Banking/Financial Services, News

Civista Bancshares, Inc. Announces Third Quarter 2022 Financial Results

SANDUSKY, Ohio, Oct. 27, 2022 /PRNewswire/ — Civista Bancshares, Inc. (NASDAQ: CIVB) (“Civista”) announced its unaudited financial results for the three and nine month periods ending September 30, 2022. 

Third quarter and year-to-date 2022 highlights:

  • Net income of $11.1 million, or $0.72 per diluted share, for the third quarter of 2022, compared to $9.6 million, or $0.64 per diluted share, for the third quarter of 2021.
  • Net income of $27.3 million, or $1.82 per diluted share, compared to $29.6 million, or $1.90 per diluted share, for the nine months ended September 30, 2022 and 2021, respectively.
  • Low cost of deposits of 14 basis points and total funding costs of 29 basis points for the quarter.
  • Based on the September 30, 2022 market close share price of $20.76, the $0.14 third quarter dividend is equivalent to an annualized yield of 2.70% and a dividend payout ratio of 19.44%.
  • On July 1, 2022, we consummated the merger of Comunibanc Corp. with and into Civista and Henry County Bank, a wholly owned subsidiary of Comunibanc, with and into Civista Bank.
  • Negotiated the merger of Vision Financial Group, a leasing company based in Pittsburgh, PA, with and into Civista Bank.  The deal closed in the fourth quarter 2022. 

“We are extremely pleased with our third quarter results.  Due to our strong core funding and rising interest rates, our net interest margin increased 60 basis points to 4.03% compared to the previous quarter.  Net interest income increased 25.4% compared to the previous quarter as we primarily benefitted from our first full quarter of earnings from the Henry County Bank acquisition, the rising interest rate environment, and excellent organic loan growth” said Dennis G. Shaffer, CEO and President of Civista.

Results of Operations:

For the three-month period ended September 30, 2022 and 2021

Net interest income increased $6.0 million, or 24.6%, for the third quarter of 2022 compared to the same period of 2021.  Interest income increased $6.7 million while interest expense increased $743 thousand.  Both increases were primarily due to rates.  Accretion of PPP fees was $122 thousand during the third quarter 2022 compared to $2.5 million for the same period in 2021.     

Net interest margin increased 41 basis points to 4.03% for the third quarter of 2022, compared to 3.62% for the same period a year ago.  The increase in margin is primarily due to increases in the volume of earning assets and to the yield on earning assets.

The increase in interest income was primarily due to a $254.8 million increase in average earning assets, which led to a $4.6 million increase in interest income.  Additionally, increased interest rates led to a 48 basis point increase in asset yield and a $2.1 million increase in interest income.

Interest expense increased $743 thousand, or 55.0%, for the third quarter of 2022, compared to the same period last year.  The average rate paid on interest-bearing liabilities increased 13 basis points, while average interest-bearing liabilities increased $177.5 million.  The increase in the rate is primarily due to the issuance of $75 million, 3.25%  subordinated debt in November 2021.  The increase in interest rates has not yet translated to significant increases in deposit costs.

Average Balance Analysis

(Unaudited – Dollars in thousands)










Three Months Ended September 30,


2022


2021


Average


Yield/


Average


Yield/

Assets:

balance

Interest

rate *


balance

Interest

rate *

Interest-earning assets:








Loans **

$   2,289,588

$ 27,176

4.71 %


$   2,010,665

$ 22,704

4.48 %

Taxable securities ***

354,597

2,936

3.06 %


264,655

1,423

2.18 %

Non-taxable securities ***

268,327

1,998

3.47 %


217,987

1,555

3.91 %

Interest-bearing deposits in other banks

89,744

423

1.87 %


254,143

102

0.16 %

Total interest-earning assets ***

$   3,002,256

32,533

4.30 %


$   2,747,450

25,784

3.82 %

Noninterest-earning assets:








Cash and due from financial institutions

58,581




33,803



Premises and equipment, net

28,633




22,845



Accrued interest receivable

8,907




7,417



Intangible assets

84,265




84,949



Bank owned life insurance

53,131




46,557



Other assets

48,013




38,189



Less allowance for loan losses

(27,546)




(26,683)



      Total Assets

$   3,256,240




$   2,954,527











Liabilities and Shareholders’ Equity:








Interest-bearing liabilities:








