Civista Bancshares, Inc. Announces Second Quarter 2024 Financial Results

Rhea-AI Summary

Civista Bancshares, Inc. (NASDAQ: CIVB) announced its unaudited financial results for Q2 2024. Key highlights include:

Earnings per diluted share (EPS) of $0.45, up 10% from the prior quarter but down 30% YoY.

Net income was $7.1 million, an 11% increase from the previous quarter but a 30% decline from Q2 2023.

Net interest income decreased $0.6 million QoQ and $3.6 million YoY. Interest income rose $0.5 million QoQ but was offset by a $1.1 million increase in interest expense.

Total assets grew by $131.7 million QoQ. Loans and leases increased by $153.3 million YTD, led by residential real estate and construction loans.

Noninterest income for Q2 2024 totaled $10.5 million, up 15.2% YoY, driven by increased lease revenue.

Noninterest expense increased 3.3% YoY, primarily due to higher compensation costs.

Provision for credit losses for Q2 2024 was $1.8 million, up from $861 thousand in Q2 2023, partly due to a fraud-related charge-off.

Deposits decreased $3.1 million QoQ but increased $34.8 million YoY.

Dividend of $0.16 per share, annualized yield of 4.13%, and payout ratio of 35.6%.

Positive

• EPS of $0.45, up 10% QoQ
• Net income of $7.1 million, up 11% QoQ
• Total assets grew by $131.7 million QoQ
• Loans and leases increased by $153.3 million YTD
• Noninterest income up 15.2% YoY
• Dividend yield of 4.13%

Negative

• EPS down 30% YoY
• Net income down 30% YoY
• Net interest income decreased $3.6 million YoY
• Provision for credit losses increased to $1.8 million
• Deposits decreased $3.1 million QoQ

Insights

Financial Analyst

Civista Bancshares' Q2 2024 results show a mixed performance amid a challenging interest rate environment. Key takeaways:

• Earnings per share of $0.45, up 10% quarter-over-quarter but down 30% year-over-year.
• Net income of $7.1 million, an 11% increase from Q1 but a 30% decrease from Q2 2023.
• Net interest margin compressed to 3.09%, down 66 basis points year-over-year.
• Loan growth of 5.4% since year-end 2023, reaching $3.01 billion.
• Deposits relatively stable at $2.98 billion, with a shift towards higher-cost funding.

The bank is navigating rising funding costs, with interest expense up significantly year-over-year. However, loan growth and non-interest income improvements are partially offsetting these pressures. The efficiency ratio increased to 72.6%, indicating some strain on profitability. Asset quality remains solid with a slight uptick in non-performing assets. Overall, Civista is maintaining growth but facing margin compression in the current rate environment.

Banking Industry Expert

Civista's Q2 results reflect broader industry trends as banks grapple with higher funding costs and net interest margin pressure. The bank's strategy appears focused on:

• Maintaining loan growth, particularly in commercial real estate and residential mortgages.
• Diversifying revenue streams, with notable increases in lease revenue and wealth management fees.
• Managing deposit mix, evidenced by the shift towards higher-yielding products.

The 30% year-over-year decline in net income is concerning, but not unusual in the current environment. The bank's ability to grow loans by 5.4% year-to-date is commendable, though it's coming at the cost of compressed margins.

The increase in the efficiency ratio to 72.6% suggests room for improvement in cost management. However, investments in digital banking and software maintenance indicate a forward-looking approach to operations.

Asset quality remains strong, with the allowance for credit losses at 1.32% of loans. The slight increase in non-performing assets bears watching but isn't alarming given the growth in the loan portfolio.

Overall, Civista is navigating a challenging landscape reasonably well, but sustained pressure on net interest income could necessitate more aggressive cost control or revenue diversification strategies in the coming quarters.

Market Research Analyst

Analyzing Civista's performance in the context of regional banking trends reveals several key insights:

• The bank's loan growth of 5.4% outpaces many peers, indicating strong demand in its markets, particularly in commercial real estate and residential mortgages.
• The shift in deposit mix, with decreases in non-interest bearing accounts and increases in higher-cost time deposits, aligns with industry-wide trends as customers seek higher yields.
• The 15.2% increase in non-interest income demonstrates success in diversifying revenue streams, a important strategy in the current low-margin environment.
• The exit from the tax refund processing business shows a willingness to streamline operations and focus on core banking activities.

Civista's performance in wealth management and leasing operations is particularly noteworthy, with year-over-year increases of 13.3% and 60.3% respectively in Q2. These areas could provide important buffers against net interest income pressure.

The bank's capital position remains strong, with shareholders' equity up 6.8% year-over-year. This provides flexibility for potential strategic initiatives or continued organic growth.

While the efficiency ratio has increased, Civista's investments in digital banking and software maintenance suggest a focus on long-term operational efficiency and customer experience enhancement.

In summary, Civista is demonstrating resilience in a challenging market, with strong loan growth and revenue diversification offsetting some of the pressure on net interest income. The bank's performance relative to regional peers positions it well for when the interest rate environment stabilizes.

SANDUSKY, Ohio, July 29, 2024 /PRNewswire/ -- Civista Bancshares, Inc. (NASDAQ: CIVB) ("Civista") announced its unaudited financial results for the three- and six-month periods ended June 30, 2024. 

