U.S. Markets closed
  • S&P 500

    3,638.35
    +8.70 (+0.24%)
     
  • Dow 30

    29,910.37
    +37.90 (+0.13%)
     
  • Nasdaq

    12,205.85
    +111.44 (+0.92%)
     
  • Russell 2000

    1,855.27
    +10.25 (+0.56%)
     
  • Crude Oil

    45.53
    -0.18 (-0.39%)
     
  • Gold

    1,788.10
    -23.10 (-1.28%)
     
  • Silver

    22.64
    -0.81 (-3.44%)
     
  • EUR/USD

    1.1970
    +0.0057 (+0.4788%)
     
  • 10-Yr Bond

    0.8420
    -0.0360 (-4.10%)
     
  • Vix

    20.84
    -0.41 (-1.93%)
     
  • GBP/USD

    1.3314
    -0.0042 (-0.3169%)
     
  • USD/JPY

    104.0850
    -0.1650 (-0.1583%)
     
  • BTC-USD

    18,111.50
    +343.44 (+1.93%)
     
  • CMC Crypto 200

    333.27
    -4.23 (-1.25%)
     
  • FTSE 100

    6,367.58
    +4.65 (+0.07%)
     
  • Nikkei 225

    26,644.71
    +107.40 (+0.40%)
     

Civista Bancshares, Inc. Announces Third Quarter 2020 Earnings

·23 min read

SANDUSKY, Ohio, Oct. 23, 2020 /PRNewswire/ -- Civista Bancshares, Inc. (NASDAQ: CIVB) ("Civista") reported net income available to common shareholders of $7.7 million, or $0.48 per diluted share, for the third quarter of 2020, compared with $7.5 million, or $0.46 per diluted share, for the prior year period. For the nine-month period ended September 30, 2020, Civista reported net income available to common shareholders of $22.0 million or $1.36 per diluted share, compared to $25.5 million or $1.54 per diluted share, in the same period of 2019.

"As we navigate through 2020, I am reminded of what differentiates us as a community bank. The great people that we have working at Civista and the quality customers that choose to work with us. We couldn't have one without the other. Our people have accomplished a lot during 2020 and we still have one more quarter to go. To report earnings per share for the third quarter of 2020 which exceeds 2019 is a great feat. The challenges for 2020 include a global pandemic that has had far reaching impacts on our economy. We continue to weather the storm despite these challenges and I am extremely pleased with our third quarter earnings." said Dennis G. Shaffer, President and CEO of Civista.

Results of Operations:

For the three-month period ended September 30, 2020 and 2019

Net interest income increased $1.6 million, or 7.8%, for the third quarter of 2020 compared to the same period of 2019, primarily due to the accretion of $1.2 million of Paycheck Protection Program ("PPP") fees.

Net interest margin decreased 68 basis points to 3.44% for the third quarter of 2020, compared to 4.12% for the same period a year ago.

Interest income increased $535 thousand, or 2.2%, for the third quarter of 2020. Average yields decreased 100 basis points which resulted in a $4.3 million decrease in interest income. Average earning assets increased $596.1 million, which resulted in a $4.9 million increase in interest income. PPP loans accounted for $259 million of the increase in average earning assets at a yield of 2.90%. Removing the impact of PPP loans, the yield on earning assets would have been 43 basis points higher. Accretion income associated with purchased loan portfolios totaled $554 thousand for the third quarter of 2020.

Interest expense decreased $1.1 million, or 29.2%, for the third quarter of 2020. The average rate paid on interest-bearing liabilities decreased 45 basis points, while average interest-bearing liabilities increased $378.4 million.

Average Balance Analysis

(Unaudited - Dollars in thousands)










Three Months Ended September 30,


2020


2019


Average


Yield/


Average


Yield/

Assets:

balance

Interest

rate *


balance

Interest

rate *

Interest-earning assets:








Loans **

$ 2,040,492

$ 21,638

4.22%


$ 1,626,010

$ 20,776

5.07%

Taxable securities

183,196

1,325

3.01%


198,994

1,712

3.50%

Non-taxable securities

205,398

1,536

4.14%


180,531

1,449

4.33%

Interest-bearing deposits in other banks

188,798

59

0.12%


16,245

86

2.10%

Total interest-earning assets

$ 2,617,884

24,558

3.83%


$ 2,021,780

24,023

4.83%

Noninterest-earning assets:








Cash and due from financial institutions

29,647




29,745



Premises and equipment, net

23,214




21,790



Accrued interest receivable

10,109




6,926



Intangible assets

84,906




85,617



Bank owned life insurance

45,574




44,579



Other assets

42,916




25,432



Less allowance for loan losses

(21,214)




