0001193125-19-041746.txt : 20190215 0001193125-19-041746.hdr.sgml : 20190215 20190215091103 ACCESSION NUMBER: 0001193125-19-041746 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20190215 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20190215 DATE AS OF CHANGE: 20190215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIVISTA BANCSHARES, INC. CENTRAL INDEX KEY: 0000944745 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 341558688 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36192 FILM NUMBER: 19609981 BUSINESS ADDRESS: STREET 1: 100 EAST WATER ST STREET 2: P O BOX 5016 CITY: SANDUSKY STATE: OH ZIP: 44870 BUSINESS PHONE: 4196254121 MAIL ADDRESS: STREET 1: 100 EAST WATER ST STREET 2: P O BOX 5016 CITY: SANDUSKY STATE: OH ZIP: 44870 FORMER COMPANY: FORMER CONFORMED NAME: FIRST CITIZENS BANC CORP /OH DATE OF NAME CHANGE: 19950502 8-K 1 d709686d8k.htm 8-K 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

February 15, 2019

 

 

Civista Bancshares, Inc.

(Exact name of Registrant as specified in its charter)

 

 

 

Ohio   001-36192   34-1558688

(State or other jurisdiction of

incorporation or organization)

   (Commission File Number)  

(IRS Employer

Identification No.)

100 East Water Street, P.O. Box 5016, Sandusky, Ohio 44870

(Address of principle executive offices)

Registrant’s telephone number, including area code: (419) 625-4121

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Act of 1934 (§240.12b-2 of this chapter)

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

Item 2.02

Results of Operations and Financial Condition

On February 15, 2019, Civista Bancshares, Inc. announced preliminary unaudited earnings for the three and twelve-month periods ended December 31, 2018. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated here by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01

Financial Statements and Exhibits

 

(d)    

   Exhibit 99.1        Press release of Civista Bancshares, Inc. reporting financial results and earnings for the three and twelve-month periods ended December 31, 2018.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

   

Civista Bancshares, Inc.

(Registrant)

Date: February 15, 2019       /s/ Todd A. Michel
      Todd A. Michel,
      Senior Vice President & Controller
 EX-99.1 2 d709686dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Civista Bancshares, Inc. Announces Fourth Quarter and Year-to-date 2018 Earnings

Sandusky, Ohio, February 15, 2019 /PRNewswire/ – Civista Bancshares, Inc. (NASDAQ:CIVB) (“Civista”) reported net income available to common shareholders of $7.4 million, or $0.45 per diluted share, for the fourth quarter of 2018. This compares to net income available to common shareholders of $3.7 million, or $0.32 per diluted share, for the fourth quarter of 2017, which included $511 thousand or $0.04 per diluted share for the revaluation of deferred tax assets as a result of the decrease in the federal corporate tax rate.

For the twelve-month period ended December 31, 2018, Civista reported net income available to common shareholders of $13.2 million or $1.02 per diluted share. This compares to $14.6 million or $1.28 per diluted share, in the same period of 2017, which included $511 thousand or $0.04 per diluted share for the revaluation of deferred tax assets as a result of the decrease in the federal corporate tax rate.

“Our Civista team once again put together a great year for our customers and shareholders. Our overall asset growth was 40.2%. Much of that was due to the acquisition of United Community Bancorp (“UCB”). We were also successful in increasing loans 8.4% exclusive of the acquisition. The integration of the UCB systems and personnel is complete. While we have worked extensively on loan production and the UCB acquisition, we have not lost our focus on asset quality, which remains very good.” said Dennis G. Shaffer, President and CEO of Civista.

Factors Affecting Comparability

Most recently, Civista acquired United Community Bancorp in September 2018. The financial position and results of operations of UCB prior to its acquisition date are not included in the Company’s financial results for periods prior to the acquisition date.

Adjusted Earnings

Financial results for the fourth quarter and twelve months ended December 31, 2018 included $782 thousand and $12.7 million respectively, in acquisition and integration expenses, as well as a loss on sale of securities of $413 thousand. Excluding these items, adjusted earnings were $8.1 million, or $0.49 diluted earnings per share, for the fourth quarter of 2018 and $24.7 million, or $1.85 diluted earnings per share, for the twelve months ended December 31, 2018.

Income taxes for the fourth quarter and year ended December 31, 2017 included $511 thousand increase as a result of the change in the federal income tax rate related to the Tax cuts and Jobs Act. Excluding this item, adjusted earnings were $4.1 million, or $0.36 diluted earnings per share, for the fourth quarter of 2017 and $15.1 million, or $1.33 diluted earnings per share, for the twelve months ended December 31, 2017.

A reconciliation of adjusted earnings to net income according to accounting principles generally accepted in the United States (“GAAP”) is provided in the financial tables at the end of this press release.

