.7	%
Non-owner Occupied		1,161,893		1,018,736		143,157			14.1	%
Residential Real Estate		659,841		552,781		107,060			19.4	%
Real Estate Construction		260,409		243,127		17,282			7.1	%
Farm Real Estate		24,771		24,708		63			0.3	%
Lease financing receivable		54,642		36,797		17,845			48.5	%
Consumer and Other		18,056		20,774		(2,718	)		-13.1	%
Loan participations sold, reflected as secured borrowings		—		101,615		(101,615	)		-100.0	%

Total Loans	$	2,861,727	$	2,648,281	$	213,446			8.1	%

Loan and lease balances increased $213.4 million, or 8.1% since December 31, 2022 and $106.8 million, or 3.9% in the fourth quarter. Commercial growth is predominantly due to loan production from the leasing division and an increase in new commercial customers. The revolving line of credit balances in our portfolio continue to be less than forty percent advanced. 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 has increased with consistent demand for more projects across the state of Ohio. The undrawn construction availability continues to be near all-time highs. Residential Real Estate has grown with continued new production in our Community Reinvestment Act (“CRA”) product, more home construction loans, and more on balance sheet ARM products in this continued higher rate environment. At December 31, 2022, certain participated loan agreements contained restrictive language that precluded sales accounting treatment. During the third quarter of 2023, these agreements were amended with language that met derecognition conditions, signed and returned by our customers, thus qualifying for sales accounting treatment. The balances of such agreements were revised and accounted for as secured borrowings as of December 31, 2022. In addition, interest income and expense were also revised during the time derecognition conditions were not met.

Deposits

Total deposits increased $365.0 million, or 13.9%, from December 31, 2022 to December 31, 2023.

End of period deposit balances

(unaudited - dollars in thousands)


	December 31, 2023		December 31, 2022		$ Change			% Change
Noninterest-bearing demand	$	771,699	$	896,333	$	(124,634	)		-13.9	%
Interest-bearing demand		449,449		527,879		(78,430	)		-14.9	%
Savings and money market		863,067		876,427		(13,360	)		-1.5	%
Time deposits		900,813		319,345		581,468			182.1	%

Total Deposits	$	2,985,028	$	2,619,984	$	365,044			13.9	%

The decrease in noninterest-bearing demand of $124.6 million was primarily due to a $76.8 million decrease in noninterest-bearing business accounts and $35.2 million noninterest-bearing personal accounts. The $78.4 million decrease in interest-bearing demand deposits was primarily due to a $41.6 million decrease in interest-bearing public fund accounts, an $18.6 million decrease in interest-bearing business accounts and a $10.3 million decrease in Jumbo NOW accounts. The decrease in savings and money market was primarily due to a $73.5 million decrease in statement savings, an $15.1 million decrease in corporate savings, a $36.7 million decrease in personal money markets, partially offset by a $58.9 million increase in brokered money market accounts, a $41.7 million increase in business money market accounts and a $12.6 million increase in public money market accounts. The increase in time certificates was primarily due to a $454.5 million increase in brokered time deposits. In addition, Jumbo time certificates increased $86.1 million and retail time certificates increased $44.8 million.

FHLB overnight advances totaled $338.0 million on December 31, 2023, down from $393.7 million on December 31, 2022. FHLB term advances totaled $2.4 million on December 31, 2023, down from $3.6 million on December 31, 2022.

Stock Repurchase Program

During the twelve months of 2023, Civista repurchased 84,230 shares for $1.5 million at a weighted average price of $17.77 per share. We have approximately $12.0 million remaining of the current $13.5 million repurchase authorization. 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 $37.2 million from December 31, 2022 to December 31, 2023, primarily due to a $27.3 million increase in retained earnings and to a $10.5 million decrease in accumulated other comprehensive loss.

Asset Quality

Civista recorded net losses of $979 thousand for the twelve months of 2023 compared to net recoveries of $118 thousand for the same period of 2022. The allowance for credit losses to loans ratio was 1.30% at December 31, 2023 and 1.08% at December 31, 2022.

