Civista Bancshares, Inc. Announces Third Quarter 2024 Financial Results of $0.53 per Common Share

SANDUSKY, Ohio, Oct. 29, 2024 /PRNewswire/ -- Civista Bancshares, Inc. (NASDAQ: CIVB) ("Civista") announced its unaudited financial results for the three- and nine-month periods ending September 30, 2024.

Third quarter and year-to-date 2024 highlights:

• Net income of $8.4 million, or $0.53 per diluted share, for the third quarter of 2024, compared to $10.4 million, or $0.66 per diluted share, for the third quarter of 2023.
• Net income of $21.8 million, or $1.39 per diluted share, compared to $33.3 million, or $2.12 per diluted share, for the nine months ended September 30, 2024 and 2023, respectively.
• Replaced nearly $5.7 million in non-interest income, for the nine months ended September 30, 2024 compared to the same period in 2023. This includes reductions in overdraft fees ($1.8 million), tax refund processing revenue ($2.4 million), and the 2023 MasterCard renewal fee ($1.5 million). Despite these decreases, non-interest income for the nine months ended September 30, 2024, is $0.4 million higher than the same period in 2023.
• Cost of deposits of 218 basis points and total funding costs of 261 basis points for the quarter.
• Based on the September 30, 2024, market close share price of $17.82, the $0.16 third quarter dividend is equivalent to an annualized yield of 3.59% and a dividend payout ratio of 30.2%.

CEO Commentary:

"We're pleased with our third-quarter earnings and performance. This quarter, we maintained a disciplined approach to loan and deposit pricing and effectively implemented our downward beta strategy. We also launched some of our deposit initiatives, that better aligned our lending and core funding. As a result, we increased deposits by $246 million and reduced wholesale borrowings by $213 million, contributing to an Earnings Per Share of $0.53, up from $0.45 last quarter.", said Dennis G. Shaffer, CEO and President of Civista.

"Our credit quality remains strong, as we continue to support lending and deepen our customer relationships. We're committed to meeting the rising demand for housing and construction financing, ensuring we address the needs of our customers and communities. With a strong third quarter coupled with the inflection in our net interest margin, we're well positioned for a strong finish to 2024.", Shaffer commented.

Results of Operations:

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

Net interest income increased $1.5 million, or 5.3%, for the third quarter of 2024 compared to the second quarter of 2024.

Interest income increased $2.1 million attributed to average interest-earning assets increasing $86 million coupled with a 6 basis point increase in asset yield.

The increase in interest income was partially offset by a $0.7 million increase in interest expenses. This was due to $246 million growth in deposits ($139 million in average balances) and a $214 million reduction in FHLB borrowings ($53 million in average balances), resulting in a net increase of $86 million in average interest-bearing liabilities when comparing Q3 2024 to Q2 2024.

When comparing the third quarter of 2024 to the same period of 2023. Net interest income declined $2.3 million. Interest income increased $6.1 million while interest expense increased $8.4 million.

Net interest margin decreased 53 basis points to 3.16% for the third quarter of 2024, compared to 3.69% for the same period a year ago.

The increase in interest income was primarily due to a 30-basis point increase in interest-earning asset yield, which led to $2.6 million of the increase in interest income. Additionally, a $325.7 million increase in average interest-earning assets led to $4.4 million of the increase in interest income.

Interest expense increased $8.4 million for the third quarter of 2024, compared to the same period last year. The average rate paid on interest-bearing liabilities increased 78 basis points, while average interest-bearing liabilities increased $583.9 million. The increase in interest-bearing liabilities was $320.3 million in time-deposits, $118.9 million in demand and savings, and $154.5 million in short-term borrowings to fund growth. This shift in the funding mix, as well as rising rates, is driving the increase in the funding rate. The 78-basis point increase in funding yield led to $4.5 million additional interest expense. Additionally, the $583.9 million of additional funds led to $4.7 million of additional interest expense. Interest-bearing deposit costs have increased 65.6% compared to a year ago.