Demand and savings

$   1,457,112

$      379

0.10 %


$   1,331,032

$      302

0.09 %

Time

280,903

557

0.79 %


257,047

668

1.03 %

Short-term FHLB advances

6,713

48

2.84 %


0.00 %

Long-term FHLB advances

25,336

133

2.08 %


75,000

194

1.03 %

Subordinated debentures

103,751

975

3.73 %


29,427

182

2.45 %

Repurchase agreements

19,277

2

0.04 %


23,084

5

0.09 %

Total interest-bearing liabilities

$   1,893,092

2,094

0.44 %


$   1,715,590

1,351

0.31 %

Noninterest-bearing deposits

980,999




849,501



Other liabilities

77,015




40,466



Shareholders’ equity

305,134




348,970



Total Liabilities and Shareholders’ Equity

$   3,256,240




$   2,954,527











Net interest income and interest rate spread

$ 30,439

3.86 %



$ 24,433

3.50 %









Net interest margin ***



4.03 %




3.62 %









*  Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $532 thousand and $414 thousand for the periods ended September 30, 2022 and 2021, 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 $46.9 million in 2022 and by unrealized gains of $24.5 million in 2021.  These adjustments were also made when calculating the yield on earning assets and the margin.


For the nine-month period ended September 30, 2022 and 2021

Net interest income increased $5.5 million, or 7.7%, compared to the same period in 2021.

Interest income increased $6.3 million, or 8.1%, for the first nine months of 2022.  Average earning assets increased $52.6 million, resulting in an increase in interest income of $6.1 million.  While average yields increased 17 basis points, interest income only increased $152 thousand due to yield.  During the nine-month period, the Bank had average PPP Loans totaling $13.7 million compared to $187.4 million for the same period last year.  For the nine months ended September 30, 2022, these loans had an average yield of 17.82% including the amortization of PPP fees, which increased the margin by 7 basis points.

Interest expense increased $718 thousand, or 14.6%, for the first nine months of 2022 compared to the same period of 2021.  Average rates increased 3 basis points and average interest-bearing liabilities increased $126.8 million, resulting in a $1.4 million increase in interest expense.    

Net interest margin increased 14 basis points to 3.62% for the first nine months of 2022, compared to 3.48% for the same period a year ago. 

Average Balance Analysis

(Unaudited – Dollars in thousands)










Nine Months Ended September 30,


2022


2021


Average


Yield/


Average


Yield/

Assets:

balance

Interest

rate *


balance

Interest

rate *

Interest-earning assets:








Loans **

$   2,111,019

$ 70,065

4.44 %


$   2,044,741

$ 68,140

4.46 %

Taxable securities ***

322,262

6,431

2.53 %


214,979

3,928

2.51 %

Non-taxable securities ***

262,790

5,669

3.55 %


211,538

4,599

4.02 %

Interest-bearing deposits in other banks

199,019

1,098

0.74 %


371,204

341

1.20 %

Total interest-earning assets ***

$   2,895,090

83,263

3.88 %


$   2,842,462

77,008

3.71 %

Noninterest-earning assets:








Cash and due from financial institutions

108,220




37,763



Premises and equipment, net

24,429




22,578



Accrued interest receivable

8,025




8,146



Intangible assets

84,268




84,817



Bank owned life insurance

48,965




46,310



Other assets

44,077




37,504



Less allowance for loan losses

(27,168)




(26,288)



      Total Assets

$   3,185,906




$   3,053,292











Liabilities and Shareholders’ Equity:








Interest-bearing liabilities:








Demand and savings

$   1,414,215

$      860

0.08 %


$   1,297,217

$      979

0.10 %

Time

250,230

1,491

0.80 %


270,139

2,387

1.18 %

Short-term FHLB advances

2,380

49

2.75 %


0.00 %

Long-term FHLB advances

58,263

515

1.18 %


100,458

968

1.29 %

Subordinated debentures

103,726

2,701

3.48 %


29,427

553

2.51 %

Repurchase agreements

21,910

8

0.05 %


26,695

19

0.10 %

Total interest-bearing liabilities

$   1,850,724

5,624

0.41 %


$   1,723,936

4,906

0.38 %

Noninterest-bearing deposits

936,686




940,123



Other liabilities

76,748




39,952



Shareholders’ equity

321,748




349,281



Total Liabilities and Shareholders’ Equity

$   3,185,906




$   3,053,292











Net interest income and interest rate spread

$ 77,639

3.48 %



$ 72,102

3.33 %









Net interest margin ***



3.62 %




3.48 %









*  Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $1.5 million and $1.2 million for the periods ended September 30, 2022 and 2021, 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 $24.7 million in 2022 and by unrealized gains of $23.9 million in 2021.  These adjustments were also made when calculating the yield on earning assets and the margin.