Results of Operations:

Net interest income increased $6.2 million, or 42.5%, for the fourth quarter of 2018, and $11.6 million, or 21.3%, for the twelve months ended December 31, compared to the same periods of 2017. Interest income increased $7.9 million, or 49.7%, for the fourth quarter of 2018 and $15.1 million or 25.7% for the twelve-month period ended December 31. Accretion income associated with purchased loan portfolios totaled $973 thousand for the fourth quarter of 2018. Interest income further increased for both periods, due to an increase in average earning assets, as well as an increase in yields, compared to 2017. The only category of interest earning assets that experienced a decrease in yield was non-taxable securities. The decrease in yield for non-taxable securities is due to the decrease in the federal income tax rate and subsequently, the tax equivalent yield. Interest expense increased $1.7 million, or 132.1 %, for the fourth quarter of 2018 and $3.5 million, or 85.0%, for the twelve months ended December 31 compared to the same periods of 2017. The increase in interest expense is due to both an increase in average balances and an increase in the cost of interest-bearing liabilities. The tax equivalent net interest margin increased 14 basis points to 4.38% for the fourth quarter of 2018, compared to 4.24% for the same period a year ago and increased 20 basis points to 4.21% for the twelve months ended December 31, 2018, compared to 4.01% for the same period a year ago. Civista’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 22 basis points and 6 basis points for the fourth quarter and year to date, respectively.

Mr. Shaffer continued, “While funding costs have been increasing throughout the industry, we have positioned our balance sheet to take advantage of rising rates. Through 2018 we have seen the benefits through the continued expansion of our margin”.

Average Balance Analysis

(Unaudited – Dollars in thousands except share data)

 

     Three Months Ended December 31,  
     2018     2017  

Assets:

    Average
balance		     Interest      Yield/
rate*		     Average
balance		     Interest      Yield/
rate*		  

Interest-earning assets:

               

Loans

    $ 1,532,012     $ 20,580        5.33 %    $ 1,152,595     $ 13,987        4.82 % 

Taxable securities

      205,200       1,702        3.27 %      145,594       981        1.91 % 

Non-taxable securities

      147,212       1,304        4.44 %      98,029       846        5.43 % 

Interest-bearing deposits in other banks

      23,542       121        2.04 %      12,261       25        0.81 % 
  

 

 

    

 

 

       

 

 

    

 

 

     

Total interest-earning assets

    $ 1,907,966       23,707        5.00 %    $ 1,408,479       15,839        4.61 % 
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

  

Noninterest-earning assets:

               

Cash and due from financial institutions

      27,187            22,984       

Premises and equipment, net

      22,635            17,864       

Accrued interest receivable

      7,189            5,440       

Intangible assets

      85,895            28,416       

Other assets

      22,903            7,450       

Bank owned life insurance

      42,818            25,031       

Less allowance for loan losses

      (13,459 )           (12,985 )      
  

 

 

         

 

 

       

Total Assets

    $ 2,103,134          $ 1,502,679       
  

 

 

         

 

 

       

Liabilities and Shareholders Equity:

               

Interest-bearing liabilities:

               

Demand and savings

    $ 854,303     $ 623        0.29 %    $ 592,643     $ 182        0.08 % 

Time

      266,573       1,075        1.60 %      256,780       660        1.02 % 

FHLB advances

      153,920       911        2.35 %      44,921       161        1.42 % 

Federal funds purchased

      462       3        2.58 %      11       —          0.00 % 

Subordinated debentures

      29,427       345        4.65 %      29,427       269        3.63 % 

Repurchase Agreements

      20,193       5        0.10 %      17,156       4        0.09 % 
  

 

 

    

 

 

       

 

 

    

 

 

     

Total interest-bearing liabilities

    $ 1,324,878       2,962        0.89 %    $ 940,938       1,276        0.54 % 
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

  

Noninterest-bearing deposits

      470,645            369,079       

Other liabilities

      17,515            10,167       

Shareholders’ Equity

      290,096            182,495       
  

 

 

         

 

 

       

Total Liabilities and Shareholders’ Equity

    $ 2,103,134          $ 1,502,679       
  

 

 

         

 

 

       

Net interest income and interest rate spread

      $ 20,745        4.11 %      $ 14,563        4.07 % 

Net interest margin

           4.38 %           4.24 % 

* – Interest yields are calculated using a 21% tax-equivalent adjustment for 2018 and a 35% tax-equivalent adjustment for 2017

Average Balance Analysis

(Unaudited – Dollars in thousands except share data)

 

     Twelve Months Ended December 31,  
     2018     2017  
Assets:    Average
balance		     Interest      Yield/
rate*		     Average
balance		     Interest      Yield/
rate*		  

