Core Viewpoint - Civista Bancshares, Inc. has announced a quarterly dividend of 17 cents per common share, maintaining the same rate as the previous quarter, with a total payout of approximately $3.3 million, resulting in an annualized yield of 3.35% based on the stock price of $20.31 as of September 30, 2025 [1][2]. Company Overview - Civista Bancshares, Inc. is a financial holding company with assets totaling $4.2 billion, headquartered in Sandusky, Ohio. Its primary subsidiary, Civista Bank, offers a range of services including full-service banking, commercial lending, mortgage, and wealth management, operating 42 locations across Ohio, Southeastern Indiana, and Northern Kentucky [2]. Additional Information - Civista Bancshares' common shares are traded on the NASDAQ Capital Market under the symbol "CIVB" [2].

Core Points - Civista Bancshares, Inc. and The Farmers Savings Bank have received all necessary regulatory approvals for their merger, which will integrate Farmers into Civista Bank [1][3] - The merger is subject to the approval of Farmers shareholders, with a meeting scheduled for November 4, 2025, and the transaction expected to close shortly thereafter [2][3] - The combined entity will operate under the Civista Bank brand, enhancing its community-focused banking services across an expanded geographic footprint [3] Company Information - Civista Bancshares, Inc. is a financial holding company with assets of $4.2 billion, headquartered in Sandusky, Ohio, and operates 42 locations across Ohio, Southeastern Indiana, and Northern Kentucky [4] - The Farmers Savings Bank is a commercial bank with assets of $285 million, headquartered in Spencer, Ohio, operating two locations in Northeast Ohio [5]

Core Points - Civista Bancshares, Inc. will release its third quarter 2025 financial results on October 23, 2025, before market open [1] - A conference call and webcast will be held on the same day at 1:00 p.m. Eastern Time to discuss the financial results [2] Company Overview - Civista Bancshares, Inc. is a financial holding company with assets of $4.2 billion, headquartered in Sandusky, Ohio [3] - The primary subsidiary, Civista Bank, offers full-service banking, commercial lending, mortgage, and wealth management services, operating 42 locations across Ohio, Southeastern Indiana, and Northern Kentucky [3] - Civista Bank also provides commercial equipment leasing services nationwide through its Civista Leasing and Finance Division [3]

Core Viewpoint - Civista Bancshares, Inc. has promoted Robert L. Katitus to Senior Vice President and Chief Lending Officer, reflecting the company's commitment to internal talent development and leadership continuity [1][3]. Group 1: Leadership Changes - Robert L. Katitus has been appointed as Senior Vice President and Chief Lending Officer, succeeding Charles A. Parcher, who has become the President of Civista Bank [1]. - Katitus will be part of Civista's Executive Leadership Team and will report directly to the President of Civista Bank [1]. Group 2: Experience and Background - Katitus brings over 25 years of banking and commercial lending experience, having joined Civista in 2010 [2]. - Prior to his current role, he served as Senior Vice President, Regional Market Executive for Northeast Ohio and oversaw commercial banking in Northwest Ohio after Civista's acquisition of The Henry County Bank in 2022 [2][3]. - His previous experience includes leadership roles in commercial lending at Park View Federal Savings Bank and starting his banking career at National City Corporation in 1998 [3]. Group 3: Company Overview - Civista Bancshares, Inc. is a $4.2 billion financial holding company headquartered in Sandusky, Ohio, with its primary subsidiary being Civista Bank, founded in 1884 [4]. - Civista Bank operates 42 locations across Ohio, Southeastern Indiana, and Northern Kentucky, providing full-service banking, commercial lending, mortgage, and wealth management services [4]. - The company also offers commercial equipment leasing services nationwide through its Civista Leasing and Finance Division [4].

