UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Exact name of registrant as specified in its charter) Ohio 34-1558688 State or other jurisdiction of (IRS Employer incorporation or organization Identification No.) 100 East Water Street, Sandusky, Ohio 44870 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (419) 625 - 4121 Securities registered pursuant to Section 12(b) of the Act: Common shares, no par value CIVB The NASDAQ Stock ...

Civista Bancshares, Inc. (NASDAQ:CIVB) Q4 2023 Results Conference Call February 8, 2024 1:00 PM ET Company Participants Dennis Shaffer - President and Chief Executive Officer Rich Dutton - Senior Vice President and Chief Operating Officer Chuck Parcher - Senior Vice President and Chief Lending Officer Mike Mulford - Chief Credit Officer Conference Call Participants Nick Cucharale - Hovde Group Terry McEvoy - Stephens Manuel Navas - D.A. Davidson Daniel Cardenas - Janney Montgomery Scott Operator Before we b ...

Civista Bancshares (CIVB) came out with quarterly earnings of $0.62 per share, beating the Zacks Consensus Estimate of $0.56 per share. This compares to earnings of $0.77 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 10.71%. A quarter ago, it was expected that this bank holding company would post earnings of $0.60 per share when it actually produced earnings of $0.66, delivering a surprise of 10%.Over the last four quarters, ...

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being un ...

Ohio 34-1558688 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 100 East Water Street, Sandusky, Ohio 44870 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (419) 625-4121 N/A (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Indicate by check mark whether the registrant (1) has filed all reports required to be ...

Civista Bancshares, Inc. (NASDAQ:CIVB) Q3 2023 Earnings Conference Call October 27, 2023 1:00 PM ET Company Participants Dennis Shaffer - President and Chief Executive Officer Rich Dutton - Senior Vice President and Chief Operating Officer Chuck Parcher - Senior Vice President and Chief Lending Officer Conference Call Participants Nick Cucharale - Hovde Terry McEvoy - Stephens Tim Switzer - KBW Manuel Navas - D.A. Davidson Daniel Cardenas - Janney Operator [Starts Abruptly] Before we begin, I would like to ...

PART I. Financial Information [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Civista Bancshares' unaudited Consolidated Financial Statements for Q2 and H1 2023, including balance sheets, income statements, and cash flows Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | | :--- | :--- | :--- | | **Total Assets** | **3,615,980** | **3,537,830** | | Cash and due from financial institutions | 41,354 | 43,361 | | Securities available-for-sale | 617,298 | 615,402 | | Loans, net of allowance | 2,601,131 | 2,518,155 | | Goodwill | 125,078 | 125,695 | | **Total Liabilities** | **3,266,104** | **3,202,995** | | Total Deposits | 2,942,774 | 2,619,984 | | Short-term FHLB advances | 142,000 | 393,700 | | **Total Shareholders' Equity** | **349,876** | **334,835** | Consolidated Statements of Operations Highlights (Unaudited) | Metric ($ in thousands, except per share data) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | 31,339 | 24,268 | 63,940 | 47,200 | | Provision for Credit Losses | 861 | 400 | 1,481 | 700 | | Noninterest Income | 9,149 | 5,635 | 20,217 | 13,278 | | Noninterest Expense | 27,913 | 20,379 | 55,546 | 40,637 | | **Net Income** | **10,034** | **7,701** | **22,922** | **16,167** | | **Earnings per common share, basic** | **$0.64** | **$0.53** | **$1.45** | **$1.10** | | **Earnings per common share, diluted** | **$0.64** | **$0.53** | **$1.45** | **$1.10** | [Notes to Interim Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Interim%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes detail accounting policies, the CECL standard's impact, and breakdowns of securities, loans, and credit loss allowances [Note 1: Consolidated Financial Statements](index=10&type=section&id=(1)%20Consolidated%20Financial%20Statements) This note describes the Company's banking operations and consolidation principles, including its wholly-owned subsidiaries - The Company operates primarily in one reportable segment: banking[4](index=4&type=chunk) - The consolidated financial statements include CBI and its wholly-owned subsidiaries: Civista Bank, Vision Financial Group, Inc. (VFG), First Citizens Insurance Agency, Inc. (FCIA), Water Street Properties, Inc., CIVB Risk Management, Inc. (CRMI), and First Citizens Investments, Inc. (FCI)[81](index=81&type=chunk) [Note 2: Significant Accounting Policies](index=10&type=section&id=(2)%20Significant%20Accounting%20Policies) This note details significant accounting policies, focusing on the CECL adoption's impact on credit loss estimation and retained earnings - On