Provision for loan losses was $300 thousand for the third quarter of 2022 while nothing was provided in the third quarter of 2021.  Provision for loan losses was $1.0 million for the first nine months of 2022 compared to $830 thousand for the first nine months of 2021.  The reserve ratio was 1.19% at September 30, 2022 and 1.33% at December 31, 2021.  Loans outstanding at September 30, 2022 include approximately $174.3 million related to the acquisition of Comunibanc, including a $2.8 million credit mark.  

For the third quarter of 2022, noninterest income totaled $5.7 million, a decrease of $692 thousand, or 10.8%, compared to the prior year’s third quarter. 

Noninterest income








(unaudited – dollars in thousands)

Three months ended September 30,


2022


2021


$ change


% change

Service charges

$    1,885


$    1,519


$       366


24.1 %

Net gain on sale of securities

4


4



0.0 %

Net gain/(loss) on equity securities

(133)


50


(183)


-366.0 %

Net gain on sale of loans

637


1,612


(975)


-60.5 %

ATM/Interchange fees

1,394


1,330


64


4.8 %

Wealth management fees

1,208


1,236


(28)


-2.3 %

Bank owned life insurance

255


261


(6)


-2.3 %

Other

484


373


111


29.8 %

Total noninterest income

$    5,734


$    6,426


$      (692)


-10.8 %


Service charges increased due to a $196 thousand increase service charges on deposit accounts and a $130 thousand increase in overdraft fees.  

Net loss on equity securities increased as a result of market value decreases.

Net gain on sale of loans decreased primarily because of a decrease in volume of loans sold, which was driven by increased interest rates.  Proceeds from the sale of loans sold totaled $11.7 million and $21.2 million during the three months ended September 30, 2022 and 2021, respectively.

Other income increased as result of an increase in servicing fee income.  Loans serviced total $457.1 million at September 30, 2022 compared to $395.3 million at September 30, 2021.

For the nine months ended September 30, 2022, noninterest income totaled $19.0 million, a decrease of $5.6 million, or 22.8%, compared to the same period in the prior year. 

Noninterest income








(unaudited – dollars in thousands)

Nine months ended September 30,


2022


2021


$ change


% change

Service charges

$    5,004


$    4,092


$       912


22.3 %

Net gain on sale of securities

10


1,787


(1,777)


-99.4 %

Net gain/(loss) on equity securities

(44)


191


(235)


-123.0 %

Net gain on sale of loans

2,146


6,575


(4,429)


-67.4 %

ATM/Interchange fees

3,990


3,950


40


1.0 %

Wealth management fees

3,713


3,570


143


4.0 %

Bank owned life insurance

732


752


(20)


-2.7 %

Tax refund processing fees

2,375


2,375



0.0 %

Other

1,086


1,214


(128)


-10.5 %

Total noninterest income

$  19,012


$  24,641


$  (5,629)


-22.8 %


Service charges increased due to a $576 thousand increase overdraft fees and a $336 thousand increase in service charges on deposit accounts. 

Net gain on sale of securities decreased due to the $1.8 million nonrecurring gain on the sale of Visa Class B shares in 2021. 

Net loss on equity securities increased as a result of market value decreases.

Net gain on sale of loans decreased primarily because of a decrease in volume of loans sold, which was driven by increased interest rates.  Proceeds from the sale of loans sold totaled $107.6 million and $204.7 million during the nine months ended September 30, 2022 and 2021, respectively.

Wealth management fees increased due to an increase in the average rate earned on the assets in 2022. 

Other income decreased as result of a $203 thousand increase in insurance loss reserves at Civista’s reinsurance subsidiary.  The loss reserve is an accrual against unpaid claims.

For the third quarter of 2022, noninterest expense totaled $22.6 million, an increase of $3.3 million, or 17.2%, compared to the prior year’s third quarter.

Noninterest expense








(unaudited – dollars in thousands)

Three months ended September 30,


2022


2021


$ change


% change

Compensation expense

$  12,484


$  11,390


$    1,094


9.6 %

Net occupancy and equipment 

1,889


1,429


460


32.2 %

Contracted data processing

846


429


417


97.2 %

Taxes and assessments

799


758


41


5.4 %

Professional services

1,335


776


559


72.0 %

Amortization of intangible assets

456


223


233


104.5 %

ATM/Interchange expense

604


594


10


1.7 %

Marketing

372


359


13


3.6 %

Software maintenance expense

942


819


123


15.0 %

Other

2,828


2,474


354


14.3 %

Total noninterest expense

$  22,555


$  19,251


$    3,304


17.2 %


Compensation expense increased primarily due to the acquisition of Comunibanc Corp. 

