Preamble and Recitals [Recitals](index=8&type=section&id=Recitals) The agreement outlines the strategic merger of Farmers into Civista Bank, intended to qualify as a tax-free reorganization - The agreement is dated **July 10, 2025**, among Civista Bancshares, Inc, Civista Bank, and The Farmers Savings Bank[26](index=26&type=chunk) - The transaction is a strategic merger where Farmers will merge into Civista Bank, with **Civista Bank as the surviving entity**[28](index=28&type=chunk) - The merger is intended to qualify as a **tax-free "reorganization"** under Section 368(a) of the Internal Revenue Code[29](index=29&type=chunk) The Merger [The Merger](index=8&type=section&id=1.1%20The%20Merger) The Farmers Savings Bank will legally merge into Civista Bank, which will be the surviving entity under Ohio law - At the Effective Time, Farmers will merge with and into Civista Bank, with **Civista Bank continuing as the surviving bank**[31](index=31&type=chunk) - Civista may change the method of the combination if it does not alter the merger consideration, adversely affect tax consequences, or materially delay regulatory approvals[32](index=32&type=chunk)[33](index=33&type=chunk) [Closing and Effective Time](index=9&type=section&id=1.2%20Closing%20and%20Effective%20Time) The merger's closing will occur within 30 days of satisfying all conditions, becoming effective upon filing with the Ohio Secretary of State - The closing will take place within **thirty (30) days** following the satisfaction or waiver of all conditions[34](index=34&type=chunk) - The merger becomes effective upon the filing of the Certificate of Merger with the **Ohio Secretary of State**[34](index=34&type=chunk) [Conversion of Shares](index=9&type=section&id=1.4%20Conversion%20of%20Shares) Each Farmers Common Share will be converted into a mix of cash and Civista common stock, with adjustments for fractional shares Merger Consideration per Farmers Common Share | Consideration Type | Formula / Amount | | :--- | :--- | | **Cash Consideration** | $34,925,000 divided by the number of outstanding Farmers Common Shares | | **Stock Consideration** | 1,434,491 Civista Common Shares divided by the number of outstanding Farmers Common Shares (the "Exchange Ratio") | - No fractional Civista Common Shares will be issued; instead, shareholders will receive cash based on the **5-day average closing price** of Civista stock[41](index=41&type=chunk) - The stock consideration can be increased and cash consideration decreased to the minimum extent necessary to ensure the merger qualifies as a **tax-free reorganization**[42](index=42&type=chunk) [Farmers Adjusted Shareholders' Equity](index=11&type=section&id=1.5%20Farmers%20Adjusted%20Shareholders'%20Equity) The cash consideration is subject to an adjustment based on Farmers' final Adjusted Shareholders' Equity relative to a $56 million threshold Equity Adjustment Mechanism | Condition | Adjustment to Cash Consideration per Share | | :--- | :--- | | Adjusted Shareholders' Equity < $56,000,000 (Equity Minimum) | Reduced by the shortfall amount, divided by total shares | | Adjusted Shareholders' Equity > $56,000,000 (Equity Minimum) | Increased by 50% of the excess amount, divided by total shares | - Adjusted Shareholders' Equity is calculated based on GAAP as of the month-end prior to closing, excluding certain transaction expenses and including adjustments for investment portfolio valuation[44](index=44&type=chunk) [Dissenters' Rights](index=11&type=section&id=1.6%20Dissenters'%20Rights) Farmers shareholders who properly exercise dissenters' rights under Ohio law will receive fair value payment instead of merger consideration - Shareholders who properly dissent under Section 1701.85 of the OGCL will **not receive the Merger Consideration**[47](index=47&type=chunk) - Dissenting shareholders are entitled to receive payment for the fair value of their shares, but if they fail to perfect or withdraw their rights, they will receive the standard Merger Consideration[48](index=48&type=chunk) [Directors and Officers of the Surviving Bank](index=12&type=section&id=1.8%20Directors%20and%20Officers%20of%20the%20Surviving%20Bank) The existing directors and officers of Civista Bank will continue to lead the surviving bank after the merger - The directors of the Surviving Bank will be the directors of **Civista Bank** immediately prior to the Effective Time[50](index=50&type=chunk) - The officers of the Surviving Bank will be the officers of **Civista Bank** immediately prior to the Effective Time[51](index=51&type=chunk) Delivery of Merger Consideration [Exchange Agent](index=12&type=section&id=2.1%20Exchange%20Agent) Civista will appoint Equiniti Trust Co as the exchange agent to manage the distribution of merger consideration - Civista will appoint **Equiniti Trust Co.