10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001- 36192

Civista Bancshares, Inc.

(Exact name of registrant as specified in its charter)

Ohio	34-1558688
State or other jurisdiction of	(IRS Employer
incorporation or organization	Identification No.)

100 East Water Street, Sandusky, Ohio 44870

(Address of principal executive offices) (Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common shares, no par value Depositary Shares, each representing 1/40th of a 6.50% Noncumulative Redeemable Convertible Perpetual Preferred share, Series B, no par value	The NASDAQ Stock Market LLC (NASDAQ Capital Market) The NASDAQ Stock Market LLC (NASDAQ Capital Market)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes  ☐    No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐  (Do not check if smaller reporting company)	Smaller reporting company	☐
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.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  ☒

The aggregate market value of the voting and non-voting common equity stock held by non-affiliates of the registrant based upon the closing market price as of June 30, 2017 was $202,025,476. For this purpose, shares held by non-affiliates include all outstanding shares except those beneficially owned by the directors and executive officers of the registrant.

As of February 28, 2018, there were 10,209,021 common shares, no par value, of the registrant issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Annual Report to Shareholders for the fiscal year ended December 31, 2017 (the “2017 Annual Report”) are incorporated by reference into Parts I and II of this Form 10-K. Portions of the registrant’s Proxy Statement for the registrant’s 2018 Annual Meeting of Shareholders to be held on April 17, 2018 (the “2018 Proxy Statement”) are incorporated by reference into Part III of this Form 10-K.

INDEX

Part I
Item 1.	Business	3
Item 1A.	Risk Factors	20
Item 1B.	Unresolved Staff Comments	30
Item 2.	Properties	30
Item 3.	Legal Proceedings	30
Item 4.	Mine Safety Disclosures	30
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	30
Item 6.	Selected Financial Data	31
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 8.	Financial Statements and Supplementary Data	32
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	32
Item 9A.	Controls and Procedures	32
Item 9B.	Other Information	33
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	33
Item 11.	Executive Compensation	33
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	33
Item 13.	Certain Relationships and Related Transactions, and Director Independence	34
Item 14.	Principal Accountant Fees and Services	34
Part IV
Item 15.	Exhibits and Financial Statement Schedules	34
Item 16	Form 10-K Summary	37
Signatures		38

PART I

Item 1.  Business

(a) General Development of Business

CIVISTA BANCSHARES, INC. (“CBI”) was organized under the laws of the State of Ohio on February 19, 1987 and is a registered financial holding company under the Gramm-Leach-Bliley Act of 1999, as amended (the “GLBA”). CBI’s office is located at 100 East Water Street, Sandusky, Ohio. CBI and its subsidiaries are sometimes referred to together as the “Company”. The Company had total consolidated assets of $1,525,857 at December 31, 2017.

CIVISTA BANK (“Civista”), owned by the Company since 1987, opened for business in 1884 as The Citizens National Bank. In 1898, Civista was reorganized under Ohio banking law and was known as The Citizens Bank and Trust Company. In 1908, Civista surrendered its trust charter and began operation as The Citizens Banking Company. The name Civista Bank was introduced during the first quarter of 2015 to solidify our dual Citizens/Champaign brand and distinguish ourselves from the many other banks using the “Citizens” name in our existing and prospective markets. Civista maintains its main office at 100 East Water Street, Sandusky, Ohio and operates branch banking offices in the following Ohio communities: Sandusky (2), Norwalk (2), Berlin Heights, Huron, Port Clinton, Castalia, New Washington, Shelby (2), Willard, Greenwich, Plymouth, Shiloh, Akron, Dublin, Plain City, Russells Point, Urbana (2), West Liberty, Quincy and Dayton (3). Civista also operates loan production offices in Mayfield Heights and Westlake, Ohio. Civista accounted for 99.6% of the Company’s consolidated assets at December 31, 2017.

FIRST CITIZENS INSURANCE AGENCY, INC. (“FCIA”) was formed in 2001 to allow the Company to participate in commission revenue generated through its third party insurance agreement. Assets of FCIA were not significant as of December 31, 2017.

WATER STREET PROPERTIES (“WSP”) was formed in 2003 to hold properties repossessed by CBI subsidiaries. Assets of WSP were not significant as of December 31, 2017.

FC REFUND SOLUTIONS, INC. (“FCRS”) was formed in 2012 and remained inactive for the periods presented. Assets of FCRS were not significant as of December 31, 2017.

FIRST CITIZENS INVESTMENTS, INC. (“FCI”) was formed in the fourth quarter of 2007 as a wholly-owned subsidiary of Civista to hold and manage its securities portfolio. The operations of FCI are located in Wilmington, Delaware.

FIRST CITIZENS CAPITAL LLC (“FCC”) was also formed in the fourth quarter of 2007 as a wholly-owned subsidiary of Civista to hold inter-company debt that is eliminated in consolidation. The operations of FCC are located in Wilmington, Delaware.

CIVB RISK MANAGEMENT, INC. (“CRMI”), a wholly-owned subsidiary of the Company which was formed and began operations on December 26, 2017, is a Delaware-based captive insurance company which insures against certain risks unique to the operations of the Company and its subsidiaries and for which insurance may not be currently available or economically feasible in today’s insurance marketplace.  CRMI pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves.  CRMI is subject to regulations of the State of Delaware and undergoes periodic examinations by the Delaware Division of Insurance.

(b) Industry Segments

CBI is a financial holding company. Through its subsidiary bank, the Company is primarily engaged in the business of community banking, which accounts for substantially all of its revenue, operating income and assets.  Refer to Consolidated Financial Statements on pages 26 through 31 of the 2017 Annual Report.

3

(c) Narrative Description of Business

General

The Company’s primary business is incidental to the subsidiary bank. Civista, located in Erie, Crawford, Champaign, Cuyahoga, Franklin, Huron, Logan, Madison, Montgomery, Ottawa, Richland and Summit Counties, Ohio, conducts a general banking business that involves collecting customer deposits, making loans, purchasing securities, and offering Trust services.

Interest and fees on loans accounted for 68% of total revenue for 2017, 68% of total revenue for 2016, and 69% of total revenue for 2015. The Company’s primary focus of lending continues to be real estate loans, both residential and commercial in nature. Residential real estate mortgages comprised 23% of the total loan portfolio in 2017, 23% of the total loan portfolio in 2016 and 24% of the total loan portfolio in 2015. Commercial real estate loans comprised 51% of the total loan portfolio in 2017, 53% in 2016, and 52% in 2015. Commercial and agriculture loans comprised 13% of the total loan portfolio in 2017, 13% in 2016, and 12% in 2015. Civista’s loan portfolio does not include any foreign-based loans, loans to lesser-developed countries or loans to CBI.

On a parent company only basis, CBI’s primary source of funds is the receipt of dividends paid by its subsidiaries, principally Civista. The ability of Civista to pay dividends is subject to limitations under various laws and regulations and to prudent and sound banking principles. Generally, subject to certain minimum capital requirements, Civista may declare a dividend without the approval of the State of Ohio Division of Financial Institutions unless the total of the dividends in a calendar year exceeds the total net profits of the bank for the year combined with the retained profits of the bank for the two preceding years. At December 31, 2017, Civista had $36,440 of accumulated net profits available to pay dividends to CBI.

The Company’s business is not seasonal, nor is it dependent on a single or small group of customers.

In the opinion of management, the Company does not have exposure to material costs associated with compliance with environmental laws and regulations or material expenditures related to environmental hazardous waste mitigation or cleanup.

Competition

The market area for Civista is Erie, Crawford, Champaign, Cuyahoga, Franklin, Huron, Logan, Madison, Montgomery, Ottawa, Richland and Summit Counties in Ohio. Traditional financial service competition for Civista consists of large national and regional financial institutions, community banks, thrifts and credit unions operating within Civista’s market area. Nontraditional sources of competition for loan and deposit dollars come from captive auto finance companies, mortgage banking companies, internet banks, brokerage companies, insurance companies and direct mutual funds.

Civista experiences intense competition within several of its markets due to the presence of several national, regional and local financial institutions and other service providers. Civista primarily competes based on client service, convenience and responsiveness to customer needs, availability and selection of products, and rates of interest on loans and deposits. However, some of Civista’ competitors have greater resources and, as such, higher lending limits, which may adversely affect the ability of Civista to compete.

Employees

CBI has no employees. Civista employs approximately 350 full-time equivalent employees to whom a variety of benefits are provided. CBI and its subsidiaries are not parties to any collective bargaining agreements. Management considers its relationship with its employees to be good.

4

Supervision and Regulation

CBI and its subsidiaries are subject to extensive supervision and regulation by federal and state agencies. The regulation of financial holding companies and their subsidiaries is intended primarily for the protection of consumers, depositors, borrowers, the federal Deposit Insurance Fund and the banking system as a whole, and not for the protection of shareholders. Applicable laws and regulations restrict permissible activities and investments and require actions to protect loan, deposit, brokerage, fiduciary and other customers, as well as the federal Deposit Insurance Fund. These laws and regulations also may restrict the ability of CBI to repurchase its common shares or to receive dividends from Civista, and impose capital adequacy and liquidity requirements. The following is a summary of the regulatory agencies that supervise and regulate CBI and Civista and the statutes and regulations that have, or could have, a material impact on the Company’s business. This discussion is qualified in its entirety by reference to such statutes and regulations.

The Bank Holding Company Act: As a financial holding company, CBI is subject to regulation under the Bank Holding Company Act of 1956, as amended (the BHCA), and the examination and reporting requirements of the Board of Governors of the Federal Reserve System (Federal Reserve Board). Under the BHCA, CBI is subject to periodic examination by the Federal Reserve Board and is required to file periodic reports regarding its operations and any additional information that the Federal Reserve Board may require. The Federal Reserve Board also has extensive enforcement authority over financial and bank holding companies, including the ability to assess civil money penalties, issue cease and desist and removal orders, and require that a financial or bank holding company divest subsidiaries, including its subsidiary banks.

Under applicable law and Federal Reserve Board policy, a financial or bank holding company is expected to act as a source of strength to each of its subsidiary banks. The Federal Reserve Board may require a financial or bank holding company to contribute additional capital to an undercapitalized subsidiary bank and may disapprove of the payment of dividends to shareholders if the Federal Reserve Board believes the payment of such dividends would be an unsafe or unsound practice.

The BHCA generally limits the activities of a bank holding company to banking, managing or controlling banks, furnishing services to or performing services for its subsidiaries and engaging in any other activities that the Federal Reserve Board has determined to be so closely related to banking or to managing or controlling banks as to be a proper incident to those activities. In addition, the BHCA requires every bank holding company to obtain the approval of the Federal Reserve Board prior to acquiring all or substantially all of the assets of any bank or another financial or bank holding company, acquiring direct or indirect ownership or control of more than 5% of the voting shares of any bank not already majority-owned by it, or merging or consolidating with another financial or bank holding company.

Gramm-Leach-Bliley Act: The GLBA permits qualifying bank holding companies to elect to become financial holding companies and thereby affiliate with securities firms and insurance companies and engage in other activities that are financial in nature if the holding company is well capitalized and well managed and each of its subsidiary banks is well capitalized under the FDIC’s Deposit Insurance Corporation Act of 1991 prompt corrective action provisions, is well managed, and has at least a satisfactory rating under the Community Reinvestment Act. In March, 2000, CBI became a financial holding company. No regulatory approval is required for a financial holding company to acquire a company, other than a bank or a savings association, engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve Board.

The GLBA defines “financial in nature” to include:

• securities underwriting, dealing and market making;

• sponsoring mutual funds and investment companies;

• insurance underwriting and agency;

• merchant banking; and

• activities that the Federal Reserve Board has determined to be closely related to banking.

5

If a financial holding company or a subsidiary bank fails to maintain all requirements for the holding company to maintain financial holding company status, material restrictions may be placed on the activities of the financial holding company and its subsidiaries and on the ability of the holding company to enter into certain transactions and obtain regulatory approvals for new activities and transactions.  The financial holding company could also be required to divest of subsidiaries that engage in activities that are not permitted for bank holding companies that are not financial holding companies. If restrictions are imposed on the activities of a financial holding company, the existence of such restrictions may not be made publicly available pursuant to confidentiality regulations of the bank regulatory agencies.

Transactions with Affiliates, Directors, Executive Officers and Shareholders: Transactions between Civista and its affiliates, including CBI, are subject to Sections 23A and 23B of the Federal Reserve Act, and Federal Reserve Board Regulation W, which generally limit the extent to which Civista may engage in “covered transactions” with affiliates and require that the terms of such transactions be the same, or at least as favorable, to Civista as the terms provided in a similar transaction between Civista and an unrelated party. The term “covered transaction” includes the making of loans to an affiliate, the purchase of assets from an affiliate, the issuance of a guarantee on behalf of an affiliate, the purchase of securities issued by an affiliate and other similar types of transactions.

A bank’s authority to extend credit to executive officers, directors and greater than 10% shareholders, as well as entities such persons control, is subject to Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O promulgated thereunder by the Federal Reserve Board. Among other things, these loans must be made on terms (including interest rates charged and collateral required) substantially the same as those offered to unaffiliated individuals or be made as part of a benefit or compensation program and on terms widely available to employees, and must not involve a greater than normal risk of repayment. In addition, the amount of loans a bank may make to these affiliated persons is based, in part, on the bank’s capital position, and specified approval procedures must be followed in making loans which exceed specified amounts.

Banking subsidiaries of financial and bank holding companies are also subject to federal regulation regarding such matters as reserves, limitations on the nature and amount of loans and investments, issuance or retirement of its own securities, limitations on the payment of dividends and other aspects of banking operations.

Privacy Provisions: Under the GLBA, federal banking regulators adopted rules that limit the ability of banks and other financial institutions to disclose non-public information about consumers to non-affiliated third parties. These rules contain extensive provisions on a customer’s right to privacy of non-public personal information. Except in certain cases, an institution may not provide personal information to unaffiliated third parties unless the institution discloses that such information may be disclosed and the customer is given the opportunity to opt out of such disclosure. The privacy provisions of the GLBA affect how consumer information is conveyed to outside vendors. CBI and its subsidiaries are also subject to certain state laws that govern the use and distribution of non-public personal information.