The increase in occupancy expense is due to increases in utilities and ground maintenance as a result of adding eight additional branches and general cost increases.  Equipment expense increased due to office equipment purchases of $101 thousand.

Taxes and assessments increased as Franchise tax expense increased due to an increase in equity capital, which is the basis of the Ohio Financial Institutions tax.  This was partially offset by a decrease in FDIC assessments due to lower assessment multipliers charged to Civista.    

Professional services increased primarily due to one-time merger related legal and audit fees of $430 thousand, accompanied by increases in recruitment fees and fees related to increased call volumes at the Company’s call center. 

The increase in amortization of intangible assets is related to the merger with Comunibanc Corp. 

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, introduced in June 2021.

The increase in other operating expense is primarily due to merger related expenses of $116 thousand, travel, lodging and meals of $64 thousand.

The efficiency ratio was 61.4% for the quarter ended September 30, 2022 compared to 61.6% for the quarter ended September 30, 2021.  The change in the efficiency ratio is primarily due to an increase in net interest income partially offset by an increase in noninterest expense.

Civista’s effective income tax rate for the third quarter 2022 was 16.6% compared to 16.9% in 2021.

For the nine months ended September 30, 2022, noninterest expense totaled $63.2 million, an increase of $2.5 million, or 4.1%, compared to the same period in the prior year.

Noninterest expense








(unaudited – dollars in thousands)

Nine months ended September 30,


2022


2021


$ change


% change

Compensation expense

$  36,654


$  34,578


$    2,076


6.0 %

Net occupancy and equipment 

5,122


4,556


566


12.4 %

Contracted data processing

1,899


1,362


537


39.4 %

Taxes and assessments

2,416


2,436


(20)


-0.8 %

Professional services

3,593


2,255


1,338


59.3 %

Amortization of intangible assets

890


668


222


33.2 %

ATM/Interchange expense

1,659


1,843


(184)


-10.0 %

Marketing

1,069


1,000


69


6.9 %

Software maintenance expense

2,440


1,872


568


30.3 %

Other

7,450


10,132


(2,682)


-26.5 %

Total noninterest expense

$  63,192


$  60,702


$    2,490


4.1 %


The increase in compensation expense was due to increased payroll, 401k expenses, payroll taxes and commission and incentive-based costs.  Payroll and payroll related expenses increased due to annual pay increases.  The addition of Comunibanc also contributed to the increase.

Equipment expense increased due to a $354 thousand increase in computer and $202 thousand due to security equipment purchases. 

Contracted data processing fees increased due to merger related system deconversion fees of $564, offset by a decrease in computer processing fees. 

Professional services primarily increased due to a $991 thousand increase in merger related expenses legal and audit and a $264 thousand increase in consulting fees, including recruiter and call center costs.

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, introduced in June 2021.

The decrease in other expense is due to the 2021 prepayment penalty of $3.7 million related to the early payoff of an FHLB long-term advance.  This was partially offset by a credit to the valuation adjustment for mortgage servicing rights posted in 2021 and increases in travel, lodging and meals, stationery and supplies and bad check expense.   

The efficiency ratio was 64.4% for the nine months ended September 30, 2022 compared to 62.0% for the nine months ended September 30, 2021.  The change in the efficiency ratio is primarily due to an increase in noninterest expense and a decrease in noninterest interest income.

Civista’s effective income tax rate for the first nine months of 2022 was 16.0% compared to 16.0% in same period in 2021.    

Balance Sheet

Total assets increased $228.8 million, or 7.6%, from December 31, 2021 to September 30, 2022, primarily due to the acquisition of Comunibanc Corp. on July 1, 2022.