January 1, 2023, the Company adopted the new credit loss methodology, **Current Expected Credit Losses (CECL)**, which requires earlier recognition of credit losses based on lifetime expected loss estimates[90](index=90&type=chunk) Day 1 Impact of CECL Adoption (January 1, 2023) | Impact Area | Amount ($ in thousands) | | :--- | :--- | | Increase to Allowance for Credit Losses (Loans) | 4,296 | | Increase to Reserve for Unfunded Commitments | 3,386 | | Reclassification of PCD Discount to ACL | 1,668 | | **Total Pre-tax Impact on Retained Earnings** | **(7,682)** | | Tax Effect | 1,613 | | **Net Reduction to Retained Earnings** | **(6,069)** | - The CECL methodology utilizes a discounted cash flow (DCF) model for pooled loans, incorporating a one-year reasonable and supportable forecast period with a one-year reversion to the long-term historical average[101](index=101&type=chunk) [Note 3: Securities](index=15&type=section&id=(3)%20Securities) This note details the securities portfolio, primarily AFS debt securities, showing unrealized losses due to higher interest rates Available-for-Sale Debt Securities Composition (June 30, 2023) | Security Type | Amortized Cost ($ in thousands) | Gross Unrealized Gains ($ in thousands) | Gross Unrealized Losses ($ in thousands) | Fair Value ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | | U.S. Treasury & government agencies | 66,357 | 18 | (5,231) | 61,144 | | Obligations of states & political subdivisions | 358,564 | 922 | (29,331) | 330,155 | | Mortgage-backed securities (GSEs) | 256,457 | 11 | (30,469) | 225,999 | | **Total Debt Securities** | **681,378** | **951** | **(65,031)** | **617,298** | - At June 30, 2023, there were 478 securities with unrealized losses, primarily due to higher current market interest rates. Management has the intent and ability to hold these securities and expects the fair value to recover as they approach maturity[17](index=17&type=chunk) - The carrying value of securities pledged to secure public deposits and other liabilities was approximately **$235.1 million** as of June 30, 2023[114](index=114&type=chunk) [Note 4: Loans](index=17&type=section&id=(4)%20Loans) This note details the loan portfolio composition, with total loans at **$2.64 billion** and net loans at **$2.60 billion** as of June 30, 2023 Loan Portfolio Composition ($ in thousands) | Loan Category | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Commercial & Agriculture | 292,091 | 278,595 | | Commercial Real Estate - Owner Occupied | 367,797 | 371,147 | | Commercial Real Estate - Non-Owner Occupied | 1,063,263 | 1,018,736 | | Residential Real Estate | 589,066 | 552,781 | | Real Estate Construction | 234,261 | 243,127 | | Farm Real Estate | 24,123 | 24,708 | | Lease Financing Receivable | 46,553 | 36,797 | | Consumer and Other | 19,126 | 20,775 | | **Total Loans** | **2,636,280** | **2,546,666** | | Allowance for credit losses | (35,149) | (28,511) | | **Net Loans** | **2,601,131** | **2,518,155** | [Note 5: Allowance for Credit Losses](index=18&type=section&id=(5)%20Allowance%20for%20Credit%20Losses) This note analyzes the Allowance for Credit Losses (ACL), detailing changes, CECL adoption impact, and credit quality indicators - Upon adopting CECL on January 1, 2023, the Company recorded a **$5.193 million** increase to the ACL as a cumulative-effect adjustment[38](index=38&type=chunk) Change in Allowance for Credit Losses (ACL) | Period | Provision for Credit Losses ($ in thousands) | Net Charge-offs / (Recoveries) ($ in thousands) | Ending ACL ($ in thousands) | | :--- | :--- | :--- | :--- | | **Three Months Ended June 30, 2023** | 861 | (92) | 35,149 | | **Three Months Ended June 30, 2022** | 400 | (2) | 27,435 | | **Six Months Ended June 30, 2023** | 1,481 | 36 | 35,149 | | **Six Months Ended June 30, 2022** | 700 | (94) | 27,435 | - Total nonaccrual loans were **$8.0 million** as of June 30, 2023, compared to **$6.5 million** as of December 31, 2022[154](index=154&type=chunk)[128](index=128&type=chunk) [Note 6: Accumulated Other Comprehensive Loss](index=33&type=section&id=(6)%20Accumulated%20Other%20Comprehensive%20Loss) This note details changes in Accumulated Other Comprehensive Loss (AOCL), which improved to a **$55.8 million** loss due to increased fair value of securities Changes in Accumulated Other Comprehensive Loss (Net of Tax, $ in thousands) | Period | Beginning Balance | Net Current-Period OCI / (OCL) | Ending Balance | | :--- | :--- | :--- | :--- | | **Three Months Ended June 30, 2023** | (49,910) | (5,860) | (55,770) | | **Six Months Ended June 30, 2023** | (58,045) | 2,275 | (55,770) | [Note 7: Goodwill and Intangible Assets](index=35&type=section&id=(7)%20Goodwill%20and%20Intangible%20Assets) This note details goodwill at **$125.1 million** and other intangible assets at **$10.3 million** as of June 30, 2023 - The