(13,920)



Total Assets

$ 2,833,036




$ 2,221,949











Liabilities and Shareholders' Equity:








Interest-bearing liabilities:








Demand and savings

$ 1,108,512

$ 389

0.14%


$ 871,673

$ 730

0.33%

Time

292,806

1,242

1.69%


267,959

1,369

2.03%

FHLB

125,000

452

1.44%


201,977

1,152

2.26%

Other borrowings

184,238

269

0.58%


-

-

0.00%

Subordinated debentures

29,427

194

2.62%


29,427

350

4.72%

Repurchase agreements

24,300

6

0.10%


14,831

4

0.11%

Total interest-bearing liabilities

$ 1,764,283

2,552

0.58%


$ 1,385,867

3,605

1.03%

Noninterest-bearing deposits

683,473




482,895



Other liabilities

46,002




27,084



Shareholders' equity

339,278




326,103



Total Liabilities and Shareholders' Equity

$ 2,833,036




$ 2,221,949











Net interest income and interest rate spread

$ 22,006

3.25%



$ 20,418

3.80%









Net interest margin



3.44%




4.12%









* - Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $411 thousand and $389 thousand for the periods ended September 30, 2020 and 2019, respectively.









** - Average balance includes nonaccrual loans

For the nine-month period ended September 30, 2020 and 2019

Net interest income increased $2.3 million, or 3.6%, compared to the same period in 2019.

Interest income increased $611 thousand, or 0.8%, for the first nine months of 2020. The increase in interest income was primarily due to an increase in average earning assets of $451.2 million, partially offset by a decrease in yield of 87 basis points. During the nine-month period, the Bank had average PPP Loans totaling $149.5 million with an average yield of 3.14%, including amortization of fees. Removing the impact of PPP loans yields would have been 27 basis points higher.

Interest expense decreased $1.7 million, or 17.7%, for the first nine months of 2020 compared to the same period of 2019. Average interest-bearing liabilities increased $264.3 million, resulting in a $448 thousand increase in interest expense. Average rates decreased 30 basis points, resulting in a $2.2 million decrease in interest expense.

Despite an increase in net interest income, the net interest margin decreased 65 basis points to 3.70% for the first nine months of 2020, compared to 4.35% for the same period a year ago.

Average Balance Analysis

(Unaudited - Dollars in thousands)










Nine Months Ended September 30,


2020


2019


Average


Yield/


Average


Yield/

Assets:

balance

Interest

rate *


balance

Interest

rate *

Interest-earning assets:








Loans **

$ 1,913,514

$ 64,924

4.53%


$ 1,591,477

$ 63,395

5.33%

Taxable securities

185,577

4,100

3.07%


203,165

5,155

3.44%

Non-taxable securities

201,303

4,589

4.18%


169,802

4,208

4.40%

Interest-bearing deposits in other banks

159,539

531

0.44%


44,287

775

2.34%

Total interest-earning assets

$ 2,459,933

74,144

4.13%


$ 2,008,731

73,533

5.00%

Noninterest-earning assets:








Cash and due from financial institutions

94,083




53,517



Premises and equipment, net

22,830




21,844



Accrued interest receivable

8,729




6,929



Intangible assets

84,965




85,863



Bank owned life insurance

45,332




44,186



Other assets

37,802




22,607



Less allowance for loan losses

(17,759)




(13,896)



Total Assets

$ 2,735,915




$ 2,229,781











Liabilities and Shareholders' Equity:








Interest-bearing liabilities:








Demand and savings

$ 1,010,719

$ 1,433

0.19%


$ 862,098

$ 2,159

0.33%

Time

287,740

3,985

1.85%


269,874

3,807

1.89%

FHLB

135,888

1,480

1.46%


146,222

2,581

2.36%

Other borrowings

103,133

275

0.36%


-

-

0.00%

Federal funds purchased

385

1

0.35%


-

-

0.00%

Subordinated debentures

29,427

757

3.44%


29,427

1,094

4.97%

Repurchase agreements

23,141

17

0.10%


18,463

14

0.10%

Total interest-bearing liabilities

$ 1,590,433

7,948

0.67%


$ 1,326,084

9,655

0.97%

Noninterest-bearing deposits

757,696




567,365



Other liabilities

53,633




21,843



Shareholders' equity

334,153




314,489



Total Liabilities and Shareholders' Equity

$ 2,735,915




$ 2,229,781











Net interest income and interest rate spread


$ 66,196

3.46%



$ 63,878

4.03%









Net interest margin



3.70%




4.35%









* - Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $1.2 million and $1.1 million for the periods ended September 30, 2020 and 2019, respectively.