Average Balance Analysis
(Unaudited - Dollars in thousands)
	Three Months Ended September 30,
	2024										2023
	Average						Yield/				Average						Yield/
Assets:	balance			Interest			rate *				balance			Interest			rate *
Interest-earning assets:
Loans **	$	3,031,884			46,899			6.15	%		$	2,679,679		$	40,547			5.88	%
Taxable securities ***		363,584			3,258			3.24	%			359,154			2,999			2.95	%
Non-taxable securities ***		291,254			2,369			3.83	%			286,048			2,336			3.77	%
Federal funds sold	-			-				0.00	%			-			-			0.00	%
Interest-bearing deposits in other banks		19,144			215			4.47	%			55,288			719			5.16	%
Total interest-earning assets ***	$	3,705,866		$	52,741			5.64	%		$	3,380,169		$	46,601			5.34	%
Noninterest-earning assets:
Cash and due from financial institutions		36,868										22,542
Premises and equipment, net		51,342										50,999
Accrued interest receivable		13,802										11,673
Intangible assets		134,083										128,215
Bank owned life insurance		63,190										53,879
Other assets		57,856										64,008
Less allowance for loan losses		(40,068)										(34,283)
Total Assets	$	4,022,939									$	3,677,202
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand and savings	$	1,452,850		$	4,074			1.12	%		$	1,333,903		$	2,189			0.65	%
Time		952,369			12,853			5.37	%			632,111			7,395			4.64	%
Short-term FHLB borrowings		388,022			5,328			5.46	%			233,547			4,061			5.51	%
Long-term FHLB borrowings		1,697			10			2.34	%			2,644			15			2.25	%
Other borrowings		-			-			0.00	%			8,026			198			9.91	%
Subordinated debentures		104,040			1,243			4.75	%			103,894			1,239			4.73	%
Repurchase agreements		-			-			0.00	%			993			-			0.00	%
Total interest-bearing liabilities	$	2,898,978		$	23,508			3.23	%		$	2,315,118		$	15,097			2.45	%
Noninterest-bearing deposits		687,364										980,835
Other liabilities		55,205										33,040
Shareholders' equity		381,392										348,209
Total Liabilities and Shareholders' Equity	$	4,022,939									$	3,677,202
Net interest income and interest rate spread				$	29,233			2.42	%					$	31,504			2.89	%
Net interest margin ***								3.16	%									3.69	%
* - Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $630 thousand and $621 thousand for the periods ended September 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 $57.2 million and $69.2 million, respectively. These adjustments were also made when calculating the yield on earning assets and the margin

For the nine-month periods ended September 30, 2024 and 2023

Net interest income decreased $10.1 million, or 10.6%, compared to the same period in 2023.

Interest income increased $22.8 million, or 17.5%, for the nine months of 2024 compared to the same period of 2023. Average interest-earning assets increased $342.2 million. Average yields increased 32 basis points. The increase in volume is due to organic loan growth.

Interest expense increased $32.9 million, or 93.4%, for the nine months of 2024 compared to the same period of 2023. Average rate paid on interest-bearing liabilities increased 117 basis points compared to 2023. Average interest-bearing liabilities increased $540.3 million for the nine months of 2024 compared to the same period of 2023. Demand, Savings and Time deposits increased $461.2 million, collectively, and FHLB borrowings increased $102.5 million for the the nine months of 2024 compared to the same period of 2023 to fund growth.

Net interest margin decreased of 72 basis points to 3.16% for the nine months of 2024, compared to 3.88% for the same period a year ago.

Average Balance Analysis
(Unaudited - Dollars in thousands)
	Nine Months Ended September 30,
	2024										2023
	Average						Yield/				Average						Yield/
Assets:	balance			Interest			rate *				balance			Interest			rate *
Interest-earning assets:
Loans **	$	2,959,031		$	136,330			6.15	%		$	2,607,632		$	114,108			5.85	%
Taxable securities ***		355,329			9,262			3.12	%			367,946			8,817			2.89	%
Non-taxable securities ***		291,589			7,116			3.85	%			285,250			6,917			3.79	%
Interest-bearing deposits in other banks		20,419			754			4.93	%			23,382			818			4.67	%
Total interest-earning assets ***	$	3,626,368		$	153,462			5.61	%		$	3,284,210		$	130,660			5.29	%
Noninterest-earning assets:
Cash and due from financial institutions		34,807										33,918
Premises and equipment, net		53,318										58,338
Accrued interest receivable		13,254										11,176
Intangible assets		134,474										133,154
Bank owned life insurance		62,176										53,796
Other assets		61,225										61,669
Less allowance for loan losses		(38,876)										(33,138)
Total Assets	$	3,946,746									$	3,603,123
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand and savings	$	1,392,082		$	11,113			1.07	%		$	1,360,692		$	4,818			0.47	%
Time		927,306			37,305			5.37	%			497,458			15,532			4.17	%
Short-term FHLB borrowings		385,801			15,921			5.51	%			282,214			10,617			5.03	%
Long-term FHLB borrowings		2,000			35			2.34	%			3,062			51			2.23	%
Other borrowings		-			-			0.00	%			11,953			587			6.57	%
Subordinated debentures		103,999			3,732			4.79	%			103,854			3,607			4.67	%
Repurchase agreements		-			-			0.00	%			11,611			4			0.05	%
Total interest-bearing liabilities	$	2,811,188		$	68,106			3.24	%		$	2,270,844		$	35,216			2.07	%
Noninterest-bearing deposits		702,696										941,842
Other liabilities		60,282										44,739
Shareholders' equity		372,580										345,698
Total Liabilities and Shareholders' Equity	$	3,946,746									$	3,603,123
Net interest income and interest rate spread				$	85,356			2.37	%					$	95,444			3.22	%
Net interest margin ***								3.16	%									3.88	%
* - Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $1.9 million and $1.8 million for the periods ended September 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 $61.9 million and $64.3 million, respectively. These adjustments were also made when calculating the yield on earning assets and the margin