carrying amount of goodwill decreased by **$617 thousand** since December 31, 2022, to a balance of **$125.1 million** at June 30, 2023, due to adjustments to estimated fair values of assets acquired[172](index=172&type=chunk) Intangible Assets Summary (June 30, 2023) | Asset Type | Net Carrying Amount ($ in thousands) | | :--- | :--- | | Core deposit intangibles | 7,272 | | Mortgage servicing rights (MSRs) | 3,056 | | **Total** | **10,328** | [Note 8: Short-Term and Other Borrowings](index=37&type=section&id=(8)%20Short-Term%20and%20Other%20Borrowings) This note details short-term borrowings, including **$142.0 million** in FHLB advances and **$6.8 million** in repurchase agreements Short-Term Borrowings Outstanding ($ in thousands) | Borrowing Type | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Short-term FHLB Borrowings | 142,000 | 393,700 | | Securities sold under agreements to repurchase | 6,788 | 25,143 | [Note 9: Earnings per Common Share](index=38&type=section&id=(9)%20Earnings%20per%20Common%20Share) This note explains the calculation of basic and diluted earnings per common share (EPS) using the two-class method Earnings Per Share (EPS) | Period | Basic EPS | Diluted EPS | | :--- | :--- | :--- | | **Three Months Ended June 30, 2023** | $0.64 | $0.64 | | **Six Months Ended June 30, 2023** | $1.45 | $1.45 | [Note 10: Commitments, Contingencies and Off-Balance Sheet Risk](index=38&type=section&id=(10)%20Commitments,%20Contingencies%20and%20Off-Balance%20Sheet%20Risk) This note discloses off-balance sheet commitments to extend credit, totaling **$777.3 million** as of June 30, 2023 Commitments to Extend Credit (June 30, 2023) | Commitment Type | Amount ($ in thousands) | | :--- | :--- | | Fixed Rate | 66,569 | | Variable Rate | 710,729 | | **Total** | **777,298** | [Note 11: Pension Information](index=39&type=section&id=(11)%20Pension%20Information) This note details the frozen defined benefit pension plan, with a net periodic pension cost credit of **$14 thousand** for H1 2023 - The Company's defined benefit pension plan is frozen, with no new participants since 2006 and no benefit accruals since 2014[193](index=193&type=chunk) - Net periodic pension cost was a credit of **$14 thousand** for the first six months of 2023, compared to a cost of **$58 thousand** for the same period in 2022. No contributions are expected in 2023[194](index=194&type=chunk) [Note 12: Equity Incentive Plan](index=39&type=section&id=(12)%20Equity%20Incentive%20Plan) This note describes the 2014 Incentive Plan, with **47,536** restricted shares granted and **$1.5 million** unrecognized compensation cost - During the six months ended June 30, 2023, the Company granted **47,536** restricted shares and had **88,422** nonvested shares outstanding at period end[198](index=198&type=chunk) - Total unrecognized compensation cost for unvested awards was **$1.485 million** at June 30, 2023, expected to be recognized over a weighted average period of 2.87 years[201](index=201&type=chunk) [Note 13: Fair Value Measurement](index=40&type=section&id=(13)%20Fair%20Value%20Measurement) This note explains the fair value hierarchy and provides measurements for assets and liabilities, primarily using Level 2 inputs for recurring items Assets Measured at Fair Value on a Recurring Basis (June 30, 2023) | Asset Type | Fair Value ($ in thousands) | Input Level | | :--- | :--- | :--- | | Securities available-for-sale | 617,298 | Level 2 | | Equity securities | 1,952 | Level 2 | | Swap asset | 16,432 | Level 2 | - Mortgage servicing rights, valued at **$3.1 million**, are classified as Level 3 due to the use of significant unobservable inputs like prepayment rates and discount rates in a discounted cash flow model[207](index=207&type=chunk)[211](index=211&type=chunk) [Note 14: Derivatives](index=43&type=section&id=(14)%20Derivatives) This note details the Company's use of interest rate swaps as an intermediary, with a notional amount of **$209.2 million** as of June 30, 2023 - The Company engages in interest rate swaps as an intermediary for customers, with offsetting positions that result in minimal impact on net income. None of the derivatives are designated as hedging instruments[221](index=221&type=chunk) Derivative Positions (June 30, 2023) | Position | Notional Amount ($ in thousands) | Fair Value ($ in thousands) | | :--- | :--- | :--- | | Swap Assets | 216,130 | 16,432 | | Swap Liabilities | 202,288 | (16,432) | [Note 15: Qualified Affordable Housing Project Investments](index=44&type=section&id=(15)%20Qualified%20Affordable%20Housing%20Project%20Investments) This note details investments in qualified affordable housing projects, with a balance of **$13.7 million** as of June 30, 2023 - The balance of investments in qualified affordable housing projects was **$13.7 million** at June 30, 2023, with related unfunded