Civista Bancshares(CIVB) - 2025 Q1 - Quarterly Report

PART I. Financial Information This section presents the unaudited consolidated financial statements and management's discussion and analysis for Q1 2025 Financial Statements 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 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 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 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 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] Condensed Consolidated Statements of Cash Flows 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 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][19] - 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][29][30] Management's Discussion and Analysis of Financial Condition and Results of Operations 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] - 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] - 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] Financial Condition 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] Results of Operations 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][169] - 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] - 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] Capital Resources 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 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] Quantitative and Qualitative Disclosures About Market Risk 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][182] | 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 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] - 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] PART II. Other Information This section provides additional disclosures on legal proceedings, risk factors, equity sales, and other corporate information Legal Proceedings 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] Risk Factors 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][195] Unregistered Sales of Equity Securities and Use of Proceeds 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] Defaults Upon Senior Securities None Mine Safety Disclosures Not applicable Other Information 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] Exhibits 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]