Group 1 - Civista Bancshares (NASDAQ: CIVB) was rated a "Strong Buy" in June 2023 amid significant market turbulence in the banking sector due to recent banking collapses [1] - The investment service focuses on cash flow and companies that generate it, highlighting value and growth prospects in the oil and natural gas sector [1] Group 2 - Subscribers have access to a model account with over 50 stocks, detailed cash flow analyses of exploration and production firms, and live discussions about the sector [2] - A two-week free trial is available for new subscribers to explore opportunities in the oil and gas industry [3]

PART I. Financial Information [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated balance sheets, statements of operations, and cash flows for the period ended June 30, 2025 Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$4,185,869** | **$4,098,469** | | Loans, net | $3,110,669 | $3,041,561 | | Securities available-for-sale | $642,910 | $648,067 | | Goodwill | $125,520 | $125,520 | | **Total Liabilities** | **$3,781,732** | **$3,709,967** | | Total Deposits | $3,196,207 | $3,211,870 | | Short-term FHLB advances | $433,500 | $339,000 | | **Total Shareholders' Equity** | **$404,137** | **$388,502** | Consolidated Statements of Operations Highlights (Unaudited) | Metric ($ in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $34,814 | $27,751 | $67,587 | $56,123 | | Provision for Credit Losses - Loans | $1,171 | $1,800 | $2,419 | $3,842 | | Noninterest Income | $6,589 | $10,377 | $14,449 | $18,634 | | Noninterest Expense | $27,482 | $28,389 | $54,608 | $55,831 | | **Net Income** | **$11,015** | **$7,064** | **$21,183** | **$13,424** | | **Earnings per share, diluted** | **$0.71** | **$0.45** | **$1.37** | **$0.85** | Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity ($ in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $14,693 | $12,945 | | Net cash used for investing activities | ($76,078) | ($164,247) | | Net cash provided by financing activities | $72,088 | $146,656 | | **Increase (Decrease) in cash and cash equivalents** | **$10,703** | **($4,646)** | [Notes to Interim Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Interim%20Consolidated%20Financial%20Statements%20(Unaudited)) Details accounting policies, securities, loans, credit loss allowances, and significant subsequent events like a planned merger - The Company operates primarily in one reportable segment, banking, providing financial services in Ohio, Indiana, and Kentucky[18](index=18&type=chunk)[19](index=19&type=chunk) - Total nonaccrual loans **decreased to $22.7 million** at June 30, 2025, from $31.0 million at December 31, 2024[61](index=61&type=chunk)[62](index=62&type=chunk) - On July 10, 2025, the Company announced an agreement to merge with The Farmers Savings Bank for an aggregate deal value of **approximately $70.4 million**[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - On July 10, 2025, the Company announced an underwritten public offering of common shares, raising aggregate **net proceeds of approximately $76.0 million**[145](index=145&type=chunk) Loan Portfolio Composition ($ in thousands) | Loan Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commercial & Agriculture | $338,598 | $328,488 | | Commercial Real Estate- Owner Occupied | $378,248 | $374,367 | | Commercial Real Estate- Non-Owner Occupied | $1,263,612 | $1,225,991 | | Residential Real Estate | $815,408 | $763,869 | | Real Estate Construction | $277,643 | $305,992 | | **Total Loans** | **$3,151,124** | **$3,081,230** | Allowance for Credit Losses (ACL) Roll-Forward - Six Months Ended June 30, 2025 ($ in thousands) | Category | Beginning Balance (Dec 31, 2024) | Charge-offs | Recoveries | Provision | Ending Balance (June 30, 2025) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total** | **$39,669** | **($2,068)** | **$435** | **$2,419** | **$40,455** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses financial condition and operational results, highlighting asset growth, increased net income, and recent strategic actions [Financial Condition](index=54&type=section&id=Financial%20Condition) Total assets grew 2.1% to $4.19 billion, driven by loan growth funded by FHLB advances as deposits slightly decreased - Total assets **increased by $87.4 million (2.1%)** to $4.19 billion at June 30, 2025, from $4.10 billion at December 31, 2024[157](index=157&type=chunk) Loan Portfolio Change ($ in thousands) | Loan Category | Change from Dec 31, 2024 | % Change | | :--- | :--- | :--- | | Residential Real Estate | $51,539 | 6.7% | | Commercial Real Estate—Non Owner Occupied | $37,621 | 3.1% | | Real Estate Construction | ($28,349) | -9.3% | | **Total