Federal Deposit Insurance Corporation (“FDIC”): The FDIC is an independent federal agency which insures the deposits of federally-insured banks and savings associations up to certain prescribed limits and safeguards the safety and soundness of financial institutions. The general insurance limit is $250,000 per separately insured depositor. This insurance is backed by the full faith and credit of the United States Government.

As insurer, the FDIC is authorized to conduct examinations of and to require reporting by insured institutions, including Civista, to prohibit any insured institution from engaging in any activity the FDIC determines to pose a threat to the deposit insurance fund, and to take enforcement actions against insured institutions. The FDIC may terminate insurance of deposits of any institution if the FDIC finds that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or other regulatory agency.

The FDIC assesses a quarterly deposit insurance premium on each insured institution based on risk characteristics of the institution and may also impose special assessments in emergency situations. The premiums fund the Deposit Insurance Fund (“DIF”). Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the FDIC has established 2.0% as the designated reserve ratio (“DRR”), which is the amount in the DIF as a percentage of all DIF insured deposits. In March

6

2016, the FDIC adopted final rules designed to meet the statutory minimum DRR of 1.35% by September 30, 2020, the deadline imposed by the Dodd-Frank Act. The Dodd-Frank Act requires the FDIC to offset the effect on institutions with assets of less than $10 billion of the increase in the statutory minimum DRR to 1.35% from the former statutory minimum of 1.15%. Although the FDIC’s new rules reduced assessment rates on all banks, they imposed a surcharge on banks with assets of $10 billion or more to be paid until the DRR reaches 1.35%. The rules also provide assessment credits to banks with assets of less than $1 billion for the portion of their assessments that contribute to the increase of the DRR to 1.35%. The rules further changed the method of determining risk-based assessment rates for established banks with less than $10 billion in assets to better ensure that banks taking on greater risks pay more for deposit insurance than banks that take on less risk.

In addition, all FDIC-insured institutions are required to pay assessments to fund interest payments on bonds issued by the Financing Corporation, which was established by the government to recapitalize a predecessor to the DIF. These assessments will continue until the Financing Corporation bonds mature in 2019.

The FDIC is authorized to prohibit any insured institution from engaging in any activity that poses a serious threat to the insurance fund and may initiate enforcement actions against a bank, after first giving the institution’s primary regulatory authority an opportunity to take such action. The FDIC may also terminate the deposit insurance of any institution that has engaged in or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, order or condition imposed by the FDIC.

Consumer Financial Protection Bureau: The Dodd-Frank Act established the Consumer Financial Protection Bureau (the “CFPB”), which regulates consumer financial products and services and certain financial services providers. The CFPB is authorized to prevent unfair, deceptive and abusive acts or practices and seeks to ensure consistent enforcement of laws so that consumers have access to fair, transparent and competitive markets for consumer financial products and services. Since it was established the CFPB has exercised extensive rulemaking and interpretive authority.

Consumer Protection Laws and Regulations: Banks are subject to regular examination to ensure compliance with federal consumer statutes and regulations, including, but not limited to, the following:

• The Equal Credit Opportunity Act (prohibiting discrimination in any credit transaction on the basis of any of various criteria);

• The Truth in Lending Act (requiring that credit terms are disclosed in a manner that permits a consumer to  understand and compare credit terms more readily and knowledgeably);

• The Fair Housing Act (making it unlawful for a lender to discriminate in its housing-related lending activities against any person on the basis of certain criteria);

• The Home Mortgage Disclosure Act (requiring financial institutions to collect data that enables regulatory agencies to determine whether financial institutions are serving the housing credit needs of the communities in which they are located); and

• The Real Estate Settlement Procedures Act (requiring that lenders provide borrowers with disclosures regarding the nature and cost of real estate settlements and prohibits abusive practices that increase borrowers’ costs).

The banking regulators also use their authority under the Federal Trade Commission Act to take supervisory or enforcement action with respect to unfair or deceptive acts or practices by banks that may not necessarily fall within the scope of a specific banking or consumer finance law.

7

Community Reinvestment Act: The Community Reinvestment Act requires depository institutions to assist in meeting the credit needs of their market areas, including low- and moderate-income areas, consistent with safe and sound banking practice. Under this Act, each institution is required to adopt a statement for each of its market areas describing the depositary institution’s efforts to assist in its community’s credit needs. Depositary institutions are periodically examined for compliance and assigned one of four ratings: outstanding, satisfactory, needs improvement, or substantial noncompliance. The rating assigned to a financial institution is considered in connection with various applications submitted by a financial institution or its holding company to its banking regulators, including applications to acquire another financial institution or to open a new branch office. In addition, all subsidiary banks of a financial holding company must maintain a satisfactory or outstanding rating in order for the financial holding company to avoid limitations on its activities.

USA Patriot Act of 2001: The Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“the USA Patriot Act”) gives the United States Government greater powers over financial institutions to combat money laundering and terrorist access to the financial system in our country. The USA Patriot Act requires the Company to establish a program for obtaining identifying information from customers seeking to open new accounts and establish enhanced due diligence policies, procedures and controls designed to detect and report suspicious activity.

Corporate Governance: As mandated by the Sarbanes-Oxley Act of 2002, the SEC has adopted rules and regulations governing, among other matters, corporate governance, auditing and accounting, executive compensation and enhanced and timely disclosure of corporate information. The NASDAQ Stock Market LLC (“Nasdaq”) has also adopted corporate governance rules. The Board of Directors of the Company has taken a series of actions to strengthen and improve the Company’s governance practices in light of the rules of the SEC and Nasdaq. The Board of Directors has adopted charters for the Audit Committee, the Compensation Committee and the Nominating Committee, as well as a Code of Conduct (Ethics) applicable to all directors, officers and employees of the Company. In addition, in accordance with Section 302(a) of the Sarbanes-Oxley Act, written certifications by CBI’s Chief Executive Officer and Chief Financial Officer are required. These certifications attest that CBI’s quarterly and annual reports filed with the SEC do not contain any untrue statement of a material fact. See Item 9A “Controls and Procedures” in Part II of this Form 10-K for CBI’s evaluation of its disclosure controls and procedures.

Regulation of Bank Subsidiary: As an Ohio chartered bank, Civista is subject to supervision and regulation by the State of Ohio Department of Commerce, Division of Financial Institutions (the “ODFI”). In addition, Civista is a member of the Federal Reserve System and, therefore, is subject to supervision and regulation by the Federal Reserve Board. Civista is subject to periodic examinations by the ODFI, and Civista is additionally subject to periodic examinations by the Federal Reserve Board. These examinations are designed primarily for the protection of the depositors of the bank and not shareholders.

Regulatory Capital Requirements: The Federal Reserve Board has adopted risk-based guidelines for financial holding companies and other bank holding companies as well as state member banks, and the FDIC has adopted risk-based capital guidelines for state non-member banks. The guidelines provide a systematic analytical framework which makes regulatory capital requirements sensitive to differences in risk profiles among banking organizations, takes off-balance sheet exposures expressly into account in evaluating capital adequacy, and minimizes disincentives to holding liquid, low-risk assets. Capital levels as measured by these standards are also used to categorize financial institutions for purposes of certain prompt corrective action regulatory provisions.

The risk-based capital guidelines adopted by the federal banking agencies are based on the “International Convergence of Capital Measurement and Capital Standard” (Basel I), published by the Basel Committee on Banking Supervision (the “Basel Committee”). In July 2013, the United States banking regulators issued new capital rules applicable to smaller banking organizations which also implement certain of the provisions of the Dodd-Frank Act (the “Basel III Capital Rules”). Community banking organizations, including CBI and Civista, began transitioning to the new rules on January 1, 2015. The new minimum capital requirements became effective on January 1, 2015, whereas a new capital conservation buffer and deductions from common equity capital phase in from January 1, 2016 through January 1, 2019, and most deductions from common equity tier 1 capital phase in from January 1, 2015 through January 1, 2019.

8

The Basel III Capital Rules include (a) a minimum common equity tier 1 capital ratio of 4.5%, (b) a minimum Tier 1 capital ratio of 6.0%, (c) a minimum total capital ratio of 8.0%, and (d) a minimum leverage ratio of 4.0%.

Common equity for the common equity tier 1 capital ratio includes common stock (plus related surplus) and retained earnings, plus limited amounts of minority interests in the form of common stock, less the majority of certain regulatory deductions.

Tier 1 capital includes common equity as defined for the common equity tier 1 capital ratio, plus certain non-cumulative preferred stock and related surplus, cumulative preferred stock and related surplus and trust preferred securities that have been grandfathered (but which are not permitted going forward), and limited amounts of minority interests in the form of additional Tier 1 capital instruments, less certain deductions.

Tier 2 capital, which can be included in the total capital ratio, includes certain capital instruments (such as subordinated debt) and limited amounts of the allowance for loan and lease losses, subject to new eligibility criteria, less applicable deductions.

The deductions from common equity tier 1 capital include goodwill and other intangibles, certain deferred tax assets, mortgage-servicing assets above certain levels, gains on sale in connection with a securitization, investments in a banking organization’s own capital instruments and investments in the capital of unconsolidated financial institutions (above certain levels). The deductions phase in from 2015 through 2019.

Under the guidelines, capital is compared to the relative risk related to the balance sheet. To derive the risk included in the balance sheet, one of several risk weights is applied to different balance sheet and off-balance sheet assets, primarily based on the relative credit risk of the counterparty. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

The new rules also place restrictions on the payment of capital distributions, including dividends, and certain discretionary bonus payments to executive officers if the company does not hold a capital conservation buffer of greater than 2.5 percent composed of common equity tier 1 capital above its minimum risk-based capital requirements, or if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5 percent at the beginning of the quarter. The capital conservation buffer phases in starting on January 1, 2016, at 0.625%, and is currently 1.875%.

In September 2017, the Federal Reserve Board, along with other bank regulatory agencies, proposed amendments to their capital requirements to simplify certain aspects of the capital rules for community banks, including Civista, in an attempt to reduce the regulatory burden for smaller financial institutions.  Because the amendments were proposed with a request for comments and have not been finalized, we do not yet know what effect the final rules will have on Civista and its regulatory capital calculations.  In November 2017, the federal bank regulatory agencies extended for community banks the existing capital requirements for certain items that were scheduled to change effective January 1, 2018, in light of the simplification amendments being considered.

At December 31, 2017, both CBI and Civista were in compliance with all of the regulatory capital requirements to which they are subject. For CBI’s and Civista’s capital ratios, see Note 19 to the Company’s 2017 Consolidated Financial Statements.

The Federal Reserve Board has adopted regulations governing prompt corrective action to resolve the problems of capital deficient and otherwise troubled state-chartered member banks. At each successively lower defined capital category, a bank is subject to more restrictive and numerous mandatory or discretionary regulatory actions or limits, and the Federal Reserve Board has less flexibility in determining how to resolve the problems of the institution. In addition, the Federal Reserve Board generally can downgrade a bank’s capital category, notwithstanding its capital level, if, after notice and opportunity for hearings, the bank is deemed to be engaged in an unsafe or unsound practice, because it has not corrected deficiencies that resulted in it receiving a less than satisfactory examination rating on matters other than capital or it is deemed to be in an unsafe or unsound condition. Civista’s capital at December 31, 2017, met the standards for the highest capital category, a “well-capitalized” bank.

9

Federal Reserve Board regulations also limit the payment of dividends by Civista to CBI. Civista may not pay a dividend if it would cause Civista not to meet its capital requirements. In addition, the dividends that Civista may pay to CBI without prior approval of the Federal Reserve Board is limited to net income for the year plus its retained net income for the preceding two years.

Executive and Incentive Compensation

In June 2010, the Federal Reserve Board, the OCC and the FDIC issued joint interagency guidance on incentive compensation policies (“Joint Guidance”) intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking. This principles-based guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles that a banking organization’s incentive compensation arrangements should (a) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, (b) be compatible with effective internal controls and risk management and (c) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors.

In 2011, federal banking regulatory agencies jointly issued proposed rules on incentive-based compensation arrangements under applicable provisions of the Dodd-Frank Act (“First Proposed Rules”). The First Proposed Rules generally would have applied to financial institutions with $1.0 billion or more in assets that maintain incentive-based compensation arrangements for certain covered employees.

In May 2016, the federal bank regulatory agencies approved a second joint notice of proposed rules (the “Second Proposed Joint Rules”) designed to prohibit incentive-based compensation arrangements that encourage inappropriate risks at financial institutions. The Second Proposed Joint Rules would apply to covered financial institutions with total assets of $1 billion or more. The requirements of the Second Proposed Joint Rules would differ for each of three categories of financial institutions:

• Level 1 consists of institutions with assets of $250 billion or more;

• Level 2 consists of institutions with assets of at least $50 billion and less than $250 billion; and

• Level 3 consists of institutions with assets of at least $1 billion and less than $50 billion.

Some of the requirements would apply only to Level 1 and Level 2 institutions. For all covered institutions, including Level 3 institutions like us, the Second Proposed Joint Rules would:

• prohibit incentive-based compensation arrangements that are “excessive” or “could lead to material financial loss;”

• require incentive-based compensation that is consistent with a balance of risk and reward, effective management and control of risk, and effective governance; and

• require board oversight, recordkeeping and disclosure to the appropriate regulatory agency.

Level 1 and Level 2 institutions would have additional requirements, including deferrals of awards to certain covered persons; potential downward adjustments, forfeitures or clawbacks; and additional risk-management and control standards, policies and procedures. In addition, certain practices and types of incentive compensation would be prohibited.

10

Pursuant to rules adopted by the stock exchanges and approved by the SEC in January 2013 under the Dodd-Frank Act, public companies are required to implement “clawback” procedures for incentive compensation payments and to disclose the details of the procedures which allow recovery of incentive compensation that was paid on the basis of erroneous financial information necessitating a restatement due to material noncompliance with financial reporting requirements. This clawback policy is intended to apply to compensation paid within a three-year look-back window of the restatement and would cover allexecutives who received incentive awards.