** - Average balance includes nonaccrual loans

Provision for loan losses was $2.3 million for the third quarter of 2020 and $7.9 million for the nine months ended September 30, 2020. Provision for loan losses was $150 thousand for both the third quarter and nine months ended September 30, 2019. The increase in provision is due to an increase in the bank's qualitative factors related to the economic shutdown that is driven by COVID-19 and the ongoing payment deferrals on loans modified under the CARES Act. Economic impacts include the loss of revenue experienced by our business clients, disruption of supply chains, additional employee costs for businesses due to the pandemic, higher unemployment rates throughout our footprint and a large number of customers requesting payment relief.

For the third quarter of 2020, noninterest income totaled $6.8 million, an increase of $1.4 million, or 25.0%, compared to the prior year's third quarter.

Noninterest income








(unaudited - dollars in thousands)

Three months ended September 30,


2020


2019


$ change


% change

Service charges

$ 1,414


$ 1,726


$ (312)


-18.1%

Net gain on sale of securities

92


3


89


N/M

Net loss on equity securities

20


112


(92)


-82.1%

Net gain on sale of loans

2,413


815


1,598


196.1%

ATM/Interchange fees

1,183


1,014


169


16.7%

Wealth management fees

1,006


975


31


3.2%

Bank owned life insurance

243


254


(11)


-4.3%

Swap fees

158


199


(41)


-20.6%

Other

257


331


(74)


-22.4%

Total noninterest income

$ 6,786


$ 5,429


$ 1,357


25.0%









N/M - not meaningful








Service charge income decreased primarily due a $332.7 thousand decrease in overdraft fees due to the COVID-19 pandemic.

Net gain on sale of loans increased due to an increase in the volume of loans sold of $48.1 million. During the third quarter of 2019 loans sold totaled $36.0 million compared to $84.1 million in the third quarter of 2020. The premium on sold loans also increased by 63 basis points in the third quarter this year compared to last year.

ATM/Interchange fees increased as a result of increased volume of transactions.

For the nine months ended September 30, 2020, noninterest income increased $3.7 million, or 22.0%, compared to the same period in the prior year.

Noninterest income








(unaudited - dollars in thousands)

Nine months ended September 30,


2020


2019


$ change


% change

Service charges

$ 3,812


$ 4,733


$ (921)


-19.5%

Net gain on sale of securities

92


17


75


441.2%

Net loss on equity securities

(126)


81


(207)


-255.6%

Net gain on sale of loans

5,501


1,701


3,800


223.4%

ATM/Interchange fees

3,226


2,871


355


12.4%

Wealth management fees

2,916


2,733


183


6.7%

Bank owned life insurance

733


753


(20)


-2.7%

Tax refund processing fees

2,375


2,750


(375)


-13.6%

Swap fees

1,260


287


973


339.0%

Other

727


890


(163)


-18.3%

Total noninterest income

$ 20,516


$ 16,816


$ 3,700


22.0%









N/M - not meaningful








Service charge income decreased primarily due a $780.2 thousand decrease in overdraft fees and $93 thousand in waived service charges, both related to the COVID-19 pandemic.

During the nine-months ended September 30, 2020 Civista sold $211.1 million of mortgage loans, an increase of $130.6 million from the same period in 2019. The premium on sold loans also increased by 50 basis points during the nine months this year compared to last year. These two factors contributed to the increase in net gain on sale of loans.

ATM/Interchange fees increased as a result of increased transaction volume.

Swap fees increased as a result of the declining interest rate environment and more customers looking to lock in lower fixed rate loans. During 2020, new swaps totaled $92.4 million in loans to provide low fixed rate loans for customers and variable rate loans for Civista.

Tax refund processing fees decreased due to a decline in volume processed.

For the third quarter of 2020, noninterest expense totaled $17.7 million, an increase of $1.0 million, or 6.0%, compared to the prior year's third quarter.

Noninterest expense








(unaudited - dollars in thousands)

Three months ended September 30,


2020


2019


$ change


% change

Compensation expense

$ 10,595


$ 9,707


$ 888


9.1%

Net occupancy and equipment

1,504


1,463


41


2.8%

Contracted data processing

415


435


(20)


-4.6%

Taxes and assessments

715


498


217


43.6%

Professional services

669


756


(87)


-11.5%

Amortization of intangible assets

227


235


(8)


-3.4%

ATM/Interchange expense

538


514


24


4.7%

Marketing

361


404


(43)


-10.6%

Software maintenance expense

506


396


110


27.8%

Other

2,197


2,323


(126)


-5.4%

Total noninterest expense

$ 17,727


$ 16,731


$ 996


6.0%

Compensation expense increased primarily due to annual pay increases and commission and incentive expense. Annual pay increases in 2020 were an average of 3.3%. Employee insurance decreased $308.3 thousand, or 26.5%, for 2020. Commission and incentive expense increased $956.9 thousand, or 89.5% as a result of increased loan activity.