Second quarter and year-to-date 2024 highlights:

• Earnings per diluted share (EPS) for the quarter were $0.45, higher by $0.04, or 10%, than the prior quarter, and lower by $0.19, or 30%, from the year-ago quarter.
• Net income of $7.1 million increased $0.7 million, or 11%, from the prior quarter and decreased $3.0 million, or 30%, compared to $10.0 million for the second quarter of 2023.
• Cost of deposits of 210 basis points and total funding costs of 261 basis points for the quarter.
• Based on the June 30, 2024 market close share price of $15.49, the $0.16 second quarter dividend is equivalent to an annualized yield of 4.13% and a dividend payout ratio of 35.6%.

CEO Commentary:

"Our second quarter earnings report shows solid loan and revenue growth compared to the last quarter, even with the higher interest expense on deposits", said Dennis G. Shaffer, CEO and President of Civista.

"We kept our credit quality strong while funding new loans, especially in residential real estate and construction. This growth highlights our focus on expanding our lending to meet the rising demand for housing and construction financing. By offering customized loan solutions, we've been able to support the needs of our customers and communities.", Shaffer commented.

Results of Operations:

For the three-month periods ended June 30 and March 31, 2024 and June 30, 2023

Net interest income decreased $0.6 million, or 2.2%, for the second quarter of 2024 compared to the first quarter of 2024.  Interest income increased $0.5 million, which was more than offset by an increase in interest expense of $1.1 million.  Both increases were driven by increases in rates and volume.      

Compared to the same period of 2023 net interest income decreased $3.6 million, or 11.4%, for the second quarter of 2024.  The lower net interest income was primarily driven by an increase in interest expense of $9.6 million, which was partially offset by an increase in interest income of $6.0 million.

The increase in interest income from the comparable prior year quarter was due to a 27-basis point increase in yield as well as a $264.8 million increase in average earning assets.  The increase in volume can be attributed to organic growth.

The increase in interest expense from the comparable prior year quarter was due to the average rate paid on interest-bearing liabilities increasing 104 basis points as well as average interest-bearing liabilities increasing $428.2 million.  The increase in interest-bearing liabilities was primarily in brokered time deposits and short-term borrowings to fund growth.  This shift in the funding mix, as well as rising interest rates, continues to drive the increase in funding costs.  Deposit costs have increased 118  basis points compared to a year ago.   Net interest margin was 3.09% for the second quarter of 2024.  It decreased 13 basis points from the first quarter of 2024, when it was 3.22%, and it decreased 66 basis points from the second quarter of 2023, when it was 3.75%.

Average Balance Analysis
(Unaudited - Dollars in thousands)
	Three Months Ended June 30,
	2024						2023
	Average				Yield/		Average				Yield/
Assets:	balance		Interest		rate *		balance		Interest		rate *
Interest-earning assets:
Loans **	$   2,964,377		$ 44,946		6.10 %		$   2,689,516		$ 39,252		5.85 %
Taxable securities ***	351,497		3,070		3.11 %		370,002		2,984		2.93 %
Non-taxable securities ***	288,128		2,372		3.87 %		288,513		2,319		3.79 %
Interest-bearing deposits in other banks	15,807		205		5.22 %		6,937		54		3.12 %
Total interest-earning assets ***	$   3,619,809		$ 50,593		5.58 %		$   3,354,968		$ 44,609		5.31 %
Noninterest-earning assets:
Cash and due from financial institutions	32,564						47,560
Premises and equipment, net	53,654						61,220
Accrued interest receivable	13,230						11,191
Intangible assets	134,473						135,669
Bank owned life insurance	61,871						53,878
Other assets	65,818						60,253
Less allowance for loan losses	(39,190)						(34,668)
Total Assets	$   3,942,229						$   3,690,071
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand and savings	$   1,339,503		$   3,054		0.92 %		$   1,364,648		$   1,546		0.45 %
Time	926,831		12,451		5.40 %		548,307		5,988		4.38 %
Short-term FHLB borrowings	440,670		6,078		5.55 %		242,395		3,113		5.15 %
Long-term FHLB borrowings	2,031		12		2.38 %		3,107		17		2.19 %
Other borrowings	-		-		0.00 %		109,248		1,406		5.16 %
Subordinated debentures	103,999		1,247		4.83 %		103,854		1,198		4.62 %
Repurchase agreements	-		-		0.00 %		13,234		2		0.06 %
Total interest-bearing liabilities	$   2,813,034		$ 22,842		3.27 %		$   2,384,793		$ 13,270		2.23 %
Noninterest-bearing deposits	703,046						904,757
Other liabilities	60,365						52,874
Shareholders' equity	365,784						347,647
Total Liabilities and Shareholders' Equity	$   3,942,229						$   3,690,071
Net interest income and interest rate spread			$ 27,751		2.31 %				$ 31,339		3.08 %
Net interest margin ***					3.09 %						3.75 %

* - Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $631 thousand and $617 thousand for the periods ended June 30, 2024 and 2023, respectively.

** - Average balance includes nonaccrual loans

*** - Average yield on investments were calculated by adjusting the average balances of taxable and nontaxable securities by unrealized losses of $69.4 million and $60.4 million, respectively.  These adjustments were also made when calculating the yield on earning assets and the margin.

For the six-month periods ended June 30, 2024 and 2023

Net interest income decreased $7.8 million, or 12.2%, compared to the same period in 2023.  Net interest margin decreased 71 basis points to 3.16% for the six months of 2024, compared to 3.87% for the same period a year ago.

Interest income increased $13.2 million, or 15.1%, for the first six months of 2024.  Average earning assets increased $251.9 million and average yields increased 35 basis points. The increase in volume can be attributed to organic growth.