Public company compensation committee members are also required to meet heightened independence requirements and to consider the independence of compensation consultants, legal counsel and other advisors to the compensation committee. The compensation committees must have the authority to hire advisors and to have the company fund reasonable compensation of such advisors.  SEC regulations require public companies to provide various disclosures about executive compensation in annual reports and proxy statements and to present to their shareholders a non-binding vote on the approval of executive compensation.

Effects of Government Monetary Policy

The earnings of the Company are affected by general and local economic conditions and by the policies of various governmental regulatory authorities. In particular, the Federal Reserve Board regulates money and credit conditions and interest rates to influence general economic conditions, primarily through open market acquisitions or dispositions of United States Government securities, varying the discount rate on member bank borrowings and setting reserve requirements against member and nonmember bank deposits. Federal Reserve Board monetary policies have had a significant effect on the interest income and interest expense of commercial banks, including Civista, and are expected to continue to do so in the future.

Available Information

CBI maintains an Internet website at www.civb.com (this uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate CBI’s website into this Annual Report on Form 10-K). CBI makes available free of charge on or through its Internet website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), as well as CBI’s definitive proxy statements filed pursuant to Section 14 of the Exchange Act, as soon as reasonably practicable after CBI electronically files such material with, or furnishes it to, the SEC.

Statistical Information

The following section contains certain financial disclosures related to the Company as required under the Securities and Exchange Commission’s Industry Guide 3, “Statistical Disclosures by Bank Holding Companies”, or a specific reference as to the location of the required disclosures in the Registrant’s 2017 Annual Report to Shareholders, portions of which are incorporated in this Form 10-K by reference.

I. Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rates and Interest Differential

Average balance sheet information and the related analysis of net interest income for the years ended December 31, 2017, 2016 and 2015 is included on pages 14 through 16—“Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rates and Interest Differential” and “Changes in Interest Income and Interest Expense Resulting from Changes in Volume and Changes in Rate”, within Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company’s 2017 Annual Report to Shareholders and is incorporated into this Item I by reference.

11

II. Investment Portfolio

The following table sets forth the carrying amount of securities at December 31.

	2017		2016		2015
	(Dollars in thousands)
Available for sale (1)
U.S. Treasury securities and obligations of    U.S. Government agencies	$	30,357	$	37,446	$	40,937
Obligations of states and political subdivisions		118,056		94,998		92,152
Mortgage-backed securities in government    sponsored entities		81,817		62,642		62,573
Total debt securities		230,230		195,086		195,662
Equity securities in financial institutions		832		778		587
Total	$	231,062	$	195,864	$	196,249

(1) The Corporation had no securitites of an “issuer” where the aggregate carrying value of such securitites exceeded ten percent of shareholders’ equity.

The following tables set forth the maturities of securities at December 31, 2017 and the weighted average yields of such debt securities. Maturities are reported based on stated maturities and do not reflect principal prepayment assumptions.

	Within one year					After one but within five years					After five but within ten years					After ten years
	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
	(Dollars in thousands)
Available for Sale (2)
U.S. Treasury securities and    obligations of U.S. government    agencies	$	7,988		1.35	%	$	17,837		1.52	%	$	3,116		1.24	%	$	1,416		1.33	%
Obligations of states and political    subdivisions (1)		777		2.92			9,854		3.40			28,506		4.60			78,919		3.48
Mortgage-backed securities in    government sponsored entities		6,933	1.75				9,899		1.79			17,970		2.28			47,015		2.71
Total	$	15,698		1.60	%	$	37,590		2.10	%	$	49,592		3.05	%	$	127,350		3.32	%

(1) Weighted average yields on nontaxable obligations have been computed based on actual yields stated on the security.

(2) The weighted average yield has been computed using the historical amortized cost for available-for-sale securities.

12

III. Loan Portfolio

Types of Loans

The amounts of gross loans outstanding at December 31 are shown in the following table according to types of loans.

	2017		2016		2015		2014		2013
	(Dollars in thousands)
Commercial and Agriculture	$	152,473	$	135,462	$	124,402	$	113,265	$	115,403
Commercial Real Estate:
Owner occupied		164,099		161,364		167,897		143,014		161,014
Non-owner occupied		425,623		395,931		348,439		308,666		282,832
Residential Real Estate		268,735		247,308		236,338		214,537		201,537
Real Estate Construction		97,531		56,293		58,898		65,452		39,964
Farm Real Estate		39,461		41,170		46,993		53,973		49,154
Consumer and other		16,739		17,978		18,560		15,950		11,337
Total	$	1,164,661	$	1,055,506	$	1,001,527	$	914,857	$	861,241

Commercial loans are those made for commercial, industrial and professional purposes to individuals, sole proprietorships, partnerships, corporations and other business enterprises. Agriculture loans are for financing agricultural production, including all costs associated with growing crops or raising livestock. Commercial and Agriculture loans may be secured, other than by real estate, or unsecured, requiring one single repayment or on an installment repayment schedule. Commercial and Agriculture loans involve certain risks relating to changes in local and national economic conditions and the resulting effect on the borrowing entities. Secured loans not collateralized by real estate mortgages maintain a loan-to-value ratio ranging from 50% in the case of certain stocks, to 100% in the case of savings or time deposit accounts. Unsecured credits rely on the financial strength and previous credit experience of the borrower and in many cases the financial strength of the principals when such credit is extended to a corporation.

Commercial Real Estate mortgage loans are made predicated on having a security interest in real property and are secured wholly or substantially by that lien on real property. Commercial Real Estate mortgage loans are generally underwritten with a maximum loan-to-value ratio of 80%.

Residential Real Estate mortgage loans and home equity lines of credit are made predicated on security interests in real property and secured wholly or substantially by those liens on real property. Such real estate mortgage loans are primarily loans secured by one-to-four family real estate. Residential Real Estate mortgage loans generally pose less risk to the Company due to the nature of the collateral being less susceptible to sudden changes in value.

Real Estate Construction loans are for the construction of residential homes, new buildings or additions to existing buildings. Generally, these loans are secured by one-to-four family real estate or commercial real estate. The Company controls disbursements in connection with construction loans.

Consumer loans are made to individuals for household, family and other personal expenditures. These expenditures include the purchase of vehicles or furniture, educational expenses, medical expenses, taxes or vacation expenses. Consumer loans may be secured, other than by real estate, or unsecured, generally requiring repayment on an installment repayment schedule. Consumer loans pose a relatively higher credit risk. This higher risk is moderated by the use of certain loan to value limits on secured credits and aggressive collection efforts. The collectability of consumer loans is influenced by local and national economic conditions.

Letters of credit represent extensions of credit granted in the normal course of business, which are not reflected in the Company’s consolidated financial statements. As of December 31, 2017 and 2016, the Company was contingently liable for $3,261 and $949, respectively, with respect to outstanding letters of credit. In addition, Civista had issued lines of credit to customers. Borrowings under such lines of credit are usually for the working capital needs of the

13

borrower. At December 31, 2017 and 2016, Civista had commitments to extend credit, excluding letters of credit, in the aggregate amounts of approximately $325,267 and $238,908, respectively. Of these amounts, $291,907 and $209,828 represented lines of credit and construction loans, and $33,360 and $29,080 represented overdraft protection commitments at December 31, 2017 and 2016, respectively. Such amounts represent the portion of total commitments that had not been used by customers as of December 31, 2017 and 2016.

14

Maturities and Sensitivities of Loans to Changes in Interest Rates

The following table shows the amount of commercial and agriculture, commercial real estate, residential real estate, real estate construction, farm real estate and consumer and other loans outstanding as of December 31, 2017, which, based on the contract terms for repayments of principal, are due in the periods indicated. In addition, the amounts due after one year are classified according to their sensitivity to changes in interest rates.

	Maturing
	Within one year		After one but within five years		After five years		Total
	(Dollars in thousands)
Commercial and Agriculture	$	73,634	$	52,241	$	26,598	$	152,473
Commercial Real Estate:
Owner Occupied		6,364		11,158		146,577		164,099
Non-Owner Occupied		34,656		75,665		315,302		425,623
Residential Real Estate		5,025		13,409		250,301		268,735
Real Estate Construction		20,793		35,289		41,449		97,531
Farm Real Estate		1,294		2,967		35,200		39,461
Consumer and Other		847		14,205		1,687		16,739
Total	$	142,613	$	204,934	$	817,114	$	1,164,661

	Interest Sensitivity
	Fixed rate		Variable rate
	(Dollars in thousands)
Due after one but within five years	$	77,217	$	127,716
Due after five years		118,365		698,749
	$	195,582	$	826,465

The preceding maturity information is based on contract terms at December 31, 2017 and does not include any possible “rollover” at maturity date. In the normal course of business, Civista considers and acts on the borrowers’ requests for renewal of loans at maturity. Evaluation of such requests includes a review of the borrower’s credit history, the collateral securing the loan and the purpose for such request.

15

Risk Elements

The following table presents information concerning the amount of loans at December 31 that contain certain risk elements, excluding purchase credit impaired loans.

	2017		2016		2015		2014		2013
	(Dollars in thousands)
Loans accounted for on a nonaccrual basis (1)	$	6,132	$	6,943	$	9,259	$	13,558	$	20,459
Loans contractually past due 90 days or more as to    principal or interest payments (2)		16		9		—		18		—
Loans whose terms have been renegotiated to    provide a reduction or deferral of interest or    principal because of deterioration in the financial    position of the borrower (3)		2,888		4,180		5,085		4,928		5,234
Total	$	9,036	$	11,132	$	14,344	$	18,504	$	25,693
Impaired loans included in above totals	$	3,460	$	6,539	$	7,386	$	7,101	$	12,458
Impaired loans not included in above totals		—		—		99		4,048		5,599
Total impaired loans	$	3,460	$	6,539	$	7,485	$	11,149	$	18,057

(1) A loan is placed on nonaccrual status when doubt exists as to the collectability of the loan, including any accrued interest. With a few immaterial exceptions, commercial and agriculture, commercial real estate, residential real estate and construction loans past due 90 days are placed on nonaccrual unless they are well collateralized and in the process of collection. Generally, consumer loans are charged-off by the time they become past due 120 days unless they are well collateralized and in the process of collection. Once a loan is placed on nonaccrual, interest is only recognized on a cash basis where future collections of principal is probable.

(2) Excludes loans accounted for on a nonaccrual basis.

(3) Excludes loans accounted for on a nonaccrual basis and loans contractually past due 90 days or more as to principal or interest payments.

There were no loans as of December 31, 2017, other than those disclosed above, where known information about probable credit problems of borrowers caused management to have serious doubts as to the ability of such borrowers to comply with the present loan repayment terms. There were no other interest-bearing assets that would be required to be disclosed in the table above, if such assets were loans as of December 31, 2017. The gross interest income that would have been recorded on nonaccrual loans and restructured loans in 2017 if the loans had been current in accordance with their original terms and had been outstanding throughout the period or since origination, if held for part of the period, was $712. The amount of cash-basis interest income on such loans actually included in net income in 2017 was $139.

Interest income recognition associated with impaired loans was as follows.

	2017		2016		2015		2014		2013
	(Dollars in thousands)
Interest income on impaired loans, all of which was    recognized on a cash basis	$	216	$	1,256	$	384	$	570	$	989

At December 31, 2017, Civista had two concentrations of loans exceeding 10% of total loans: one to Lessors of Non-Residential Buildings and Dwellings totaling $294,855, or 25.3 percent of total loans, as of December 31, 2017, and the other to Lessors of Residential Buildings and Dwellings totaling $155,333, or 13.3 percent of total loans, as of December 31, 2017.

16

These segments of the portfolio are stable and have been conservatively underwritten, monitored and managed by experienced commercial bankers. However, the customers’ ability to repay their loans is dependent on the real estate market and general economic conditions in the area. There were no foreign loans outstanding at December 31, 2017.

IV. Summary of Loan Loss Experience

Analysis of the Allowance for Loan Losses

The following table shows the daily average loan balances and changes in the allowance for loan losses for the years indicated.

	2017			2016			2015			2014			2013
	(Dollars in thousands)
Daily average amount of loans net of unearned    income	$	1,109,069		$	1,025,908		$	981,475		$	874,432		$	819,152
Allowance for loan losses at beginning of year	$	13,305		$	14,361		$	14,268		$	16,528		$	19,742
Loan charge-offs:
Commercial and Agriculture		11			880			190			338			483
Commercial Real Estate—Owner Occupied		328			228			523			1,661			989
Commercial Real Estate—Non-Owner    Occupied		38			23			81			198			815
Real Estate Mortgage		400			455			1,135			2,449			2,800
Real Estate Construction		—			115			—			—			136
Farm Real Estate		—			—			—			—			107
Consumer and Other		165			125			120			135			220
Total charge-offs		942			1,826			2,049			4,781			5,550
Recoveries of loans previously charged-off:
Commercial and Agriculture		372			105			182			251			141
Commercial Real Estate—Owner Occupied		69			56			187			360			265
Commercial Real Estate—Non-Owner    Occupied		46			1,372			115			50			184
Real Estate Mortgage		194			479			331			293			391
Real Estate Construction		44			12			5			6			108
Farm Real Estate		3			—			76			—			67
Consumer and Other		43			46			46			61			80
Total recoveries		771			2,070			942			1,021			1,236
Net recoveries (charge-offs) (1)		(171	)		244			(1,107	)		(3,760	)		(4,314	)
Provision (credit) for loan losses (2)		—			(1,300	)		1,200			1,500			1,100
Allowance for loan losses at year end	$	13,134		$	13,305		$	14,361		$	14,268		$	16,528
Allowance for loan losses as a percent of loans at    year-end		1.13	%		1.26	%		1.43	%		1.56	%		1.92	%
Ratio of net charge-offs (recoveries) during the    year to average loans outstanding		0.02	%		(0.02	)%		0.11	%		0.43	%		0.53	%

(1) The amount of net charge-offs fluctuates from year to year due to factors relating to the condition of the general economy, decline in market values of collateral and deteriorization of specific businesses.

(2) The determination of the balance of the allowance for loan losses is based on a detailed analysis of the loan portfolio and reflects an amount that, in management’s judgment, is adequate to provide for probable incurred loan losses. Such analysis is based on a review of specific loans, the character of the loan portfolio, current economic conditions, risk management practices and such other factors as management believes require current recognition in estimating probable incurred loan losses.