Provision for credit losses for the third quarter of 2024 was $1.3 million compared to $0.6 million for the third quarter of 2023. Provision for unfunded commitments for the third quarter of 2024 was (- $0.3) million compared to $0.1 million for the third quarter of 2023.

Year-to-date 2024 provision for credit losses (including provision for unfunded commitments) was $4.7 million compared to $2.7 million for the same period of 2023.

The Allowance to total loans ratio as of September 30, 2024 was 1.36%, up from 1.32% on June 30, 2024 and up from 1.30% at December 31, 2023. The increased reserve requirement is attributed to longer expected lives of certain loans due to slower expected prepayments of lower interest rate loans in this higher interest rate environment.

For the third quarter of 2024, noninterest income totaled $9.7 million, a decrease of $0.9 million or 8.1% from second quarter 2024 and an increase of $1.6 million, or 19.2%, compared to the prior year's third quarter.

Noninterest income
(unaudited - dollars in thousands)	Three months ended September 30,
	2024				2023				$ change				% change
Service charges	$	1,595			$	1,853			$	(258)				-13.9	%
Net gain/(loss) on equity securities		223				69				154				223.2	%
Net gain on sale of loans		1,427				787				640				81.3	%
ATM/Interchange fees		1,402				1,424				(22)				-1.5	%
Wealth management fees		1,443				1,197				246				20.6	%
Lease revenue and residual income		2,428				1,913				515				26.9	%
Bank owned life insurance		717				266				451				169.5	%
Swap fees		(14)				21				(35)				-166.7	%
Other		465				595				(130)				-21.8	%
Total noninterest income	$	9,686			$	8,125			$	1,561				19.2	%

Service charges for the third quarter of 2024 decreased year over year as we have eliminated our representment fee as well as reduced our overdraft charges, the effect of which was partially offset by an increase in service fees in consumer and treasury management.

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

Net gain on sale of loans includes gain/loss on sale of mortgages, adjustments to mortgage service rights (MSR), and gain/loss on sales of loans and leases from the Civista Leasing and Finance division; which continues to provide a strong and consistent revenue source for Civista.

Wealth management fees increased from organic growth in the trust and investment services business.

Lease revenue and residual income increased as we shifted away from operating leases to more finance leases, resulting in residual and lease rental income.

Income from Bank Owned Life Insurance (BOLI) increased due to a death benefit on an insured individual in the third quarter of 2024.

Other income decreased in the third quarter which includes loan fees, loan servicing fees, and leasing rental income.

For the nine months ended September 30, 2024, noninterest income totaled $28.7 million, an increase of $391 thousand, or 1.4%, compared to the same period in the prior year. This reflects the replacement of the tax refund processing business exited in 2023.

Noninterest income
(unaudited - dollars in thousands)	Nine months ended September 30,
	2024				2023				$ change				% change
Service charges	$	4,523			$	5,457			$	(934)				-17.1	%
Net gain/(loss) on equity securities		156				(169)				325				192.3	%
Net gain on sale of loans		3,179				2,033				1,146				56.4	%
ATM/Interchange fees		4,201				4,227				(26)				-0.6	%
Wealth management fees		4,055				3,570				485				13.6	%
Lease revenue and residual income		7,630				6,160				1,470				23.9	%
Bank owned life insurance		1,434				830				604				72.8	%
Swap fees		165				198				(33)				-16.7	%
Tax Refund Processing Fee		-				2,375				(2,375)				-100.0	%
Other		3,390				3,661				(271)				-7.4	%
Total noninterest income	$	28,733			$	28,342			$	391				1.4	%

Service charges for the first nine months of 2024 decreased resulting from the elimination of our representment fee and reducing our overdraft charges, the effect of which was partially offset by an increase in service fees in consumer and treasury management.

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

Net gain on sale of loans increased primarily due to an increase in the volume of mortgage and Civista Leasing and Finance leases as well as loans sold.

Wealth management fees increased from organic growth in the trust and investment services business.

Lease revenue and residual income increased from prior year as we shifted from operating leases to more finance leases, resulting in residual and lease rental income; as the Civista Leasing and Finance business continues to increase.