Interest expense increased $21.0 million, or 89%, for the first six months of 2024 compared to the same period of 2023.  Average rates increased 121 basis points and average interest-bearing liabilities increased $419.7 million.  

Average Balance Analysis
(Unaudited - Dollars in thousands)
	Six Months Ended June 30,
	2024						2023
	Average				Yield/		Average				Yield/
Assets:	balance		Interest		rate *		balance		Interest		rate *
Interest-earning assets:
Loans **	$   2,922,204		$   89,431		6.15 %		$   2,669,830		$ 77,036		5.82 %
Taxable securities ***	351,156		6,004		3.06 %		372,413		5,818		2.85 %
Non-taxable securities ***	291,758		4,747		3.86 %		284,845		4,581		3.80 %
Interest-bearing deposits in other banks	21,062		539		5.15 %		7,166		99		2.79 %
Total interest-earning assets ***	$   3,586,180		$ 100,721		5.62 %		$   3,334,254		$ 87,534		5.27 %
Noninterest-earning assets:
Cash and due from financial institutions	31,123						44,584
Premises and equipment, net	54,317						62,002
Accrued interest receivable	12,977						10,924
Intangible assets	134,672						135,625
Bank owned life insurance	61,664						53,754
Other assets	62,414						60,478
Less allowance for loan losses	(38,273)						(32,555)
Total Assets	$   3,905,074						$   3,669,066
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand and savings	$   1,361,364		$     7,039		1.04 %		$   1,374,305		$   2,629		0.39 %
Time	914,637		24,452		5.38 %		429,016		8,137		3.82 %
Short-term FHLB borrowings	384,679		10,593		5.54 %		306,952		7,370		4.84 %
Long-term FHLB borrowings	2,153		25		2.34 %		3,274		37		2.28 %
Other borrowings	-		-		0.00 %		112,728		3,050		5.46 %
Subordinated debentures	103,978		2,489		4.81 %		103,834		2,367		4.60 %
Repurchase agreements	-		-		0.00 %		17,008		4		0.05 %
Total interest-bearing liabilities	$   2,766,811		$   44,598		3.24 %		$   2,347,117		$ 23,594		2.03 %
Noninterest-bearing deposits	707,806						926,929
Other liabilities	62,331						50,599
Shareholders' equity	368,126						344,421
Total Liabilities and Shareholders' Equity	$   3,905,074						$   3,669,066
Net interest income and interest rate spread			$   56,123		2.38 %				$ 63,940		3.24 %
Net interest margin ***					3.16 %						3.87 %

* - Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $1.3 million and $1.2 million for the periods ended June 30, 2024 and 2023, respectively.

** - Average balance includes nonaccrual loans

*** - 2024 and 2023 average yield on investments were calculated by adjusting the average balances of taxable and nontaxable securities by unrealized losses of $64.3 million and $61.8 million, respectively.  These adjustments were also made when calculating the yield on earning assets and the margin.

Provision for credit losses for the second quarter of 2024 was $1.8 million compared to $861 thousand for the second quarter of 2023.  Provision for unfunded commitments for the second quarter of 2024 was ($145) thousand compared to $264 thousand for the second quarter of 2023. 

Year-to-date 2024 provision for credit losses was $3.8 million compared to $1.5 million for the same period of 2023.  The year-to-date 2024 provision for unfunded commitments was ($195) thousand compared to $465 thousand for the same period of 2023.

The increases in provision during the second quarter and the first six months of 2024 over the comparable prior year periods were primarily attributable to funding loan growth, as well as a charge-off associated with a discrete fraud event in the second quarter of 2024.    

The reserve ratio as of June 30, 2024 was 1.32%, up from 1.30% at December 31, 2023.

For the second quarter of 2024, noninterest income totaled $10.5 million, an increase of $1.4 million, or 15.2%, compared to the prior year's second quarter.

Noninterest income
(unaudited - dollars in thousands)	Three months ended June 30,
	2024		2023		$ change		% change
Service charges	$    1,488		$    1,831		$     (343)		-18.7 %
Net gain/(loss) on equity securities	74		(170)		244		143.5 %
Net gain on sale of loans	888		615		273		44.4 %
ATM/Interchange fees	1,416		1,450		(34)		-2.3 %
Wealth management fees	1,337		1,180		157		13.3 %
Lease revenue and residual income	3,529		2,201		1,328		60.3 %
Bank owned life insurance	367		311		56		18.0 %
Tax refund processing fees	-	#	475		(475)		-100.0 %
Other	1,444		1,256		188		15.0 %
Total noninterest income	$ 10,543		$    9,149		$    1,394		15.2 %

Service charges for the second quarter of 2024 decreased $343 thousand as we have eliminated our representment fee and reduced our overdraft charges, the effect of which was partially offset by an increase in service fees.    

Net gain/loss on equity securities was the result of a market valuation adjustment.

Lease revenue and residual income for the second quarter of 2024 increased $1.3 million due to increased income from leasing operations.

Tax refund processing fee income is now zero as we exited our relationship with a third-party processor that was in the tax refund processing business.

For the six months ended June 30, 2024, noninterest income totaled $19.0 million, a decrease of $1.2 million, or 5.8%, compared to the same period in the prior year.