17

Allocation of Allowance for Loan Losses

The following table allocates the allowance for loan losses at December 31 to each loan category. The allowance has been allocated according to the amount deemed to be reasonably necessary to provide for the probable losses estimated to be incurred within the following categories of loans at the dates indicated.

	2017					2016
	Allowance		Percentage of loans to total loans			Allowance		Percentage of loans to total loans
	(Dollars in thousands)
Commercial and Agriculture	$	1,562		13.1	%	$	2,018		12.8	%
Commercial Real Estate—Owner Occupied		2,043		14.1			2,171		15.3
Commercial Real Estate—Non-Owner Occupied		5,307		36.5			4,606		37.5
Real Estate Mortgage		1,910		23.1			3,089		23.4
Real Estate Construction		834		8.4			420		5.3
Farm Real Estate		430		3.4			442		3.9
Consumer and Other		290		1.4			314		1.7
Unallocated		758		—			245		—
	$	13,134		100.0	%	$	13,305		100.0	%

	2015					2014
	Allowance		Percentage of loans to total loans			Allowance		Percentage of loans to total loans
	(Dollars in thousands)
Commercial and Agriculture	$	1,478		12.4	%	$	1,819		12.4	%
Commercial Real Estate—Owner Occupied		2,467		16.8			2,221		15.6
Commercial Real Estate—Non-Owner Occupied		4,657		34.8			4,334		33.7
Real Estate Mortgage		4,086		23.6			3,747		23.5
Real Estate Construction		371		5.9			428		7.2
Farm Real Estate		538		4.7			822		5.9
Consumer and Other		382		1.9			200		1.7
Unallocated		382		—			697		—
	$	14,361		100.0	%	$	14,268		100.0	%

	2013
	Allowance		Percentage of loans to total loans
	(Dollars in thousands)
Commercial and Agriculture	$	2,838		13.4	%
Commercial Real Estate—Owner Occupied		2,931		18.7
Commercial Real Estate—Non-Owner Occupied		3,888		32.8
Real Estate Mortgage		5,224		23.4
Real Estate Construction		184		4.6
Farm Real Estate		740		5.7
Consumer and Other		217		1.3
Unallocated		506		—
	$	16,528		100.0	%

18

Civista measures the adequacy of the allowance for loan losses by using both specific and general components. The specific component relates to the evaluation of each loan identified as impaired. The general component consists of a pooling of commercial credits risk graded as special mention and substandard, based on portfolio experience, and general reserves, which are based on a twelve quarter loss migration analysis, adjusted for current economic factors. The use of twelve quarters is a change in loss migration during 2015. During the third quarter of 2015, loss migration rates were lengthened and are now calculated over a twelve quarter period for all portfolio segments, except for the segment consisting of purchased automobile loans which was calculated over an eight quarter period. Previously, an eight quarter loss migration was used for all portfolio segments. Factors in the determination of the economic reserve include items such as changes in the economic and business conditions of its market, changes in lending policies and procedures, changes in loan concentrations, as well as a few others. The allowance for loan losses to total loans decreased from 1.26% in 2016to 1.13% in 2017. The unallocated reserve of Civista increased to $758 in 2017 from $245 in 2016. Management considers both the increase in unallocated and the end-of-period number to be insignificant and within the loan policy guidelines.

Deposits

The average daily amount of deposits (all in domestic offices) and average rates paid on such deposits is summarized for the years indicated.

	2017					2016					2015
	Average balance		Average rate paid			Average balance		Average rate paid			Average balance		Average rate paid
	(Dollars in thousands)
Noninterest-bearing demand deposits	$	450,648	N/A			$	434,601	N/A			$	340,360	N/A
Interest-bearing demand deposits		189,419		0.06	%		190,965		0.05	%		192,842		0.05	%
Savings, including Money Market deposit accounts		395,799		0.12	%		375,624		0.10	%		351,144		0.09	%
Certificates of deposit, including IRA’s		200,797		0.87	%		209,093		0.73	%		223,099		0.75	%
	$	1,236,663				$	1,210,283				$	1,107,445

Maturities of certificates of deposits and individual retirement accounts of $100,000 or more outstanding at December 31, 2017 are summarized as follows.

	Certificates of Deposits		Individual Retirement Accounts		Total
	(Dollars in thousands)
3 months or less	$	8,711	$	1,113	$	9,824
Over 3 through 6 months		7,637		464		8,101
Over 6 through 12 months		6,772		1,349		8,121
Over 12 months		11,463		2,214		13,677
	$	34,583	$	5,140	$	39,723

Return on Equity and Assets

Information required by this section is incorporated herein by reference from the information appearing under the caption “Five-Year Selected Consolidated Financial Data” located on pages 1 and 2 of the 2017 Annual Report. The common share dividend payout ratio was 16.9% in 2017, 11.2% in 2016, 14.0% in 2015, 19.2% in 2014 and 23.1% in 2013.

19

Short-term Borrowings

See Note 10 to the consolidated financial statements (located on page 68 of the 2017 Annual Report) and “Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rates and Interest Differential” (located on pages 14 through 16 of the 2017 Annual Report) for the statistical disclosures for short-term borrowings for 2017 and 2016.

Item 1A. Risk Factors

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to such matters as financial condition, anticipated operating results, cash flows, business line results, credit quality expectations, prospects for new lines of business, economic trends (including interest rates) and similar matters. Forward-looking statements reflect our expectations, estimates or projections concerning future results or events. These statements are generally identified by the use of forward-looking words or phrases such as “believe,” “belief,” “expect,” “anticipate,” “may,” “could,” “intend,” “intent,” “estimate,” “plan,” “foresee,” “likely,” “will,” “should” or other similar words or phrases. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause our actual results, performance or achievements to differ materially from those expressed in or implied by the forward-looking statements. Factors that could cause actual results, performance or achievements to differ from those discussed in the forward-looking statements include, but are not limited to, changes in financial markets or national or local economic conditions; adverse changes in the real estate market; volatility and direction of market interest rates; credit risks of lending activities; changes in the allowance for loan losses; legislation or regulatory changes or actions; increases in FDIC insurance premiums and assessments; changes in tax laws; accounting changes; unexpected losses of key management; failure, interruption or breach in security of our communications and information systems; unforeseen litigation; increased competition in our market area; failures to manage growth and/or effectively integrate acquisitions; future revenues of our tax refund program; and other risks identified from time-to-time in the Company’s other public documents on file with the Securities and Exchange Commission, including those risks set forth under Item 1A of Part 1 of this Annual Report on Form 10-K.

The forward-looking statements included in this report are only made as of the date of this report, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements, and the purpose of this section is to secure the use of the safe harbor provisions.

CHANGES IN ECONOMIC AND POLITICAL CONDITIONS COULD ADVERSELY AFFECT OUR EARNINGS THROUGH DECLINES IN DEPOSITS, LOAN DEMAND, THE ABILITY OF OUR CUSTOMERS TO REPAY LOANS AND THE VALUE OF THE COLLATERAL SECURING OUR LOANS.

Our success depends to a significant extent upon local and national economic and political conditions, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, money supply and other factors beyond our control can adversely affect our asset quality, deposit levels and loan demand and, therefore, our earnings and our capital. The election of a new United States President in 2017 has resulted, and is expected to continue to result, in substantial, unpredictable changes in economic and political conditions for the United States and the rest of the world. Economic turmoil in Europe and Asia and changes in oil production in the Middle East affect the economy and stock prices in the United States, which can affect our earnings and capital and the ability of our customers to repay loans. Because we have a significant amount of real estate loans, decreases in real estate values could adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings and cash flows. As a result, our success depends on the general economic conditions of these areas, particularly given that a significant portion of our lending relates to real estate located in these regions.

20

ADVERSE CHANGES IN THE REAL ESTATE MARKET COULD CAUSE INCREASES IN DELINQUENCIES AND NON-PERFORMING ASSETS, INCLUDING ADDITIONAL LOAN CHARGE-OFFS, AND COULD DEPRESS OUR INCOME, EARNINGS AND CAPITAL.

At December 31, 2017, approximately 23.1% and 50.6%, respectively, of our loan portfolio was comprised of residential and commercial real estate loans. Adverse changes in economic conditions both nationally and in the communities we serve have and may to cause deterioration to the value of real estate Civista uses to secure its loans. Adverse changes in the economy, deterioration of our real estate portfolio, a decrease in real estate values, an increase in unemployment, decreased or nonexistent housing price appreciation or increases in interest rates could reduce our earnings and consequently our financial condition because borrowers may not be able to repay their loans. The value of the collateral securing our loans and the quality of our loan portfolio may decline and customers may not want or need our products and services.

Any of these scenarios could cause us to make fewer loans, increase delinquencies and non-performing assets, require us to charge off a higher percentage of our loans or result in additional increases to our provision for loan losses in future periods, which could adversely affect our business, financial condition and results of operations.

CHANGES IN INTEREST RATES COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR NET INTEREST INCOME.

Our results of operations are affected principally by net interest income, which is the difference between interest earned on loans and investments and interest expense paid on deposits and other borrowings. The spread between the yield on our interest-earning assets and our overall cost of funds has been compressed in the recent low interest rate environment, and our net interest income may continue to be adversely impacted by an extended period of continued low rates. We cannot predict or control changes in interest rates. National, regional and local economic conditions and the policies of regulatory authorities, including monetary policies of the Board of Governors of the Federal Reserve System, affect the movement of interest rates and our interest income and interest expense. If the interest rates paid on deposits and other borrowed funds increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected. Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and other borrowed funds.

In addition, certain assets and liabilities may react in different degrees to changes in market interest rates. For example, interest rates on some types of assets and liabilities may fluctuate prior to changes in broader market interest rates, while interest rates on other types may lag behind. Some of our assets, such as adjustable rate mortgages, have features that restrict changes in their interest rates, including rate caps.

Interest rates are highly sensitive to many factors that are beyond our control. Some of these factors include:

• inflation;

• recession;

• unemployment;

• money supply;

• international disorders; and

• instability in domestic and foreign financial markets.

21

Changes in interest rates may affect the level of voluntary prepayments on our loans and may also affect the level of financing or refinancing by customers. We believe that the impact on our cost of funds from a rise in interest rates will depend on a number of factors, including but not limited to, the competitive environment in the banking sector for deposit pricing, opportunities for clients to invest in other markets such as fixed income and equity markets, and the propensity of customers to invest in their businesses. The effect on our net interest income from an increase in interest rates will ultimately depend on the extent to which the aggregate impact of loan re-pricings exceeds the impact of increases in our cost of funds.

WE ARE EXPOSED TO OPERATIONAL RISK.

We are exposed to many types of operational risk, including reputational risk, legal and compliance risk, the risk of fraud or theft by employees or outsiders, unauthorized transactions by employees or operational errors, including clerical or record-keeping errors or those resulting from faulty or disabled computer or telecommunications systems.

We rely heavily on communications and information systems to conduct our business. Any failure, interruption or breach in security of these systems could result in failures or disruptions in our customer relationship management, general ledger, deposit, loan and other systems.

We may be subject to disruptions of our operating systems arising from events that are wholly or partially beyond our control, which may include, for example, computer viruses, cyber-attacks, spikes in transaction volume and/or customer activity, electrical or telecommunications outages, or natural disasters. Although we have programs in place related to business continuity, disaster recovery and information security to maintain the confidentiality, integrity and availability of our systems, business applications and customer information, such disruptions may give rise to interruptions in service to customers, loss of data privacy and loss or liability to us.  Any failure or interruption in our operations or information systems, or any security or data breach, could cause reputational damage, jeopardize the confidentiality of customer information, result in a loss of customer business, subject us to regulatory intervention or expose us to civil litigation and financial loss or liability, any of which could have a material adverse effect on us.

Given the volume of transactions we process, certain errors may be repeated or compounded before they are discovered and successfully rectified. Our necessary dependence upon automated systems to record and process our transaction volume may further increase the risk that technical system flaws or employee tampering or manipulation of those systems will result in losses that are difficult to detect. We may also be subject to disruptions of our operating systems arising from events that are wholly or partially beyond our control (for example, computer viruses or electrical or telecommunications outages), which may give rise to disruption of service to customers and to financial loss or liability. We are further exposed to the risk that our external vendors may be unable to fulfill their contractual obligations (or will be subject to the same risk of fraud or operational errors by their respective employees as we are) and to the risk that our (or our vendors’) business continuity and data security systems prove to be inadequate.

Negative public opinion can result from our actual or alleged conduct in any number of activities, including lending practices, corporate governance and acquisitions, and from actions taken by governmental regulators and community organizations in response to those activities. Negative public opinion can adversely affect our ability to attract and keep customers and can expose us to potential litigation and regulatory action.

UNAUTHORIZED DISCLOSURE OF SENSITIVE OR CONFIDENTIAL CLIENT INFORMATION OR BREACHES IN SECURITY OF OUR SYSTEMS, COULD SEVERELY HARM OUR BUSINESS.

As part of our financial institution business, we collect, process and store sensitive consumer data by utilizing computer systems and telecommunications networks operated by both us and third-party service providers.  Our necessary dependence upon automated systems to record and process transactions poses the risk that technical system flaws, employee errors, tampering or manipulation of those systems, or attacks by third parties will result in losses and may be difficult to detect.  We have security and backup and recovery systems in place, as well as a business continuity plan, to ensure the computer systems will not be inoperable, to the extent possible. Our inability to use or

22

access these information systems at critical points in time could unfavorably impact the timeliness and efficiency of our business operations.  In recent years, some banks have experienced denial of service attacks in which individuals or organizations flood the bank's website with extraordinarily high volumes of traffic, with the goal and effect of disrupting the ability of the bank to process transactions.  We could be adversely affected if one of our employees causes a significant operational break-down or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our operations or systems. We are further exposed to the risk that the third-party service providers may be unable to fulfill their contractual obligations (or will be subject to the same risks as faced by us). These disruptions may interfere with service to our customers, cause additional regulatory scrutiny and result in a financial loss or liability.

Misconduct by employees could include fraudulent, improper or unauthorized activities on behalf of clients or improper use of confidential information.  We may not be able to prevent employee errors or misconduct, and the precautions we take to detect this type of activity might not be effective in all cases.  Employee errors or misconduct could subject us to civil claims for negligence or regulatory enforcement actions, including fines and restrictions on our business.

