Retirement Plans

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Retirement Plans

NOTE 15 - RETIREMENT PLANS

The Company sponsors a savings and retirement 401(k) plan, which covers all employees who meet certain eligibility requirements and who choose to participate in the plan. The matching contribution to the 401(k) plan was $1,608, $1,377 and $1,258 in 2023, 2022 and 2021, respectively. The Company’s matching contribution is 100% of an employee’s first three percent contributed and 50% of the next two percent contributed.

The Company also sponsors a pension plan which is a noncontributory defined benefit retirement plan for all employees who have attained the age of 20 1 ⁄ 2, completed six months of service and work 1,000 or more hours per year. Annual payments, subject to the maximum amount deductible for federal income tax purposes, are made to a pension trust fund. In 2006, the Company amended the pension plan to provide that no employee could be added as a participant to the pension plan after December 31, 2006. In April 2014, the Company amended the pension plan again to provide that no additional benefits would accrue beyond April 30, 2014.

In October 2015, the Company, on behalf of it and its subsidiaries, entered into Pension Shortfall Agreements (the “Shortfall Agreements”) with ten employees of Civista. When the Company ceased accruals to its defined benefit pension plan on April 30, 2014, the circumstances of some participants with limited periods until their anticipated retirement dates would not permit them to use other available alternatives to make up for the shortfall in their expected pension. The Company calculated the total amount of the shortfall for each of the referenced individuals after considering its contributions to other retirement benefits. Pension shortfall expense was $118 in 2023, $145 in 2022 and $135 in 2021. Included in pension shortfall expense was interest expense, totaling $36, $24 and $15 in 2023, 2022 and 2021, respectively, which was also recorded in and credited to the accounts of the ten individuals covered by this plan.

NOTE 15 - RETIREMENT PLANS (Continued)

Information about the pension plan is as follows:

	2023			2022
Change in benefit obligation:
Beginning benefit obligation	$	10,123		$	15,384
Service cost		—			—
Interest cost		454			392
Curtailment gain		—			—
Settlement loss		—			—
Actuarial (gain)/loss		(637	)		(3,455	)
Benefits paid		(1,921	)		(2,198	)
Settlement payments		—			—
Ending benefit obligation		8,019			10,123
Change in plan assets, at fair value:
Beginning plan assets		10,934			15,120
Actual return		940			(1,988	)
Employer contribution		—			—
Benefits paid		(1,921	)		(2,198	)
Settlement payments		—			—
Administrative expenses		—			—
Ending plan assets		9,953			10,934
Funded status at end of year	$	1,934		$	811

Amounts recognized in accumulated other comprehensive income (loss) at December 31, consist of unrecognized actuarial loss of $4,506, net of $1,198 tax in 2023 and $5,274, net of $1,402 tax in 2022.

The accumulated benefit obligation for the defined benefit pension plan was $8,019 at December 31, 2023 and $10,123 at December 31, 2022.

The components of net periodic pension expense were as follows:

	2023			2022			2021
Service cost	$	—		$	—		$	—
Interest cost		454			392			378
Expected return on plan assets		(605	)		(732	)		(574	)
Net amortization and deferral		—			—			240
Net periodic pension cost (benefit)		(151	)		(340	)		44
Additional loss due to settlement		—			—			—
Total pension cost (benefit)	$	(151	)	$	(340	)	$	44
Net loss (gain) recognized in other comprehensive    income	$	(972	)	$	(736	)	$	(854	)
Total recognized in net periodic benefit cost    and other comprehensive loss (before tax)	$	(1,123	)	$	(1,076	)	$	(810	)

The components of net periodic benefit cost other than the service cost component are included in the line item “Other operating expenses” in the Consolidated Statement of Operations.

The estimated net loss for the defined benefit pension plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $169. The Company incurred settlement costs in 2023, 2022 and 2021 of $0, $0 and $(18), respectively.