End of period loan balances








(unaudited – dollars in thousands)









September 30,


December 31,






2022


2021


$ Change


% Change

Commercial and Agriculture

$           226,568


$           203,293


$    23,275


11.4 %

Paycheck protection program loans

819


43,209


(42,390)


-98.1 %

Commercial Real Estate:








Owner Occupied

364,468


295,452


69,016


23.4 %

Non-owner Occupied

956,169


829,310


126,859


15.3 %

Residential Real Estate

531,164


430,060


101,104


23.5 %

Real Estate Construction

202,793


157,127


45,666


29.1 %

Farm Real Estate

25,636


28,419


(2,783)


-9.8 %

Consumer and Other

20,997


11,009


9,988


90.7 %

Total Loans

$        2,328,614


$        1,997,879


$  330,735


16.6 %


Loan balances increased $330.7 million, or 16.6% since December 31, 2021, including the $174.3 million portfolio related to Comunibanc Corp.  The growth is partially offset by a $43.4 million decrease in PPP loans.  Removing the balances in the portfolio related to Comunibanc and PPP loans, the loan portfolio increased $198.8 million or 10.2%.  Commercial Real Estate continued to grow due to consistent demand in both the Non-owner Occupied and Owner Occupied categories.  The growth has come from all regions and has been strong in our major metropolitan areas of Cleveland, Columbus and Cincinnati.  Residential Real Estate has increased due to more need this year for the on-balance sheet products of residential construction loans, Jumbo Loans and our Community View CRA product.  Commercial and Agriculture loans continue to grow as we successfully onboard new clients. Commercial Line of Credit utilization remains low.  Real Estate Construction continues to increase as the construction demand remains steady and construction availability continues to be near all-time highs.

Paycheck Protection Program

In total, we processed over 3,600 loans totaling $399.4 million of PPP loans, of which $398.6 million have been forgiven or have paid off.  We recognized $122 thousand of PPP fees in income during the quarter and $1.7 million of PPP fees in income during the nine months ended September 30, 2022.  As of September 30, 2022, $38 thousand of unearned PPP fees remain.

Deposits

Total deposits increased $291.6 million, or 12.1%, from December 31, 2021 to September 30, 2022, including the addition of the $250.8 million of deposits related to the Comunibanc deal. 

End of period deposit balances








(unaudited – dollars in thousands)









September 30,


December 31,






2022


2021


$ Change


% Change

Noninterest-bearing demand

$             944,241


$             788,906


$    155,335


19.7 %

Interest-bearing demand

560,594


537,510


23,084


4.3 %

Savings and money market

931,393


843,837


87,556


10.4 %

Time deposits

272,025


246,448


25,577


10.4 %

Total Deposits

$         2,708,253


$         2,416,701


$    291,552


12.1 %


The increase in noninterest-bearing demand of $155.3 million was primarily due to $65.5 million of deposits related to the merger with Comunibanc Corp and to a $60.1 million increase in cash balances related to the Company’s participation in a tax refund processing program.  In addition, demand deposit and public fund demand deposit accounts increased $19.7 million and $10.2 million, respectively.  Interest-bearing demand deposits increased $23.1, primarily related to Comunibanc Corp balances, totaling $41.4 million.  Personal and public-fund interest bearing demand accounts increased $8.0 million and $11.8 million, respectively.  These increases were partially offset by decreases to business interest-bearing demand and Jumbo NOW accounts of $31.0 million and $9.5 million, respectively.  Savings and money market balances increased $87.6 million, primarily related to Comunibanc Corp balances.  Time deposits related to Comunibanc totaled $56.3 million, partially offset by a $17.4 million decrease to accounts over $100 thousand and a $ 11.4 million decrease to accounts under $100 thousand

FHLB advances totaled $75.0 million at December 31, 2021.  The entire outstanding balance was called in July.  This was replaced by $6.7 million of term advances related to Comunibanc and to overnight advances of $55.0 million.

Stock Repurchase Program

During the first nine months of 2022, Civista repurchased 734,810 shares for $16.6 million at a weighted average price of $22.59 per share, including 392,847 shares repurchased under the previous authorization for $9.3 million.  We have approximately $6.2 million remaining of the current $13.5 million repurchase authorization, which was approved in April 2022.  In addition, Civista liquidated 5,403 shares held by employees, at $24.66 per share, to satisfy tax obligations stemming from vesting of restricted shares.

Shareholders’ Equity

Total shareholders’ equity decreased $52.6 million from December 31, 2021 to September 30, 2022, primarily due to a $78.8 million increase in accumulated other comprehensive loss caused by an increase in interest rates.  The increase in other comprehensive loss does not impact our regulatory capital adequacy ratios.  Shareholders’ equity also decreased due to a $16.7 million repurchase of treasury shares.  The decrease in equity was partially offset by a $21.0 million increase in retained earnings and a $21.8 million increase in common stock.  The increase in common stock was primarily a result of shares issued related to the Comunibanc acquisition.   

Asset Quality

Civista recorded net recoveries of $132 thousand for the nine months of 2022 compared to net recoveries of $710 thousand for the same period of 2021.  The allowance for loan losses to loans ratio was 1.19% at September 30, 2022 and 1.33% at December 31, 2021.