In addition, there have been instances where financial institutions have been victims of fraudulent activity in which criminals pose as customers to initiate wire and automated clearinghouse transactions out of customer accounts.  The recent massive breach of the systems of a credit bureau presents additional threats as criminals now have more information about a larger portion of our country's population than past breaches have involved, which could be used by criminals to pose as customers initiating transfers of money from customer accounts.  Although we have policies and procedures in place to verify the authenticity of our customers, we cannot assure that such policies and procedures will prevent all fraudulent transfers.  Such activity can result in financial liability and harm to our reputation.

We have implemented security controls to prevent unauthorized access to the computer systems and require our third-party service providers to maintain similar controls. However, we cannot be certain that these measures will be successful. A security breach of our computer systems and loss of confidential information, such as customer account numbers and related information, could result in a loss of customers’ confidence and, thus, loss of business. In addition, unauthorized access to or use of sensitive data could subject us to litigation and liability and costs to prevent further such occurrences.

Further, we may be impacted by data breaches at retailers and other third parties who participate in data interchanges with us and our customers that involve the theft of customer credit and debit card data, which may include the theft of our debit card PIN numbers and commercial card information used to make purchases at such retailers and other third parties. Such data breaches could result in us incurring significant expenses to reissue debit cards and cover losses, which could result in a material adverse effect on our results of operations.

Our assets at risk for cyber-attacks include financial assets and non-public information belonging to customers. We use several third-party vendors who have access to our assets via electronic media. Certain cyber security risks arise due to this access, including cyber espionage, blackmail, ransom, and theft. As cyber and other data security threats continue to evolve, we may be required to expend significant additional resources to continue to modify and enhance our protective measures or to investigate and remediate any security vulnerabilities.

WE MAY ELECT OR NEED TO RAISE ADDITIONAL CAPITAL IN THE FUTURE, BUT CAPITAL MAY NOT BE AVAILABLE WHEN IT IS NEEDED.

We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations. In addition, federal banking agencies have recently finalized extensive changes to their capital requirements, including the adoption of the final “Basel III” rules as discussed above, which result in higher capital requirements and more restrictive leverage and liquidity ratios than those previously in place. If we experience significant loan losses, addition capital may need to be infused.  In addition, we may elect to raise additional capital to support business growth and/or to finance acquisitions, if any, or we may otherwise elect or be required to raise additional capital.  Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions and a number of other factors, many of which are outside our control, and are based on our financial performance. Accordingly, we cannot be assured of our ability to raise additional capital if needed or on terms acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our financial condition, results of operations and prospects.

23

STRONG COMPETITION WITHIN OUR MARKET AREA MAY REDUCE OUR ABILITY TO ATTRACT AND RETAIN DEPOSITS AND ORIGINATE LOANS.

We face competition both in originating loans and in attracting deposits within our market area, which includes North Central, West Central and South Western Ohio. We compete for clients by offering personal service and competitive rates on our loans and deposit products. The type of institutions we compete with include large regional financial institutions, community banks, thrifts and credit unions operating within our market areas. Nontraditional sources of competition for loan and deposit dollars come from captive auto finance companies, mortgage banking companies, internet banks, brokerage companies, insurance companies and direct mutual funds. As a result of their size and ability to achieve economies of scale, certain of our competitors offer a broader range of products and services than we offer. We expect competition to remain intense in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the financial services industry. In addition, to stay competitive in our markets we may need to adjust the interest rates on our products to match the rates offered by our competitors, which could adversely affect our net interest margin. As a result, our profitability depends upon our continued ability to successfully compete in our market areas while achieving our investment objectives.

LEGISLATIVE OR REGULATORY CHANGES OR ACTIONS COULD ADVERSELY IMPACT OUR BUSINESS.

The financial services industry is extensively regulated. We are subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our operations. These laws and regulations are primarily intended for the protection of consumers, depositors, borrowers and the deposit insurance fund, not to benefit our shareholders. Changes to laws and regulations or other actions by regulatory agencies may negatively impact us, possibly limiting the services we provide, increasing the ability of non-banks to compete with us or requiring us to change the way we operate. Regulations affecting banks and other financial services businesses are undergoing continuous changes.  Recently, the current United States President and certain legislators have taken steps to make extensive changes to regulations affecting financial institutions.  While such changes are generally intended to lessen the regulatory burden for financial institutions, we cannot predict the impact of any such changes to laws and regulations or other actions.   Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the ability to impose restrictions on the operation of an institution and the ability to determine the adequacy of an institution’s allowance for loan losses. Failure to comply with applicable laws, regulations and policies could result in sanctions being imposed by the regulatory agencies, including the imposition of civil money penalties, which could have a material adverse effect on our operations and financial condition. Even the reduction of regulatory restrictions could have an adverse effect on us if such lessening of restrictions increases competition within our industry or market areas.

In light of conditions in the global financial markets and the global economy that occurred in the last decade, regulators increased their focus on the regulation of the financial services industry. In the last several years, the United States Congress and the federal bank regulators have acted on an unprecedented scale in responding to the stresses experienced in the global financial markets. Some of the laws enacted by Congress and regulations promulgated by federal bank regulators subject us and other financial institutions to additional restrictions, oversight and costs that may have an adverse impact on our business and results of operations. In addition to laws, regulations and supervisory and enforcement actions directed at the operations of banks, proposals to reform the housing finance market contemplate winding down Fannie Mae and Freddie Mac, which could negatively affect our sales of loans.

In July 2013, our primary federal regulator, the Federal Reserve, published final rules establishing a new comprehensive capital framework for U.S. banking organizations. The rules implement the Basel Committee’s December 2010 framework known as “Basel III” for strengthening international capital standards as well as certain provisions of the Dodd-Frank Act. The implementation of the final rules will lead to higher capital requirements and more restrictive leverage and liquidity ratios than those currently in place. In addition, in order to avoid limitations on capital distributions, such as dividend payments and certain bonus payments to executive officers, the rules require insured financial institutions to hold a capital conservation buffer of common equity tier 1 capital above the minimum risk-based capital requirements. The capital conservation buffer will be phased in over time, becoming effective on January 1, 2019, and will consist of an additional amount of common equity equal to 2.5% of risk-weighted assets. The rules will also revise the regulatory agencies’ prompt corrective action framework by incorporating the new regulatory capital minimums and updating the definition of common equity. The rules began to phase in on January 1,

24

2014 for larger institutions and January 1, 2015 for smaller, less complex banking organizations such as the Company, and will be fully phased in by January 1, 2019. Although the implementation of Basel III, once fully phased in, is not expected to have a material impact on our capital ratios, any future changes to capital requirements could have such an effect.

DEPOSIT INSURANCE PREMIUMS MAY INCREASE AND HAVE A NEGATIVE EFFECT ON THE COMPANY’S RESULTS OF OPERATIONS.

The Deposit Insurance Fund (the “DIF”) maintained by the FDIC to resolve bank failures is funded by fees assessed on insured depository institutions. The costs of resolving bank failures increased for a period of time and decreased the DIF. The FDIC collected a special assessment in 2009 to replenish the DIF and also required a prepayment of an estimated amount of future deposit insurance premiums. If the costs of future bank failures increase, the deposit insurance premiums required to be paid by Civista may also increase. The FDIC recently adopted rules revising its assessments in a manner benefitting banks with assets totaling less than $10 billion. There can be no assurance, however, that assessments will not be changed in the future.

OUR ALLOWANCE FOR LOAN LOSSES MAY PROVE TO BE INSUFFICIENT TO ABSORB POTENTIAL LOSSES IN OUR LOAN PORTFOLIO.

We maintain an allowance for loan losses that we believe is a reasonable estimate of known and inherent losses within the loan portfolio. We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of loans. Through a periodic review and consideration of the loan portfolio, management determines the amount of the allowance for loan losses by considering general market conditions, the credit quality of the loan portfolio, the collateral supporting the loans and the performance of customers relative to their financial obligations with us. However, every loan we make carries a risk of non-payment. This risk is affected by, among other things, cash flow of the borrower and/or the project being financed, changes and uncertainties as to the future value of the collateral securing such loan, the credit history of the particular borrower, changes in economic and industry conditions, and the duration of the loan.

The amount of future losses is also susceptible to changes in economic, operating and other conditions, including changes in interest rates, which may be beyond our control, and these losses may exceed current estimates. We cannot fully predict the amount or timing of losses or whether the allowance for loan losses will be adequate in the future. If our assumptions prove to be incorrect, our allowance for loan losses may not be sufficient to cover losses inherent in our loan portfolio, resulting in additions to the allowance, which would adversely affect our earnings. Excessive loan losses and significant additions to our allowance for loan losses could have a material adverse impact on our financial condition and results of operations.

In addition, bank regulators periodically review our allowance for loan losses and may require us to increase our allowance for loan losses or recognize further loan charge-offs. Any increase in our allowance for loan losses or loan charge-offs as required by these regulatory authorities could have a material adverse effect on our financial condition and results of operations.

OUR BUSINESS AND FINANCIAL RESULTS ARE SUBJECT TO RISKS ASSOCIATED WITH THE CREDITWORTHINESS OF OUR CUSTOMERS AND COUNTERPARTIES.

Credit risk is inherent in the financial services business and results from, among other things, extending credit to customers, purchasing securities, and entering into financial derivative transactions and certain guarantee contracts. Credit risk is one of our most significant risks, particularly given the high percentage of our assets represented directly or indirectly by loans, and the importance of lending to our overall business. We manage credit risk by assessing and monitoring the creditworthiness of our customers and counterparties and by diversifying our loan portfolio. Many factors impact credit risk.

25

A borrower’s ability to repay a loan can be adversely affected by individual factors, such as business performance, job losses or health issues. A weak or deteriorating economy and changes in the United States or global markets also could adversely impact the ability of our borrowers to repay outstanding loans. Any decrease in our borrowers’ ability to repay loans would result in higher levels of nonperforming loans, net charge-offs, and provision for loan losses.

Despite maintaining a diversified loan portfolio, in the ordinary course of business, we may have concentrated credit exposure to a particular person or entity, industry, region or counterparty. Events adversely affecting specific customers, industries, regions or markets, a decrease in the credit quality of a customer base or an adverse change in the risk profile of a market, industry, or group of customers could adversely affect us.

Our credit risk may be exacerbated when collateral held by us to secure obligations to us cannot be realized upon or is liquidated at prices that are not sufficient to recover the full amount of the loan or derivative exposure due us.

Due in part to improvement in local and general economic conditions, as well as actions we have taken to manage our loan portfolio, our provision for loan losses has declined since the end of the recent recession.  However, if we experience higher levels of provision for loan losses in the future, our net income could be negatively affected.

CHANGES IN TAX LAWS COULD ADVERSELY AFFECT OUR PERFORMANCE

We are subject to extensive federal, state and local taxes, including income, excise, sales/use, payroll, franchise, withholding and ad valorem taxes. Changes to our taxes could have a material adverse effect on our results of operations. In addition, our customers are subject to a wide variety of federal, state and local taxes. Changes in taxes paid by our customers may adversely affect their ability to purchase homes or consumer products, which could adversely affect their demand for our loans and deposit products. In addition, such negative effects on our customers could result in defaults on the loans we have made and decrease the value of mortgage-backed securities in which we have invested.

On December 22, 2017, H.R.1, formally known as the "Tax Cuts and Jobs Act," was enacted into law.  This new tax legislation, among other changes, limits the amount of state, federal and local taxes that taxpayers are permitted to deduct on their individual tax returns and eliminates other deductions in their entirety.  Such limits and eliminations may result in customer defaults on loans we have made and decrease the value of mortgage-backed securities in which we have invested.

Accounting changes could impact our reported financial condition or results of operations.

The accounting standard setters, including the Financial Accounting Standards Board, the SEC and other regulatory bodies, periodically change the financial accounting and reporting guidance that governs the preparation of our consolidated financial statements. The pace of change continues to accelerate and changes in accounting standards can be hard to predict and could materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply new or revised guidance retroactively, resulting in the restatement of prior period financial statements.

The preparation of consolidated financial statements in conformity with GAAP requires management to make significant estimates that affect the financial statements. Due to the inherent nature of these estimates, actual results may vary materially from management’s estimates.

26

WE RELY HEAVILY ON OUR MANAGEMENT TEAM, AND THE UNEXPECTED LOSS OF KEY MANAGEMENT MAY ADVERSELY AFFECT OUR OPERATIONS.

Our success to date has been strongly influenced by our ability to attract and to retain senior management experienced in banking in the markets we serve. Our ability to retain executive officers and the current management teams will continue to be important to successful implementation of our strategies. The unexpected loss of services of any key management personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business and financial results.

WE NEED TO CONSTANTLY UPDATE OUR TECHNOLOGY IN ORDER TO COMPETE AND MEET CUSTOMER DEMANDS.

The financial services market, including banking services, is undergoing rapid changes with frequent introductions of new technology-driven products and services. In addition to better serving customers, the effective use of technology increases efficiency and may enable us to reduce costs. Our future success will depend, in part, on our ability to use technology to provide products and services that provide convenience to customers and to create additional efficiencies in our operations. Some of our competitors have substantially greater resources to invest in technological improvements. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers.

WE MAY BE THE SUBJECT OF LITIGATION WHICH COULD RESULT IN LEGAL LIABILITY AND DAMAGE TO OUR BUSINESS AND REPUTATION.

From time to time, we may be subject to claims or legal action from customers, employees or others. Financial institutions like CBI and Civista are facing a growing number of significant class actions, including those based on the manner of calculation of interest on loans and the assessment of overdraft fees. Future litigation could include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. We are also involved from time to time in other reviews, investigations and proceedings (both formal and informal) by governmental and other agencies regarding our business. These matters also could result in adverse judgments, settlements, fines, penalties, injunctions or other relief. Like other large financial institutions, we are also subject to risk from potential employee misconduct, including non-compliance with policies and improper use or disclosure of confidential information. Substantial legal liability or significant regulatory action against us could materially adversely affect our business, financial condition or results of operations and/or cause significant reputational harm to our business.