** as the exchange agent for the merger[54](index=54&type=chunk) [Exchange Procedures](index=13&type=section&id=2.3%20Exchange%20Procedures) Shareholders will receive instructions to exchange their shares for merger consideration, with unclaimed funds reverting to Civista after one year - Within **five business days** after the Effective Time, the Exchange Agent will mail a Letter of Transmittal to each Farmers shareholder[57](index=57&type=chunk) - Shareholders will receive their merger consideration, including cash for fractional shares and any owed dividends, after surrendering their certificates or book-entry shares with a completed Letter of Transmittal[57](index=57&type=chunk) - Any portion of the Exchange Fund unclaimed after **one year** will be returned to Civista, and shareholders must then look to Civista for payment[63](index=63&type=chunk) Representations and Warranties of Farmers [Capitalization](index=16&type=section&id=3.2%20Capitalization) Farmers represents it has 500 common shares authorized and outstanding, with no other equity rights or repurchase obligations - Farmers' authorized capital stock consists of **500 common shares**, all of which are issued and outstanding[70](index=70&type=chunk) - Farmers has **no outstanding options, warrants**, or other commitments to issue additional equity securities[70](index=70&type=chunk) [Financial Statements](index=18&type=section&id=3.6%20Financial%20Statements) Farmers affirms its provided financial statements conform to GAAP, fairly present its financial position, and contain no undisclosed material liabilities - Farmers has provided unaudited financial statements for fiscal years **2022, 2023, 2024** and the interim period ended **May 31, 2025**[79](index=79&type=chunk) - The financial statements were prepared in conformity with **GAAP** and fairly present the financial position of Farmers[79](index=79&type=chunk) - Farmers has **no material liabilities** other than those reflected in its financial statements, incurred in the ordinary course of business, or related to this agreement[80](index=80&type=chunk) [Farmers Benefit Plans](index=20&type=section&id=3.11%20Farmers%20Benefit%20Plans) Farmers represents its employee benefit plans are compliant and confirms the merger will not trigger excess parachute payments or tax gross-ups - A list of all material employee benefit plans (Farmers Benefit Plans) is provided in **Section 3.11(a)** of the Farmers Disclosure Schedule[89](index=89&type=chunk) - The execution of the merger agreement will not result in an **"excess parachute payment"** within the meaning of Section 280G of the Code[99](index=99&type=chunk) - No Farmers Benefit Plan provides for the gross-up or reimbursement of taxes under **Section 4999 or 409A** of the Code[99](index=99&type=chunk) [Opinion](index=23&type=section&id=3.13%20Opinion) Farmers' board received a fairness opinion from Janney Montgomery Scott LLC confirming the merger consideration is financially fair to its shareholders - The Board of Directors of Farmers received a fairness opinion from **Janney Montgomery Scott LLC**[109](index=109&type=chunk) - The opinion concludes that the Merger Consideration is **fair from a financial point of view** to Farmers' shareholders[109](index=109&type=chunk) Representations and Warranties of Civista and Civista Bank [Capitalization](index=34&type=section&id=4.2%20Capitalization) Civista represents its capital structure and confirms the shares issued in the merger will be duly authorized and fully paid Civista Capitalization | Security | Amount | | :--- | :--- | | Authorized Common Shares | 40,000,000 | | Outstanding Common Shares | 15,519,072 | | Treasury Shares | 3,860,536 | | Authorized Preferred Shares | 200,000 | | Outstanding Preferred Shares | 0 | - The Civista Common Shares to be issued in the Merger will be **duly authorized, validly issued, fully paid, nonassessable**, and free of preemptive rights[161](index=161&type=chunk) [Reports](index=35&type=section&id=4.5%20Reports) Civista affirms it has timely filed all required regulatory reports since December 31, 2021, without material misstatements or omissions - Since **December 31, 2021**, Civista has timely filed all required reports with Regulatory Agencies and other Governmental Entities[167](index=167&type=chunk) - Civista SEC Reports complied in all material respects with applicable law and did **not contain material misstatements or omissions**[168](index=168&type=chunk) Covenants Relating to Conduct of Business [Farmers Forbearances](index=37&type=section&id=5.2%20Farmers%20Forbearances) Farmers is prohibited from taking certain actions before closing without Civista's consent to preserve its business operations and value - Farmers shall not issue additional shares, equity rights, or grant equity-based awards[183](index=183&type=chunk) - Farmers is restricted from paying dividends other than quarterly dividends consistent with past practice, not to exceed **$1,500 per share per quarter**[183](index=183&type=chunk) - Farmers cannot, without consent, make or acquire any loan or commitment that results in a total credit exposure to a single borrower exceeding **$750,000**[185](index=185&type=chunk) - Farmers cannot increase compensation or benefits for directors, officers, or employees, except for ordinary course salary increases and specified annual bonuses[183](index=183&type=chunk) [Civista and Civista Bank Forbearances](index=40&type=section&id=5.3%20Civista%20and%20Civista%20Bank%20Forbearances) Civista is restricted from actions that could jeopardize the merger's tax-free status or adversely affect Farmers' shareholders - Civista