Interest-earning assets:

               

Loans

    $ 1,274,779     $ 64,196        5.04 %    $ 1,109,069     $ 51,198        4.62 % 

Taxable securities

      159,451       4,770        2.97 %      144,685       3,745        2.62 % 

Non-taxable securities

      114,547       3,976        4.43 %      89,564       3,153        5.50 % 

Interest-bearing deposits in other banks

      45,766       735        1.61 %      61,859       498        0.81 % 
  

 

 

    

 

 

       

 

 

    

 

 

     

Total interest-earning assets

    $ 1,594,543       73,677        4.69 %    $ 1,405,177       58,594        4.30 % 
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

  

Noninterest-earning assets:

               

Cash and due from financial institutions

      43,247            45,801       

Premises and equipment, net

      19,045            18,027       

Accrued interest receivable

      5,514            4,697       

Intangible assets

      45,524            28,605       

Other assets

      17,678            12,374       

Bank owned life insurance

      30,483            24,819       

Less allowance for loan losses

      (13,211 )           (13,113 )      
  

 

 

         

 

 

       

Total Assets

    $ 1,742,823          $ 1,526,387       
  

 

 

         

 

 

       
Liabilities and Shareholders Equity:               

Interest-bearing liabilities:

               

Demand and savings

    $ 685,497     $ 1,442        0.21 %    $ 585,218     $ 595        0.10 % 

Time

      189,600       2,316        1.22 %      200,797       1,747        0.87 % 

FHLB

      119,753       2,471        2.06 %      54,100       695        1.28 % 

Federal funds purchased

      116       3        2.59 %      119       2        1.68 % 

Subordinated debentures

      29,427       1,320        4.49 %      29,427       1,035        3.52 % 

Repurchase Agreements

      18,456       18        0.10 %      18,234       18        0.10 % 
  

 

 

    

 

 

       

 

 

    

 

 

     

Total interest-bearing liabilities

    $ 1,042,849       7,570        0.73 %    $ 887,895       4,092        0.46 % 
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

  

Noninterest-bearing deposits

      466,763            450,648       

Other liabilities

      15,840            15,081       

Shareholders’ Equity

      217,371            172,763       
  

 

 

         

 

 

       

Total Liabilities and Shareholders’ Equity

    $ 1,742,823          $ 1,526,387       
  

 

 

         

 

 

       

Net interest income and interest rate spread

 

   $ 66,107        3.96 %      $ 54,502        3.84 % 

Net interest margin

           4.21 %           4.01 % 

* – Interest yields are calculated using a 21% tax-equivalent adjustment for 2018 and a 35% tax-equivalent adjustment for 2017

Provision for loan losses was $390 thousand and $780 thousand for the three and twelve months ended December 31, 2018, respectively. No provision was recorded during 2017.

For the fourth quarter of 2018, noninterest income totaled $4.8 million, an increase of $1.2 million, or 33.3%, compared to the prior year’s fourth quarter. Noninterest income for the twelve months of 2018 totaled $18.1 million, an increase of $1.8 million, or 11.0%, compared to the prior year’s twelve months.

Noninterest income

 

(dollars in thousands)    Three months ended
December 31,		      Twelve months ended
December 31,		  
     2018      2017      2018      2017  

Service charges

    $ 1,496      $ 1,168      $ 5,208      $ 4,777  

Net gain (loss) on sale of securities

      (27 )       21        (413 )       12  

Net gain (loss) on equity securities

      (76 )       —          26        —    

Net gain on sale of loans

      386        538        1,621        1,745  

ATM/Interchange fees

      1,030        661        2,794        2,304  

Wealth management fees

      1,108        835        3,669        3,068  

Bank owned life insurance

      286        144        718        573  

Tax refund processing fees

      —          —          2,750        2,750  

Other

      635        263        1,758        1,105  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total noninterest income

    $ 4,838      $ 3,630      $ 18,131      $ 16,334  
  

 

 

     

 

 

     

 

 

     

 

 

  

Service Charges increased $328 thousand, or 28.1% and $431 thousand, or 9.0% for the fourth quarter and twelve-month periods. Service charges related to the acquisition of UCB were $280 thousand and $287 thousand for the three and twelve-month periods ended December 31, 2018, respectively. Additionally, for the twelve month period, service charges on business accounts increased by $83 thousand. For 2018, we recorded a loss on securities sold of $413 thousand, which includes $392 thousand of losses in the third quarter that resulted from selling three securities to improve the structure and to gain future yield. ATM/Interchange fees increased $369 thousand, or 55.8%, and $490 thousand, or 21.3%, for the fourth quarter and twelve-month periods ended December 31, 2018, primarily due to increased interchange income related to the UCB acquisition. Wealth management fees increased $273 thousand, or 32.7%, and $601 thousand, or 19.6%, for the fourth quarter and twelve-month period ended December 31, 2018. While assets under management decreased $7.9 million to $472.4 million at December 31, 2018, average assets under management increased $21.8 million in 2018. Bank owned life insurance income increased $142 thousand, or 98.6%, for the three-month period and $145 thousand, or 25.3%, for the twelve-month period ended December 31, 2018. Both of these increases were primarily due to the addition of policies from the acquisition of UCB. Other noninterest income increased for the three and twelve-month periods due primarily to an increases in swap related income of $279 thousand and $443 thousand, respectively.