Income from Bank Owned Life Insurance (BOLI) increased due to death benefit on an insured individual in 2024.

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.

Other income - includes $1.1 million of loan and loan servicing fees and $1.3 million of leasing rental income. 2023 includes a $1.5 million fee collected with the renewal of the company's contract with MasterCard.

For the third quarter of 2024, noninterest expense totaled $28.0 million, a decrease of $0.6 million or 2.0% when compared to the second quarter of 2024. When compared to the prior years' third quarter, noninterest expense increased $1.4 million, or 5.1%.

Noninterest expense
(unaudited - dollars in thousands)	Three months ended September 30,
	2024				2023				$ change				% change
Compensation expense	$	15,726			$	14,054			$	1,672				11.9	%
Net occupancy Expense		1,293				1,368			$	(75)				-5.5	%
Contracted data processing		636				651			$	(15)				-2.3	%
Taxes and assessments		1,040				1,028			$	12				1.2	%
Professional services		1,134				1,010			$	124				12.3	%
Equipment Maint/Depr		2,345				2,687			$	(342)				-12.7	%
ATM/Interchange expense		805				788			$	17				2.2	%
Marketing		716				497			$	219				44.1	%
Sponsorships		39				381			$	(342)				-89.8	%
Communications		354				384			$	(30)				-7.8	%
Insurance Expense		634				635			$	(1)				-0.2	%
Software maintenance expense		1,239				1,103			$	136				12.3	%
Other		2,020				2,036			$	(16)				-0.8	%
Total noninterest expense	$	27,981			$	26,622			$	1,359				5.1	%

Compensation expense increased primarily due to a merit increases, employee insurance, and other payroll-related expenses. The quarter-to-date average number of full time equivalent (FTE) employees was 526 at September 30, 2024, compared with an average number of 528 for the same period in 2023.

Equipment maintenance and depreciation expense decreased $342 thousand primarily due to depreciation associated with Civista Leasing and Finance as operating leases mature.

Software maintenance expense increased $136 thousand due to increases in both software maintenance contracts as well as the implementation of the new digital banking platform.

In the third quarter of 2024, other expenses include a $0.8 million reserve to address a reconciling item related to a system conversion, which is expected to be completed in the fourth quarter of 2024.

The efficiency ratio was 70.2% for the quarter ended September 30, 2024, compared to 65.6% for the quarter ended September 30, 2023. The change in the efficiency ratio is primarily due to a 5.3% increase in noninterest expenses and a 7.2% decrease in net interest income; partially offset by a 19.2% increase in noninterest income.

Civista's effective income tax rate for the third quarter of 2024 was 15.6% compared to 15.2% in the third quarter of 2023.

For the nine months ended September 30, 2024, noninterest expense totaled $84.2 million, an increase of $2.5 million, or 3.1%, compared to the same period in the prior year.

Noninterest expense
(unaudited - dollars in thousands)	Nine months ended September 30,
	2024				2023				$ change				% change
Compensation expense	$	46,922			$	44,137			$	2,785				6.3	%
Net occupancy and equipment		3,959				4,096				(137)				-3.3	%
Contracted data processing		1,740				1,730				10				0.6	%
Taxes and assessments		3,036				2,985				51				1.7	%
Professional services		3,532				3,804				(272)				-7.2	%
Equipment Maint/Depr		7,313				8,213				(900)				-11.0	%
ATM/Interchange expense		2,452				2,340				112				4.8	%
Marketing		1,640				1,542				98				6.4	%
Sponsorships		1,300				1,102				198				18.0	%
Communications		1,069				1,283				(214)				-16.7	%
Insurance Expense		1,902				1,853				49				2.6	%
Software maintenance expense		3,685				3,145				540				17.2	%
Other		5,675				5,473				202				3.7	%
Total noninterest expense	$	84,225			$	81,703			$	2,522				3.1	%

Compensation expense increased primarily due to merit increases, employee insurance, and other payroll-related expenses. The year-to-date average number of full time equivalent (FTE) employees was 534 for the nine-months ended September 30, 2024, compared with an average number of 531 for the same period in 2023.

Equipment maintenance and depreciation expense decreased by $900 thousand, primarily from a decrease of $785 thousand in depreciation of equipment on operating leases as operating leases mature.

Software maintenance expense increased due to increases in both software maintenance contracts as well as the implementation of the new digital banking platform.

The efficiency ratio was 71.7% for the nine months ended September 30, 2024 compared to 64.5% for the nine months ended September 30, 2023. The change in the efficiency ratio is primarily due to an 3.2% increase in noninterest expense and a 10.6% decrease in net interest income, partially offset by an 1.4% increase in noninterest income.