commitments of **$4.8 million**[227](index=227&type=chunk) [Note 16: Revenue Recognition](index=45&type=section&id=(16)%20Revenue%20Recognition) This note details revenue recognition policies, disaggregating noninterest income into in-scope and out-of-scope categories under ASC 606 Noninterest Income Breakdown (Six Months Ended June 30, 2023) | Revenue Category | Amount ($ in thousands) | | :--- | :--- | | **In-scope of Topic 606** | **14,448** | | Service charges | 3,604 | | ATM/Interchange fees | 2,803 | | Wealth management fees | 2,373 | | Tax refund processing fees | 2,375 | | Other | 3,293 | | **Out-of-scope of Topic 606** | **5,769** | | **Total Noninterest Income** | **20,217** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=47&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and results for Q2 and H1 2023, focusing on balance sheet changes, income drivers, and capital [Financial Condition](index=48&type=section&id=Financial%20Condition) Total assets grew to **$3.62 billion** (2.2%) driven by loan growth, with deposits increasing by **$322.8 million** and ACL rising to **1.33%** - Total assets increased by **$78.2 million** (2.2%) to **$3.62 billion** at June 30, 2023, from December 31, 2022, primarily driven by loan growth[247](index=247&type=chunk) Loan Portfolio Change (Dec 31, 2022 to June 30, 2023) | Loan Category | Change ($ in thousands) | % Change | | :--- | :--- | :--- | | Commercial Real Estate—Non-Owner Occupied | 44,527 | 4.4% | | Residential Real Estate | 36,285 | 6.6% | | Commercial & Agriculture | 13,496 | 4.8% | | Lease Financing Receivables | 9,756 | 26.5% | | **Total Loans** | **89,614** | **3.5%** | Deposit Composition Change (Dec 31, 2022 to June 30, 2023) | Deposit Type | Change ($ in thousands) | % Change | | :--- | :--- | :--- | | Time deposits | 263,011 | 82.4% | | Noninterest-bearing demand | 106,128 | 11.8% | | Interest-bearing demand | (24,153) | -4.6% | | Savings and money market | (22,196) | -2.5% | | **Total Deposits** | **322,790** | **12.3%** | [Results of Operations](index=52&type=section&id=Results%20of%20Operations) Net income increased for Q2 and H1 2023, driven by higher net interest income and noninterest income, partially offset by increased expenses Q2 2023 vs Q2 2022 Performance | Metric | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | Net Income | $10.0M | $7.7M | +30.3% | | Diluted EPS | $0.64 | $0.53 | +20.8% | | Net Interest Margin (FTE) | 3.86% | 3.43% | +43 bps | H1 2023 vs H1 2022 Performance | Metric | H1 2023 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | Net Income | $22.9M | $16.2M | +41.8% | | Diluted EPS | $1.45 | $1.10 | +31.8% | | Net Interest Margin (FTE) | 3.99% | 3.40% | +59 bps | - Noninterest income for Q2 2023 increased by **62.4%** year-over-year, primarily due to **$2.2 million** in new lease revenue and residual income from the VFG acquisition[287](index=287&type=chunk) - Noninterest expense for Q2 2023 rose **37.0%** year-over-year, driven by higher compensation, occupancy, and equipment expenses related to the acquisitions of Comunibanc and VFG[289](index=289&type=chunk) [Capital Resources](index=61&type=section&id=Capital%20Resources) The Company maintains a strong capital position, with shareholders' equity at **$349.9 million** and all capital ratios exceeding 'well-capitalized' thresholds Regulatory Capital Ratios (June 30, 2023) | Ratio | Company Ratio | 'Well Capitalized' Minimum | | :--- | :--- | :--- | | Total Risk Based Capital | 14.8% | 10.0% | | Tier I Risk Based Capital | 10.9% | 8.0% | | CET1 Risk Based Capital | 9.9% | 6.5% | | Leverage Ratio | 8.9% | 5.0% | [Liquidity](index=61&type=section&id=Liquidity) The Company maintains a conservative liquidity position, with **$700.8 million** FHLB borrowing capacity and **$44.4 million** net cash from financing activities - As of June 30, 2023, Civista had a remaining borrowing capacity of approximately **$700.8 million** with the FHLB[319](index=319&type=chunk) - For the six months ended June 30, 2023, net cash provided by operating activities was **$39.1 million**, net cash used in investing activities was **$85.5 million** (mainly for net loan growth), and net cash provided by financing activities was **$44.4 million** (mainly from deposit growth)[318](index=318&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses interest-rate risk management through asset/liability processes and NPV sensitivity to hypothetical rate changes Net Portfolio Value Sensitivity Analysis (June 30, 2023) | Change in Interest Rates | Dollar Change ($ in thousands) | Percent Change | | :--- | :--- | :--- | | +200 bp | 25,067 | 4% | | +100 bp | 15,840 | 3% | | **Base** | **—** | **—** | | -100 bp | (14,201) | (2)% | | -200 bp | (41,955) | (7)% | [Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal controls - Management concluded that disclosure