Allowance for Loan Losses




(dollars in thousands)





September 30,


September 30,


2022


2021

Beginning of period

$         26,641


$         25,028

Charge-offs

(164)


(148)

Recoveries

296


858

Provision

1,000


830

End of period

$         27,773


$         26,568


Non-performing assets at September 30, 2022 were $5.8 million, an 8.6% increase from December 31, 2021. The non-performing assets to assets ratio 0.18% at both September 30, 2022 and December 31, 2021.  The allowance for loan losses to non-performing loans decreased from 496.10% at December 31, 2021 to 476.24% at September 30, 2022.  

Non-performing Assets




(dollars in thousands)

September 30,


December 31,


2022


2021

Non-accrual loans

$          5,002


$          3,873

Restructured loans

830


1,497

Total non-performing loans

5,832


5,370

Other Real Estate Owned


Total non-performing assets

$          5,832


$          5,370

Conference Call and Webcast

Civista Bancshares, Inc. will also host a conference call to discuss the Company’s financial results for the third quarter of 2022 at 1:00 p.m. ET on Thursday, October 27, 2022.  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. third quarter 2022 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, 2021, 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 $3.2 billion financial holding company headquartered in Sandusky, Ohio. Civista’s banking subsidiary, Civista Bank, operates 43 locations in Northern, Central, Northwestern and Southwestern Ohio, Southeastern Indiana and Northern Kentucky.  Additional information on Civista may be accessed at www.civb.com, but information at that website is not part of this press release nor is it part of any filing by Civista with the Securities and Exchange Commission.  Civista’s common shares are traded on the NASDAQ Capital Market under the symbol “CIVB”.

Civista Bancshares, Inc.

Financial Highlights

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



Consolidated Condensed Statement of Income










Three Months Ended


Nine Months Ended


September 30,


September 30,


2022


2021


2022


2021









Interest income

$         32,533


$         25,784


$         83,263


$         77,008

Interest expense

2,094


1,351


5,624


4,906

Net interest income

30,439


24,433


77,639


72,102

Provision for loan losses

300



1,000


830

Net interest income after provision

30,139


24,433


76,639


71,272

Noninterest income

5,734


6,426


19,012


24,641

Noninterest expense

22,555


19,251


63,192


60,702

Income before taxes

13,318


11,608


32,459


35,211

Income tax expense

2,206


1,966


5,180


5,647

Net income

11,112


9,642


27,279


29,564









Dividends paid per common share

$             0.14


$             0.14


$             0.42


$             0.38









Earnings per common share








Basic








Net income

$         11,112


$           9,642


$         27,279


$         29,564

Less allocation of earnings and 








dividends to participating securities

52


46


122


122

Net income available to common 








shareholders – basic

$         11,060


$           9,596


$         27,157


$         29,442

Weighted average common shares outstanding

15,394,898


15,168,233


14,974,863


15,543,488

Less average participating securities

71,604


72,071


67,323


64,064

Weighted average number of shares outstanding 







used to calculate basic earnings per share

15,323,294


15,096,162


14,907,540


15,479,424









Earnings per common share (1)








Basic

$             0.72


$             0.64


$             1.82


$             1.90

Diluted

0.72


0.64


1.82


1.90









Selected financial ratios:








Return on average assets

1.35 %


1.29 %


1.14 %


1.29 %

Return on average equity

14.45 %


10.96 %


11.34 %


11.32 %

Dividend payout ratio

19.40 %


22.02 %


23.06 %


19.98 %

Net interest margin (tax equivalent)

4.03 %


3.62 %


3.62 %


3.48 %

 

 

 Selected Balance Sheet Items 

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






 September 30, 


 December 31, 


2022


2021


(unaudited)


(unaudited)





 Cash and due from financial institutions 

$                  40,914


$               264,239

 Investment in time deposits 

1,479


1,730

 Investment securities 

604,074


560,946

 Loans held for sale 

3,491


1,972

 Loans 

2,328,614


1,997,879

 Less: allowance for loan losses 

(27,773)


(26,641)