Allowance for Credit Losses

(dollars in thousands)


	Twelve months ended December 31,
	2023			2022
Beginning of period	$	28,511		$	26,641
CECL adoption adjustments		5,193			—
Charge-offs		(1,431	)		(222	)
Recoveries		452			340
Provision		4,435			1,752

End of period	$	37,160		$	28,511

Allowance for Unfunded Commitments

(dollars in thousands)


	Twelve months ended December 31,
	2023		2022
Beginning of period	$	—	$	—
CECL adoption adjustments		3,386
Charge-offs		—		—
Recoveries		—		—
Provision		515		—

End of period	$	3,901	$	—

Non-performing assets at December 31, 2023 were $15.1 million, a 38.7% increase from December 31, 2022. The non-performing assets to assets ratio was 0.30% at December 31, 2023 and 0.31% at December 31, 2022. The allowance for credit losses to non-performing loans decreased from 261.45% at December 31, 2022 to 245.67% at December 31, 2023.

Non-performing Assets

(dollars in thousands)


	December 31, 2023		December 31, 2022
Non-accrual loans	$	12,467	$	7,890
Restructured loans		2,659		3,015

Total non-performing loans		15,126		10,905
Other Real Estate Owned		—		—

Total non-performing assets	$	15,126	$	10,905

Conference Call and Webcast

Civista Bancshares, Inc. will also host a conference call to discuss the Company’s financial results for the fourth quarter of 2023 at 1:00 p.m. ET on Thursday, February 8, 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 join the Civista Bancshares, Inc. fourth 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 $3.9 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 Leasing & Finance, a division of Civista Bank, offers commercial equipment leasing services for businesses nationwide. 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						Twelve Months Ended
	December 31,						December 31,
	2023			2022			2023			2022
Interest income	$	48,599		$	39,399		$	182,734		$	126,155
Interest expense		18,547			6,834			57,238			15,951

Net interest income		30,052			32,565			125,496			110,204
Provision for credit losses		2,325			752			4,435			1,752

Net interest income after provision		27,727			31,813			121,061			108,452
Noninterest income		8,823			10,064			37,163			29,076
Noninterest expense		25,313			27,301			107,611			90,493

Income before taxes		11,237			14,576			50,613			47,035
Income tax expense		1,582			2,428			7,649			7,608

Net income		9,655			12,148			42,964			39,427
Dividends paid per common share	$	0.16		$	0.14		$	0.61		$	0.56
Earnings per common share
Basic
Net income	$	9,655		$	12,148		$	42,964		$	39,427

Less allocation of earnings and dividends to participating securities		362			54			1,585			177

Net income available to common shareholders - basic	$	9,293		$	12,094		$	41,379		$	39,250

Weighted average common shares outstanding		15,695,978			15,717,439			15,734,624			15,162,033
Less average participating securities		588,625			70,179			579,857			68,043

Weighted average number of shares outstanding used to calculate basic earnings per share		15,107,353			15,647,260			15,154,767			15,093,990

Earnings per common share
Basic	$	0.62		$	0.77		$	2.73		$	2.60
Diluted		0.62			0.77			2.73			2.60
Selected financial ratios:
Return on average assets		1.02	%		1.37	%		1.16	%		1.18	%
Return on average equity		11.34	%		16.09	%		12.50	%		12.47	%
Dividend payout ratio		25.81	%		18.11	%		22.34	%		21.54	%
Net interest margin (tax equivalent)		3.44	%		4.01	%		3.69	%		3.65	%

Selected Balance Sheet Items

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


	December 31, 2023			December 31, 2022
	(unaudited)			(unaudited)
Cash and due from financial institutions	$	60,406		$	43,361
Investment in time deposits		1,225			1,477
Investment securities		620,441			617,592
Loans held for sale		1,725			683
Loans		2,861,728			2,648,281
Less: allowance for credit losses		(37,160	)		(28,511	)

Net loans		2,824,568			2,619,770
Other securities		29,998			33,585
Premises and equipment, net		56,769			64,018
Goodwill and other intangibles		135,028			136,454
Bank owned life insurance		61,335			53,543
Other assets		69,923			68,962

Total assets	$	3,861,418		$	3,639,445

Total deposits	$	2,985,028		$	2,619,984
Federal Home Loan Bank advances - short term		338,000			393,700
Federal Home Loan Bank advances - long term		2,392			3,578
Securities sold under agreements to repurchase		—			25,143
Subordinated debentures		103,943			103,799
Other borrowings		9,859			15,516
Secured borrowings		—			101,615
Securities purchased payable		—			1,338
Tax refunds in process		2,885			278
Accrued expenses and other liabilities		47,309			39,658
Total shareholders’ equity		372,002			334,836