controls and procedures were effective as of June 30, 2023[335](index=335&type=chunk) - No material changes were made to the Company's internal control over financial reporting during the most recent fiscal quarter[336](index=336&type=chunk) PART II. Other Information [Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) Management believes ongoing legal proceedings will not materially adversely affect the Company's financial position or operations - Management does not expect pending legal proceedings to have a material adverse effect on the Company's financial condition or results[339](index=339&type=chunk) [Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) No new risk factors are disclosed beyond those in the 2022 Annual Report on Form 10-K and Q1 2023 Form 10-Q - The report refers to the risk factors disclosed in the 2022 Annual Report on Form 10-K and the Q1 2022 Form 10-Q, with no new additions in this filing[340](index=340&type=chunk)[341](index=341&type=chunk) [Other Items (Items 2, 3, 4, 5)](index=65&type=section&id=Other%20Items) This section confirms no unregistered equity sales, no senior security defaults, and no Rule 10b5-1 trading plan changes - No unregistered sales of equity securities or defaults upon senior securities occurred[342](index=342&type=chunk)[345](index=345&type=chunk) - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the quarter ended June 30, 2023[342](index=342&type=chunk) [Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/PAO certifications and iXBRL financial data

Civista Bancshares, Inc. (NASDAQ:CIVB) Q2 2023 Earnings Conference Call July 28, 2023 7:30 PM ET Company Participants Dennis Shaffer - President and Chief Executive Officer Charles Parcher - Senior Vice President and Chief Lending Officer Richard Dutton - Senior Vice President Chief Operating Officer Paul Stark - Senior Vice President Conference Call Participants Terry McEvoy - Stephens Nick Cucharale - Hovde Tim Switzer - KBW Manuel Navas - D.A. Davidson Daniel Cardenas - Janney Operator Good afternoon. Be ...

PART I. Financial Information [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for Civista Bancshares, Inc. as of March 31, 2023, detailing financial position, operations, and CECL accounting standards Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | | :--- | :--- | :--- | | **Total Assets** | **3,584,558** | **3,537,830** | | Loans, net of allowance | 2,545,870 | 2,518,155 | | Securities available-for-sale | 627,707 | 615,402 | | **Total Liabilities** | **3,236,861** | **3,202,995** | | Total Deposits | 2,843,516 | 2,619,984 | | **Total Shareholders' Equity** | **347,697** | **334,835** | Consolidated Statement of Operations Highlights (Unaudited, Three Months Ended) | Account | March 31, 2023 ($ in thousands) | March 31, 2022 ($ in thousands) | | :--- | :--- | :--- | | Net Interest Income | 32,601 | 22,932 | | Provision for Credit Losses | 620 | 300 | | Noninterest Income | 11,068 | 7,643 | | Noninterest Expense | 27,633 | 20,258 | | **Net Income** | **12,888** | **8,466** | | **Earnings per share, diluted** | **$0.82** | **$0.57** | [Note 1: Consolidated Financial Statements](index=9&type=section&id=(1)%20Consolidated%20Financial%20Statements) Civista Bancshares, Inc. is a financial holding company primarily operating Civista Bank, offering diverse financial services across Ohio, Indiana, and Kentucky - The company's primary business is banking through its subsidiary Civista Bank, with operations concentrated in Ohio, Indiana, and Kentucky[252](index=252&type=chunk) - In October 2022, the company acquired Vision Financial Group, Inc. (VFG), expanding into the equipment leasing and financing business[252](index=252&type=chunk) [Note 2: Significant Accounting Policies](index=9&type=section&id=(2)%20Significant%20Accounting%20Policies) The company adopted the CECL standard on January 1, 2023, significantly changing credit loss estimation and impacting retained earnings - The company adopted the CECL accounting standard on January 1, 2023, using a modified retrospective method, requiring estimation of lifetime expected credit losses for financial assets[255](index=255&type=chunk)[281](index=281&type=chunk) Day 1 Impact of CECL Adoption on January 1, 2023 ($ in thousands) | Component | Dec 31, 2022 Balance | Adoption Impact | Jan 1, 2023 Balance | | :--- | :--- | :--- | :--- | | **Allowance for Credit Losses (Loans)** | **$28,511** | **$5,964** (incl. PCD reclass) | **$34,475** | | Reserve for Unfunded Commitments | $0 | $3,386 | $3,386 | | **Total Reserve for Credit Losses** | **$28,511** | **$9,350** | **$37,861** | | **Retained Earnings Impact (After-tax)** | - | **($6,069)** | - | - The CECL model utilizes a Discounted Cash Flow (DCF) method based on historical data, current conditions, and a one-year reasonable and supportable forecast, reverting to a