Civista's effective income tax rate for the nine months ended September 30, 2024 was 13.5% compared to 15.4% for the nine months ended September 30, 2023.

Balance Sheet

Total assets at September 30, 2024, were $4.1 billion, an increase of $200.0 million, or 5.2%, from December 31, 2023.

End of period loan and lease balances

(unaudited - dollars in thousands)
	September 30,				December 31,
	2024				2023				$ Change				% Change
Commercial and Agriculture	$	304,639			$	304,793			$	(154)				-0.1	%
Commercial Real Estate:
Owner Occupied		375,751				377,321				(1,570)				-0.4	%
Non-owner Occupied		1,205,453				1,161,894				43,559				3.7	%
Residential Real Estate		751,825				659,841				91,984				13.9	%
Real Estate Construction		318,063				260,409				57,654				22.1	%
Farm Real Estate		24,122				24,771				(649)				-2.6	%
Lease financing receivable		49,453				54,642				(5,189)				-9.5	%
Consumer and Other		14,640				18,057				(3,417)				-18.9	%
Total Loans	$	3,043,946			$	2,861,728			$	182,218				6.4	%

Loan and lease balances increased $182.2 million, or 6.4% since December 31, 2023.

Growth was tempered in the first quarter with a diligent focus on rate and margin, and also tempered in the third quarter to focus on deposits and reduce dependency on wholesale funding.

Commercial Real Estate continued to grow due to consistent demand in the non-owner occupied category, especially in the multi-family area in the major Ohio metropolitan areas. Real Estate Construction has increased with consistent demand for more projects across the state of Ohio.

Residential Real Estate has grown primarily due to more home construction loans as we meet the demand for housing and construction financing by our customers and communities.

Deposits

Total deposits at September 30, 2024 were $3.2 billion, an increase of $238.7 million, or 8.0%, from December 31, 2023.

(unaudited - dollars in thousands)
	September 30,				December 31,
	2024				2023				$ Change				% Change
Noninterest-bearing demand	$	686,316			$	771,699			$	(85,383)				-11.1	%
Interest-bearing demand		420,333				449,449				(29,116)				-6.5	%
Savings and money market		1,111,771				854,881				256,890				30.0	%
Time deposits		456,973				391,809				65,164				16.6	%
Brokered deposits		548,339				517,190				31,149				6.0	%
Total Deposits	$	3,223,732			$	2,985,028			$	238,704				8.0	%

The $85.4 million decrease in noninterest-bearing demand deposits was primarily due to a $48.0 million decrease in noninterest-bearing business accounts and $36.8 million noninterest-bearing accounts related to the former tax refund processing program as customers migrate deposits to interest bearing accounts.

The $29.1 million decrease in interest-bearing demand deposits was primarily due to a $14.6 million decrease in interest-bearing personal accounts, a $7.5 million decrease in Jumbo NOW accounts, and a $3.7 million decrease in interest-bearing business accounts.

The $256.9 million increase in savings and money market deposits was primarily due to a $65.9 million increase in personal money market accounts, a $148.5 million increase in business money market accounts, $115.1 million increase in public funds money markets, partially offset by a $18.4 million decrease in statement savings coupled with a $7.2 million decrease in business savings accounts. Included in the growth are the $87 million of trust cash deposits brought onto the balance sheet in the third quarter, and $110 million of deposits associated with the Ohio Home Buyers Program.

The $65.2 million increase in time deposits was primarily due to a $22.7 million increase in Jumbo time certificates, a $23.5 million increase in retail time certificates, and a $23.5 million increase in time certificates over $250 thousand.

FHLB overnight advances totaled $287.0 million on September 30, 2024, down $213.5 million from $500.5 million on June 30, 2024 and down from $338.0 million on December 31, 2023. FHLB term advances totaled $1.6 million on September 30, 2024, down from $2.4 million on December 31, 2023.

Stock Repurchase Program

So far in 2024, Civista has not repurchased any shares, leaving the entire $13.5 million of the current repurchase authorization remaining. The current repurchase plan will expire in May 2025. In January, Civista liquidated 8,262 shares held by employees, at $18.38 per share, to satisfy tax obligations stemming from vesting of restricted shares.

Shareholders' Equity

Total shareholders' equity at September 30, 2024, totaled $394.4 million, an increase of $22.4 million from December 31, 2023. This resulted from an increase of $14.1 million in retained earnings and a reduction in accumulated other comprehensive loss of $7.6 million.

Asset Quality

Civista recorded net losses of $1.1 million for the first nine months of 2024 compared to net losses of $0.5 million for the same period of 2023. The allowance for credit losses to loans ratio was 1.36% at September 30, 2024, compared to 1.32% at June 30, 2024 and 1.30% at December 31, 2023.