The quarter-over-quarter increase in taxes and assessments was attributable to an increase in the FDIC assessment base and a $147.6 thousand credit for small banks, applied to the September 2019 assessments. State franchise tax decreased related to a refund of taxes paid in 2020.

The increase in software maintenance expense is due to contracts related to new services.

The decrease in other operating expense is primarily due to a decreases in travel and lodging expense of $222.9 thousand and education and training of $54.4 thousand. These decreases were partially offset by increases in loan origination expense of $129.4 thousand and communications expense of $19.9 thousand.

The efficiency ratio was 60.7% for the quarter ended September 30, 2020 compared to 63.8% for the quarter ended September 30, 2019. The change in the efficiency ratio is due to increases in both noninterest income and the increase in net interest income.

Civista's effective income tax rate for the third quarter 2020 was 12.9% compared to 14.0% in 2019.

For the nine months ended September 30, 2020, noninterest expense totaled $53.7 million, an increase of $3.9 million, or 7.8%, compared to the same period in the prior year.

Noninterest expense








(unaudited - dollars in thousands)

Nine months ended September 30,


2020


2019


$ change


% change

Compensation expense

$ 32,063


$ 29,059


$ 3,004


10.3%

Net occupancy and equipment

4,557


4,410


147


3.3%

Contracted data processing

1,340


1,301


39


3.0%

Taxes and assessments

1,925


1,695


230


13.6%

Professional services

2,289


2,151


138


6.4%

Amortization of intangible assets

686


710


(24)


-3.4%

ATM/Interchange expense

1,316


1,437


(121)


-8.4%

Marketing

1,056


1,111


(55)


-5.0%

Software maintenance expense

1,350


1,101


249


22.6%

Other

7,115


6,843


272


4.0%

Total noninterest expense

$ 53,697


$ 49,818


$ 3,879


7.8%

The increase in compensation expense was due to increased payroll and commission and incentive based costs, offset by a decrease in employee insurance costs. Annual pay increases in 2020 were an average of 3.3%. Commission expense increased $1.5 million, or 46.5% as a result of increased loan activity. Employee insurance decreased $235.3 thousand, or 5.8%, for 2020.

The increase in taxes and assessments was attributable to a $147.6 thousand FDIC assessment credit for small banks that was applied to the 2019 assessment charges.

The increase in software maintenance expense is due to contracts related to new services.

The increase in other operating expense is primarily due to increases in loan origination expense of $336.9 thousand. MSR valuation expense of $137.4 thousand, postage expense of $66.8 thousand and communications expense of $75.1 thousand. These increases were partially offset by a decrease in travel and lodging expense of $478.3 thousand.

The efficiency ratio was 61.1% for the nine months ended September 30, 2020 compared to 60.9% for the nine months ended September 30, 2019. The change in the efficiency ratio is due primarily to the increase in noninterest expense.

Civista's effective income tax rate for the first nine months of 2020 was 12.5% compared to 15.3% in same period in 2019.

Balance Sheet

Total assets increased $508.4 million, or 22.0%, from December 31, 2019 to September 30, 2020, due primarily to a $332.0 million, or 19.4%, increase in the loan portfolio. Loans held for sale increased $11.0 million, or 480.1%, and cash increased $146.2 million, primarily related to the proceeds from PPP loans held on deposit.

End of period loan balances








(unaudited - dollars in thousands)









September 30,


December 31,






2020


2019


$ Change


% Change

Commercial and Agriculture 1

$ 435,285


$ 203,110


$ 232,175


114.3%

Commercial Real Estate:








Owner Occupied

261,235


245,606


15,629


6.4%

Non-owner Occupied

683,579


592,222


91,357


15.4%

Residential Real Estate

443,960


463,032


(19,072)


-4.1%

Real Estate Construction

167,560


155,825


11,735


7.5%

Farm Real Estate

35,232


34,114


1,118


3.3%

Consumer and Other

14,089


15,061


(972)


-6.5%

Total Loans

$ 2,040,940


$ 1,708,970


$ 331,970


19.4%









1 includes PPP loans








Loan growth during 2020 totaled $332.0 million, including $259.1 million of PPP loans. Otherwise, loan growth was led by increases of $107.0 million in Commercial Real Estate and $11.7 million in Real Estate Construction. The Commercial Real Estate growth continues to be aided by some successful real estate projects we kept on balance sheet by using longer term swaps that might otherwise have been refinanced on the commercial mortgage-backed securities market. Our construction portfolio continues to be vibrant, especially in the Metro markets. The decrease in Residential Real Estate continued as we successfully refinanced many on balance sheet mortgages and home equity loans into saleable mortgage products. All regions have contributed to the growth in the first nine months, aided by many new clients and prospects from our success in PPP originations.