long-term average[260](index=260&type=chunk)[261](index=261&type=chunk) [Note 3: Securities](index=14&type=section&id=(3)%20Securities) The AFS securities portfolio totaled **$627.7 million** at March 31, 2023, with **$58.6 million** in unrealized losses due to rising interest rates Available-for-Sale Securities Portfolio ($ in thousands) | Security Type | Amortized Cost (Mar 31, 2023) | Fair Value (Mar 31, 2023) | Fair Value (Dec 31, 2022) | | :--- | :--- | :--- | :--- | | U.S. Treasury & government agencies | $66,781 | $62,513 | $61,029 | | Obligations of states & political subdivisions | $356,250 | $330,638 | $317,248 | | Mortgage-backed securities | $261,324 | $234,556 | $237,125 | | **Total Debt Securities** | **$684,355** | **$627,707** | **$615,402** | - At March 31, 2023, the AFS portfolio had **$58.6 million** in gross unrealized losses, primarily attributed to the impact of rising interest rates, which the company does not consider credit-related[291](index=291&type=chunk)[299](index=299&type=chunk) - Securities with a carrying value of approximately **$238.7 million** were pledged to secure public deposits and other liabilities as of March 31, 2023[296](index=296&type=chunk) [Note 4: Loans](index=16&type=section&id=(4)%20Loans) Total loans increased to **$2.58 billion** at March 31, 2023, primarily driven by commercial real estate loans, with an ACL of **1.33%** of total loans Loan Portfolio Composition ($ in thousands) | Loan Category | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Commercial & Agriculture | $271,160 | $278,595 | | Commercial Real Estate - Owner Occupied | $375,825 | $371,147 | | Commercial Real Estate - Non-Owner Occupied | $1,043,635 | $1,018,736 | | Residential Real Estate | $560,978 | $552,781 | | Real Estate Construction | $247,253 | $243,127 | | Lease Financing Receivable | $37,570 | $36,797 | | Other (Farm, Consumer) | $43,645 | $45,483 | | **Total Loans** | **$2,580,066** | **$2,546,666** | - Paycheck Protection Program (PPP) loan balances decreased to **$464 thousand** as of March 31, 2023, from **$566 thousand** at year-end 2022[301](index=301&type=chunk) [Note 5: Allowance for Credit Losses](index=17&type=section&id=(5)%20Allowance%20for%20Credit%20Losses) The ACL increased to **$34.2 million** at March 31, 2023, primarily due to CECL adoption and a **$620 thousand** provision, with net charge-offs of **$128 thousand** Changes in Allowance for Credit Losses (Q1 2023, $ in thousands) | Description | Amount | | :--- | :--- | | Beginning Balance (Dec 31, 2022) | $28,511 | | CECL Adoption Impact (Day 1) | $4,296 | | Adopting ASC 326 - PCD Loans | $897 | | Provision for Credit Losses | $620 | | Charge-offs | ($175) | | Recoveries | $47 | | **Ending Balance (Mar 31, 2023)** | **$34,196** | - The company defines five internal risk grades for loans: Pass, Special Mention, Substandard, Doubtful, and Loss[5](index=5&type=chunk) - Total nonaccrual loans were **$7.0 million** as of March 31, 2023, an increase from **$6.5 million** at December 31, 2022[22](index=22&type=chunk)[23](index=23&type=chunk) [Note 6: Accumulated Other Comprehensive Loss](index=30&type=section&id=(6)%20Accumulated%20Other%20Comprehensive%20Loss) AOCL improved to a loss of **$49.9 million** at March 31, 2023, driven by an **$8.1 million** positive change in AFS securities unrealized gains/losses Changes in Accumulated Other Comprehensive Loss (Q1 2023, $ in thousands) | Component | Beginning Balance (Dec 31, 2022) | Net Current-Period OCI | Ending Balance (Mar 31, 2023) | | :--- | :--- | :--- | :--- | | Unrealized Gains/Losses on AFS Securities | ($52,771) | $8,135 | ($44,636) | | Defined Benefit Pension Items | ($5,274) | $0 | ($5,274) | | **Total AOCL** | **($58,045)** | **$8,135** | **($49,910)** | [Note 7: Goodwill and Intangible Assets](index=31&type=section&id=(7)%20Goodwill%20and%20Intangible%20Assets) Goodwill decreased to **$125.1 million** due to fair value adjustments, while net amortized intangible assets were **$7.7 million** and MSRs increased to **$3.1 million** - Goodwill decreased by **$617 thousand** to **$125.1 million** during Q1 2023 due to adjustments to estimated fair values of assets acquired and liabilities assumed from a past acquisition[53](index=53&type=chunk) Intangible Assets ($ in thousands) | Asset Type | Net Carrying Amount (Mar 31, 2023) | Net Carrying Amount (Dec 31, 2022) | | :--- | :--- | :--- | | Core deposit intangibles | $7,671 | $8,070 | | **Total amortized intangible assets** | **$7,671** | **$8,070** | - Mortgage servicing rights (MSRs) increased to **$3.1 million** at the end of Q1 2023, up from **$2.7 million** at year-end 2022, primarily due to new additions[57](index=57&type=chunk) [Note 8: Short-Term and Other Borrowings](index=33&type=section&id=(8)%20Short-Term%20and%20Other%20Borrowings) Short-term borrowings decreased to **$212.0 