shall not take any action that would prevent the merger from qualifying as a **tax-free reorganization**[187](index=187&type=chunk) - Civista shall not effect any **Change in Capitalization** (e.g., stock split, reverse stock split)[187](index=187&type=chunk) - Civista cannot amend its articles or regulations in a manner that would **materially and adversely affect** Farmers' shareholders relative to existing Civista shareholders[187](index=187&type=chunk) Additional Agreements [Regulatory Matters](index=41&type=section&id=6.1%20Regulatory%20Matters) Both parties will cooperate on all regulatory filings, including the Form S-4 registration statement, to secure necessary approvals promptly - Civista and Farmers will cooperate to prepare the **Proxy Statement and Form S-4** to be filed with the SEC[189](index=189&type=chunk) - The parties will use **commercially reasonable efforts** to promptly file all necessary applications to obtain all required permits, consents, and approvals from governmental entities[190](index=190&type=chunk) [Shareholder Approval](index=43&type=section&id=6.3%20Shareholder%20Approval) Farmers' board must recommend the merger to its shareholders and hold a vote, regardless of any alternative acquisition proposals - Farmers' Board of Directors will recommend that its shareholders approve the merger agreement (the **"Farmers Recommendation"**)[197](index=197&type=chunk) - Farmers must hold a shareholder meeting to vote on the agreement, even if the Board effects a **"Change in the Farmers Recommendation"**[198](index=198&type=chunk) [Employee Matters](index=44&type=section&id=6.5%20Employee%20Matters) The agreement details post-merger employee benefits, severance, and specific bonus and SEP plan contributions permitted for Farmers - Farmers employees whose employment is terminated without cause within six months of closing will receive a severance payment of **two weeks' base pay per year of service**, with a minimum of 4 weeks and a maximum of 26 weeks[209](index=209&type=chunk) - Farmers may pay annual bonuses for 2025 up to an aggregate amount of **$115,000**[211](index=211&type=chunk) - Farmers may make contributions to the Farmers SEP Plan for 2025 up to an aggregate amount of **$100,000**[211](index=211&type=chunk) - Civista will request that Farmers terminate its Simplified Employee Pension (SEP) Plan immediately prior to the Effective Time, and will permit rollovers into **Civista's 401(k) plan**[205](index=205&type=chunk) [Indemnification; Directors' and Officers' Insurance](index=47&type=section&id=6.6%20Indemnification;%20Directors'%20and%20Officers'%20Insurance) Civista will indemnify Farmers' former directors and officers and purchase a six-year "tail" D&O insurance policy for them - Civista will **indemnify former directors and officers** of Farmers after the Effective Time[213](index=213&type=chunk) - Civista will purchase a **six-year "tail"** Directors' and Officers' Liability Insurance (D&O) policy, with a premium capped at **150%** of the current policy's annual premium[214](index=214&type=chunk) [No Solicitation](index=47&type=section&id=6.7%20No%20Solicitation) Farmers is prohibited from soliciting other offers but may engage with a superior proposal under its fiduciary duties, subject to a matching right for Civista - Farmers is prohibited from soliciting, initiating, or encouraging any alternative **Acquisition Proposal**[215](index=215&type=chunk) - Farmers' board may engage with an unsolicited, bona fide written Acquisition Proposal if it is deemed a **"Superior Proposal"** and failing to do so would likely violate fiduciary duties[217](index=217&type=chunk) - Before changing its recommendation, Farmers must provide Civista with a **three-business-day "Notice Period"** to allow Civista to negotiate and adjust the terms of its offer[220](index=220&type=chunk) [Voting Agreements](index=51&type=section&id=6.13%20Voting%20Agreements) Key Farmers shareholders are required to sign a Voting Agreement, committing their votes in favor of the merger - Key Shareholders of Farmers must deliver a duly executed **Voting Agreement**, committing to vote in favor of the merger[231](index=231&type=chunk) [Deposit Agreement](index=52&type=section&id=6.15%20Deposit%20Agreement) Members of the Lee Family must agree to maintain at least 95% of their deposit balances with the surviving bank for two years post-merger - The Lee Family will enter a Deposit Agreement to retain at least **95% of their aggregate deposit balances** with the Surviving Bank for at least **two years** post-merger[234](index=234&type=chunk) [Lock-Up Agreements](index=52&type=section&id=6.16%20Lock-Up%20Agreements) Key Farmers shareholders must enter lock-up agreements restricting the sale of their newly acquired Civista stock for a defined period - Key Shareholders will be subject to a **six-month lock-up period** where they cannot sell any Civista shares received in the merger[235](index=235&type=chunk) - For 18 months following the lock-up period, Key Shareholders cannot sell more than **20,000 Civista shares** in any 30-day period[235](index=235&type=chunk) Conditions Precedent [Conditions to Each Party's Obligation to Effect the