Paycheck Protection Program

We began accepting applications for the PPP loans on April 3, 2020 and during the first nine months of 2020 processed over 2,300 loans totaling $259.1 million. SBA fees total approximately $9.9 million, which are being recognized in interest income over the life of the PPP loans. We borrowed $183.7 million from the Paycheck Protection Program Lending Facility ("PPPLF").

"As we begin the forgiveness stage of the PPP loans, I am reminded of the difference we have made to our customers and their employees. We expect to see many of our customers begin the forgiveness process during the fourth quarter of 2020," said Dennis G. Shaffer, President and CEO of Civista.

COVID-19 Loan Modifications

During 2020, Civista modified a total of 813 loans totaling $431.3 million, primarily consisting of the deferral of principal and/or interest payments. All of the loans modified were performing at December 31, 2019 and comply with the provisions of the CARES Act to not be considered a troubled debt restructuring. As of September 30, 2020, the loans that remain on a CARES Act modification total $52.2 million.

Details with respect to the loan modifications that remain on deferred status are as follows:

Loans currently modified under COVID-19 programs



(unaudited - dollars in thousands)





Type of Loan


Number of
Loans


Balance


Percent of
loans
outstanding 1








Commercial and Agriculture


12


$ 1,370


0.08%

Commercial Real Estate:







Owner Occupied


19


16,076


0.90%

Non-owner Occupied


14


27,720


1.56%

Real Estate Construction


2


7,020


0.39%



47


$ 52,186


2.93%








1excluding PPP loans







Total deposits increased $390.0 million, or 23.2%, from December 31, 2019 to September 30, 2020.

End of period deposit balances








(unaudited - dollars in thousands)









September 30,


December 31,






2020


2019


$ Change


% Change

Noninterest-bearing demand

$ 660,120


$ 512,553


$ 147,567


28.8%

Interest-bearing demand

394,975


301,674


93,301


30.9%

Savings and money market

721,571


588,697


132,874


22.6%

Time deposits

292,103


275,840


16,263


5.9%

Total Deposits

$ 2,068,769


$ 1,678,764


$ 390,005


23.2%

The increase in noninterest-bearing demand of $147.6 million was primarily due to a $107.5 million increase in business demand deposit accounts and a $16.2 million increase in personal demand deposit accounts. Much of the increase in the business demand deposit accounts is due to PPP loan proceeds. Interest-bearing demand deposits increased, split nearly evenly between increases in public fund accounts non-public fund accounts. The increase in savings and money market was primarily due to an increases in money markets and brokered money market accounts.

FHLB advances totaled $125.0 million at September 30, 2020, a decrease of $101.5 million, or 44.8%, from December 31, 2019. The increase in deposits reduced the need for wholesale funding. The Company also borrowed $183.7 million from the PPPLF to help fund PPP loans.

Stock Repurchase Program

An important part of capital management are share repurchases. During the third quarter of 2020 Civista repurchased 107,000 shares for $1.3 million at a weighted average price of $12.15 per share. This is part of the $13.5 million repurchase authorization which was approved in April 2020. Earlier in 2020, Civista repurchased 672,000 shares for $11.4 million, at a weighted average price of $16.90 per share. In addition, Civista liquidated 3,808 shares held by employees, at $24.07 per share, to satisfy tax obligations stemming from vesting of restricted shares. Year to date, Civista has repurchased a total of 783,308 shares for $12.8 million, at a weighted average price of $16.29 per share.

Shareholder Equity

Total shareholders' equity increased $11.9 million, or 3.6%, from December 31, 2019 to September 30, 2020 as a result of a $16.7 million increase in retained earnings and an increase in other comprehensive income of $7.5 million. These increases were partially offset by a $12.8 million decrease related to the repurchase of treasury shares.