million** at March 31, 2023, with an increased average interest rate of **4.86%**, and repurchase agreements also declined Short-Term Borrowings Overview ($ in thousands) | Metric | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Short-term Borrowings Outstanding | $212,000 | $393,700 | | Interest Rate on Balance | 4.86% | 4.24% | | Securities Sold Under Repurchase Agreements | $15,631 | $25,143 | [Note 9: Earnings per Common Share](index=34&type=section&id=(9)%20Earnings%20per%20Common%20Share) Basic and diluted EPS for Q1 2023 were **$0.82**, an increase from **$0.57** in Q1 2022, computed using the two-class method Earnings Per Share Calculation (Three Months Ended) | Item | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Net Income ($ in thousands) | $12,888 | $8,466 | | Net Income Available to Common Shareholders ($ in thousands) | $12,436 | $8,434 | | Weighted Average Shares Outstanding (Basic) | 15,179,210 | 14,853,287 | | **Basic EPS** | **$0.82** | **$0.57** | | **Diluted EPS** | **$0.82** | **$0.57** | [Note 10: Commitments, Contingencies and Off-Balance Sheet Risk](index=34&type=section&id=(10)%20Commitments,%20Contingencies%20and%20Off-Balance%20Sheet%20Risk) Off-balance sheet commitments increased to **$712.7 million** at March 31, 2023, primarily lines of credit and construction loans, subject to standard credit policies Off-Balance Sheet Commitments ($ in thousands) | Commitment Type | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Lines of credit and construction loans | $665,458 | $641,369 | | Overdraft protection | $45,528 | $45,192 | | Letters of credit | $1,668 | $1,590 | | **Total** | **$712,654** | **$688,151** | [Note 13: Fair Value Measurement](index=36&type=section&id=(13)%20Fair%20Value%20Measurement) The company uses a three-level fair value hierarchy, with most recurring measurements (AFS securities, swaps) as Level 2, and nonrecurring MSRs as Level 3 - Available-for-sale debt securities are valued using matrix pricing (Level 2 inputs)[83](index=83&type=chunk) - Mortgage servicing rights (MSRs) are classified as Level 3 and valued using a discounted cash flow model with significant unobservable inputs like prepayment rates and discount rates[86](index=86&type=chunk) Assets Measured at Fair Value on a Recurring Basis (Mar 31, 2023, $ in thousands) | Asset Type | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | | Securities available-for-sale | $0 | $627,707 | $0 | | Equity securities | $0 | $2,122 | $0 | | Swap asset | $0 | $13,350 | $0 | [Note 14: Derivatives](index=39&type=section&id=(14)%20Derivatives) The company uses interest rate swaps with customers and offsetting bank counterparties, holding **$13.35 million** in derivative assets and liabilities with a **$211.1 million** gross notional amount - The company acts as an intermediary in interest rate swap transactions for its customers, entering into offsetting positions with bank counterparties[212](index=212&type=chunk) Derivative Positions (Fair Value, $ in thousands) | Position | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Swap Asset | $13,350 | $16,579 | | Swap Liability | $13,350 | $16,579 | | **Gross Notional Amount** | **$211,117** | **$212,570** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2023 financial condition and results, highlighting asset growth, increased net income, and expanded net interest margin [Financial Condition](index=44&type=section&id=Financial%20Condition) Total assets increased by **1.3%** to **$3.58 billion** at March 31, 2023, driven by loan and securities growth, with shareholders' equity at **$347.7 million** - Total assets increased by **$46.7 million** (**1.3%**) to **$3.58 billion** in Q1 2023, primarily due to increases in loans (**+$27.7 million**) and securities (**+$12.3 million**)[106](index=106&type=chunk) Loan Portfolio Changes (Q1 2023, $ in thousands) | Loan Category | Change from Dec 31, 2022 | % Change | | :--- | :--- | :--- | | Commercial Real Estate—Non-Owner Occupied | $24,899 | 2.4% | | Residential Real Estate | $8,197 | 1.5% | | Commercial & Agriculture | ($7,435) | -2.7% | | **Total Net Loans** | **$27,715** | **1.1%** | Deposit Changes (Q1 2023, $ in thousands) | Deposit Type | Change from Dec 31, 2022 | % Change | | :--- | :--- | :--- | | Time deposits | $207,434 | 65.0% | | Noninterest-bearing demand | $42,634 | 4.8% | | Savings and money market | ($39,684) | -4.5% | | **Total Deposits** | **$223,532** | **8.5%** | - Shareholders' equity increased by **$12.9 million**, driven by net income of **$12.9 million** and an **$8.1 million** improvement in the fair value of AFS securities, offset by dividends and the CECL adoption impact[132](index=132&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) Q1 2023 net income rose to **$12.9 million** (**$0.82** diluted EPS), driven by a **42.2%** increase in net interest