NOTE 15 - RETIREMENT PLANS (Continued)

The weighted average assumptions used to determine benefit obligations at year-end were as follows:

	2023			2022			2021
Discount rate on benefit obligation		4.76	%		4.95	%		2.74	%
Long-term rate of return on plan assets		5.53	%		4.84	%		3.84	%
Rate of compensation increase		0.00	%		0.00	%		0.00	%

The weighted average assumptions used to determine net periodic pension cost were as follows:

	2023			2022			2021
Discount rate on benefit obligation		4.95	%		2.74	%		2.39	%
Long-term rate of return on plan assets		4.84	%		3.84	%		4.44	%
Rate of compensation increase		0.00	%		0.00	%		0.00	%

The Company uses long-term market rates to determine the discount rate on the benefit obligation. Declines in the discount rate lead to increases in the actuarial loss related to the benefit obligation.

The expectation for long-term rate of return on the pension assets and the expected rate of compensation increases are reviewed periodically by management in consultation with outside actuaries and primary investment consultants. Factors considered in setting and adjusting these rates are historic and projected rates of return on the portfolio and historic and estimated rates of increases of compensation. Since the pension plan is frozen, the rate of compensation increase used to determine the benefit obligation for 2023, 2022 and 2021 was zero.

The Company’s pension plan asset allocation at year-end 2023 and 2022 and target allocation for 2024 by asset category are as follows:

	Target Allocation	Percentage of Plan  Assets at Year-end
Asset Category	2024	2023			2022
Equity securities	0-30%		20.0	%		20.0	%
Debt securities	70-100		80.0			80.0
Total			100.0	%		100.0	%

The Company developed the pension plan investment policies and strategies for plan assets with its pension management firm. The assets are currently invested in seven diversified investment funds, which include four equity funds and three bond funds. The long-term guidelines from above were created to maximize the return on portfolio assets while reducing the risk of the portfolio. The management firm may allocate assets among the separate accounts within the established long-term guidelines. Transfers among these accounts will be at the management firm’s discretion based on their investment outlook and the investment strategies that are outlined at periodic meetings with the Company. The expected long-term rate of return on the plan assets was 5.53% in 2023 and 4.84% in 2022. This return is based on the expected return for each of the asset categories, weighted based on the target allocation for each class.

The Company does not expect to make any contribution to its pension plan in 2024. Employer contributions totaled $0 in 2023 and 2022. A decrease in the benefit obligations, offset by a decrease in the fair value of plan assets led to an increase in the funded status from $811 at December 31, 2022 to a funded status of $1,934 at December 31, 2023.

Common/Collective Trust Funds

Common/Collective Trust Funds are valued at the daily net asset value ("NAV") as reported by the funds. These funds are not traded in an active market or exchange, and the NAV per unit is calculated by dividing the net assets of the fund by the number of units outstanding, which includes observable inputs. The method described above may

NOTE 15 - RETIREMENT PLANS (Continued)

produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the pension plan believes its valuation method is appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Certain investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient are not required to be categorized in the fair value hierarchy tables.

Fair Value of Investments in Entities That Use NAV

The following table summarizes investments measured at fair value based on NAV per share as of December 31, 2023 and 2022, respectively:

December 31, 2023	Fair Value		Unfunded Commitments	Redemption Frequency (if currently eligible)	Redemption Notice Period
Common/collective trust funds	$	9,953	N/A	Daily	Daily

December 31, 2022	Fair Value		Unfunded Commitments	Redemption Frequency (if currently eligible)	Redemption Notice Period
Common/collective trust funds	$	10,934	N/A	Daily	Daily

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the pension plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Expected benefit payments, which reflect expected future service, are as follows:

2024	$	315
2025		359
2026		398
2027		431
2028		453
2029 through 2033		3,278
Total	$	5,234

Supplemental Executive Retirement Plan

Civista established a supplemental executive retirement plan (“SERP”) in 2011, which covers key members of management. The SERP was amended and restated effective January 1, 2024. Under the SERP, participants will receive annually, following retirement, a percentage of their base compensations at the time of their retirement for a maximum of ten years. The SERP liability recorded at December 31, 2023, was $4,083, compared to $4,028 at December 31, 2022. The expense related to the SERP was $233, $420 and $404 for 2023, 2022 and 2021, respectively. Distributions to participants made in 2023, 2022 and 2021 totaled $176, $173, and $167, respectively.