Loans** | **$69,894** | **2.3%** | Deposit Composition Change ($ in thousands) | Deposit Category | Change from Dec 31, 2024 | % Change | | :--- | :--- | :--- | | Time deposits | $90,748 | 19.3% | | Brokered deposits | ($46,118) | -9.2% | | Noninterest-bearing demand | ($47,485) | -6.8% | | **Total Deposits** | **($15,663)** | **-0.5%** | [Results of Operations](index=58&type=section&id=Results%20of%20Operations) Net income increased significantly for Q2 and YTD 2025, driven by higher net interest income and an expanded net interest margin - The fully tax equivalent net interest margin for the six months ended June 30, 2025, was **3.57%**, an increase from 3.16% for the same period in 2024[188](index=188&type=chunk) Q2 2025 vs Q2 2024 Performance ($ in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $11,015 | $7,064 | $3,951 | | Net Interest Income | $34,814 | $27,751 | $7,063 | | Noninterest Income | $6,589 | $10,377 | ($3,788) | | Noninterest Expense | $27,482 | $28,389 | ($907) | YTD 2025 vs YTD 2024 Performance ($ in thousands) | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $21,183 | $13,424 | $7,759 | | Net Interest Income | $67,587 | $56,123 | $11,464 | | Noninterest Income | $14,449 | $18,634 | ($4,185) | | Noninterest Expense | $54,608 | $55,831 | ($1,223) | [Capital Resources and Liquidity](index=67&type=section&id=Capital%20Resources%20and%20Liquidity) The Company maintains a strong capital position with all regulatory ratios exceeding 'well-capitalized' minimums and has significant liquidity - As of June 30, 2025, Civista had a remaining borrowing capacity of **approximately $331.8 million** with the FHLB, plus other credit lines[205](index=205&type=chunk) Regulatory Capital Ratios | Ratio | June 30, 2025 | December 31, 2024 | Well-Capitalized Minimum | | :--- | :--- | :--- | :--- | | CET1 Risk Based Capital | 10.3% | 9.5% | 6.5% | | Tier I Risk Based Capital | 11.2% | 10.4% | 8.0% | | Total Risk Based Capital | 14.7% | 13.9% | 10.0% | | Leverage Ratio | 8.8% | 8.6% | 5.0% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company's primary market risk is interest-rate risk, with analysis showing a slightly asset-sensitive position - The company's primary technique for managing interest-rate risk is the measurement of its asset/liability gap[212](index=212&type=chunk) Net Portfolio Value Sensitivity Analysis (June 30, 2025) | Change in Rates (basis points) | Dollar Change ($ in thousands) | Percent Change | | :--- | :--- | :--- | | +400bp | $34,022 | 5.4% | | +200bp | $17,280 | 2.7% | | +100bp | $8,026 | 1.3% | | **Base** | **—** | **0.0%** | | -100bp | ($6,861) | (1.1%) | | -200bp | ($29,396) | (4.7%) | [Item 4. Controls and Procedures](index=72&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls during the quarter - Management, including the CEO and CFO, concluded that the Company's **disclosure controls and procedures were effective** as of June 30, 2025[218](index=218&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter[219](index=219&type=chunk) PART II. Other Information [Item 1. Legal Proceedings](index=73&type=section&id=Item%201.%20Legal%20Proceedings) Management believes pending legal proceedings in the ordinary course of business will not have a material adverse effect - Management believes that any pending legal proceedings **will not have a material adverse effect** on the company's financial position or operations[221](index=221&type=chunk) [Item 1A. Risk Factors](index=73&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors, focusing on the pending merger with The Farmers Savings Bank and challenges in maintaining internal controls - The consummation of the FSB Merger is subject to customary closing conditions, and **there is no assurance it will be completed**[224](index=224&type=chunk) - The company may face challenges in integrating FSB's business, which could prevent the **realization of anticipated benefits and synergies**[227](index=227&type=chunk)[231](index=231&type=chunk) - A new risk factor highlights the importance of maintaining effective internal control over financial reporting due to recent staff turnover and acquisitions[233](index=233&type=chunk)[235](index=235&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=77&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A new $13.5 million share repurchase program was authorized, though no shares were repurchased in the second quarter of 2025 - On April 15, 2025, the Company announced a new common share repurchase program authorizing up to **$13.5 million** in repurchases[238](index=238&type=chunk) - **No shares were repurchased** during the three months ended June 30, 2025[237](index=237&type=chunk)