Allowance for Credit Losses
(dollars in thousands)
	Nine months ended September 30,
	2024				2023
Beginning of period	$	37,160			$	28,511
CECL adoption adjustments		-				5,193
Charge-offs		(1,580)				(855)
Recoveries		500				320
Provision		5,188				2,111
End of period	$	41,268			$	35,280

Allowance for Unfunded Commitments
(dollars in thousands)
	Nine months ended September 30,
	2024				2023
Beginning of period	$	3,901			$	-
CECL adoption adjustments		-				3,386
Charge-offs		-				-
Recoveries		-				-
Provision		(520)				595
End of period	$	3,381			$	3,981

Non-performing assets at September 30, 2024 were $18.2 million, an increase of $3.1 million or 20.4%, from December 31, 2023. The non-performing assets to assets ratio was 0.46% at September 30, 2024 and 0.39% at December 31, 2023. The allowance for credit losses to non-performing loans decreased from 245.67% at December 31, 2023 to 227.36% at September 30, 2024.

(dollars in thousands)	September 30,				December 31,
	2024				2023
Non-accrual loans	$	16,488			$	12,467
Restructured loans		1,663				2,659
Total non-performing loans		18,151				15,126
Other Real Estate Owned		61				-
Total non-performing assets	$	18,212			$	15,126

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 2024 at 1:00 p.m. ET on Tuesday, October 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. third 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 $4.1 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.

CivistaBancshares, 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,
	2024				2023				2024				2023
Interest income	$	52,741			$	46,601			$	153,462			$	130,660
Interest expense		23,508				15,097				68,106				35,216
Net interest income		29,233				31,504				85,356				95,444
Provision for credit losses		1,346				630				5,188				2,111
Provision for unfunded commitments		(325)				130				(520)				595
Net interest income after provision		28,212				30,744				80,688				92,738
Noninterest income		9,686				8,125				28,733				28,342
Noninterest expense		27,981				26,622				84,225				81,703
Income before taxes		9,917				12,247				25,196				39,377
Income tax expense		1,551				1,860				3,406				6,068
Net income		8,366				10,387				21,790				33,309
Preferred stock dividends		-				-				-				-
Net income available
to common shareholders	$	8,366			$	10,387			$	21,790			$	33,309
Dividends paid per common share	$	0.16			$	0.16			$	0.48			$	0.45
Earnings per common share
Basic
Net income	$	8,366			$	10,387			$	21,790			$	33,309
Less allocation of earnings and
dividends to participating securities		177				389				455				1,220
Net income available to common
shareholders - basic	$	8,189			$	9,998			$	21,335			$	32,089
Weighted average common shares outstanding		15,736,966				15,735,007				15,720,714				15,747,648
Less average participating securities		332,531				588,715				328,447				576,902
Weighted average number of shares outstanding
used to calculate basic earnings per share		15,404,435				15,146,292				15,392,267				15,170,746
Earnings per common share
Basic	$	0.53			$	0.66			$	1.39			$	2.12
Diluted		0.53				0.66				1.39				2.12
Selected financial ratios:
Return on average assets		0.83	%			1.12	%			0.74	%			1.24	%
Return on average equity		8.73	%			11.83	%			7.81	%			12.88	%
Dividend payout ratio		30.10	%			24.24	%			34.63	%			21.27	%
Net interest margin (tax equivalent)		3.19	%			3.69	%			3.16	%			3.88	%

Selected Balance Sheet Items
(Dollars in thousands, except share and per share amounts)
	September 30,				December 31,
	2024				2023
	(unaudited)				(unaudited)
Cash and due from financial institutions	$	74,662			$	60,406
Investment in time deposits		1,450				1,225
Investment securities		629,113				620,441
Loans held for sale		8,299				1,725
Loans		3,043,946				2,861,728
Less: allowance for credit losses		(41,268)				(37,160)
Net loans		3,002,678				2,824,568
Other securities		32,633				29,998
Premises and equipment, net		49,967				56,769
Goodwill and other intangibles		133,829				135,028
Bank owned life insurance		62,912				61,335
Other assets		65,880				69,923
Total assets	$	4,061,423			$	3,861,418
Total deposits	$	3,223,732			$	2,985,028
Federal Home Loan Bank advances - short term		287,047				338,000
Federal Home Loan Bank advances - long term		1,598				2,392
Subordinated debentures		104,067				103,943
Other borrowings		-				9,859
Accrued expenses and other liabilities		50,541				50,194
Total shareholders' equity		394,438				372,002
Total liabilities and shareholders' equity	$	4,061,423			$	3,861,418
Shares outstanding at period end		15,736,528				15,695,424
Book value per share	$	25.07			$	23.70
Equity to asset ratio		9.71	%			9.63	%
Selected asset quality ratios:
Allowance for credit losses to total loans		1.36	%			1.30	%
Non-performing assets to total assets		0.45	%			0.39	%
Allowance for credit losses to non-performing loans		227.36	%			245.67	%
Non-performing asset analysis
Nonaccrual loans	$	16,488			$	12,467
Troubled debt restructurings		1,663				2,659
Other real estate owned		61				-
Total	$	18,212			$	15,126