Merger](index=52&type=section&id=7.1%20Conditions%20to%20Each%20Party's%20Obligation%20to%20Effect%20the%20Merger) The merger is contingent upon several mutual conditions, including shareholder approval, regulatory consent, and Nasdaq listing authorization - The merger is conditional upon receiving the **Farmers Shareholder Approval**[237](index=237&type=chunk) - The **Form S-4 must be declared effective** by the SEC and the new Civista shares must be authorized for listing on Nasdaq[238](index=238&type=chunk) - All **requisite regulatory approvals** must be obtained and be in full force and effect[240](index=240&type=chunk) [Conditions to Obligations of Civista and Civista Bank](index=53&type=section&id=7.2%20Conditions%20to%20Obligations%20of%20Civista%20and%20Civista%20Bank) Civista's obligation to close is conditional on the accuracy of Farmers' warranties, receipt of a tax opinion, and limited shareholder dissent - Farmers' representations and warranties must be true and correct, and it must have performed its obligations under the agreement[242](index=242&type=chunk)[243](index=243&type=chunk) - Civista must receive a legal opinion that the merger will qualify as a **tax-free reorganization** under Section 368(a) of the Code[244](index=244&type=chunk) - The holders of **not more than 10%** of the outstanding Farmers Common Shares shall have perfected dissenters' rights[248](index=248&type=chunk) Termination and Amendment [Termination](index=55&type=section&id=8.1%20Termination) The agreement can be terminated by mutual consent, regulatory denial, a material breach, or if the merger is not completed by June 30, 2026 - The agreement can be terminated by **mutual written consent**[253](index=253&type=chunk) - Either party can terminate if the merger is not completed by **June 30, 2026**[253](index=253&type=chunk) - Civista can terminate if the Farmers Board of Directors effects a **Change in the Farmers Recommendation**[253](index=253&type=chunk) - Either party can terminate if the **Farmers Shareholder Approval is not obtained**[254](index=254&type=chunk) [Fees and Expenses](index=56&type=section&id=8.3%20Fees%20and%20Expenses) Each party bears its own costs, but Farmers must pay a $2.5 million termination fee to Civista under specific circumstances - Generally, each party pays its own fees and expenses[256](index=256&type=chunk) Termination Fee | Fee Amount | Payable By | Payable To | Conditions | | :--- | :--- | :--- | :--- | | $2,500,000 | Farmers | Civista | Payable if the agreement is terminated under certain conditions (e.g., Civista terminates due to a change in recommendation by Farmers' board, or Farmers enters into an alternative acquisition agreement within 12 months of certain termination events) | General Provisions [Governing Law; Jurisdiction](index=59&type=section&id=9.6%20Governing%20Law;%20Jurisdiction) The agreement is governed by Ohio law, with legal disputes to be handled exclusively in the courts of Erie County, Ohio - The agreement is governed by the laws of the **State of Ohio**[269](index=269&type=chunk) - Legal disputes will be handled exclusively in federal or state courts in **Erie County, Ohio**[269](index=269&type=chunk) [Waiver of Jury Trial](index=60&type=section&id=9.7%20Waiver%20of%20Jury%20Trial) All parties to the agreement irrevocably waive their right to a jury trial for any litigation related to the agreement - Each party **waives any right to a trial by jury** in respect of any litigation related to the agreement[271](index=271&type=chunk) Exhibit A: Form of Voting Agreement [Voting Agreement](index=63&type=section&id=Voting%20Agreement) Key Farmers shareholders must sign this agreement, committing to vote for the merger and granting Civista an irrevocable proxy - Shareholders agree to **vote their shares in favor** of the merger agreement and against any competing proposal[285](index=285&type=chunk) - Shareholders grant Civista an **irrevocable proxy** to vote their shares in accordance with the agreement[287](index=287&type=chunk) - Shareholders agree **not to sell, pledge, or transfer their shares** without Civista's prior written consent during the term of the agreement[295](index=295&type=chunk)

Core Points - Civista Bancshares, Inc. reported a net income of $11.0 million, or $0.71 per common share, for the quarter ended June 30, 2025, reflecting a 56% increase compared to the same quarter last year [1][8][9] - The company announced a partnership with The Farmers Savings Bank to expand its presence in Northeast Ohio and successfully raised $80.5 million in capital [2][20] - The efficiency ratio improved to 64.5% from 72.6% a year ago, indicating better operational efficiency [8][14] Financial Performance - Total assets increased to $4.2 billion, up $39.2 million or 0.9% from the previous quarter [5] - Total deposits decreased to $3.2 billion, down $42.7 million or 1.32% from the previous quarter [6] - Net interest income rose by $7.1 million or 25.5% year-over-year, totaling $34.8 million for the quarter [7][9] - Noninterest income decreased to $6.6 million, a decline of $3.8 million or 36.5% compared to the same period last year [12][29] Credit Quality - Provision for credit losses decreased to $1.0 million from $1.7 million a year ago, indicating improved credit quality [11] - Non-performing assets decreased by $8.0 million or 25.7% from the previous quarter, with a non-performing assets to assets ratio of 0.55% [11] Capital and Equity - Total shareholders' equity increased to $404.1 million, up $6.7 million from the previous quarter [18] - The company did not repurchase any shares in the second quarter of 2025, with the current repurchase plan set to expire in April 2026 [19] Recent Developments - Civista announced a definitive merger agreement to acquire The Farmers Savings Bank on July 10, 2025 [20] - The company also conducted an underwritten public offering of its common stock, raising approximately $80.5 million [20]