WE DEPEND UPON THE ACCURACY AND COMPLETENESS OF INFORMATION ABOUT CUSTOMERS AND OTHER PARTIES.

In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely on information provided to us by customers and other parties, including financial statements and other financial information. We may also rely on representations of customers and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. For example, in deciding whether to extend credit to a business, we may assume that the customer’s audited financial statements conform with accounting principles generally accepted in the United States and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer. We may also rely on the audit report covering those financial statements. Our financial condition and results of operations could be negatively impacted to the extent we rely on financial statements that do not comply with generally accepted accounting principles or that are materially misleading, or on other financial information that is inaccurate or incomplete.

27

WE COULD FACE LEGAL AND REGULATORY RISK ARISING OUT OF OUR RESIDENTIAL MORTGAGE BUSINESS.

Numerous federal and state governmental, legislative and regulatory authorities are investigating practices in the business of mortgage and home equity loan lending and servicing and in the mortgage-related insurance and reinsurance industries. We could face the risk of class actions, other litigation and claims from: the owners of or purchasers of such loans originated or serviced by us, homeowners involved in foreclosure proceedings or various mortgage-related insurance programs, downstream purchasers of homes sold after foreclosure, title insurers, and other potential claimants. Included among these claims are claims from purchasers of mortgage and home equity loans seeking the repurchase of loans where the loans allegedly breached origination covenants and representations and warranties made to the purchasers in the purchase and sale agreements. The CFPB has issued new rules for mortgage origination and mortgage servicing. Both the origination and servicing rules create new private rights of action for consumers against lenders and servicers in the event of certain violations.

WE MAY BE REQUIRED TO REPURCHASE LOANS WE HAVE SOLD OR INDEMNIFY LOAN PURCHASERS UNDER THE TERMS OF THE SALE AGREEMENTS, WHICH COULD ADVERSELY AFFECT OUR LIQUIDITY, RESULTS OF OPERATIONS AND FINANCIAL STATEMENTS.

When Civista sells a mortgage loan, it agrees to repurchase or substitute a mortgage loan if it is later found to have breached any representation or warranty Civista made about the loan or if the borrower is later found to have committed fraud in connection with the origination of the loan. While we have underwriting policies and procedures designed to avoid breaches of representations and warranties as well as borrower fraud, there can be no assurance that no breach or fraud will ever occur. Required repurchases, substitutions or indemnifications could have an adverse effect on our liquidity, results of operations and financial statements.

WE DO NOT HAVE ASSURANCE REGARDING THE FUTURE REVENUES OF OUR TAX REFUND PROGRAM.

The revenues from our tax refund program are based upon a contract with a third party. While the contract has a term of three years expiring October 31, 2019 and contains provisions for automatic renewal after that term, the amount to be paid to us is not fixed for any period after 2017. As a result, the amount paid to us may fluctuate after 2017, and there is no assurance that the parties will be able to negotiate compensation that is acceptable to us after that year.

FUTURE ACQUISITIONS OR OTHER EXPANSION MAY ADVERSELY AFFECT OUR FINANCIAL CONDITION AND RESULT OF OPERATIONS.  

In the future, we may acquire other financial institutions or branches or assets of other financial institutions. We may also open new branches, enter into new lines of business, or offer new products or services. Any such acquisition or expansion of our business will involve a number of expenses and risks, which may include some or all of the following:

• the time and expense associated with identifying and evaluating potential acquisitions or expansions;

• the potential inaccuracy of estimates and judgments used to evaluate credit, operations, management and market risk with respect to target institutions;

• the time and costs of evaluating new markets, hiring local management and opening new offices, and the delay between commencing these activities and the generation of profits from the expansion;

• any financing required in connection with an acquisition or expansion;

• the diversion of management’s attention to the negotiation of a transaction and the integration of the operations and personnel of the combining businesses;

• entry into unfamiliar markets and the introduction of new products and services into our existing business;

28

• the possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations; and

• the risk of loss of key employees and customers.

We may incur substantial costs to expand, and we can give no assurance that such expansion will result in the levels of profits we expect. Neither can we assure that integration efforts for any future acquisitions will be successful. We may issue equity securities in connection with acquisitions, which could dilute the economic and voting interests of our existing shareholders.

WE ARE A HOLDING COMPANY AND DEPEND ON OUR SUBSIDIARY BANK FOR DIVIDENDS.

As a financial holding company, we are a legal entity separate and distinct from our subsidiaries and affiliates. Our principal source of funds to support our operations, pay dividends on our common and preferred shares and service our debt is dividends from our subsidiary bank, Civista. In the event that Civista is unable to pay dividends to us, we may not be able to service our debt, pay our other obligations or pay dividends on our common or preferred shares. Accordingly, our inability to receive dividends from Civista could also have a material adverse effect on our business, financial condition and results of operations.

Various federal and state statutory provisions and regulations limit the amount of dividends that Civista may pay to us without regulatory approval. Generally, subject to certain minimum capital requirements, Civista may declare a dividend without the approval of the State of Ohio Division of Financial Institutions so long as the total amount of the dividends in a calendar year does not exceed Civista’s total net income for that year combined with its retained net income for the two preceding years. In addition, the Federal Reserve has issued policy statements that provide that insured banks and bank holding companies should generally only pay dividends out of current operating earnings. Thus, the ability of Civista to pay dividends in the future is currently influenced, and could be further influenced, by bank regulatory policies and capital guidelines and may restrict our ability to declare and pay dividends on our common or preferred shares.

THE MARKET PRICE OF OUR COMMON SHARES MAY BE SUBJECT TO FLUCTUATIONS AND VOLATILITY.

The market price of our common shares may fluctuate significantly due to, among other things, changes in market sentiment regarding our operations or business prospects, the banking industry generally or the macroeconomic outlook. Factors that could impact our trading price include:

• our operating and financial results, including how those results vary from the expectations of management, securities analysts and investors;

• developments in our business or operations or in the financial sector generally;

• future offerings by us of debt or preferred shares, which would be senior to our common shares upon liquidation and for purposes of dividend distributions;

• legislative or regulatory changes affecting our industry generally or our business and operations specifically;

• the operating and stock price performance of companies that investors consider to be comparable to us;

• announcements of strategic developments, acquisitions and other material events by us or our competitors;

• actions by our current shareholders, including future sales of common shares by existing shareholders, including our directors and executive officers; and

• other changes in U.S. or global financial markets, global economies and general market conditions, such as interest or foreign exchange rates, stock, commodity, credit or asset valuations or volatility.

29

Equity markets in general and our common shares in particular have experienced considerable volatility over the past few years. The market price of our common shares may continue to be subject to volatility unrelated to our operating performance or business prospects. Increased volatility could result in a decline in the market price of our common shares.

THE SALE OF SUBSTANTIAL AMOUNTS OF OUR COMMON SHARES OR SECURITIES CONVERTIBLE INTO OUR COMMON SHARES IN THE PUBLIC MARKET COULD DEPRESS THE PRICE OF OUR COMMON SHARES.

In recent years, the stock market has experienced a high level of price and volume volatility, and market prices for the stock of many companies have experienced wide fluctuations that have not necessarily been related to their operating performance. Therefore, our shareholders may not be able to sell their shares at the volumes, prices, or times that they desire. We cannot predict the effect, if any, that future sales of our common shares or securities convertible into our common shares in the market, or availability of shares of our common shares or securities convertible into our common shares for sale in the market, will have on the market price of our common shares. We can give no assurance that sales of substantial amounts of our common shares or securities convertible into our common shares in the market, or the potential for large amounts of sales in the market, would not cause the price of our securities to decline or impair our ability to raise capital through sales of our common shares.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

CBI neither owns nor leases any properties. Civista owns its main office at 100 East Water Street, Sandusky, Ohio, which is also the office of CBI. Civista also owns branch banking offices in the following Ohio communities: Sandusky (2), Norwalk, Berlin Heights, Castalia, Port Clinton, New Washington, Shelby (2), Greenwich, Plymouth, Shiloh, Dublin, Plain City, Russells Point, Urbana (2), Dayton (2) and Quincy. Civista leases branch banking offices in the Ohio communities of Akron, Huron, Norwalk, West Liberty, Dayton and Willard. Civista also leases loan production offices in Mayfield Heights and Westlake, Ohio.

Item 3. Legal Proceedings

In the ordinary course of their respective businesses, CBI or Civista or their respective properties may be named or otherwise subject as a plaintiff, defendant or other party to various pending and threatened legal proceedings and various actual and potential claims. In view of the inherent difficulty of predicting the outcome of such matters, CBI cannot state what the eventual outcome of any such matters will be. However, based on current knowledge and after consultation with legal counsel, management believes these proceedings will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of CBI.

Item 4. Mine Safety Disclosures

Not Applicable

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Information regarding the market in which CBI’s common shares are traded, the prices at which such shares have traded and dividend information is incorporated herein by reference from the information appearing under the caption “Common Shares and Shareholder Matters” located on page 3 of the 2017 Annual Report.

30

As of February 16, 2018, there were approximately 1,137 shareholders of record (not including the number of persons or entities holding stock in nominee or street name through various brokerage firms) of the Company’s common shares.

Information regarding the restrictions applicable to the Company’s payment of dividends is included under Item 1 of this Annual Report on Form 10-K and is incorporated herein by reference.

The Company did not repurchase any of its common shares during 2017.

Item 6. Selected Financial Data

Information required by this item is incorporated herein by reference from the information appearing under the caption “Five-Year Selected Consolidated Financial Data” located on pages 1 and 2 of the 2017 Annual Report.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation

Information required by this item is incorporated herein by reference from the information appearing under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located on pages 4 through 19 of the 2017 Annual Report.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Information required by this item is incorporated herein by reference from the disclosures included under the caption “Quantitative and Qualitative Disclosures About Market Risk” on pages 20 through 21 of the 2017 Annual Report.

31

Item 8. Financial Statements and Supplementary Financial Data

Civista Bancshares, Inc.’s Report of Independent Auditors and Consolidated Financial Statements and accompanying notes are listed below and are incorporated herein by reference from pages 26 through 86 of the 2017 Annual Report (included as Exhibit 13.1 hereto). The supplementary financial information specified by Item 302 of Regulation S-K, is included in Note 23 - “Quarterly Financial Data (Unaudited)” to the consolidated financial statements found on page 85 of the 2017 Annual Report.

Report of Independent Registered Public Accounting Firm on Financial Statements

Consolidated Balance Sheets

December 31, 2017 and 2016

Consolidated Statements of Operations

For the years ended December 31, 2017, 2016 and 2015

Consolidated Comprehensive Income Statements

For the years ended December 31, 2017, 2016 and 2015

Consolidated Statements of Changes in Shareholders’ Equity

For the years ended December 31, 2017, 2016 and 2015

Consolidated Statements of Cash Flows

For the years ended December 31, 2017, 2016 and 2015

Notes to Consolidated Financial Statements

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

The Company has had no disagreements with its independent accountants on matters of accounting principles or practices or financial statement disclosure required to be reported under this Item.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Principal Accounting Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15 under the Exchange Act, as of the end of the fiscal year covered by this Annual Report on Form 10-K. Based upon that evaluation, our Chief Executive Officer and Principal Accounting Officer concluded that our disclosure controls and procedures as of December 31, 2017, were effective.

Report on Internal Control over Financial Reporting

The “Management’s Report on Internal Control over Financial Reporting” and the “Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting” located on pages 23 through 25 of the 2017 Annual Report are incorporated herein by reference.

32

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter ended December 31, 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

There was no information the Company was required to disclose in a current report on Form 8-K during the fourth quarter of 2017 that was not reported.

PART III

Item 10. Directors, Executive Officers, and Corporate Governance

The information contained under the captions “Proposal 1 - Election of Directors”, “Executive Officers of the Corporation”, “Beneficial Ownership of Common Shares of the Corporation - Section 16(a) Beneficial Ownership Reporting Compliance”, “Board of Director Meetings and Committees – Audit Committee”, “Corporate Governance - Code of Ethics” and “Corporate Governance – Nominating Procedure” in the 2018 Proxy Statement is incorporated herein by reference in response to this Item.

Item 11. Executive Compensation.

The information contained under the captions “Executive Compensation”, “2016 Compensation of Directors” and “Compensation Committee Interlocks and Insider Participation” in the 2018 Proxy Statement is incorporated herein by reference in response to this Item.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information contained under the caption “Beneficial Ownership of Common Shares of the Company” in the 2018 Proxy Statement is incorporated herein by reference in response to this Item.

The following table shows the number of common shares remaining available for awards under the 2014 Incentive Plan at December 31, 2017.

Equity Compensation Plan Information
Plan category	(a) Number of Common Shares to be issued upon Exercise Of outstanding options, Warrants and rights (1)		(b) Weighted-average Exercise price of Outstanding options, warrants and rights (2)		(c) Number of common Shares remaining Available for future Issuance under equity Compensation plans (excluding common shares reflected in column (a)
Equity compensation plans approved by    shareholders		—		—		292,209
Equity compensation plans not approved by    shareholders		—		—		—
Total		—		—		292,209

33

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information contained under the caption “Corporate Governance-Director Independence” and “Corporate Governance-Transactions with Directors, Officers and Associates” in the 2018 Proxy Statement is incorporated herein by reference in response to this Item.

Item 14. Principal Accountant Fees and Services.

The information contained under the caption “Audit Committee Matters” of the 2018 Proxy Statement is incorporated herein by reference in response to this Item.

PART IV

Item 15. Exhibit and Financial Statement Schedules

(a) Documents filed as a Part of the Report

1. Financial Statements. Civista Bancshares, Inc.’s Report of Independent Auditors and Consolidated Financial Statements and accompanying notes are listed below and are incorporated herein by reference from pages 26 through 86 of the 2017 Annual Report (included as Exhibit 13.1 hereto).