Noninterest income
(unaudited - dollars in thousands)	Six months ended June 30,
	2024		2023		$ change		% change
Service charges	$    2,928		$    3,604		$     (676)		-18.8 %
Net gain/(loss) on equity securities	(67)		(238)		171		71.8 %
Net gain on sale of loans	1,751		1,246		505		40.5 %
ATM/Interchange fees	2,799		2,803		(4)		-0.1 %
Wealth management fees	2,613		2,373		240		10.1 %
Lease revenue and residual income	5,203		4,247		956		22.5 %
Bank owned life insurance	717		564		153		27.1 %
Tax refund processing fees	-		2,375		(2,375)		-100.0 %
Other	3,103		3,243		(140)		-4.3 %
Total noninterest income	$ 19,047		$ 20,217		$  (1,170)		-5.8 %

Service charges for the first six months of 2024 decreased $676 thousand as we have eliminated our representment fee and reduced our overdraft charges, the effect of which was partially offset by an increase in service fees. 

Net gain/loss on equity securities was the result of a market valuation adjustment.    

Net gain on sale of loans for the first six months of 2024 increased primarily due to an increase in volume of loans sold.

Lease revenue and residual income for the first six months of 2024 increased $956 thousand principally due to increased revenue from leasing operations.

Tax refund processing fee income is now zero as we exited our relationship with a third-party processor that was in the tax refund processing business.

For the second quarter of 2024, noninterest expense totaled $28.6 million, an increase of $866, or 3.1%, compared to the first quarter of 2024, and an increase of $906 thousand, or 3.3%, compared to the prior year's second quarter.

Noninterest expense
(unaudited - dollars in thousands)	Three months ended June 30,
	2024		2023		$ change		% change
Compensation expense	$    15,740		$   14,978		$       762		5.1 %
Net occupancy and equipment	3,732		4,135		(403)		-9.7 %
Contracted data processing	559		559		-		0.0 %
Taxes and assessments	1,027		1,183		(156)		-13.2 %
Professional services	1,249		1,239		10		0.8 %
Amortization of intangible assets	366		399		(33)		-8.3 %
ATM/Interchange expense	632		615		17		2.8 %
Marketing	445		540		(95)		-17.6 %
Software maintenance expense	1,176		1,059		117		11.0 %
Other	3,629		2,942		687		23.4 %
Total noninterest expense	$    28,555		$   27,649		$       906		3.3 %

Compensation expense for the second quarter of 2024 increased primarily due to annual merit increases, employee insurance and other payroll related expenses.    

The decrease in occupancy and equipment expense for the second quarter of 2024 was primarily due to a decrease in equipment depreciation from leasing operations as operating leases mature.

The increase in software maintenance expense for the second quarter of 2024 was due to an increase in software maintenance contracts, including investments in digital banking.

Other expenses include expenses for the SBA, CDARS and ICS programs and additional ATM/Debit card losses.

The efficiency ratio was 72.6% for the quarter ended June 30, 2024, compared to 66.0% for the quarter ended June 30, 2023. The increase in the efficiency ratio was driven largely as a result of the decrease in net interest income.

For the six months ended June 30, 2024, noninterest expense totaled $56.2 million, an increase of $1.2 million, or 2.1%, compared to the same period in the prior year.

Noninterest expense
(unaudited - dollars in thousands)	Six months ended June 30,
	2024		2023		$ change		% change
Compensation expense	$  31,197		$    30,083		$    1,114		3.7 %
Net occupancy and equipment	7,635		8,255		(620)		-7.5 %
Contracted data processing	1,104		1,079		25		2.3 %
Taxes and assessments	1,996		1,957		39		2.0 %
Professional services	2,398		2,794		(396)		-14.2 %
Amortization of intangible assets	757		797		(40)		-5.0 %
ATM/Interchange expense	1,257		1,195		62		5.2 %
Marketing	924		1,045		(121)		-11.6 %
Software maintenance expense	2,365		1,937		428		22.1 %
Other	6,611		5,939		672		11.3 %
Total noninterest expense	$  56,244		$    55,081		$    1,163		2.1 %

Compensation expense for the first six months of 2024 increased primarily due to annual merit increases, employee insurance and other payroll related expenses. The year-to-date average full time equivalent (FTE) employees were 538 at June 30, 2024, an increase of 6 FTEs over the same period in 2023. 

The decrease in occupancy and equipment expense for the first six months of 2024 was primarily due to a decrease in equipment depreciation from leasing operations as operating leases mature.

Professional services for the first six months of 2024 decreased primarily due to advisory fees in 2023 for the company's MasterCard contract of $400 thousand. 

The increase in software maintenance expense for the first six months of 2024 was due to an increase in software maintenance contracts, including on new software related to digital banking investments.   

Other expenses include expenses for the SBA, CDARS and ICS programs and ATM/Debit card losses.

The efficiency ratio was 72.5% for the first six months ended June 30, 2024 compared to 63.4% for the first six months ended June 30, 2023. The increase in the efficiency ratio was driven largely as a result of the decrease in net interest income and the reduction in non-interest income related to the exit from the tax refund processing business.

Income Taxes

Civista's effective income tax rate for the second quarter 2024 was 12.6% compared to 14.3% in 2023. The effective income tax rate for the six months ended June 30, 2024 was 12.1% compared to 15.5% for the six months ended June 30, 2023.

Balance Sheet

Total assets increased $131.7 million, or 3.4%, from March 31, 2024 to June 30, 2024, primarily due to growth in the loan portfolio.

Total assets increased $150.5 million, or 3.9%, from December 31, 2023 to June 30, 2024, and $303.8 million, or 8.2% from June 30, 2023 to June 30, 2024.