Supplemental Financial Information
(Unaudited - dollars in thousands except share data)
	September 30,				June 30,				March 31,				December 31,				September 30,
End of Period Balances	2024				2024				2024				2023				2023
Assets
Cash and due from banks	$	74,662			$	55,760			$	50,310			$	60,406			$	50,316
Investment in time deposits		1,450				1,450				1,450				1,225				1,472
Investment securities		629,113				611,866				608,277				620,441				595,508
Loans held for sale		8,299				5,369				3,716				1,725				1,589
Loans and leases		3,043,946				3,014,996				2,898,139				2,861,728				2,759,771
Allowance for credit losses		(41,268)				(39,919)				(38,849)				(37,160)				(35,280)
Net Loans		3,002,678				2,975,077				2,859,290				2,824,568				2,724,491
Other securities		32,633				37,615				31,360				29,998				34,224
Premises and equipment, net		49,967				52,142				54,280				56,769				58,989
Goodwill and other intangibles		133,829				134,227				134,618				135,028				134,998
Bank owned life insurance		62,912				63,367				61,685				61,335				54,053
Other assets		65,880				75,041				75,272				69,923				82,157
Total Assets	$	4,061,423			$	4,011,914			$	3,880,258			$	3,861,418			$	3,737,797
Liabilities
Total deposits	$	3,223,732			$	2,977,616			$	2,980,695			$	2,985,028			$	2,795,743
Federal Home Loan Bank advances - short term	$	287,047				500,500				368,500				338,000				431,500
Federal Home Loan Bank advances - long term	$	1,598				1,841				2,211				2,392				2,573
Securities sold under agreement to repurchase		-				-				-				-				-
Subordinated debentures		104,067				104,026				103,984				103,943				103,921
Other borrowings		-				7,156				8,105				9,859				10,964
Secured borrowings		-				-				-				-				4,881
Securities purchased payable		-				-				-				-				1,755
Tax refunds in process		-				-				-				2,885				493
Accrued expenses and other liabilities		50,541				46,967				47,104				47,309				53,222
Total liabilities		3,666,985				3,638,106				3,510,599				3,489,416				3,405,052
Shareholders' Equity
Preferred shares, Series B		-				-				-				-				-
Common shares		311,901				311,529				311,352				311,166				310,975
Retained earnings		198,034				192,186				187,638				183,788				176,644
Treasury shares		(75,586)				(75,574)				(75,574)				(75,422)				(75,412)
Accumulated other comprehensive loss		(39,911)				(54,333)				(53,757)				(47,530)				(79,462)
Total shareholders' equity		394,438				373,808				369,659				372,002				332,745
Total Liabilities and Shareholders' Equity	$	4,061,423			$	4,011,914			$	3,880,258			$	3,861,418			$	3,737,797

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	2024				2024				2024				2023				2023
Total interest and dividend income	$	52,741			$	50,593			$	50,128			$	48,599			$	46,601
Total interest expense		23,508				22,842				21,756				18,547				15,097
Net interest income		29,233				27,751				28,372				30,052				31,504
Provision for credit losses		1,346				1,800				2,042				2,325				630
Provision for unfunded commitments		(325)				(145)				(50)				(80)				130
Noninterest income		9,686				10,543				8,504				8,823				8,125
Noninterest expense		27,981				28,555				27,689				25,393				26,622
Income before taxes		9,917				8,084				7,195				11,237				12,247
Income tax expense		1,551				1,020				835				1,582				1,860
Net income	$	8,366			$	7,064			$	6,360			$	9,655			$	10,387
Preferred stock dividends		-				-				-				-				-
Net income available to
common shareholders	$	8,366			$	7,064			$	6,360			$	9,655			$	10,387
Per share data
Earnings per common share
Basic
Net income	$	8,366			$	7,064			$	6,360			$	9,655			$	10,387
Less allocation of earnings and
dividends to participating securities		177				153				126				362				389
Net income available to common
shareholders - basic	$	8,189			$	6,911			$	6,234			$	9,293			$	9,998
Weighted average common shares outstanding		15,736,966				15,729,049				15,695,963				15,695,978				15,735,007
Less average participating securities		332,531				341,567				311,199				588,625				588,715
Weighted average number of shares outstanding
used to calculate basic earnings per share		15,404,435				15,387,482				15,384,764				15,107,353				15,146,292
Earnings per common share
Basic	$	0.53			$	0.45			$	0.41			$	0.62			$	0.66
Diluted	$	0.53			$	0.45				0.41				0.62				0.66
Common shares dividend paid	$	2,518			$	2,516			$	2,510			$	2,511			$	2,521
Dividends paid per common share		0.16				0.16				0.16				0.16				0.16