Core Insights - The company reported a net income of $11.0 million, or $0.71 per share, representing a 56% increase year-over-year and an $847,000 increase over the prior quarter [5][17] - A follow-on capital raise generated $76.3 million net, which will be used to reduce overnight borrowings and fund new loans over time [8][22] - The company announced the acquisition of Farmers Savings Bank, expected to close in the fourth quarter, which will enhance core deposit funding and improve capital ratios [8][20] Financial Performance - Net interest income increased to $34.8 million, up $2.0 million or 6.2% sequentially, driven by a rise in earning asset yields [6][18] - Pre-provision net revenue rose by $3.3 million, or 37.5%, year-over-year, and by $770,000, or 6.7%, over the linked quarter [5][17] - Noninterest income decreased by $1.3 million, or 16.2%, from the previous quarter, primarily due to reduced leasing and residential fee revenues [3][22] Loan and Deposit Metrics - The loan-to-deposit ratio increased to 98.6%, higher than desired, with expectations for reduction following deposit initiatives and the Farmers acquisition [4][31] - Total loans and leases grew by $47.1 million, representing an annualized growth rate of 6.1%, with residential loans being the largest segment increase [6][26] - Total deposits declined by $42.7 million, or 1.3%, mainly due to the exit of a single municipal customer [7][29] Capital and Credit Quality - Pro forma capital ratios are projected to improve, with the tangible common equity ratio rising to 8.6% and the tier one leverage ratio to 10.6% post-capital raise and acquisition [9][33] - The allowance for credit losses to total loans was 1.28%, with an allowance for credit losses to nonperforming loans at 175%, up from 122% at the end of 2024 [9][35] - Criticized credits decreased by $2 million, indicating stable credit quality metrics [9][34] Strategic Initiatives - The company launched a new digital account opening platform aimed at attracting customers outside current branch locations [10][30] - Management aims to reduce the loan-to-deposit ratio to a target range of 90-95% through various deposit initiatives [31] - The acquisition of Farmers Savings Bank is seen as a strategic move to leverage their low-cost core deposits and enhance loan growth opportunities [20][21]

Core Viewpoint - Civista Bancshares reported mixed Q2 2025 earnings, with GAAP EPS of $0.71 slightly exceeding analyst expectations, but net interest income fell short of estimates, highlighting challenges in core revenue growth and deposit trends [1][5][10] Financial Performance - GAAP EPS for Q2 2025 was $0.71, up 58% from $0.45 in Q2 2024, and above the estimate of $0.70 [2] - Net income reached $11.0 million, a 55.6% increase from $7.1 million in Q2 2024 [2] - Net interest income was $34.8 million, falling short of the $42.77 million estimate but up 25.2% year-over-year [2][5] - Noninterest income dropped 36.5% to $6.6 million from $10.4 million in Q2 2024 [2][6] - Efficiency ratio improved to 64.5% from 72.6% year-over-year, indicating better expense management [2][9] Company Overview and Strategy - Civista Bancshares operates 42 branches in Ohio, southeastern Indiana, and northern Kentucky, focusing on retail and commercial banking, mortgage origination, and wealth management [3] - The company aims to grow its loan portfolio, expand core deposits, leverage its mortgage banking platform, and maintain strong capital ratios [4] Notable Events - The bank announced the acquisition of The Farmers Savings Bank, expected to add $233 million in low-cost deposits [10] - An $80.5 million common equity capital raise was completed to strengthen capital position [10] - A new digital deposit account system, Mantle, was launched to attract online customers [10] Future Outlook - Management projects a slight dip in core net interest margin in Q3 2025, with expectations for recovery in Q4 2025 [12] - Loan growth is anticipated in the mid-single digit range for the remainder of fiscal 2025, with plans for high-single digit growth in 2026 [12] - Noninterest income streams are expected to stabilize and potentially rebound in the second half of 2025 [13]