End of period loans and leases:

(unaudited - dollars in thousands)
	June 30,		December 31,
	2024		2023		$ Change		% Change
Commercial and Agriculture	$           318,499		$           304,793		$    13,706		4.5 %
Commercial Real Estate:
Owner Occupied	377,308		377,322		(14)		0.0 %
Non-owner Occupied	1,213,341		1,161,893		51,448		4.4 %
Residential Real Estate	729,213		659,841		69,372		10.5 %
Real Estate Construction	283,446		260,409		23,037		8.8 %
Farm Real Estate	24,376		24,771		(395)		-1.6 %
Lease financing receivable	53,461		54,642		(1,181)		-2.2 %
Consumer and Other	15,352		18,056		(2,704)		-15.0 %
Total Loans	$        3,014,996		$        2,861,727		$  153,269		5.4 %

Loan and lease balances increased $153.3 million, or 5.4% since December 31, 2023.  Commercial Real Estate loans continued to grow due to consistent demand in the Non-owner Occupied category, especially in multi-family in the major Ohio metropolitan areas.  Real Estate Construction loans have increased with consistent demand for more projects across our footprint.  The undrawn construction availability continues to be near all-time highs.  Residential Real Estate loans have grown primarily due to more home construction loans and continued new production in our Community Reinvestment Act ("CRA") product. 

Deposits

Total deposits decreased $3.1 million or 0.1%, from March 31, 2024 to June 30, 2024.

Total deposits increased $34.8 million or 1.2%, from June 30, 2023 to June 30, 2024 and decreased $7.4 million, or 0.2%, from December 31, 2023 to June 30, 2024.

End of period deposit balances
(unaudited - dollars in thousands)
	June 30,		December 31,
	2024		2023		$ Change		% Change
Noninterest-bearing demand	$             691,203		$             771,699		$     (80,496)		-10.4 %
Interest-bearing demand	409,848		449,449		(39,601)		-8.8 %
Savings and money market	940,312		863,067		77,245		9.0 %
Time deposits	936,254		900,813		35,441		3.9 %
Total Deposits	$         2,977,617		$         2,985,028		$       (7,411)		-0.2 %

The $80.5 million decrease in noninterest-bearing demand deposits from December 31, 2023 was primarily due to a $49.0 million decrease in noninterest-bearing business accounts and a $24.8 million decrease in noninterest-bearing accounts related to the former tax refund processing program. 

The $39.6 million decrease from December 31, 2023 in interest-bearing demand deposits was primarily due to a $17.2 million decrease in interest-bearing personal accounts, a $8.5 million decrease in Jumbo NOW accounts, and a $5.8 million decrease in interest-bearing business accounts.

The $77.2 million increase from December 31, 2023 in savings and money market was primarily due to a $54.1 million increase in brokered money market accounts, and a $6.8 million increase in business money market accounts.   

The increase in time certificates from December 31, 2023 was primarily due to a $17.3 million increase in Jumbo time certificates, and a $18.3 million increase in retail time certificates, partially offset by a $19.3 million decrease in brokered time deposits.    

FHLB overnight advances totaled $500.5 million on June 30, 2024, up from $338.0 million on December 31, 2023.  FHLB term advances totaled $1.8 million on June 30, 2024, down from $2.4 million on December 31, 2023.

Stock Repurchase Program

On April 18, 2024, Civista announced a new common share repurchase program pursuant to which the Company was authorized to repurchase a maximum aggregate value of $13,500,000 of its outstanding common shares through April 15, 2025. As of June 30, 2024, no common shares had been repurchased under this common share repurchase program. During January 2024, a total of 8,262 shares (valued at $18.38 per share) were surrendered by employees to satisfy tax obligations stemming from vesting of restricted shares.

Shareholders' Equity

Total shareholders' equity at June 30, 2024 increased $3.8 million, or 1.0% from March 31, 2024, primarily due to a $4.5 million, or 2.4% increase in retained earnings, partially offset by a $0.6 million, or 1.1%, increase in accumulated other comprehensive loss.

Total shareholders' equity at June 30, 2024 increased $1.8 million from December 31, 2023, primarily due to an $8.4 million increase in retained earnings, partially offset by an additional accumulated other comprehensive loss of $6.8 million.

Total shareholders' equity at June 30, 2024 increased $23.9 million, or 6.8%, from June 30, 2023, due to increased retained earnings of $23.4 million, or 13.9%, and an additional accumulated other comprehensive loss of $1.4 million.

Asset Quality

Civista recorded net charge-offs of $1.1 million for the first six months of 2024 compared to net charge-offs of $36 thousand for the same period of 2023.  The allowance for credit losses to loans ratio was 1.32% at June 30, 2024 and 1.30% at December 31, 2023.  The increase in charge-offs was partially attributable to a $500 thousand charge-off on a commercial and industrial loan related to a fraud.  

Allowance for Credit Losses
(dollars in thousands)
	June 30,		June 30,
	2024		2023
January 1	$         37,160		$         28,511
CECL adoption adjustments	-		5,193
Charge-offs	(1,538)		(189)
Recoveries	455		153
Provision	3,842		1,481
End of period	$         39,919		$         35,149

 

Allowance for Unfunded Commitments
(dollars in thousands)
	June 30,		June 30,
	2024		2023
January 1	$           3,901		$                   -
CECL adoption adjustments	-		3,386
Charge-offs	-		-
Recoveries	-		-
Provision	(195)		465
End of period	$           3,706		$           3,851

Non-performing assets at June 30, 2024 were $17.1 million, a 13%, or $1.9 million increase from December 31, 2023. The non-performing assets to total assets ratio was 0.37% at June 30, 2024 and 0.39% at December 31, 2023, a decrease of 0.02%.  The allowance for credit losses to non-performing loans was 233.47% at June 30, 2024, a decrease from 245.66% at December 31, 2023 and 327.05% at June 30, 2023.