Asset Quality

Civista recorded net recoveries of $8 thousand for the nine months of 2020 compared to net recoveries of $315 thousand for the same period of 2019. The allowance for loan losses to loans was 1.11% at September 30, 2020 and 0.86% at December 31, 2019. Without the PPP loans, the allowance ratio would have been 16 basis points higher, as the reserve percentage on these loans is very low compared to the remaining portfolio due to the SBA guaranteeing 100 percent of the balance.

Allowance for Loan Losses




(unaudited - dollars in thousands)





Nine months ended September 30,


2020


2019

Beginning of period

$ 14,767


$ 13,679

Charge-offs

(325)


(431)

Recoveries

333


746

Provision

7,862


150

End of period

$ 22,637


$ 14,144

Non-performing assets at September 30, 2020 were $7.7 million, a 15.2% decrease from December 31, 2019. The non-performing assets to assets ratio decreased to 0.27% from 0.39% at December 31, 2019. The allowance for loan losses to non-performing loans increased to 292.88% from 161.95% at December 31, 2019.

Non-performing Assets




(unaudited - dollars in thousands)

September 30,


December 31,


2020


2019

Non-accrual loans

$ 5,736


$ 6,115

Troubled debt restructurings

1,993


3,004

Total non-performing loans

7,729


9,119

Other Real Estate Owned

-


-

Total non-performing assets

$ 7,729


$ 9,119

Conference Call and Webcast

Civista Bancshares, Inc. will also host a conference call to discuss the Company's financial results for the third quarter of 2020 at 1:00 p.m. ET on Friday, October 23, 2020. Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company's website, www.civb.com. Participants can also listen to the conference call by dialing 855-238-2712 and ask to be joined into the Civista Bancshares, Inc. third quarter 2020 earnings call. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

An archive of the webcast will be available for one year on the Investor Relations section of the Company's website (www.civb.com).

Forward Looking Statements

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Civista. For these statements, Civista claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Civista, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Civista' reports filed with the Securities and Exchange Commission, including those described in "Item 1A Risk Factors" of Part I of Civista's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and any additional risks identified in the Company's subsequent Form 10-Q's. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Civista does not undertake, and specifically disclaims any obligation, to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Civista Bancshares, Inc. is a $2.8 billion financial holding company headquartered in Sandusky, Ohio. The Company's banking subsidiary, Civista Bank, operates 37 locations in Northern, Central and Southwestern Ohio, Southeastern Indiana and Northern Kentucky. Civista Bancshares, Inc. may be accessed at www.civb.com. The Company's common shares are traded on the NASDAQ Capital Market under the symbol "CIVB".

Civista Bancshares, Inc.
Financial Highlights
(Unaudited, dollars in thousands, except share and per share amounts)


Consolidated Condensed Statement of Income










Three Months Ended


Nine Months Ended


September 30,


September 30,


2020


2019


2020


2019









Interest income

$ 24,558


24,023


...$ 74,144


73,533

Interest expense

2,552


3,605


7,948


9,655

Net interest income

22,006


20,418


66,196


63,878

Provision for loan losses

2,250


150


7,862


150

Net interest income after provision

19,756


20,268


58,334


63,728

Noninterest income

6,786


5,429


20,516


16,816

Noninterest expense

17,727


16,731


53,697


49,818

Income before taxes

8,815


8,966


25,153


30,726

Income tax expense

1,133


1,258


3,134


4,688

Net income

7,682


7,708


22,019


26,038

Preferred stock dividends

-


162


-


490

Net income available








to common shareholders

$ 7,682


$ 7,546


$ 22,019


$ 25,548









Dividends paid per common share

$ 0.11


$ 0.11


$ 0.33


$ 0.31









Earnings per common share,








basic

$ 0.48


$ 0.48


$ 1.36


$ 1.64

diluted

$ 0.48


$ 0.46


$ 1.36


$ 1.54









Average shares outstanding,








basic

16,045,544


15,577,371


16,201,898


15,604,410

diluted

16,045,544


16,849,887


16,201,898


16,891,286









Selected financial ratios:








Return on average assets (annualized)

1.08%


1.38%


1.08%


1.56%

Return on average equity (annualized)

9.01%


9.38%


8.80%


11.07%

Dividend payout ratio

22.98%


22.23%


24.28%


18.58%

Net interest margin (tax equivalent)

3.44%


4.12%


3.70%


4.35%

Selected Balance Sheet Items

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






September 30,


December 31,


2020


2019


(unaudited)







Cash and due from financial institutions

$ 194,773


$ 48,535

Investment securities

366,691


359,690

Loans held for sale

13,256


2,285

Loans

2,040,940


1,708,970

Less: allowance for loan losses

(22,637)


(14,767)