income and expanded net interest margin to **4.11%** - Net income increased by **$4.4 million** (**52.2%**) year-over-year for the first quarter[134](index=134&type=chunk) - Net interest income grew by **$9.7 million** (**42.2%**) YoY, driven by a **$541.5 million** increase in the average balance of loans and a rise in the loan yield to **5.79%** from **4.25%**[135](index=135&type=chunk)[136](index=136&type=chunk) - The fully tax-equivalent net interest margin was **4.11%** for Q1 2023, compared to **3.38%** for Q1 2022[135](index=135&type=chunk) - Noninterest income increased by **$3.4 million**, primarily due to **$2.0 million** in new lease revenue and residual income from the VFG acquisition[150](index=150&type=chunk) - Noninterest expense rose by **$7.4 million**, with compensation expense increasing by **$2.9 million** and equipment expense by **$2.3 million**, largely due to the acquisitions of Comunibanc Corp. and VFG[151](index=151&type=chunk)[158](index=158&type=chunk) [Capital Resources and Liquidity](index=53&type=section&id=Capital%20Resources%20and%20Liquidity) Capital ratios remained strong, with Total Risk-Based Capital at **14.7%** and CET1 at **9.7%**, supported by **$632.2 million** FHLB borrowing capacity and **$19.8 million** operating cash flow Regulatory Capital Ratios | Ratio | March 31, 2023 | Well Capitalized Minimum | | :--- | :--- | :--- | | Total Risk Based Capital | 14.7% | 10.0% | | Tier I Risk Based Capital | 10.8% | 8.0% | | CET1 Risk Based Capital | 9.7% | 6.5% | | Leverage Ratio | 8.6% | 5.0% | - As of March 31, 2023, the company had a remaining borrowing capacity of approximately **$632.2 million** with the FHLB[162](index=162&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details the company's primary interest-rate risk, using asset/liability modeling to assess Net Portfolio Value sensitivity to hypothetical rate changes - The company's primary market risk exposure is interest-rate risk, which it manages through asset/liability management techniques, including analyzing its asset/liability gap[165](index=165&type=chunk)[170](index=170&type=chunk) Interest Rate Sensitivity Analysis (Change in Net Portfolio Value) | Change in Rates | Dollar Change (Mar 31, 2023) | Percent Change (Mar 31, 2023) | | :--- | :--- | :--- | | +200bp | $20,539 | 4% | | +100bp | $14,021 | 2% | | Base | $0 | — | | -100bp | ($11,941) | (2)% | | -200bp | ($36,621) | (6)% | [Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting - The principal executive and financial officers concluded that disclosure controls and procedures were effective as of March 31, 2023[179](index=179&type=chunk) - No material changes to internal control over financial reporting occurred during the first quarter of 2023[180](index=180&type=chunk) PART II. Other Information [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course legal proceedings, which management believes will not materially affect its financial position, operations, or liquidity - Management does not expect any pending or threatened legal proceedings to have a material adverse effect on the company[185](index=185&type=chunk) [Risk Factors](index=57&type=page&id=Item%201A.%20Risk%20Factors) Updates risk factors, adding a new risk concerning recent U.S. bank failures and their potential impact on customer confidence, funding, and regulatory costs - A new risk factor has been added concerning the potential impact of recent and future bank failures on customer confidence, funding, liquidity, and regulatory costs for the banking industry[187](index=187&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2023, the company repurchased **5,620** common shares at **$21.52** per share, primarily for tax payments on restricted stock vesting Share Repurchases (Q1 2023) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 1 - Jan 31, 2023 | 5,620 | $21.52 | | Feb 1 - Feb 28, 2023 | 0 | $0 | | Mar 1 - Mar 31, 2023 | 0 | $0 | | **Total** | **5,620** | **$21.52** | [Exhibits](index=58&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including CEO and Principal Accounting Officer certifications and Inline XBRL financial statements - Exhibits include CEO and Principal Accounting Officer certifications (Rule 13a-14(a) and Section 1350) and Inline XBRL data[192](index=192&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)

Civista Bancshares, Inc. (NASDAQ:CIVB) Q1 2023 Results Conference Call April 28, 2023 1:00 PM ET Company Participants Dennis Shaffer - President and CEO Rich Dutton - SVP and COO Chuck Parcher - SVP and Chief Lending Officer Paul Stark - SVP Conference Call Participants Terry McEvoy - Stephens Tim Switzer - KBW Manuel Navas - D.A. Davidson Ben Gerlinger - Hovde Group Dan Cardenas - Janney Montgomery Scott Operator Good day, and welcome to the Civista Bancshares First Quarter 2023 Earnings Conference Call. [ ...