Non-performing Assets:

(dollars in thousands)	June 30,		December 31,
	2024		2023
Non-accrual loans	$        15,209		$        12,467
Restructured loans	1,889		2,659
Total non-performing loans	17,098		15,126
Other Real Estate Owned	-		-
Total non-performing assets	$        17,098		$        15,126

Conference Call and Webcast

Civista Bancshares, Inc. will host a conference call to discuss the Company's financial results for the second quarter of 2024 at 1:00 p.m. ET on Monday, July 29, 2024.  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 800-836-8184 and ask to be joined into the Civista Bancshares, Inc. second quarter 2024 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, 2023, 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 $4.0 billion financial holding company headquartered in Sandusky, Ohio.  Its primary subsidiary, Civista Bank, was founded in 1884 and provides full-service banking, commercial lending, mortgage, and wealth management services.  Today, Civista Bank operates 43 locations across Ohio, Southeastern Indiana and Northern Kentucky.  Civista Bank also offers commercial equipment leasing services for businesses nationwide through its Civista Leasing and Finance Division (formerly Vision Financial Group, Inc.), headquartered in Pittsburgh, Pennsylvania.  Civista Bancshares' common shares are traded on the NASDAQ Capital Market under the symbol "CIVB".  Learn more at www.civb.com.

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

Consolidated Condensed Statement of Income
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Interest income	$         50,593		$         44,609		$       100,721		$         87,534
Interest expense	22,842		13,270		44,598		23,594
Net interest income	27,751		31,339		56,123		63,940
Provision for credit losses	1,655		1,125		3,647		1,946
Net interest income after provision	26,096		30,214		52,476		61,994
Noninterest income	10,543		9,149		19,047		20,217
Noninterest expense	28,555		27,649		56,244		55,081
Income before taxes	8,084		11,714		15,279		27,130
Income tax expense	1,020		1,680		1,855		4,208
Net income	7,064		10,034		13,424		22,922
Dividends paid per common share	$             0.16		$             0.15		$             0.32		$             0.29
Earnings per common share
Basic
Net income	$           7,064		$         10,034		$         13,424		$         22,922
Less allocation of earnings and
dividends to participating securities	266		374		492		831
Net income available to common
shareholders - basic	$           6,798		$           9,660		$         12,932		$         22,091
Weighted average common shares outstanding	15,729,049		15,775,812		15,712,499		15,754,072
Less average participating securities	591,712		588,715		576,528		570,897
Weighted average number of shares outstanding
used to calculate basic earnings per share	15,137,337		15,187,097		15,135,971		15,183,175
Earnings per common share
Basic	$             0.45		$             0.64		$             0.85		$             1.45
Diluted	0.45		0.64		0.85		1.45
Selected financial ratios:
Return on average assets	0.72 %		1.12 %		0.69 %		1.29 %
Return on average equity	7.77 %		11.58 %		7.33 %		13.42 %
Dividend payout ratio	35.63 %		23.58 %		37.46 %		19.93 %
Net interest margin (tax equivalent)	3.09 %		3.75 %		3.16 %		3.87 %
Effective income tax rate	12.6 %		14.3 %		12.1 %		15.5 %

 

Selected Balance Sheet Items
(Dollars in thousands, except share and per share amounts)
	June 30,		December 31,
	2024		2023
	(unaudited)		(unaudited)
Cash and due from financial institutions	$                 55,760		$                 60,406
Investment in time deposits	1,450		1,225
Investment securities	611,866		620,441
Loans held for sale	5,369		1,725
Loans	3,014,996		2,861,728
Less: allowance for credit losses	(39,919)		(37,160)
Net loans	2,975,077		2,824,568
Other securities	37,615		29,998
Premises and equipment, net	52,142		56,769
Goodwill and other intangibles	134,227		135,028
Bank owned life insurance	63,367		61,335
Other assets	75,041		69,923
Total assets	$            4,011,914		$            3,861,418
Total deposits	$            2,977,616		$            2,985,028
Federal Home Loan Bank advances - short term	500,500		338,000
Federal Home Loan Bank advances - long term	1,841		2,392
Subordinated debentures	104,026		103,943
Other borrowings	7,156		9,859
Securities purchased payable	-		-
Tax refunds in process	-		2,885
Accrued expenses and other liabilities	46,967		47,309
Total shareholders' equity	373,808		372,002
Total liabilities and shareholders' equity	$            4,011,914		$            3,861,418
Shares outstanding at period end	15,737,222		15,695,424
Book value per share	$                    23.75		$                    23.70
Equity to asset ratio	9.32 %		9.63 %
Selected asset quality ratios:
Allowance for credit losses to total loans	1.32 %		1.30 %
Non-performing assets to total assets	0.43 %		0.39 %
Allowance for credit losses to non-performing loans	233.47 %		245.67 %
Non-performing asset analysis
Nonaccrual loans	$                 15,209		$                 12,467
Troubled debt restructurings	1,889		2,659
Other real estate owned	-		-
Total	$                 17,098		$                 15,126