Net loans

2,018,303


1,694,203

Other securities

20,537


20,280

Premises and equipment, net

22,958


22,871

Goodwill and other intangibles

84,896


85,156

Bank owned life insurance

45,732


44,999

Other assets

50,847


31,538

Total assets

$ 2,817,993


$ 2,309,557





Total deposits

$ 2,068,769


$ 1,678,764

Federal Home Loan Bank advances

125,000


226,500

Securities sold under agreements to repurchase

25,813


18,674

Other borrowings

183,695


-

Subordinated debentures

29,427


29,427

Accrued expenses and other liabilities

43,234


26,066

Total shareholders' equity

342,055


330,126

Total liabilities and shareholders' equity

$ 2,817,993


$ 2,309,557





Shares outstanding at period end

15,945,479


16,687,542





Book value per share

$ 21.45


$ 19.78

Equity to asset ratio

12.14%


14.29%





Selected asset quality ratios:




Allowance for loan losses to total loans

1.11%


0.86%

Non-performing assets to total assets

0.27%


0.39%

Allowance for loan losses to non-performing loans

292.88%


161.95%





Non-performing asset analysis




Nonaccrual loans

$ 5,736


$ 6,115

Troubled debt restructurings

1,993


3,004

Other real estate owned

-


-

Total

$ 7,729


$ 9,119

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)












September 30,


June 30,


March 31,


December 31,


September 30,

End of Period Balances

2020


2020


2020


2019


2019











Assets










Cash and due from banks

$ 194,773


$ 196,520


$ 256,023


$ 48,535


$ 62,219

Investment securities

366,691


369,181


366,689


359,690


356,439

Loans held for sale

13,256


18,523


7,632


2,285


8,983

Loans

2,040,940


2,022,965


1,743,125


1,708,970


1,648,640

Allowance for loan losses

(22,637)


(20,420)


(16,948)


(14,767)


(14,144)

Net Loans

2,018,303


2,002,545


1,726,177


1,694,203


1,634,496

Other securities

20,537


20,537


20,280


20,280


20,280

Premises and equipment, net

22,958


23,137


22,443


22,871


22,201

Goodwill and other intangibles

84,896


84,852


84,919


85,156


85,461

Bank owned life insurance

45,732


45,489


45,249


44,999


44,745

Other assets

50,847


51,369


46,444


31,538


34,241

Total Assets

$ 2,817,993


$ 2,812,153


$ 2,575,856


$ 2,309,557


$ 2,269,065











Liabilities










Total deposits

$ 2,068,769


$ 2,069,261


$ 1,991,939


$ 1,678,764


$ 1,632,621

Federal Home Loan Bank advances

125,000


125,000


142,000


226,500


236,100

Securities sold under agreement to repurchase

25,813


23,608


22,699


18,674


15,088

Other borrowings

183,695


183,695


-


-


-

Subordinated debentures

29,427


29,427


29,427


29,427


29,427

Accrued expenses and other liabilities

43,234


44,549


61,624


26,066


26,566

Total liabilities

2,475,938


2,475,540


2,247,689


1,979,431


1,939,802











Shareholders' Equity









Preferred shares, Series B

-


-


-


-


9,158

Common shares

276,940


276,841


276,546


276,422


267,559

Retained earnings

84,628


78,712


73,972


67,974


62,023

Treasury shares

(33,900)


(32,594)


(32,239)


(21,144)


(21,144)

Accumulated other comprehensive income

14,387


13,654


9,888


6,874


11,667

Total shareholders' equity

342,055


336,613


328,167


330,126


329,263











Total Liabilities and Shareholders' Equity

$ 2,817,993


$ 2,812,153


$ 2,575,856


$ 2,309,557


$ 2,269,065











Quarterly Average Balances








Assets:










Earning assets

$ 2,617,884


$ 2,528,006


$ 2,232,168


$ 2,070,175


$ 2,021,780

Securities

388,594


386,838


385,187


372,639


379,525

Loans

2,040,492


1,972,969


1,725,685


1,676,769


1,626,010

Liabilities and Shareholders' Equity










Total deposits

$ 2,084,791


$ 2,108,227


$ 1,975,133


$ 1,661,452


$ 1,622,527

Interest-bearing deposits

1,401,318


1,317,336


1,175,593


1,160,499


1,139,632

Other interest-bearing liabilities

362,965


302,267


209,909


252,908


246,235

Total shareholders' equity

339,278


330,524


332,602


329,634


326,103











Supplemental Financial Information

(Unaudited - dollars in thousands except share data)