For the fourth quarter of 2018, noninterest expense totaled $16.4 million, an increase of $4.0 million, or 32.3%, compared to the prior year’s fourth quarter. Noninterest expense for the twelve months of 2018 totaled $66.7 million, an increase of $18.1 million, or 37.2%, when compared to the twelve months of 2017.

Noninterest expense

 

(dollars in thousands)    Three months ended
December 31,		      Twelve months ended
December 31,		  
     2018      2017      2018      2017  

Compensation expense

    $ 9,668      $ 7,569      $ 37,299      $ 29,253  

Net occupancy and equipment

      1,573        1,154        5,017        4,253  

Contracted data processing

      904        664        7,140        1,838  

Taxes and assessments

      487        345        1,906        1,526  

Professional services

      816        582        4,229        2,300  

Amortization of intangible assets

      281        104        366        586  

Marketing

      194        49        1,182        817  

Other

      2,468        1,920        9,540        8,031  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total noninterest expense

    $ 16,391      $ 12,387      $ 66,679      $ 48,604  
  

 

 

     

 

 

     

 

 

     

 

 

  

Compensation expense increased $2.1 million and $8.0 million for the three and twelve-month periods ending December 31, 2018, respectively. The three and twelve-month periods included $172 thousand and $5.2 million of acquisition related expenses, respectively. The remaining increase is due to payroll and payroll related expenses resulting from an increase in full time equivalent (FTE) employees and annual pay increases. FTE employees increased 82, to 431 FTE, compared to the same period of 2017, as a result of the UCB acquisition. Additionally, employee insurance increased $504 thousand for the three months and $788 thousand for the twelve months ended December 31, 2018 compared to last year. Net occupancy and equipment expense increased $419 thousand, or 36.3%, and $764 thousand, or 18.0%, for the three and twelve-month periods ended December 31, 2018. Net occupancy expense increased as a result of increases in miscellaneous building repairs, janitorial services, grounds maintenance and real estate taxes, primarily as a result of the acquisition of UCB. Contracted data processing expenses increased $240 thousand and $5.3 million for the three and twelve-month periods ended December 31, 2018, due to $260 thousand for three months and $5.5 million for twelve months, incurred for data processing conversion expenses of UCB. Professional services costs increased $234 thousand, or 40.2%, and $1.9 million, or 83.9%, for the three and twelve-month periods ended December 31, 2018, respectively. The increases include $139 thousand and $1.6 million of legal and consulting expenses related to the UCB acquisition, respectively.

The efficiency ratio was 78.2% for the twelve months ended December 31, 2018 compared to 67.0% for the twelve months ended December 31, 2017. The increase in the efficiency ratio is due primarily to $12.7 million of expenses related to the merger with UCB, partially offset by an increase in net interest income. Excluding the merger related expenses, the efficiency ratio was 62.9% for the twelve months ended December 31, 2018. See the non-GAAP reconciliation at the end of this document.

Civista’s effective income tax rate for the fourth quarter and twelve-month period ended December 31, 2018 was 14.0% and 15.7%, respectively compared to 31.5% and 28.6% in 2017.

Mr. Shaffer continued, “While our noninterest expense is up 32% in the fourth quarter, we increased our size 40% in 2018 and also incurred some additional integration costs. We are optimistic as we look forward to 2019.”

Balance Sheet

Total assets increased $613.1 million, or 40.2%, from December 31, 2017 to December 31, 2018, primarily due to the acquisition of United Community Bancorp.