 

Supplemental Financial Information
(Unaudited - dollars in thousands except share data)
	June 30,		March 31,		December 31,		September 30,		June 30,
End of Period Balances	2024		2024		2023		2023		2023
Assets
Cash and due from banks	$       55,760		$       50,310		$       60,406		$       50,316		$        41,354
Investment in time deposits	1,450		1,450		1,225		1,472		1,719
Investment securities	611,866		608,277		620,441		595,508		619,250
Loans held for sale	5,369		3,716		1,725		1,589		3,014
Loans and leases	3,014,996		2,898,139		2,861,728		2,759,771		2,728,390
Allowance for credit losses	(39,919)		(38,849)		(37,160)		(35,280)		(35,149)
Net Loans	2,975,077		2,859,290		2,824,568		2,724,491		2,693,241
Other securities	37,615		31,360		29,998		34,224		28,449
Premises and equipment, net	52,142		54,280		56,769		58,989		60,899
Goodwill and other intangibles	134,227		134,618		135,028		134,998		135,406
Bank owned life insurance	63,367		61,685		61,335		54,053		53,787
Other assets	75,041		75,272		69,923		82,157		70,971
Total Assets	$  4,011,914		$  3,880,258		$  3,861,418		$  3,737,797		$  3,708,090
Liabilities
Total deposits	$  2,977,616		$  2,980,695		$  2,985,028		$  2,795,743		$  2,942,774
Federal Home Loan Bank advances - short term	500,500		368,500		338,000		431,500		142,000
Federal Home Loan Bank advances - long term	1,841		2,211		2,392		2,573		2,859
Securities sold under agreement to repurchase	-		-		-		-		6,788
Subordinated debentures	104,026		103,984		103,943		103,921		103,880
Other borrowings	7,156		8,105		9,859		10,964		12,568
Secured borrowings	-		-		-		4,881		92,110
Securities purchased payable	-		-		-		1,755		-
Tax refunds in process	-		-		2,885		493		7,208
Accrued expenses and other liabilities	46,967		47,104		47,309		53,222		48,027
Total liabilities	3,638,106		3,510,599		3,489,416		3,405,052		3,358,214
Shareholders' Equity
Common shares	311,529		311,352		311,166		310,975		310,784
Retained earnings	192,186		187,638		183,788		176,644		168,777
Treasury shares	(75,574)		(75,574)		(75,422)		(75,412)		(73,915)
Accumulated other comprehensive loss	(54,333)		(53,757)		(47,530)		(79,462)		(55,770)
Total shareholders' equity	373,808		369,659		372,002		332,745		349,876
Total Liabilities and Shareholders' Equity	$  4,011,914		$  3,880,258		$  3,861,418		$  3,737,797		$  3,708,090
Quarterly Average Balances
Assets:
Earning assets	$  3,619,809		$  3,552,552		$  3,449,344		$  3,443,226		$  3,354,968
Securities	639,625		646,203		645,202		645,202		658,515
Loans	2,964,377		2,880,031		2,805,995		2,742,736		2,689,516
Liabilities and Shareholders' Equity
Total deposits	$  2,969,380		$  2,998,150		$  2,977,802		$  2,946,849		$  2,817,712
Interest-bearing deposits	2,266,334		2,285,667		2,163,160		1,966,014		1,912,955
Other interest-bearing liabilities	546,700		431,919		383,877		178,614		471,837
Total shareholders' equity	365,784		370,452		337,866		348,209		347,647

 

Supplemental Financial Information
(Unaudited - dollars in thousands except share data)
	Three Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
Income statement	2024		2024		2023		2023		2023
Total interest and dividend income	$          50,593		$          50,128		$          48,599		$          46,601		$          44,609
Total interest expense	22,842		21,756		18,547		15,097		13,270
Net interest income	27,751		28,372		30,052		31,504		31,339
Provision for credit losses	1,800		2,042		2,325		630		861
Provision for unfunded commitments	(145)		(50)		(80)		130		264
Noninterest income	10,543		8,504		8,823		8,125		9,149
Noninterest expense	28,555		27,689		25,393		26,622		27,649
Income before taxes	8,084		7,195		11,237		12,247		11,714
Income tax expense	1,020		835		1,582		1,860		1,680
Net income	$            7,064		$            6,360		$            9,655		$          10,387		$          10,034
Per share data
Earnings per common share
Basic
Net income	$            7,064		$            6,360		$            9,655		$          10,387		$          10,034
Less allocation of earnings and
dividends to participating securities	266		227		362		389		374
Net income available to common
shareholders - basic	$            6,798		$            6,133		$            9,293		$            9,998		$            9,660
Weighted average common shares outstanding	15,729,049		15,695,963		15,695,978		15,735,007		15,775,812
Less average participating securities	591,712		561,344		588,625		588,715		588,715
Weighted average number of shares outstanding
used to calculate basic earnings per share	15,137,337		15,134,619		15,107,353		15,146,292		15,187,097
Earnings per common share
Basic	$              0.45		$              0.41		$              0.62		$              0.66		$              0.64
Diluted	$              0.45		0.41		0.62		0.66		0.64
Common shares dividend paid	$            2,516		$            2,510		$            2,511		$            2,521		$            2,367
Dividends paid per common share	0.16		0.16		0.16		0.16		0.15

 