Financial Data and Key Metrics Changes - The company reported net income for Q2 2025 of $11 million, or $0.71 per diluted share, representing a 56% increase from Q2 2024 and an increase of $847,000 from the linked quarter [4] - Pre-provision net revenue increased by $3.3 million, or 37.5%, compared to Q2 2024, and by $770,000, or 6.7%, from the linked quarter [5] - Net interest income for the quarter was $34.8 million, an increase of $2 million, or 6.2%, compared to the linked quarter [5] - Non-interest income declined by $1.3 million, or 16.2%, from the first quarter and by $3.8 million from Q2 2024 [11] Business Line Data and Key Metrics Changes - The loan and lease portfolio grew at an annualized rate of 6.8% during the quarter, with significant growth in residential loans, which increased by $42 million [6][14] - Non-interest expense for the quarter was $27.5 million, a 1.3% increase over the first quarter, primarily due to merit increases in compensation [12] - The efficiency ratio improved to 64.5% compared to 64.9% for the linked quarter and 72.6% for the prior year [13] Market Data and Key Metrics Changes - Total deposits declined by $42.7 million, or 1.3%, primarily due to a municipal customer transferring funds out [17] - The loan-to-deposit ratio was 98.6%, higher than desired, with plans to reduce it to a targeted range of 90% to 95% [19] - The company launched a new digital deposit account opening platform to attract new customers [18] Company Strategy and Development Direction - The company announced a definitive agreement to acquire a former Savings Bank in Spencer, Ohio, and an $88.5 million follow-on capital offering [7][8] - The acquisition is expected to enhance the company's capital ratios and support organic growth [10][22] - The company aims to leverage the acquired low-cost core deposits and security portfolio to fund loan growth [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth, particularly in Ohio, which is becoming more business-friendly [40] - The company anticipates loan growth to remain in the mid-single digits for the remainder of 2025 and accelerate into high single digits in 2026 [24] - Credit quality remains strong, with criticized credits declining by $2 million during the quarter [23] Other Important Information - The company successfully raised $76.3 million in additional capital through a follow-on offering [11] - The effective tax rate for the quarter was 14.6% [13] - Unrealized losses in the securities portfolio increased to $63.1 million as of June 30 [20] Q&A Session Summary Question: Core margin trends for the second half - Management expects the core margin to improve, projecting a range of 3.52% to 3.53% for Q3, with further expansion in Q4 [31] Question: Competitive environment for lending and funding - The competitive landscape is intensifying, with larger regional banks becoming more aggressive in both lending and deposits [33] Question: Specific markets driving loan growth - Loan growth was primarily in residential loans, with a focus on Ohio's expanding job market and business investments [40] Question: Deposit growth strategy and initiatives - Previous initiatives are nearing capacity, but new initiatives, including a digital account opening system, are expected to enhance deposit growth [44] Question: Leasing recovery impact on loan balances - The leasing side is expected to rebound, positively impacting loan balances as well [66]

Group 1: Earnings Performance - Civista Bancshares reported quarterly earnings of $0.66 per share, missing the Zacks Consensus Estimate of $0.69 per share, but showing an increase from $0.45 per share a year ago, representing an earnings surprise of -4.35% [1] - The company posted revenues of $41.4 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.37%, compared to year-ago revenues of $38.29 million [2] Group 2: Stock Performance and Outlook - Civista Bancshares shares have increased by approximately 1.7% since the beginning of the year, while the S&P 500 has gained 8.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.75 on revenues of $43.66 million, and for the current fiscal year, it is $2.81 on revenues of $170.47 million [7] Group 3: Industry Context - The Zacks Industry Rank for Banks - Midwest is currently in the top 29% of over 250 Zacks industries, indicating that the industry is performing relatively well [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the outlook for the industry can significantly impact stock performance [5][8]