Total liabilities and shareholders’ equity	$	3,861,418		$	3,639,445

Shares outstanding at period end		15,695,424			15,728,234
Book value per share	$	23.70		$	21.29
Equity to asset ratio		9.63	%		9.20	%
Selected asset quality ratios:
Allowance for loan losses to total loans		1.30	%		1.08	%
Non-performing assets to total assets		0.39	%		0.30	%
Allowance for loan losses to non-performing loans		245.67	%		261.45	%
Non-performing asset analysis
Nonaccrual loans	$	12,467		$	7,890
Restructured loans		2,659			3,015
Other real estate owned		—			—

Total	$	15,126		$	10,905

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)


End of Period Balances	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Assets
Cash and due from banks	$	60,406		$	50,316		$	41,354		$	52,723		$	43,361
Investment in time deposits		1,225			1,472			1,719			1,721			1,477
Investment securities		620,441			595,508			619,250			629,829			617,592
Loans held for sale		1,725			1,589			3,014			1,465			683
Loans and leases		2,861,728			2,759,771			2,728,390			2,681,180			2,648,281
Allowance for credit losses		(37,160	)		(35,280	)		(35,149	)		(34,196	)		(28,511	)

Net Loans		2,824,568			2,724,491			2,693,241			2,646,984			2,619,770
Other securities		29,998			34,224			28,449			35,383			33,585
Premises and equipment, net		56,769			58,989			60,899			61,895			64,018
Goodwill and other intangibles		125,520			134,998			135,406			135,808			136,454
Bank owned life insurance		61,335			54,053			53,787			53,796			53,543
Other assets		79,431			82,157			70,971			66,068			68,962

Total Assets	$	3,861,418		$	3,737,797		$	3,708,090		$	3,685,672		$	3,639,445

Liabilities
Total deposits	$	2,985,028		$	2,795,743		$	2,942,774		$	2,843,516		$	2,619,984
Federal Home Loan Bank advances - short term		338,000			431,500			142,000			212,000			393,700
Federal Home Loan Bank advances - long term		2,392			2,573			2,859			3,361			3,578
Securities sold under agreement to repurchase		—			—			6,788			15,631			25,143
Subordinated debentures		103,943			103,921			103,880			103,841			103,799
Other borrowings		9,859			10,964			12,568			13,938			15,516
Secured borrowings		—			4,881			92,110			101,114			101,615
Securities purchased payable		—			1,755			—			—			1,338
Tax refunds in process		2,885			493			7,208			5,752			278
Accrued expenses and other liabilities		47,309			53,222			48,027			38,822			39,658

Total liabilities		3,489,416			3,405,052			3,358,214			3,337,975			3,304,609
Shareholders’ Equity
Common shares		311,166			310,975			310,784			310,412			310,182
Retained earnings		183,788			176,644			168,777			161,110			156,493
Treasury shares		(75,422	)		(75,412	)		(73,915	)		(73,915	)		(73,794	)
Accumulated other comprehensive loss		(47,530	)		(79,462	)		(55,770	)		(49,910	)		(58,045	)

Total shareholders’ equity		372,002			332,745			349,876			347,697			334,836
Total Liabilities and Shareholders’ Equity	$	3,861,418		$	3,737,797		$	3,708,090		$	3,685,672		$	3,639,445


Quarterly Average Balances
Assets:
Earning assets	$	3,449,344		$	3,443,226		$	3,354,967		$	3,313,285		$	3,199,635
Securities		645,202			645,202			658,515			655,987			630,127
Loans		2,805,995			2,742,736			2,689,515			2,649,901			2,559,114
Liabilities and Shareholders’ Equity
Total deposits	$	2,977,802		$	2,946,849		$	2,817,712		$	2,654,356		$	2,649,755
Interest-bearing deposits	$	2,163,160			1,966,014			1,912,955			1,692,470			1,710,019
Other interest-bearing liabilities		383,877			178,614			471,837			616,505			507,844
Total shareholders’ equity		337,866			348,209			347,647			341,159			299,509

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)


	Three Months Ended
Income statement	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Total interest and dividend income	$	48,599	$	46,601	$	44,609	$	42,925	$	39,399
Total interest expense		18,547		15,097		13,270		10,324		6,834

Net interest income		30,052		31,504		31,339		32,601		32,565
Provision for loan losses		2,325		630		861		620		752
Noninterest income		8,823		8,125		9,149		11,068		10,064
Noninterest expense		25,313		26,752		27,913		27,633		27,301