 Net loans 

2,300,841


1,971,238

 Other securities 

18,578


17,011

 Premises and equipment, net 

30,168


22,445

 Goodwill and other intangibles 

113,206


84,432

 Bank owned life insurance 

53,291


46,641

 Other assets 

75,677


42,251

 Total assets 

$            3,241,719


$            3,012,905





 Total deposits 

$            2,708,253


$            2,416,701

 Federal Home Loan Bank advances 

61,723


75,000

 Securities sold under agreements to repurchase 

20,155


25,495

 Subordinated debentures 

103,778


103,735

 Securities purchased payable 

2,611


3,524

 Tax refunds in process 

2,709


549

 Accrued expenses and other liabilities 

39,888


32,689

 Total shareholders’ equity 

302,602


355,212

 Total liabilities and shareholders’ equity 

$            3,241,719


$            3,012,905





 Shares outstanding at period end 

15,235,545


14,954,200





 Book value per share 

$                    19.86


$                    23.75

 Equity to asset ratio 

9.33 %


11.79 %





Selected asset quality ratios:




Allowance for loan losses to total loans

1.19 %


1.33 %

Non-performing assets to total assets

0.18 %


0.18 %

Allowance for loan losses to non-performing loans

476.24 %


496.10 %





Non-performing asset analysis




Nonaccrual loans

$                    5,002


$                    3,873

Troubled debt restructurings

830


1,497

Other real estate owned


Total

$                    5,832


$                    5,370

 

Supplemental Financial Information

(Unaudited – dollars in thousands except share data)












September 30,


June 30,


March 31,


December 31,


September 30,

End of Period Balances

2022


2022


2022


2021


2021











Assets










Cash and due from banks

$       40,914


$     233,281


$     412,698


$     264,239


$      250,943

Investment in time deposits

1,479


1,236


1,728


1,730


2,222

Investment securities

604,074


531,978


553,499


560,946


499,226

Loans held for sale

3,491


4,167


4,794


1,972


5,810

Loans

2,328,614


2,064,221


2,018,188


1,997,879


2,004,814

Allowance for loan losses

(27,773)


(27,435)


(27,033)


(26,641)


(26,568)

Net Loans

2,300,841


2,036,786


1,991,155


1,971,238


1,978,246

Other securities

18,578


18,511


18,511


17,011


17,011

Premises and equipment, net

30,168


24,151


22,110


22,445


22,716

Goodwill and other intangibles

113,206


84,021


84,251


84,432


84,589

Bank owned life insurance

53,291


47,118


46,885


46,641


46,728

Other assets

75,677


57,850


48,726


42,251


45,667

Total Assets

$  3,241,719


$  3,039,099


$  3,184,357


$  3,012,905


$  2,953,158











Liabilities










Total deposits

$  2,708,253


$  2,455,502


$  2,615,137


$  2,416,701


$  2,434,766

Federal Home Loan Bank advances

61,723


75,000


75,000


75,000


75,000

Securities sold under agreement to repurchase

20,155


17,479


23,931


25,495


23,331

Subordinated debentures

103,778


103,737


103,704


103,735


30,349

Securities purchased payable

2,611


15,025


1,876


3,524


3,857

Tax refunds in process

2,709


39,448


10,232


549


911

Accrued expenses and other liabilities

39,888


30,846


26,785


32,689


36,494

Total liabilities

2,939,117


2,737,037


2,856,665


2,657,693


2,604,708











Shareholders’ Equity










Common shares

299,515


278,240


277,919


277,741


277,627

Retained earnings

146,546


137,592


131,934


125,558


116,680

Treasury shares

(73,641)


(67,528)


(61,472)


(56,907)


(55,155)

Accumulated other comprehensive income(loss)

(69,818)


(46,242)


(20,689)


8,820


9,298

Total shareholders’ equity

302,602


302,062


327,692


355,212


348,450











Total Liabilities and Shareholders’ Equity

$  3,241,719


$  3,039,099


$  3,184,357


$  3,012,905


$  2,953,158











Quarterly Average Balances










Assets:










Earning assets

$  3,002,256


$  2,866,362


$  2,814,589


$  2,773,498


$  2,747,450

Securities

622,924


556,352


575,359


522,058


482,642

Loans

2,289,588


2,033,378


2,006,984


1,973,989


2,010,665

Liabilities and Shareholders’ Equity










Total deposits

$  2,719,014


$  2,524,971


$  2,557,638


$  2,430,613


$  2,437,580

Interest-bearing deposits

1,738,015


1,630,084


1,623,984


1,619,560


1,588,079

Other interest-bearing liabilities

155,077


200,005


204,299


155,094


127,511

Total shareholders’ equity

305,134


313,272


347,302


348,971


348,970

 

Supplemental Financial Information

(Unaudited – dollars in thousands except share data)