End of period loan balances

(dollars in thousands)

 

     December 31,
2018		      December 31,
2017		      $ Change      % Change  

Commercial and Agriculture

    $ 177,101      $ 152,473      $ 24,628        16.2 % 

Commercial Real Estate:

            

Owner Occupied

      210,121        164,099        46,022        28.0 % 

Non-owner Occupied

      523,598        425,623        97,975        23.0 % 

Residential Real Estate

      457,850        268,735        189,115        70.4 % 

Real Estate Construction

      135,195        97,531        37,664        38.6 % 

Farm Real Estate

      38,513        39,461        (948 )       -2.4 % 

Consumer and Other

      19,563        16,739        2,824        16.9 % 
  

 

 

     

 

 

     

 

 

     

Total Loans

    $ 1,561,941      $ 1,164,661      $ 397,280        34.1 % 
  

 

 

     

 

 

     

 

 

     

The acquisition of UCB contributed $298.9 million, or 75.2%, of the increase in the loan portfolio. Loan growth during 2018, not related to the UCB acquisition, totaled $98.4 million with increases of $54.6 million in the Commercial Real Estate, $12.4 million in the Residential Real Estate and $26.3 million in the Real Estate Construction loan portfolios.

Total deposits increased $375.0 million, or 31.1%, from December 31, 2017 to December 31, 2018. The acquisition of UCB added $475.9 million in deposits which was offset by a decrease of $96.5 million in brokered deposits.

End of period deposit balances

(dollars in thousands)

 

     December 31,
2018		      December 31,
2017		      $ Change     % Change  

Noninterest-bearing demand

    $ 468,083      $ 361,964      $ 106,119       29.3 % 

Interest-bearing demand

      261,996        183,680        78,316       42.6 % 

Savings and money market

      562,882        404,690        158,192       39.1 % 

Time deposits

      262,686        133,853        128,833       96.2 % 

Brokered deposits

      24,246        120,736        (96,490 )      -79.9 % 
  

 

 

     

 

 

     

 

 

    

Total Deposits

    $ 1,579,893      $ 1,204,923      $ 374,970       31.1 % 
  

 

 

     

 

 

     

 

 

    

The increase in noninterest-bearing demand is due to an increase in deposits from the acquisition of $112.8 million, which was partially offset by cash paid by the Company related to the UCB acquisition. Interest-bearing demand deposits increased due to an $86.1 million increase related to the UCB acquisition. Savings and money market deposits increased primarily due to a $148.5 million increase related to the UCB acquisition. All but $211 thousand of the increase in time deposits was related to the UCB acquisition. The decrease in brokered deposits was due to a shift in wholesale funding sources.

Federal Home Loan Bank advances at December 31, 2018 increased $121.7 million to $193.6 million, or 169.3%, from December 31, 2017, due to a shift in wholesale funding sources.

Total shareholders’ equity increased $114.4 million, or 62.0%, from December 31, 2017 to December 31, 2018. The acquisition of UCB resulted in the issuance of 4.3 million shares of stock totaling $104.7 million. In addition, retained earnings increased $9.7 million. During 2018, $8.0 million of preferred stock was converted to 1.1 million shares of common stock. Since issuance in December 2013, approximately $13.8 million, or 59.5%, has been converted from preferred stock to common stock.

Asset Quality

The Company recorded net charge-offs of $235 thousand for the twelve months of 2018 compared to $171 thousand for the same period of 2017.    

 

 

 

Allowance for Loan Losses              
(dollars in thousands)              
     December 31,
2018		      December 31,
2017		  

Beginning of period

    $ 13,134      $ 13,305  

Charge-offs

      (903 )       (942 ) 

Recoveries

      668        771  

Provision

      780        —    
  

 

 

     

 

 

  

End of period

    $ 13,679      $ 13,134  
  

 

 

     

 

 

  

The allowance for loan losses to loans was 0.88% for 2018 and 1.13% for 2017. The non-performing assets to assets ratio decreased to 0.43% from 0.63% in 2017. The allowance for loan losses to non-performing loans increased to 149.67% from 137.73% in 2017. The changes in these ratios are due to improved asset quality as well as changes related to the UCB acquisition.

Non-performing assets at December 31, 2018 were $9.1 million, a 4.3% decrease from December 31, 2017.

 

 

Non-performing Assets      
(dollars in thousands)    December 31,
2018		      December 31,
2017		  

Non-accrual loans

    $ 6,116      $ 6,648  

Restructured loans

      3,024        2,888  
  

 

 

     

 

 

  

Total non-performing loans

      9,140        9,536  

Other Real Estate Owned

      —          16  
  

 

 

     

 

 

  

Total non-performing assets

    $ 9,140      $ 9,552  
  

 

 

     

 

 

  

Conference Call and Webcast

Civista Bancshares, Inc. will also host a conference call to discuss the Company’s financial results for the fourth quarter of 2018 at 1:00 p.m. ET on Friday, February 15, 2019. Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company’s website, www.civb.com. Participants can also listen to the conference call by dialing 855-238-2712 and ask to be joined into the Civista Bancshares, Inc. Fourth Quarter 2018 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).

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP. These non-GAAP financial measures include “Adjusted Earnings,” and “Adjusted Efficiency Ratio.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.