Three Months Ended


September 30,


June 30,


March 31,


December 31,


September 30,

Income statement

2020


2020


2020


2019


2019











Total interest and dividend income

$ 24,558


$ 24,584


$ 25,002


$ 24,521


$ 24,023

Total interest expense

2,552


2,509


2,887


3,299


3,605

Net interest income

22,006


22,075


22,115


21,222


20,418

Provision for loan losses

2,250


3,486


2,126


885


150

Noninterest income

6,786


6,854


6,876


5,627


5,429

Noninterest expense

17,727


18,114


17,856


17,128


16,731

Income before taxes

8,815


7,329


9,009


8,836


8,966

Income tax expense

1,133


825


1,176


995


1,258

Net income

7,682


6,504


7,833


7,841


7,708

Preferred stock dividends

-


-


-


157


162

Net income available to










common shareholders

$ 7,682


$ 6,504


$ 7,833


$ 7,684


$ 7,546











Common shares dividend paid

$ 1,766


$ 1,764


$ 1,835


$ 1,702


$ 1,722











Per share data




















Basic earnings per common share

$ 0.48


$ 0.41


$ 0.47


$ 0.49


$ 0.48

Diluted earnings per common share

0.48


0.41


0.47


0.47


0.46

Dividends paid per common share

0.11


0.11


0.11


0.11


0.11

Average common shares outstanding - basic

16,045,544


16,044,125


16,517,745


15,796,713


15,577,371

Average common shares outstanding - diluted

16,045,544


16,044,125


16,517,745


16,734,391


16,849,887











Asset quality










Allowance for loan losses, beginning of period

$ 20,420


$ 16,948


$ 14,767


$ 14,144


$ 13,786

Charge-offs

(185)


(116)


(24)


(345)


(36)

Recoveries

152


102


79


83


244

Provision

2,250


3,486


2,126


885


150

Allowance for loan losses, end of period

$ 22,637


$ 20,420


$ 16,948


$ 14,767


$ 14,144











Ratios










Allowance to total loans

1.11%


1.01%


0.97%


0.86%


0.86%

Allowance to nonperforming assets

292.88%


262.14%


197.97%


161.95%


149.91%

Allowance to nonperforming loans

292.88%


262.14%


197.97%


161.95%


149.91%











Nonperforming assets










Nonperforming loans

$ 7,729


$ 7,790


$ 8,561


$ 9,119


$ 9,435

Other real estate owned

-


-


-


-


-

Total nonperforming assets

$ 7,729


$ 7,790


$ 8,561


$ 9,119


$ 9,435











Capital and liquidity










Tier 1 leverage ratio

10.73%


10.43%


10.66%


12.35%


12.37%

Tier 1 risk-based capital ratio

14.73%


12.99%


14.33%


15.26%


15.50%

Total risk-based capital ratio

15.94%


13.97%


15.25%


16.10%


16.32%

Tangible common equity ratio (1)

9.47%


9.29%


9.82%


11.08%


10.81%











(1) See reconciliation of non-GAAP measures at the end of this press release.







Reconciliation of Non-GAAP Financial Measures

(Unaudited - dollars in thousands except share data)












Three Months Ended


September 30,


June 30,


March 31,


December 31,


September 30,


2020


2020


2020


2019


2019











Tangible Common Equity










Total Shareholder's Equity - GAAP

$ 342,055


$ 336,613


$ 328,167


$ 330,126


$ 329,263

Less: Preferred Equity

-


-


-


-


9,158

Less: Goodwill and intangible assets

82,907


83,135


83,363


83,595


83,829

Tangible common equity (Non-GAAP)

$ 259,148


$ 253,478


$ 244,804


$ 246,531


$ 236,276











Total Shares Outstanding

15,945,479


16,052,979


16,064,010


16,687,542


15,473,275











Tangible book value per share

$ 16.25


$ 15.79


$ 15.24


$ 14.77


$ 15.27











Tangible Assets










Total Assets - GAAP

$ 2,817,993


$ 2,812,153


$ 2,575,856


$ 2,309,557


$ 2,269,065

Less: Goodwill and intangible assets

82,907


83,135


83,363


83,595


83,829

Tangible assets (Non-GAAP)

$ 2,735,086


$ 2,729,018


$ 2,492,493


$ 2,225,962


$ 2,185,236











Tangible common equity to tangible assets

9.47%


9.29%


9.82%


11.08%


10.81%











Cision
Cision

View original content:http://www.prnewswire.com/news-releases/civista-bancshares-inc-announces-third-quarter-2020-earnings-301158780.html

SOURCE Civista Bancshares, Inc.