Three Months Ended


September 30,


June 30,


March 31,


December 31,


September 30,

Income statement

2022


2022


2022


2021


2021











Total interest and dividend income

$          32,533


$          26,064


$          24,666


$          24,735


$          25,784

Total interest expense

2,094


1,796


1,734


1,412


1,351

Net interest income

30,439


24,268


22,932


23,323


24,433

Provision for loan losses

300


400


300



Noninterest income

5,734


5,635


7,643


6,811


6,426

Noninterest expense

22,555


20,379


20,258


16,963


19,251

Income before taxes

13,318


9,124


10,017


13,171


11,608

Income tax expense

2,206


1,423


1,551


2,189


1,966

Net income

$          11,112


$            7,701


$            8,466


$          10,982


$            9,642











Per share data




















Earnings per common share










Basic










Net income

$          11,112


$            7,701


$            8,466


$          10,982


$            9,642

Less allocation of earnings and 










dividends to participating securities

52


39


32


51


46

Net income available to common 










shareholders – basic

$          11,060


$            7,662


$            8,434


$          10,931


$            9,596











Weighted average common shares outstanding

15,394,898


14,615,154


14,909,192


15,009,376


15,168,233

Less average participating securities

71,604


74,286


55,905


70,349


72,071

Weighted average number of shares outstanding 










used to calculate basic earnings per share

15,323,294


14,540,868


14,853,287


14,939,027


15,096,162











Earnings per common share










Basic

$              0.72


$              0.53


$              0.57


$              0.73


$              0.64

Diluted

0.72


0.53


0.57


0.73


0.64











Common shares dividend paid

$            2,158


$            2,042


$            2,091


$            2,104


$            2,140











Dividends paid per common share

0.14


0.14


0.14


0.14


0.14

 

Supplemental Financial Information

(Unaudited – dollars in thousands except share data)












Three Months Ended


September


June


March


December 31,


September 30,

Asset quality

2022


2022


2022


2021


2021











Allowance for loan losses, beginning of period

$         27,435


$         27,033


$         26,641


$         26,568


$         26,197

Charge-offs

(74)


(60)


(30)


(11)


(77)

Recoveries

112


62


122


84


448

Provision

300


400


300



Allowance for loan losses, end of period

$         27,773


$         27,435


$         27,033


$         26,641


$         26,568











Ratios










Allowance to total loans

1.19 %


1.33 %


1.34 %


1.33 %


1.33 %

Allowance to nonperforming assets

476.24 %


572.78 %


501.50 %


496.10 %


501.01 %

Allowance to nonperforming loans

476.24 %


572.78 %


501.50 %


496.10 %


503.50 %











Nonperforming assets










Nonperforming loans

$            5,832


$            4,790


$            5,390


$            5,370


$            5,277

Other real estate owned





26

Total nonperforming assets

$            5,832


$            4,790


$            5,390


$            5,370


$            5,303











Capital and liquidity










Tier 1 leverage ratio

9.32 %


9.87 %


9.50 %


10.21 %


10.01 %

Tier 1 risk-based capital ratio

11.62 %


13.63 %


14.02 %


14.35 %


14.18 %

Total risk-based capital ratio

15.62 %


18.24 %


18.74 %


19.17 %


15.43 %

Tangible common equity ratio (1)

6.05 %


7.38 %


7.85 %


9.25 %


9.20 %











(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


September 30,


June 30,


March 31,


December 31,


September 30,


2022


2022


2022


2021


2021











Tangible Common Equity










Total Shareholder’s Equity – GAAP

$       302,602


$       302,062


$       327,692


$       355,212


$       348,450

Less: Goodwill and intangible assets

113,206


84,021


84,251


84,432


84,589

Tangible common equity (Non-GAAP)

$       189,396


$       218,041


$       243,441


$       270,780


$       263,861











Total Shares Outstanding

15,235,545


14,537,433


14,797,232


14,954,200


15,029,972











Tangible book value per share

$            12.43


$            15.00


$            16.45


$            18.11


$            17.56











Tangible Assets










Total Assets – GAAP

$    3,241,719


$    3,039,099


$    3,184,357


$    3,011,983


$    2,952,236

Less: Goodwill and intangible assets

113,206


84,021


84,251


84,432


84,589

Tangible assets (Non-GAAP)

$    3,128,513


$    2,955,078


$    3,100,106


$    2,927,551


$    2,867,647











Tangible common equity to tangible assets

6.05 %


7.38 %


7.85 %


9.25 %


9.20 %

 

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SOURCE Civista Bancshares, Inc.

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