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, 2017. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Civista does not undertake, and specifically disclaims any obligation, to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Civista Bancshares, Inc. is a $2.1 billion financial holding company headquartered in Sandusky, Ohio. The Company’s banking subsidiary, Civista Bank, operates 38 locations in Northern, Central and Southwestern Ohio, Southeastern Indiana and Northern Kentucky. Civista Bancshares, Inc. may be accessed at HUwww.civb.comUH. The Company’s common shares are traded on the NASDAQ Capital Market under the symbol “CIVB”. The Company’s depositary shares, each representing a 1/40th ownership interest in a Series B Preferred Share, are traded on the NASDAQ Capital Market under the symbol “CIVBP”.

For additional information, contact:

Dennis G. Shaffer

President and CEO

Civista Bancshares, Inc.

888-645-4121

Civista Bancshares, Inc.

Financial Highlights

(dollars in thousands, except share amounts)

Consolidated Condensed Statement of Operations

 

     Three Months Ended     Twelve Months Ended  
     December 31,     December 31,  
     (unaudited)     (unaudited)  
     2018     2017     2018     2017  

Interest and dividend income

    $ 23,707     $ 15,839     $ 73,677     $ 58,594  

Interest expense

      2,962       1,276       7,570       4,092  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

      20,745       14,563       66,107       54,502  

Provision for loan losses

      390       —         780       —    
  

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision

      20,355       14,563       65,327       54,502  

Noninterest income

      4,838       3,630       18,131       16,334  

Noninterest expense

      16,391       12,387       66,679       48,604  
  

 

 

    

 

 

    

 

 

    

 

 

  

Income before taxes

      8,802       5,806       16,779       22,232  

Income tax expense

      1,233       1,826       2,640       6,360  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income

      7,569       3,980       14,139       15,872  

Preferred stock dividends

      165       308       959       1,244  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income available to common shareholders

    $ 7,404     $ 3,672     $ 13,180     $ 14,628  
  

 

 

    

 

 

    

 

 

    

 

 

  

Dividends per common share

    $ 0.09     $ 0.06     $ 0.32     $ 0.24  

Earnings per common share,

         

basic

    $ 0.48     $ 0.36     $ 1.10     $ 1.48  

diluted

    $ 0.45     $ 0.32     $ 1.02     $ 1.28  

Average shares outstanding,

         

basic

      15,521,404       10,179,079       11,971,786       9,906,856  

diluted

      16,898,186       12,597,396       13,855,707       12,352,616  

Selected financial ratios:

         

Return on average assets

      1.43 %      1.05 %      0.81 %      1.04 % 

Return on average equity

      10.35 %      8.65 %      6.50 %      9.19 % 

Dividend payout ratio

      18.46 %      15.35 %      27.10 %      14.98 % 

Net interest margin (tax equivalent)

      4.38 %      4.24 %      4.21 %      4.01 % 

Selected Balance Sheet Items

 

     December 31,     December 31,  
     2018     2017  
     (unaudited)     (unaudited)  

Cash and due from financial institutions

    $ 42,779     $ 40,519  

Investment securities

      347,364       231,062  

Loans held for sale

      1,391       2,197  

Loans

      1,561,941       1,164,661  

Less allowance for loan losses

      13,679       13,134  
  

 

 

    

 

 

  

Net loans

      1,548,262       1,151,527  

Other securities

      21,021       14,247  

Premises and equipment, net

      22,021       17,611  

Goodwill and other intangibles

      86,203       28,374  

Bank owned life insurance

      43,037       25,125  

Other assets

      26,876       15,195  
  

 

 

    

 

 

  

Total assets

    $ 2,138,954     $ 1,525,857  
  

 

 

    

 

 

  

Total deposits

    $ 1,579,893     $ 1,204,923  

Federal Home Loan Bank advances

      193,600       71,900  

Securities sold under agreements to repurchase

      22,199       21,755  

Subordinated debentures

      29,427       29,427  

Accrued expenses and other liabilities

      14,937       13,391  

Total shareholders’ equity

      298,898       184,461  
  

 

 

    

 

 

  

Total liabilities and shareholders’ equity

    $ 2,138,954     $ 1,525,857  
  

 

 

    

 

 

  

Shares outstanding at period end

      15,603,499       10,198,475  

Book value per share

    $ 18.56     $ 16.39  

Equity to asset ratio

      13.97 %      12.09 % 

Selected asset quality ratios:

     

Allowance for loan losses to total loans

      0.88 %      1.13 % 

Non-performing assets to total assets

      0.43 %      0.63 % 

Allowance for loan losses to non-performing loans

      149.66 %      137.73 % 

Non-performing asset analysis

     