Group 1 - Civista Bancshares, Inc. announced a quarterly dividend of 17 cents per common share, consistent with the prior quarter, to shareholders of record date August 5, 2025, payable August 19, 2025 [1] - The dividend payout amounts to approximately $3.3 million, resulting in an annualized yield of 2.89% based on the closing stock price of $23.20 on June 30, 2025 [2] - Civista Bancshares, Inc. is a $4.1 billion financial holding company headquartered in Sandusky, Ohio, with its primary subsidiary, Civista Bank, providing full-service banking and other financial services [3]

Company Overview - Civista Bancshares (CIVB) is anticipated to report a year-over-year increase in earnings due to higher revenues for the quarter ended June 2025, with a consensus EPS estimate of $0.69, reflecting a +53.3% change [1][3] - Revenues are expected to reach $42.41 million, marking a 10.8% increase from the previous year [3] Earnings Expectations - The upcoming earnings report is scheduled for July 24, and the stock may rise if the actual results exceed expectations, while a miss could lead to a decline [2] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4] Earnings Surprise Prediction - The Most Accurate Estimate for Civista Bancshares is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -4.35%, suggesting a bearish outlook from analysts [12] - The company currently holds a Zacks Rank of 5, which complicates the prediction of an earnings beat [12] Historical Performance - In the last reported quarter, Civista Bancshares had an earnings surprise of +32.00%, reporting $0.66 per share against an expectation of $0.50 [13] - Over the past four quarters, the company has consistently beaten consensus EPS estimates [14] Industry Comparison - Eagle Bancorp Montana, Inc. (EBMT), another player in the Zacks Banks - Midwest industry, is expected to report an EPS of $0.41 for the same quarter, reflecting a year-over-year change of +86.4% [18] - EBMT's revenues are projected to be $21.8 million, up 9.6% from the previous year, with an Earnings ESP of +2.44% and a Zacks Rank of 2, indicating a higher likelihood of beating the consensus EPS estimate [19][20]

Company Overview - Civista Bancshares, Inc. is a financial services holding company with total assets of $4.1 billion, headquartered in Sandusky, Ohio [5] - The primary subsidiary, Civista Bank, offers full-service banking, commercial lending, mortgage, wealth management, and commercial equipment leasing services, operating 42 locations across Ohio, Southeastern Indiana, and Northern Kentucky [5] Recent Offering - Civista Bancshares announced the completion of a public offering where underwriters exercised their overallotment option, resulting in the sale of an additional 494,118 common shares at a price of $21.25 per share [1] - The expected proceeds from this exercise, after deducting the underwriting discount but before other expenses, are approximately $9.9 million [1] Underwriters and Management - Piper Sandler & Co. acted as the sole book-running manager for the offering, with several firms serving as co-managers, including D.A. Davidson & Co., Hovde Group, LLC, Janney Montgomery Scott LLC, Keefe, Bruyette & Woods, and Stephens Inc. [2]

Core Viewpoint - Civista Bancshares, Inc. has announced a public offering of 3,294,120 common shares priced at $21.25 per share, aiming for an aggregate amount of $70.0 million, with an option for underwriters to purchase an additional 494,118 shares [1][2]. Group 1: Offering Details - The gross proceeds from the offering are expected to be approximately $70.0 million before discounts and expenses, potentially increasing to $80.5 million if the underwriters fully exercise their option [2]. - The offering is anticipated to close on July 14, 2025, subject to customary closing conditions [2]. Group 2: Use of Proceeds - The net proceeds from the offering will be utilized for general corporate purposes, which may include supporting organic growth opportunities and future strategic transactions [2]. Group 3: Management and Registration - Piper Sandler & Co. is the sole book-running manager for the offering, with several firms serving as co-managers [3]. - Civista has filed a shelf registration statement with the SEC, including a preliminary prospectus supplement for the offering [4]. Group 4: Company Overview - Civista Bancshares, Inc. is a financial services holding company with assets of $4.1 billion, headquartered in Sandusky, Ohio, and operates 42 locations across Ohio, Southeastern Indiana, and Northern Kentucky [6].