Income before taxes		11,237		12,247		11,714		15,416		14,576
Income tax expense		1,582		1,860		1,680		2,528		2,428

Net income	$	9,655	$	10,387	$	10,034	$	12,888	$	12,148


Per share data
Earnings per common share
Basic
Net income	$	9,655	$	10,387	$	10,034	$	12,888	$	12,148
Less allocation of earnings and dividends to participating securities		362		389		374		453		432

Net income available to common shareholders - basic	$	9,293	$	9,998	$	9,660	$	12,435	$	11,716
Weighted average common shares outstanding		15,695,978		15,735,007		15,775,812		15,732,092		15,717,439
Less average participating securities		588,625		588,715		588,715		552,882		559,596

Weighted average number of shares outstanding used to calculate basic earnings per share		15,107,353		15,146,292		15,187,097		15,179,210		15,157,843

Earnings per common share
Basic	$	0.62	$	0.66	$	0.64	$	0.82	$	0.77
Diluted		0.62		0.66		0.64		0.82		0.77
Common shares dividend paid	$	2,511	$	2,521	$	2,367	$	2,201	$	2,202
Dividends paid per common share		0.16		0.16		0.15		0.14		0.14

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)


	Three Months Ended
Asset quality	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Allowance for credit losses:
Beginning of period	$	35,280		$	35,251		$	34,196		$	28,511		$	27,773
CECL adoption adjustments		—			—			—			5,193			—
Charge-offs		(577	)		(666	)		(14	)		(175	)		(58	)
Recoveries		132			65			208			47			44
Provision		2,325			630			861			620			752

End of period	$	37,160		$	35,280		$	35,251		$	34,196		$	28,511

Allowance for unfunded commitments:
Beginning of period	$	3,981		$	3,851		$	3,587		$	—		$	—
CECL adoption adjustments		—			—			—			3,386			—
Charge-offs		—			—			—			—			—
Recoveries		—			—			—			—			—
Provision		(80	)		130			264			201			—

End of period	$	3,901		$	3,981		$	3,851		$	3,587		$	—

Ratios
Allowance to total loans		1.30	%		1.28	%		1.29	%		1.28	%		1.08	%
Allowance to nonperforming assets		245.66	%		308.52	%		327.05	%		345.91	%		261.45	%
Allowance to nonperforming loans		245.66	%		308.52	%		327.05	%		345.82	%		261.45	%
Nonperforming assets
Nonperforming loans	$	15,126		$	11,435		$	10,747		$	9,860		$	10,905
Other real estate owned		—			—			—			26			—

Total nonperforming assets	$	15,126		$	11,435		$	10,747		$	9,886		$	10,905
Capital and liquidity
Tier 1 leverage ratio		8.75	%		8.73	%		8.69	%		8.42	%		8.69	%
Tier 1 risk-based capital ratio		10.72	%		10.82	%		10.71	%		10.50	%		10.43	%
Total risk-based capital ratio		14.45	%		14.60	%		14.49	%		14.31	%		14.05	%
Tangible common equity ratio ⁽¹⁾		6.36	%		5.49	%		6.00	%		5.96	%		5.66	%

(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
	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Tangible Common Equity
Total Shareholder’s Equity - GAAP	$	372,012		$	332,745		$	349,876		$	347,697		$	334,835
Less: Goodwill and intangible assets		135,028			134,998			135,406			135,808			136,454

Tangible common equity (Non-GAAP)	$	236,984		$	197,747		$	214,470		$	211,889		$	198,381
Total Shares Outstanding		15,695,424			15,695,997			15,780,227			15,732,092			15,728,234
Tangible book value per share	$	15.10		$	12.60		$	13.59		$	13.47		$	12.61
Tangible Assets
Total Assets - GAAP	$	3,861,418		$	3,737,797		$	3,708,090		$	3,688,232		$	3,639,445
Less: Goodwill and intangible assets		135,028			134,998			135,406			135,808			136,454

Tangible assets (Non-GAAP)	$	3,726,390		$	3,602,799		$	3,572,684		$	3,552,424		$	3,502,991
Tangible common equity to tangible assets		6.36	%		5.49	%		6.00	%		5.96	%		5.66	%

Document and Entity Information	Feb. 08, 2024
Cover [Abstract]
Amendment Flag	false
Entity Central Index Key	0000944745
Document Type	8-K
Document Period End Date	Feb. 08, 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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