Nonaccrual loans

    $ 6,116     $ 6,648  

Troubled debt restructurings

      3,024       2,888  

Other real estate owned

      —         16  
  

 

 

    

 

 

  

Total

    $ 9,140     $ 9,552  
  

 

 

    

 

 

  

Supplemental Financial Information

(Unaudited—Dollars in thousands except share data)

 

     December 31,     September 30,     June 30,     March 31,     December 31,  

End of Period Balances

    2018     2018     2018     2018     2017  

Assets

           

Cash and due from banks

    $ 42,779     $ 64,754     $ 41,156     $ 118,970     $ 40,519  

Investment securities

      347,364       318,112       231,013       234,915       231,062  

Loans held for sale

      1,391       4,025       4,058       2,379       2,197  

Loans

      1,561,941       1,515,644       1,180,032       1,153,758       1,164,661  

Allowance for loan losses

      (13,679 )      (13,331 )      (12,867 )      (12,814 )      (13,134 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net Loans

      1,548,262       1,502,313       1,167,165       1,140,944       1,151,527  

Other securities

      21,021       17,774       15,154       14,247       14,247  

Premises and equipment, net

      22,021       22,518       17,308       17,424       17,611  

Goodwill and other intangibles

      86,203       85,964       28,342       28,354       28,374  

Bank owned life insurance

      43,037       42,750       25,411       25,267       25,125  

Other assets

      26,876       27,325       18,700       17,805       15,195  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Assets

    $  2,138,954     $  2,085,535     $  1,548,307     $  1,600,305     $  1,525,857  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities

           

Total deposits

    $ 1,579,893     $ 1,577,755     $ 1,146,172     $ 1,290,671     $ 1,204,923  

Federal Home Loan Bank advances

      193,600       145,100       156,200       60,000       71,900  

Securities sold under agreement to repurchase

      22,199       18,515       14,230       17,452       21,755  

Subordinated debentures

      29,427       29,427       29,427       29,427       29,427  

Accrued expenses and other liabilities

      14,937       25,350       12,430       14,712       13,391  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total liabilities

      1,840,056       1,796,147       1,358,459       1,412,262       1,341,396  

Shareholders’ Equity

           

Preferred shares, Series B

      9,364       10,878       13,250       17,034       17,358  

Common stock

      266,901       265,324       158,191       154,170       153,810  

Accumulated earnings

      41,320       35,302       39,898       37,902       31,652  

Treasury stock

      (17,235 )      (17,235 )      (17,235 )      (17,235 )      (17,235 ) 

Accumulated other comprehensive loss

      (1,452 )      (4,881 )      (4,256 )      (3,828 )      (1,124 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total shareholders’ equity

      298,898       289,388       189,848       188,043       184,461  

Total Liabilities and Shareholders’ Equity

    $ 2,138,954     $ 2,085,535     $ 1,548,307     $ 1,600,305     $ 1,525,857  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Quarterly Average Balances

           

Assets:

           

Earning assets

    $ 1,907,966     $ 1,534,039     $ 1,427,953     $ 1,502,943     $ 1,408,479  

Securities

      352,412       252,832       247,301       242,477       243,623  

Loans

      1,532,012       1,256,680       1,158,956       1,147,441       1,152,595  

Liabilities and Shareholders’ Equity

           

Total deposits

    $ 1,591,521     $ 1,202,419     $ 1,190,415     $ 1,380,413     $ 1,218,502  

Interest-bearing deposits

      1,120,876       816,773       756,289       803,604       849,423  

Interest-bearing liabilities

      204,002       228,164       149,433       87,467       91,515  

Total shareholders’ equity

      290,096       205,601       188,330       184,432       182,495  

Supplemental Financial Information

(Unaudited—Dollars in thousands except share data)

 

     Three Months Ended  
     December 31,     September 30,     June 30,     March 31,     December 31,  

Income statement

    2018     2018     2018     2018     2017  

Total interest and dividend income

    $ 23,707     $ 17,886     $ 16,160     $ 15,924     $ 15,839  

Total interest expense

      2,962       2,062       1,394       1,152       1,276  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

      20,745       15,824       14,766       14,772       14,563  

Provision for loan losses

      390       390       —         —         —    

Noninterest income

      4,838       3,288       4,390       5,616       3,630  

Noninterest expense

      16,391       22,156       15,928       12,205       12,387  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) before taxes

      8,802       (3,434 )      3,228       8,183       5,806  

Income tax expense (benefit)

      1,233       (1 )      214       1,194       1,826  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss)

      7,569       (3,433 )      3,014       6,989       3,980  

Preferred stock dividends

      165       192       299       303       308  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) available to common shareholders

    $ 7,404     $ (3,625 )    $ 2,715     $ 6,686     $ 3,672  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Common shares dividend paid