Merger Announcement - Civista Bancshares, Inc. will acquire The Farmers Savings Bank, with a combined total asset of approximately $4.4 billion, total net loans of about $3.2 billion, and total deposits of around $3.5 billion as of March 31, 2025 [1][3] - The acquisition will add two branches in Medina and Lorain Counties, along with approximately $183 million in low-cost core deposits [3] Financial Details - Civista will pay $34.925 million in cash and issue 1,434,491 common shares for all outstanding shares of Farmers, resulting in an aggregate deal value of approximately $70.4 million based on Civista's closing share price of $24.72 on July 9, 2025 [5] - The acquisition is expected to be approximately 10% accretive to Civista's diluted earnings per share once cost savings are fully realized [7] Strategic Rationale - The merger is aimed at enhancing Civista's commercial lending platform and deploying Farmers' excess liquidity, which has a loan-to-deposit ratio of 46%, to drive growth [3][4] - Both companies express a commitment to community banking and believe the merger will provide greater value to shareholders and enhanced resources to customers [4][5] Regulatory and Approval Process - The transaction is expected to close in the fourth quarter of 2025, pending approval from Farmers' shareholders and regulatory authorities [5][6] - Key shareholders of Farmers have agreed to vote in favor of the merger [6] Investor Communication - Civista will host an investor conference call on July 11, 2025, to discuss the merger transaction [8]

Company Overview - Civista Bancshares (CIVB) is based in Sandusky and operates in the Finance sector, with a year-to-date share price change of 12.26% [3] - The company currently pays a dividend of $0.17 per share, resulting in a dividend yield of 2.88%, which is lower than the Banks - Midwest industry's yield of 3.12% and higher than the S&P 500's yield of 1.54% [3] Dividend Performance - Civista Bancshares has an annualized dividend of $0.68, reflecting a 6.3% increase from the previous year [4] - Over the last five years, the company has increased its dividend five times, achieving an average annual increase of 9.33% [4] - The current payout ratio is 30%, indicating that the company distributes 30% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Civista Bancshares' earnings in 2025 is projected at $2.84 per share, representing a significant increase of 41.29% compared to the previous year [5] Investment Considerations - Dividends are favored by investors for various reasons, including improving stock investing profits and providing tax advantages [6] - It is noted that high-yielding stocks may face challenges during periods of rising interest rates, but Civista Bancshares is considered a compelling investment opportunity due to its strong dividend profile [7] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [7]

Group 1 - Civista Bancshares, Inc. will release its second quarter 2025 financial results on July 24, 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, with analysts invited to participate in the Q&A session [1][2] - Civista Bancshares, Inc. is a $4.1 billion financial holding company based in Sandusky, Ohio, with its primary subsidiary, Civista Bank, providing full-service banking and other financial services [3] Group 2 - Civista Bank operates 42 locations across Ohio, Southeastern Indiana, and Northern Kentucky, and offers commercial equipment leasing services nationwide [3] - The company's common shares are traded on the NASDAQ Capital Market under the symbol "CIVB" [3]

[PART I. Financial Information](index=4&type=section&id=PART%20I.%20Financial%20Information) This section presents the unaudited consolidated financial statements and management's discussion and analysis for Q1 2025 [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q1 2025, detailing balance sheets, income, and cash flows | Financial Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $4,146,717,000 | $4,098,469,000 | | Total Liabilities | $3,749,283,000 | $3,709,967,000 | | Total Shareholders' Equity | $397,434,000 | $388,502,000 | | Income Statement (Q1) | 2025 | 2024 | | :--- | :--- | :--- | | Net Interest Income | $32,773,000 | $28,372,000 | | Net Income | $10,168,000 | $6,360,000 | | Diluted EPS | $0.66 | $0.41 | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheet shows total assets increased to **$4.15 billion** as of March 31, 2025, from **$4.10 billion** at December 31, 2024, driven by an increase in net loans | Balance Sheet Items (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and due from financial institutions | $90,456 | $63,155 | | Loans, net | $3,063,752 | $3,041,561 | | Total assets | $4,146,717 | $4,098,469 | | **Liabilities & Equity** | | | | Total deposits | $3,238,888 | $3,211,870 | | Short-term FHLB advances | $360,000 | $339,000 | | Total liabilities | $3,749,283 | $3,709,967 | | Total shareholders' equity | $397,434 | $388,502 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For the first quarter of 2025, net income significantly increased to **$10.2 million** from **$6.4 million** in the same period of 2024, primarily driven by a **15.5%** increase in net interest income | Key Metrics (Q1, in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net Interest Income | $32,773 | $28,372 | | Provision for credit losses | $1,567 | $1,992 | | Total Noninterest Income | $7,860 | $8,256 | | Total Noninterest Expense | $27,126 | $27,441 | | Net Income | $10,168 | $6,360 | | Earnings per share, diluted | $0.66 | $0.41 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for Q1 2025 was **$11.6 million**, a substantial improvement from **$0.1 million** in Q1 2024, driven by higher net income and a positive shift in other comprehensive income | Comprehensive Income (Q1, in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net income | $10,168 | $6,360 | | Other comprehensive income (loss) | $1,408 | $(6,227) | | Comprehensive income | $11,576 | $133 | [Consolidated Statement of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity increased from **$388.5 million** at the end of 2024 to **$397.4 million** at March 31, 2025, primarily due to net income and other comprehensive income - Key changes in shareholders' equity for Q1 2025 include: - Net Income: **+$10.17 million** - Other comprehensive income: **+$1.41 million** - Common stock dividends: **-$2.63 million** - Purchase of common stock: **-$0.17 million**[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first three months of 2025, cash and cash equivalents increased by **$27.3 million**, driven by **$44.9 million** in net cash from financing activities | Cash Flow Activities (Q1, in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,612 | $752 | | Net cash used for investing activities | $(21,231) | $(34,172) | | Net cash provided by financing activities | $44,920 | $23,324 | | **Increase (decrease) in cash** | **$27,301** | **$(10,096)** | [Notes to Interim Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Interim%20Consolidated%20Financial%20Statements) The notes provide detailed information on accounting policies and financial statement line items, confirming the company operates as a single reportable segment in banking - The company operates primarily in one reportable segment: banking, with main products being residential mortgage, commercial, and installment loans, and deposits primarily consisting of checking, savings, and term certificate accounts[18](index=18&type=chunk)[19](index=19&type=chunk) - The company adopted ASU 2023-07 for segment reporting in 2024 with minimal impact, as it operates as a single reportable segment, and other recently issued accounting standards are not expected to have a material impact[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides an analysis of the company's financial condition and operational results, highlighting total asset growth to **$4.15 billion** and increased net income to **$10.2 million** for Q1 2025 - Total assets increased by **$48.2 million (1.2%)** to **$4.15 billion** at March 31, 2025, compared to year-end 2024, mainly due to increases in net loans and cash[140](index=140&type=chunk) - Net income for Q1 2025 was **$10.2 million ($0.66 per share)**, a significant increase from **$6.4 million ($0.41 per share)** in Q1 2024[159](index=159&type=chunk) - Net interest income increased by **$4.4 million** year-over-year, and the fully tax-equivalent net interest margin expanded to **3.51%** for Q1 2025 from **3.22%** in Q1 2024[160](index=160&type=chunk) [Financial Condition](index=48&type=section&id=Financial%20Condition) As of March 31, 2025, total assets reached **$4.15 billion**, a **1.2%** increase from year-end 2024, with net loans growing by **$22.2 million** | Loan Portfolio Change (Q1 2025 vs Q4 2024, in thousands) | $ Change | % Change | | :--- | :--- | :--- | | Commercial Real Estate—Non Owner Occupied | $20,034 | 1.6% | | Residential Real Estate | $9,480 | 1.2% | | Real Estate Construction | $(8,403) | -2.7% | | **Total loans** | **$22,806** | **0.7%** | | Deposit Change (Q1 2025 vs Q4 2024, in thousands) | $ Change | % Change | | :--- | :--- | :--- | | Noninterest-bearing demand | $(46,411) | -6.7% | | Interest-bearing demand | $48,018 | 11.4% | | Savings and money market | $19,506 | 1.7% | | Time deposits | $45,956 | 9.8% | | **Total Deposits** | **$27,018** | **0.8%** | - The allowance for credit losses to total loans was **1.30%** at March 31, 2025, slightly up from **1.29%** at December 31, 2024[148](index=148&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) For Q1 2025, net income increased by **$3.8 million** year-over-year to **$10.2 million**, driven by a **$4.4 million** increase in net interest income - Net