Supplemental Financial Information
(Unaudited - dollars in thousands except share data)
	Three Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
Asset quality	2024		2024		2023		2023		2023
Allowance for credit losses:
Beginning of period	$         38,849		$         37,160		$         35,280		$         35,251		$         34,196
Charge-offs	(887)		(651)		(577)		(666)		(14)
Recoveries	157		298		132		65		208
Provision	1,800		2,042		2,325		630		861
End of period	$         39,919		$         38,849		$         37,160		$         35,280		$         35,251
Allowance for unfunded commitments:
Beginning of period	$            3,851		$            3,901		$            3,981		$            3,851		$            3,587
Charge-offs	-		-		-		-		-
Recoveries	-		-		-		-		-
Provision	(145)		(50)		(80)		130		264
End of period	$            3,706		$            3,851		$            3,901		$            3,981		$            3,851
Ratios
Allowance to total loans	1.32 %		1.34 %		1.30 %		1.28 %		1.29 %
Allowance to non-performing assets	233.47 %		247.06 %		245.66 %		308.52 %		327.05 %
Allowance to non-performing loans	233.47 %		247.06 %		245.66 %		308.52 %		327.05 %
Non-performing assets to total assets	0.43 %		0.41 %		0.39 %		0.31 %		0.29 %
Non-performing assets
Non-performing loans	$         17,098		$         15,725		$         15,126		$         11,435		$         10,747
Other real estate owned	-		-		-		-		-
Total non-performing assets	$         17,098		$         15,725		$         15,126		$         11,435		$         10,747
Capital and liquidity
Tier 1 leverage ratio	8.59 %		8.62 %		8.75 %		8.73 %		8.69 %
Tier 1 risk-based capital ratio	10.63 %		10.81 %		10.72 %		10.82 %		10.71 %
Total risk-based capital ratio	14.28 %		14.53 %		14.45 %		14.60 %		14.49 %
Tangible common equity ratio (1)	6.18 %		6.28 %		6.36 %		5.49 %		6.00 %
(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
	June 30,		March 31,		December 31,		September 30,		June 30,
	2024		2024		2023		2023		2023
Tangible Common Equity
Total Shareholder's Equity - GAAP	$       373,808		$       369,659		$       372,002		$       332,745		$       349,876
Less: Goodwill and intangible assets	134,227		134,618		135,028		134,998		135,406
Tangible common equity (Non-GAAP)	$       239,581		$       235,041		$       236,974		$       197,747		$       214,470
Total Shares Outstanding	15,737,222		15,727,013		15,695,424		15,695,997		15,780,227
Tangible book value per share	$            15.22		$            14.95		$            15.10		$            12.60		$            13.59
Tangible Assets
Total Assets - GAAP	$    4,011,914		$    3,880,258		$    3,861,418		$    3,737,797		$    3,708,090
Less: Goodwill and intangible assets	134,227		134,618		135,028		134,998		135,406
Tangible assets (Non-GAAP)	$    3,877,687		$    3,745,640		$    3,726,390		$    3,602,799		$    3,572,684
Tangible common equity to tangible assets	6.18 %		6.28 %		6.36 %		5.49 %		6.00 %

 

The efficiency ratio is noninterest expenses, less amortization of intangible assets and acquisition related costs, as a percentage of FTE net interest income plus noninterest income. The following tables reconcile the non-GAAP financial measures of the efficiency ratio to GAAP for the three and six months ended June 30, 2024 and 2023:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
Efficiency ratio (non-GAAP):	2024		2023		2024		2023
Noninterest expense (GAAP)	$    28,555		$    27,649		$    56,244		$    55,081
Less: Amortization of intangible assets expense	366		399		757		797
Less: Acquisition related expenses	-		-		-		-
Noninterest expense (non-GAAP)	28,189		27,250		55,487		54,284
Net interest income (GAAP)	27,751		31,339		56,123		63,940
Plus: Taxable equivalent adjustment	631		629		1,262		1,219
Noninterest income (GAAP)	10,543		9,149		19,047		20,217
Less: Net gains (losses) on equity securities	74		(170)		(67)		(238)
Net interest income (FTE) plus noninterest income (non-GAAP)	38,851		41,287		76,499		85,614
Efficiency ratio (non-GAAP)	72.6 %		66.0 %		72.5 %		63.4 %

 

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SOURCE Civista Bancshares, Inc.

FAQ

What were Civista Bancshares' EPS for Q2 2024?

The EPS for Q2 2024 was $0.45.

How did Civista Bancshares' net income perform in Q2 2024?

Net income was $7.1 million, an 11% increase from the prior quarter but a 30% decrease from Q2 2023.

How did Civista Bancshares' net interest income change in Q2 2024?

Net interest income decreased by $0.6 million from the prior quarter and $3.6 million from the same quarter last year.

What was Civista Bancshares' total asset growth in Q2 2024?

Total assets increased by $131.7 million from the prior quarter.

How did Civista Bancshares' noninterest income perform in Q2 2024?

Noninterest income increased by 15.2% from the same quarter last year, totaling $10.5 million.

What was Civista Bancshares' provision for credit losses in Q2 2024?

The provision for credit losses was $1.8 million, up from $861 thousand in Q2 2023.

Did Civista Bancshares' deposits change in Q2 2024?

Total deposits decreased by $3.1 million from the prior quarter but increased by $34.8 million from the same quarter last year.

What dividend did Civista Bancshares declare for Q2 2024?

Civista declared a dividend of $0.16 per share, with an annualized yield of 4.13% and a payout ratio of 35.6%.