    $ 1,386     $ 971     $ 719     $ 714     $ 712  

Per share data

           

Basic earnings per common share

    $ 0.48     $ (0.31 )    $ 0.26     $ 0.65     $ 0.36  

Diluted earnings per common share

      0.45       (0.31 )      0.24       0.55       0.32  

Dividends per common share

      0.09       0.09       0.07       0.07       0.06  

Average common shares outstanding—basic

      15,521,404       11,627,093       10,470,839       10,213,264       10,179,079  

Average common shares outstanding—diluted

      16,898,186       13,271,073       12,615,336       12,597,394       12,597,396  

Asset quality

           

Allowance for loan losses, beginning of period

    $ 13,331     $ 12,867     $ 12,814     $ 13,134     $ 12,946  

Charge-offs

      (119 )      (133 )      (226 )      (425 )      (145 ) 

Recoveries

      77       207       279       105       333  

Provision

      390       390       —         —         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Allowance for loan losses, end of period

    $ 13,679     $ 13,331     $ 12,867     $ 12,814     $ 13,134  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ratios

           

Allowance to total loans

      0.88 %      0.88 %      1.09 %      1.11 %      1.13 % 

Allowance to nonperforming assets

      149.67 %      132.86 %      168.36 %      154.21 %      137.50 % 

Allowance to nonperforming loans

      149.67 %      132.86 %      168.36 %      154.41 %      137.73 % 

Nonperforming assets

           

Nonperforming loans

    $ 9,140     $ 10,034     $ 7,642     $ 8,298     $ 9,536  

Other real estate owned

      —  `       —         —         11       16  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total nonperforming assets

    $ 9,140     $ 10,034     $ 7,642     $ 8,309     $ 9,552  

Capital and liquidity

           

Tier 1 leverage ratio

      12.22 %      15.37 %      12.96 %      11.82 %      12.69 % 

Tier 1 risk-based capital ratio

      15.30 %      15.43 %      15.71 %      15.87 %      15.45 % 

Total risk-based capital ratio

      16.15 %      16.29 %      16.74 %      16.92 %      16.53 % 

Tangible common equity ratio

      9.98 %      9.70 %      9.80 %      9.12 %      9.33 % 

Reconciliation of Non-GAAP Financial Measures

(Unaudited—Dollars in thousands except share data)

 

     Three Months
Ended		     Three Months
Ended		     Twelve
Months
Ended		     Twelve
Months
Ended		  
     December 31,     December 31,     December 31,     December 31,  

Adjusted earnings

    2018     2017     2018     2017  

Income before taxes (GAAP)

      8,802       5,806       16,779       22,232  

Loss on sale of investment securities

      (27 )      —         (413 )      —    

Acquisition and integration expenses

      782       —         12,735       —    
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted earnings, pretax

      9,611       5,806       29,927       22,232  

Income tax expense

      1,233       1,826       2,640       6,360  

Income tax expense adjustment

      150       (511 )      1,678       (511 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted net income (Non-GAAP)

      8,228       4,491       25,609       16,383  

Preferred stock dividends

      165       308       959       1,244  
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted net income available to common shareholders

    $ 8,063     $ 4,183     $ 24,650     $ 15,139  
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted earnings per common share—basic

    $ 0.52     $ 0.41     $ 2.06     $ 1.53  

Adjusted earnings per common share—diluted

      0.49       0.36       1.85       1.33  

Average common shares outstanding—basic

      15,521,404       10,179,079       11,971,786       9,906,856  

Average common shares outstanding—diluted

      16,898,186       12,597,396       13,855,707       12,352,616  

Adjusted return on average assets

      1.55 %      1.19 %      1.47 %      1.07 % 

Adjusted return on average equity

      11.25 %      9.76 %      11.78 %      9.48 % 

Adjusted Efficiency ratio

         
     Twelve Months
Ended		     Twelve Months
Ended		              
     December 31,     December 31,              
     2018     2017              

Noninterest expense (GAAP)

      66,679       48,604      

Acquisition and integration expense

      (12,735 )      —      
  

 

 

    

 

 

      

Adjusted noninterest expense

      53,944       48,604      

Net interest income (GAAP)

      66,107       54,502      

Effect of tax-exempt income

      1,062       1,711      
  

 

 

    

 

 

      

Adjusted net interest income

      67,169       56,213      

Noninterest Income—GAAP

      18,131       16,334      

Loss on sales of investment securities, net

      413       —      
  

 

 

    

 

 

      

Adjusted Non-interest Income

      18,544       16,334      

Adjusted total revenue

      85,713       72,547      

Adjusted Efficiency ratio

      62.9 %      67.0 %     
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