interest income increased by **$4.4 million** in Q1 2025 compared to Q1 2024, driven by a **$3.6 billion** increase in interest income that outpaced a **$0.8 million** decrease in interest expense[160](index=160&type=chunk)[169](index=169&type=chunk) - Noninterest income decreased by **4.8%** YoY, mainly due to lower fee revenue from the CLF division and reduced gains on sale of loans[170](index=170&type=chunk) - Noninterest expense decreased by **1.1%** YoY, primarily due to a **$1.4 million (9.1%)** reduction in compensation expense, partially offset by higher professional fees and FDIC assessment costs[171](index=171&type=chunk) [Capital Resources](index=57&type=section&id=Capital%20Resources) Shareholders' equity grew to **$397.4 million** at March 31, 2025, representing **9.6%** of total assets, with all regulatory capital ratios remaining well above 'well-capitalized' thresholds | Capital Ratios | March 31, 2025 | Well-Capitalized Minimum | | :--- | :--- | :--- | | Total Risk Based Capital | 14.5% | 10.0% | | Tier I Risk Based Capital | 11.0% | 8.0% | | CET1 Risk Based Capital | 10.0% | 6.5% | | Leverage Ratio | 8.7% | 5.0% | [Liquidity](index=59&type=section&id=Liquidity) The company maintains a conservative liquidity position with significant additional borrowing capacity, including **$50 million** in federal funds lines and approximately **$384 million** remaining with the FHLB - The company has access to multiple liquidity sources, including federal funds borrowing lines of **$50 million** and remaining FHLB borrowing capacity of approximately **$384.23 million** as of March 31, 2025[177](index=177&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's primary market risk, interest-rate risk, and its management through asset/liability techniques, with sensitivity analysis indicating a **3%** impact on net portfolio value for a **100 basis point** rate change - The company's primary market risk exposure is interest-rate risk, which it manages through active board and senior management oversight and a comprehensive risk-management process[179](index=179&type=chunk)[182](index=182&type=chunk) | Change in Rates (bps) | Impact on Net Portfolio Value (%) - Mar 31, 2025 | | :--- | :--- | | +400 | 8% | | +200 | 5% | | +100 | 3% | | Base | 0% | | -100 | (3)% | | -200 | (7)% | [Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[190](index=190&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[191](index=191&type=chunk) [PART II. Other Information](index=63&type=section&id=PART%20II.%20Other%20Information) This section provides additional disclosures on legal proceedings, risk factors, equity sales, and other corporate information [Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings in the ordinary course of business, which management believes will not have a material adverse effect on its financial condition or operations - Based on current knowledge and consultation with legal counsel, management does not expect pending legal proceedings to have a material adverse effect on the company[193](index=193&type=chunk) [Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) There were no material changes to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K, except for an added disclosure concerning risks from U.S. government policy changes - A new risk factor was added regarding the potential for significant changes in U.S. federal government policies and economic priorities to cause disruptions that could adversely impact the company's business, results, and financial condition[194](index=194&type=chunk)[195](index=195&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the company repurchased **8,182** common shares at an average price of **$20.39** per share, and a new **$13.5 million** repurchase program was announced | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 1 - Jan 31, 2025 | 8,182 | $20.39 | | Feb 1 - Feb 28, 2025 | — | $— | | Mar 1 - Mar 31, 2025 | — | $— | | **Total** | **8,182** | **$20.39** | - A new common share repurchase program was announced on April 15, 2025, authorizing up to **$13.5 million** in repurchases through April 15, 2026[200](index=200&type=chunk) [Defaults Upon Senior Securities](index=64&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None [Mine Safety Disclosures](index=64&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Other Information](index=64&type=section&id=Item%205.%20Other%20Information) During the quarter ended March 31, 2025, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the first quarter of 2025[201](index=201&type=chunk) [Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including merger agreements, articles of incorporation, and CEO/CFO certifications - The report includes CEO and CFO certifications as required by Sarbanes-Oxley Act sections 302 and 906, filed as exhibits 31.1, 31.2, 32.1, and 32.2[204](index=204&type=chunk)