Report of Independent Registered Public Accounting Firm on Financial Statements

Consolidated Balance Sheets

December 31, 2017 and 2016

Consolidated Statements of Operations

For the years ended December 31, 2017, 2016 and 2015

Consolidated Comprehensive Income Statements

For the years ended December 31, 2017, 2016 and 2015

Consolidated Statements of Changes in Shareholders’ Equity

For the years ended December 31, 2017, 2016 and 2015

Consolidated Statements of Cash Flows

For the years ended December 31, 2017, 2016 and 2015

Notes to Consolidated Financial Statements

2. Financial Statement Schedules. All schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

34

3. Exhibits

Exhibit	Description	Location
3.1	Amended and Restated Articles of Incorporation of Civista Bancshares, Inc., as filed with the Ohio Secretary of State on December 4, 2015	Filed as Exhibit 3.1 to Civista Bancshares, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2017, filed on November 8, 2017 and incorporated herein by reference (File No. 001-36192)
3.2	Amended and Restated Code of Regulations of Civista Bancshares, Inc. (adopted April 15, 2008).	Filed as Exhibit 3.2 to Civista Bancshares, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2017, filed on November 8, 2017 and incorporated herein by reference. (File No. 001-36192)
4.3	Form of Certificate for 6.50% Noncumulative Redeemable Convertible Perpetual Preferred Shares, Series B, of Civista Bancshares, Inc.	Filed as Exhibit 4.2 to Civista Bancshares, Inc.’s Pre-Effective Amendment No.1 to Form S-1 Registration Statement filed November 1, 2013, and incorporated herein by reference. (File No. 333-191169)
4.4	Form of Depositary Receipt for Depositary Shares, each representing 1/40th of a 6.50% Noncumulative Redeemable Convertible Perpetual Preferred Share, Series B, of Civista Bancshares, Inc.	Filed as Exhibit 4.3 to Civista Bancshares, Inc.’s Pre-Effective Amendment No.1 to Form S-1 Registration Statement filed November 1, 2013, and incorporated herein by reference. (File No. 333-191169)
4.5	Deposit Agreement dated December 1, 2013, among Civista Bancshares, Inc., Illinois Stock Transfer Company, as Depositary, and the holders from time to time of Depositary Receipts thereunder.	Filed as Exhibit 4.4 to Civista Bancshares, Inc.’s Pre-Effective Amendment No.1 to Form S-1 Registration Statement filed November 1, 2013, and incorporated herein by reference. (File No. 333-191169)
4.6	Agreement to furnish instrument and agreements defining rights of holders of long-term debt.	Included herewith.
10.1*	Form of Change of Control Agreement by and among Civista Bancshares, Inc., Civista Bank and certain executive officers.	Filed as Exhibit 10.1 to Civista Bancshares, Inc.’s Current Report on Form 8-K dated and filed on October 29, 2015 and incorporated herein by reference.  (File No. 001-36192).
10.2*	Form of Pension Shortfall Agreement by and among Civista Bancshares, Inc., Civista Bank and certain executive officers.	Filed as Exhibit 10.2 to Civista Bancshares, Inc.’s Current Report on Form 8-K dated and filed on October 29, 2015 and incorporated herein by reference.  (File No. 001-36192).
10.3	Supplemental Nonqualified Executive Retirement Plan	Filed as Exhibit 10.12 to Civista Bancshares, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011, filed on March 15, 2012 and incorporated herein by reference (File No. 0-25980).
10.4	Amendment to Supplemental Nonqualified Executive Retirement Plan	Filed as Exhibit 10.13 to Civista Bancshares, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011, filed on March 15, 2012 and incorporated herein by reference (File No. 0-25980).

35

Exhibit	Description	Location
10.5	Second Amendment to Supplemental Nonqualified Executive Retirement Plan	Filed as Exhibit 10.1 to Civista Bancshares, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2016, filed on August 9, 2016 and incorporated herein by reference (File No. 1-36192)
10.6	Civista Bancshares, Inc. 2014 Incentive Plan	Filed as Exhibit 10.1 to Civista Bancshares, Inc.’s Registration Statement on Form S-8 filed on February 26, 2015 and incorporated herein by reference (File No. 333-202316).
11.1	Statement regarding earnings per share	Included in Note 22 to the Consolidated Financial Statements filed as Exhibit 13.1 of this Annual Report on Form 10-K.
13.1	Civista Bancshares, Inc. 2017 Annual Report to Shareholders (not deemed filed except for portions which are specifically incorporated by reference in this Annual Report on Form 10-K)	Included herewith
21.1	Subsidiaries of CBI	Included herewith
23.1	Consent of S.R. Snodgrass, P.C.	Included herewith
31.1	Rule 13a-14(a)/15-d-14(a) Certification of Chief Executive Officer	Included herewith
31.2	Rule 13a-14(a)/15-d-14(a) Certification of Principal Accounting Officer	Included herewith
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Included herewith
32.2	Certification of Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Included herewith
101	The following materials from Civista Bancshares, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of December 31, 2017 and 2016; (ii) Consolidated Statements of Operations for each of the three years ended December 31, 2017, 2016 and 2015;  (iii) Consolidated Comprehensive Income Statements for each of the three years ended December 31, 2017, 2016 and 2015; (iv) Consolidated Statements of Changes in Shareholders’ Equity for each of the three years ended December 31, 2017, 2016 and 2015; (v) Consolidated Statement of Cash Flows for each of the three years ended December 31, 2017, 2016 and 2013; and (vi) Notes to Consolidated Financial Statements .

* Management contract or compensatory plan or arrangement

36

Item 16. Form 10-K Summary

Not Applicable

37

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

(Registrant) Civista Bancshares, Inc.
By	/s/ Dennis G. Shaffer
	Dennis G. Shaffer, President & CEO (Principal Executive Officer)

Date: March 8, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on March 8, 2018 by the following persons (including a majority of the Board of Directors of the Registrant) in the capacities indicated:

/s/ Thomas A. Depler	/s/ Allen R. Nickles, CPA , CFE , FCPA , CFF , CICA
Thomas A. Depler, Director	Allen R. Nickles, CPA , CFE , FCPA , CFF , CICA , Director
/s/ Allen R. Maurice	/s/ J. William Springer
Allen R. Maurice, Director	J. William Springer, Director
/s/ Todd A. Michel	/s/ M. Patricia Oliver
Todd A. Michel, Senior Vice President,	M. Patricia Oliver, Director
(Principal Accounting Officer)
/s/ James O. Miller	/s/ Daniel J. White
James O. Miller, Chairman of the Board	Daniel J. White, Director
/s/ Dennis E. Murray, Jr.	/s/ Dennis G. Shaffer
Dennis E. Murray, Jr., Director	Dennis G. Shaffer, President & CEO, (Principal Executive Officer)

38

EX-4.6

Exhibit 4.6

[CIVISTA BANCSHARES, INC. LETTERHEAD]

March 8, 2018

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Re:  Civista Bancshares, Inc. Form 10-K for the fiscal year ended December 31, 2017

Ladies and Gentlemen:

Civista Bancshares, Inc., an Ohio corporation (“CBI”), is today filing an Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the Form 10-K), as executed on March 8, 2018.

Pursuant to the instructions relating to the Exhibits in Item 601(b)(4)(iii) of Regulation S-K, CBI hereby agrees to furnish the Commission, upon request, copies of instruments and agreements defining the rights of holders of its long-term debt and of the long-term debt of its consolidated subsidiaries, which are not being filed as exhibits to the Form 10-K.  None of such long-term debt exceeds 10% of the total assets of CBI and its subsidiaries on a consolidated basis.  

Very truly yours,

/s/ Dennis G. Shaffer

Dennis G. Shaffer

President and Chief Executive Officer

EX-13.1

Exhibit 13.1

Dear Shareholders:

2017 was another successful year for the bank.  We completed a number of projects including the opening of a new loan production office in Westlake, Ohio, the completion of a $32.8 million capital offering, and the hiring of a Chief Customer Experience Officer.  These items will continue to help us grow the bank, with a continued focus on the customer.

We also continue to explore product and banking enhancements that will attract new clientele and improve the overall banking experience for our customers.  We have invested in technology to improve not only our efficiency but to meet the demands of our customers and the changing ways in which they bank with us.  We improved the convenience of our mobile banking app by rolling out products such as mobile payments and Touch ID, and we introduced Civista FraudEYE and EMV chip cards which provide greater security to the cards that we offer to our clients.  We are also currently piloting Branch Anywhere, an electronic tablet product that will allow us to open deposit accounts offsite.  

Civista believes in investing in the communities that we serve.  In 2017, our employees were involved in hundreds of organizations volunteering their time at local churches, schools, sporting events and civic organizations.  Civista and its employees donated over $127,000 to 23 different United Way organizations throughout the state of Ohio and was named a Pacesetter for the United Way campaign in Erie County.  Each year we hold a Volunteer Day – in 2017 Civista employees donated more than 400 hours of their time working and helping out 20 organizations throughout our footprint.  

We are proud of our accomplishments in 2017 and, while bottom-line results were slightly less than in 2016, we are very pleased with the operational results of the company.

Performance for 2017

Net income available to common shareholders was $14,628,000 compared to $15,716,000.  This equates to $1.28 diluted earnings per share for 2017 compared to $1.57 diluted earnings per share in 2016.  There are two items to keep in mind that complicate a year to year comparison.  In 2016 we enjoyed a $919,000 recovery of interest income and a $1,300,000 loan loss recovery.  In 2017 common shares outstanding increased approximately 1,600,000 as a result of our $32.8 million capital offering in February.  For a different view of our 2017 performance, let’s examine the components of earnings.

Our loans at year end 2017 totaled $1,164,661,000, a 10.3% increase from $1,055,506,000 at year end 2016.  In 2017 our loans, plus approximately $245,309,000 in investment securities, generated $58,594,000 in interest income.  This compares to $53,567,000 for the year 2016.  As result of all our efforts in solid loan growth, this is an increase in interest income of 9.4%.

To fund our loan growth, we gather deposits which totaled $1,204,923,000 at year end 2017 compared to $1,121,103,000 at year end 2016.  This was an increase of $83,820,000 or 7.5%.  While we enjoyed an increase of $16,376,000 in noninterest bearing deposit growth, the greater growth was in interest bearing deposits.  The funding costs in 2017 were $4,092,000, compared to $3,308,000 in 2016, an increase of 23.7%.

The result was net interest income of $54,502,000 for 2017 compared to $50,259,000 for 2016.  This resultant net interest income translates into an interest margin of 4.01% for 2017 compared to 3.93% for the year 2016.  The median interest margin for companies our size in the Midwest was 3.37% at the end of the third quarter (last available information).  We are very pleased at the comparison of this peer rate of 3.37% to our year end 4.01%.  The positive margin difference of 64 basis points multiplied times approximately $1,400,000,000 in loans and investments is significant.  The result supports our operating philosophy of how we gather deposits and put those deposits to work in lending.

Noninterest income for 2017 totaled $16,334,000.  This was a modest increase of $202,000 from the prior year.  Within that total, wealth management fees showed the largest revenue increase of $390,000 or 14.6%.  At the end of the third quarter (last comparative information available) our noninterest income to average assets at the bank was

1.11% compared to the State of Ohio average of 0.89%.  While we are pleased with our level of noninterest income, we believe there are continued revenue opportunities in our markets through cash management services and wealth management services.

Noninterest expenses for 2017 were $48,604,000.  Total noninterest expense increased $4,749,000 from the total in 2016.  The driving categories was compensation expense and professional services.  Compensation expense increases were made up of several items – first was the addition of lending and lending support staff.  The hiring of skilled lenders with existing relationships contributed nicely to our loan growth for 2017.  Other items included base increases in 2017, increases in health care costs, and legacy pension expense.  

The last component in the bottom-line calculation is provision for loan loss.  For 2017 we did not expense a provision.  We perform an extensive exercise in examining the adequacy of our loss reserve.  We believe we are adequately reserved at year end with $13,134,000 in our reserve.

Our Common Stock Offering

Through the years we believe we have been very efficient in putting our capital to work through growth.  One measure of this is our tangible common equity to tangible assets.  At year end 2012 this was approximately 5%.  Coming out of the recession the expectations of the marketplace was for a higher ratio of tangible common equity.  We made the conscious decision to bide our time on raising capital until it would be more advantageous to our existing shareholders.  By the end of 2016, the value of our stock allowed for the consideration of an offering.  Having laid the groundwork over a number of years and by having performed to expectation, we were able to raise approximately $32,800,000.  These capital dollars will be utilized to support general growth in the company both organically and through acquisition.  We firmly believe there will be acquisition opportunities to examine.  Of the 186 banks (at 9/30/17) in the State of Ohio, 125 are under $300,000,000 in size.  Cost of regulation, cost of technology, attraction of management, and greater competition for customers should result in many in this group looking hard at their futures.

Your Investment in Civista

One of our goals is solid disciplined growth in the company.  Disciplined growth will lead to performance and consistent performance will lead to shareholder reward.  Shareholder reward can be measured in many ways – be it in dividends, stock performance, and stock liquidity.

Shareholder dividends is a balance between immediate shareholder reward in the form of cash payment and retention of earnings for growth.  Striking a balance between the level of dividend versus retention for growth, the earnings retained provide increased capital support for an increasing company size and lending which, in turn, will increase net interest income and performance of the company.

Examining the value performance of your stock from December 2014 to December 2017, your stock has had a price increase of 114.0% compared to the KBW NASDAQ bank index of 43.7%.  For a shorter view of this value – our stock closing price for the end of February 2016 was $9.80.  In February 2017, around the time of our common stock offering, this closing price had increased to $21.93.  We believe this is the markets’ reflection of our performance and disciplined execution of growth plans.

An additional benefit of market performance, which allowed a successful common stock offering, is increased liquidity of our stock.  In February 2016 we traded 164,800 shares of CIVB stock.  This number increased to 1,183,000 in February 2017.  We believe this reflects the attractiveness of our stock in the market and provides much greater liquidity to buy or sell the stock.

2018 and Beyond

We have positioned ourselves for the future.  We have assembled a management team with broad capabilities.  We have assembled a lending and customer service team that can provide first class services to our customers.  We continue to serve our legacy markets in Erie, Huron, Crawford, Richland and Champaign counties gathering deposits and generating consumer and commercial loans.  We have strategically located branches and loan production offices in robust markets to take full advantage of the continuing economic recovery.  We have a presence in Cleveland,

Columbus, Dayton and Akron.  As noted previously, we believe there is continued opportunity for both organic growth and acquisition growth in banking.  There is a strong place for “hands on” personal service that Civista can provide its customers.