Supplemental Financial Information
(Unaudited - dollars in thousands except share data)
	Three Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,
Asset quality	2024				2024				2024				2023				2023
Allowance for credit losses:
Beginning of period	$	39,919			$	38,849			$	37,160			$	35,280			$	35,251
Charge-offs		(42)				(887)				(651)				(577)				(666)
Recoveries		45				157				298				132				65
Provision		1,346				1,800				2,042				2,325				630
End of period	$	41,268			$	39,919			$	38,849			$	37,160			$	35,280
Allowance for unfunded commitments:
Beginning of period	$	3,706			$	3,851			$	3,901			$	3,981			$	3,851
Charge-offs		-				-				-				-				-
Recoveries		-				-				-				-				-
Provision		(325)				(145)				(50)				(80)				130
End of period	$	3,381			$	3,706			$	3,851			$	3,901			$	3,981
Ratios
Allowance to total loans		1.36	%			1.32	%			1.34	%			1.30	%			1.28	%
Allowance to nonperforming assets		226.60	%			233.47	%			247.06	%			245.66	%			308.52	%
Allowance to nonperforming loans		227.36	%			233.47	%			247.06	%			245.66	%			308.52	%
Nonperforming assets
Nonperforming loans	$	18,151			$	17,098			$	15,725			$	15,126			$	11,435
Other real estate owned		61				-				-				-				-
Total nonperforming assets	$	18,212			$	17,098			$	15,725			$	15,126			$	11,435
Capital and liquidity
Tier 1 leverage ratio		8.45	%			8.59	%			8.62	%			8.75	%			8.73	%
Tier 1 risk-based capital ratio		10.29	%			10.63	%			10.81	%			10.72	%			10.82	%
Total risk-based capital ratio		13.81	%			14.28	%			14.53	%			14.45	%			14.60	%
Tangible common equity ratio (1)		6.64	%			6.19	%			6.28	%			6.36	%			5.49	%
(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,
	2024				2024				2024				2023				2023
Tangible Common Equity
Total Shareholder's Equity - GAAP	$	394,438			$	373,808			$	369,659			$	372,002			$	332,745
Less: Preferred Equity		-				-				-				-				-
Less: Goodwill and intangible assets		133,829				133,785				134,618				135,028				134,998
Tangible common equity (Non-GAAP)	$	260,609			$	240,023			$	235,041			$	236,974			$	197,747
Total Shares Outstanding		15,736,528				15,737,222				15,727,013				15,695,424				15,695,997
Tangible book value per share	$	16.56			$	15.25			$	14.95			$	15.10			$	12.60
Tangible Assets
Total Assets - GAAP	$	4,061,423			$	4,011,914			$	3,880,258			$	3,861,418			$	3,737,797
Less: Goodwill and intangible assets		133,829				133,785				134,618				135,028				134,998
Tangible assets (Non-GAAP)	$	3,927,594			$	3,878,129			$	3,745,640			$	3,726,390			$	3,602,799
Tangible common equity to tangible assets		6.64	%			6.19	%			6.28	%			6.36	%			5.49	%

Reconciliation of Non-GAAP Financial Measures
(Unaudited - dollars in thousands except share data)
	Three Months Ended								Nine Months Ended
	September 30,				September 30,				September 30,				September 30,
Efficiency ratio (non-GAAP):	2024				2023				2024				2023
Noninterest expense (GAAP)		27,981				26,622				84,225				81,703
Less: Amortization of intangible assets expense		363				398				1,121				1,195
Less: Acquisition related expenses		-				-				-				-
Noninterest expense (non-GAAP)		27,618				26,224				83,104				80,508
Net interest income (GAAP)		29,233				31,504				85,356				95,444
Plus: Taxable equivalent adjustment		630				621				1,892				1,841
Noninterest income (GAAP)		9,686				8,125				28,733				28,342
Less: Net gains (losses) on equity securities		223				69				156				(169)
Net interest income (FTE) plus noninterest income (non-GAAP)		39,326				40,181				115,825				125,796
Efficiency ratio (non-GAAP)		70.2	%			65.3	%			71.7	%			64.0	%

SOURCE Civista Bancshares, Inc.