As always, please read your proxy and vote your shares in your company.  We hope to see you at the annual meeting.

	Very truly yours,
James O. Miller	Dennis G. Shaffer
Chairman	CEO and President

ANNUAL REPORT

CONTENTS

Five –Year Selected Consolidated Financial Data	1
Common Shares and Shareholder Matters	3
General Development of Business	3
Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Quantitative and Qualitative Disclosures about Market Risk	17
Financial Statements
Management’s Report on Internal Control over Financial Reporting	20
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Statements	21
Report of Independent Registered Public Accounting Firm on Financial Statements	22
Consolidated Balance Sheets	24
Consolidated Statements of Operations	25
Consolidated Comprehensive Income Statements	26
Consolidated Statements of Changes in Shareholders’ Equity	27
Consolidated Statements of Cash Flow	28
Notes to Consolidated Financial Statements	30

This page left blank intentionally.

Five-Year Selected Consolidated Financial Data

(Amounts in thousands, except per share data)

	Year ended December 31,
	2017		2016		2015		2014		2013
Statements of income:
Total interest and dividend income	$	58,594	$	53,567	$	50,701	$	45,970	$	44,881
Total interest expense		4,092		3,308		3,309		4,104		4,907
Net interest income		54,502		50,259		47,392		41,866		39,974
Provision (credit) for loan losses		—		(1,300)		1,200		1,500		1,100
Net interest income after provision for loan    losses		54,502		51,559		46,192		40,366		38,874
Security gains/(losses)		12		19		(18)		113		204
Other noninterest income		16,322		16,113		14,296		13,761		11,858
Total noninterest income		16,334		16,132		14,278		13,874		12,062
Total noninterest expense		48,604		43,855		42,944		41,550		43,384
Income before federal income taxes		22,232		23,836		17,526		12,690		7,552
Federal income tax expense		6,360		6,619		4,781		3,162		1,373
Net income	$	15,872	$	17,217	$	12,745	$	9,528	$	6,179
Preferred share dividends and discount    accretion		1,244		1,501		1,577		1,873		1,159
Net income available to common    shareholders	$	14,628	$	15,716	$	11,168	$	7,655	$	5,020
Per common share earnings:
Available to common shareholders (basic)		1.48		1.96		1.43		0.99		0.65
Available to common shareholders (diluted)		1.28		1.57		1.17		0.85		0.64
Dividends		0.25		0.22		0.20		0.19		0.15
Book value		16.39		14.22		13.12		12.04		10.65
Average common shares outstanding:
Basic		9,906,856		8,010,399		7,822,369		7,707,917		7,707,917
Diluted		12,352,616		10,950,961		10,918,335		10,904,848		7,821,780
Year-end balances:
Loans, net	$	1,151,527	$	1,042,201	$	987,166	$	900,589	$	844,713
Securities		245,309		209,919		209,701		210,491		215,037
Total assets		1,525,857		1,377,263		1,315,041		1,213,191		1,167,546
Deposits		1,204,923		1,121,103		1,052,033		968,918		942,475
Borrowings		123,082		106,852		125,667		116,240		87,206
Shareholders’ equity		184,461		137,616		125,173		115,909		128,376
Average balances:
Loans, net	$	1,095,956	$	1,011,683	$	966,786	$	858,532	$	800,063
Securities		234,249		213,496		211,436		214,123		216,848
Total assets		1,526,387		1,441,717		1,336,645		1,234,406		1,172,819
Deposits		1,236,663		1,210,283		1,107,445		1,026,093		965,370
Borrowings		101,880		79,391		95,132		83,058		89,496
Shareholders’ equity		172,763		133,445		120,350		114,266		103,563

See accompanying notes to consolidated financial statements

1

Five-Year Selected Ratios

	Year ended December 31,
	2017			2016			2015			2014			2013
Net interest margin		4.01	%		3.93	%		3.96	%		3.79	%		3.79	%
Return on average total assets		1.04			1.19			0.95			0.77			0.53
Return on average shareholders’ equity		9.19			12.90			10.59			8.34			5.97
Dividend payout ratio		16.89			11.22			13.99			19.19			23.08
Average shareholders’ equity as a percent of    average total assets		11.32			9.26			9.00			9.26			8.83
Net loan charge-offs (recoveries) as a percent of    average total loans		0.02			(0.02)			0.11			0.43			0.53
Allowance for loan losses as a percent of loans at    year-end		1.13			1.26			1.43			1.56			1.92
Shareholders’ equity as a percent of total year-end    assets		12.09			9.99			9.52			9.55			11.00

Stockholder Return Performance

Set forth below is a line graph comparing the five-year cumulative return of the common shares of Civista Bancshares, Inc. (ticker symbol CIVB), based on an initial investment of $100 on December 31, 2012 and assuming reinvestment of dividends, with the cumulative return of the Standard & Poor’s 500 Index, the NASDAQ Bank Index and the SNL Bank Index. The comparative indices were obtained from SNL Securities and NASDAQ.

Annual Report on Form 10-K

A copy of the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, will be furnished, free of charge, to shareholders, upon written request to James E. McGookey, Secretary of Civista Bancshares, Inc., 100 East Water Street, Sandusky, Ohio 44870.

See accompanying notes to consolidated financial statements

2

Common Shares and Shareholder Matters

The common shares of Civista Bancshares, Inc. (“CBI”) trade on The NASDAQ Capital Market under the symbol “CIVB”. As of February 16, 2018, there were 10,209,021 common shares outstanding and held by approximately 1,137 shareholders of record (not including the number of persons or entities holding stock in nominee or street name through various brokerage firms). Information below is the range of sales prices of our common shares for each quarter for the last two years for trades occurring during normal trading hours as reported on The NASDAQ Capital Market.

2017
First Quarter					Second Quarter					Third Quarter					Fourth Quarter
$	18.59	to	$	23.75	$	18.82	to	$	22.41	$	18.96	to	$	22.73	$	20.41	to	$	23.76

2016
First Quarter					Second Quarter					Third Quarter					Fourth Quarter
$	9.75	to	$	13.29	$	10.20	to	$	13.10	$	12.99	to	$	15.16	$	14.09	to	$	19.99

Dividends per share declared on common shares by CBI were as follows:

	2017		2016
First quarter	$	0.06	$	0.05
Second quarter		0.06		0.05
Third quarter		0.06		0.06
Fourth quarter		0.07		0.06
	$	0.25	$	0.22

Information regarding potential restrictions on the payment of dividends can be found in the “Liquidity and Capital Resources” section of the Management’s Discussion and Analysis and in Note 19 to the Consolidated Financial Statements.

On February 24, 2017, CBI completed a public offering of 1,610,000 of its common shares at a price of $21.75 per share. The offering resulted in gross proceeds of approximately $35.0 million and net proceeds of approximately $32.8 million.

On December 19, 2013, CBI completed a public offering of 1,000,000 depositary shares, each representing a 1/40th ownership interest in a Noncumulative Redeemable Convertible Perpetual Preferred Share, Series B (the “Series B Preferred Shares”), of CBI. The depositary shares trade on The NASDAQ Capital Market under the symbol “CIVBP.” The terms of the Series B Preferred Shares provide for the payment of quarterly dividends on the Series B Preferred Shares (and, therefore, the depositary shares) at the rate of 6.50% per annum of the liquidation preference of $1,000 per Series B Preferred Share (or $25.00 per depositary share). Dividends are noncumulative and are payable if, when and as declared by the board of directors. However, no dividends may be declared or paid on the common shares of CBI during any calendar quarter unless full dividends on the Series B Preferred Shares (and, therefore, the depositary shares) have been declared for that quarter and all dividends previously declared on the Series B Preferred Shares (and, therefore, the depositary shares) have been paid in full. As of February 16, 2018, a total of 747,083 depository shares were outstanding.

General Development of Business

(Amounts in thousands)

CBI was organized under the laws of the State of Ohio on February 19, 1987 and is a registered financial holding company under the Gramm-Leach-Bliley Financial Modernization Act of 1999, as amended. CBI and its subsidiaries are sometimes referred to together as the Company. The Company’s office is located at 100 East Water Street, Sandusky, Ohio. The Company had total consolidated assets of $1,525,857 at December 31, 2017.

CIVISTA BANK (“Civista”), owned by the Company since 1987, opened for business in 1884 as The Citizens National Bank. In 1898, Civista was reorganized under Ohio banking law and was known as The Citizens Bank and Trust Company. In 1908, Civista surrendered its trust charter and began operation as The Citizens Banking Company. The name Civista Bank was introduced during the first quarter of 2015 to solidify our dual Citizens/Champaign brand and distinguish ourselves from the many other banks using the “Citizens” name in our existing and prospective markets. Civista maintains its main office at 100 East Water Street, Sandusky, Ohio and operates branch

See accompanying notes to consolidated financial statements

3

banking offices in the following Ohio communities: Sandusky (2), Norwalk (2), Berlin Heights, Huron, Port Clinton, Castalia, New Washington, Shelby (2), Willard, Greenwich, Plymouth, Shiloh, Akron, Dublin, Plain City, Russells Point, Urbana (2), West Liberty, Quincy and Dayton(3). Civista also operates loan production offices in Mayfield Heights and Westlake, Ohio. Civista accounted for 99.6% of the Company’s consolidated assets at December 31, 2017.

FIRST CITIZENS INSURANCE AGENCY INC. (“FCIA”) was formed to allow the Company to participate in commission revenue generated through its third party insurance agreement. Assets of FCIA were less than one percent of the Company’s consolidated assets as of December 31, 2017.

WATER STREET PROPERTIES, INC. (“WSP”) was formed to hold properties repossessed by CBI subsidiaries. WSP accounted for less than one percent of the Company’s consolidated assets as of December 31, 2017.

FC REFUND SOLUTIONS, INC. (“FCRS”) was formed during 2012 and remained inactive for the periods presented.

FIRST CITIZENS INVESTMENTS, INC. (“FCI”) is wholly-owned by Civista and holds and manages its securities portfolio. The operations of FCI are located in Wilmington, Delaware.

FIRST CITIZENS CAPITAL LLC (“FCC”) is wholly-owned by Civista and holds inter-company debt that is eliminated in consolidation. The operations of FCC are located in Wilmington, Delaware.

CIVB RISK MANAGEMENT, INC. (“CRMI”) is a wholly-owned captive insurance company formed in 2017 which insures against certain risks unique to the operations of the Company and its subsidiaries and for which insurance may not be currently available or economically feasible in today's insurance marketplace. Assets of CRMI were less than one percent of the Company’s consolidated assets as of December 31, 2017.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—As of December 31, 2017 and December 31, 2016 and for the Years Ended December 31, 2017, 2016 and 2015

(Amounts in thousands, except per share data)

General

The following paragraphs more fully discuss the significant highlights, changes and trends as they relate to the Company’s financial condition, results of operations, liquidity and capital resources as of December 31, 2017 and 2016, and during the three-year period ended December 31, 2017. This discussion should be read in conjunction with the Consolidated Financial Statements and Notes to the Consolidated Financial Statements, which are included elsewhere in this report.

Forward-Looking Statements

This report may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to such matters as financial condition, anticipated operating results, cash flows, business line results, credit quality expectations, prospects for new lines of business, economic trends (including interest rates) and similar matters. Forward-looking statements reflect our expectations, estimates or projections concerning future results or events. These statements are generally identified by the use of forward-looking words or phrases such as “believe,” “belief,” “expect,” “anticipate,” “may,” “could,” “intend,” “intent,” “estimate,” “plan,” “foresee,” “likely,” “will,” “should” or other similar words or phrases. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause our actual results, performance or achievements to differ materially from those expressed in or implied by the forward-looking statements. Factors that could cause actual results, performance or achievements to differ from those discussed in the forward-looking statements include, but are not limited to, changes in financial markets or national or local economic conditions; adverse changes in the real estate market; volatility and direction of market interest rates; credit risks of lending activities; changes in the allowance for loan losses; legislation or regulatory changes or actions; increases in FDIC insurance premiums and assessments; changes in tax laws; accounting changes; unexpected losses of key management; failure, interruptions or breach of security of our communications and information systems; unforeseen litigation; increased competition in our market area; failures to manage growth and/or effectively integrate acquisitions; future revenues of our tax

See accompanying notes to consolidated financial statements

4

refund program; and other risks identified from time-to-time in the Company’s other public documents on file with the Securities and Exchange Commission.

The forward-looking statements included in this report are only made as of the date of this report, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements, and the purpose of this section is to secure the use of the safe harbor provisions.

Financial Condition

At December 31, 2017, the Company’s total assets were $1,525,857, compared to $1,377,263 at December 31, 2016. The increase in assets is primarily the result of growth in securities available for sale and the loan portfolio during 2017. Factors contributing to the change in assets are discussed in the following sections.

At $1,151,527, net loans increased from December 31, 2016 by 10.5%. Commercial & Agriculture, Commercial Real Estate – Owner Occupied, Commercial Real Estate—Non-Owner Occupied, Residential Real Estate and Real Estate Construction loans increased $17,011, $2,735, $29,692, $21,427 and $41,238, respectively, since December 31, 2016, while Farm Real Estate and Consumer and other loans decreased $1,709 and $1,239, respectively, since December 31, 2016.

Securities available for sale increased by $35,198, or 18.0%, from $195,864 at December 31, 2016 to $231,062 at December 31, 2017. U.S. Treasury securities and obligations of U.S. government agencies decreased $7,089, from $37,446 at December 31, 2016 to $30,357 at December 31, 2017. Obligations of states and political subdivisions available for sale increased by $23,058 from 2016 to 2017. Mortgage-backed securities increased by $19,175 to total $81,817 at December 31, 2017. The Company continues to utilize letters of credit from the Federal Home Loan Bank (FHLB) to replace maturing securities that were pledged for public entities. As of December 31, 2017, the Company was in compliance with all pledging requirements.

Mortgage-backed securities totaled $81,817 at December 31, 2017 and none were considered unusual or “high risk” securities as defined by regulatory authorities. Of this total, $77,538 consisted of pass-through securities issued by the Federal National Mortgage Association (“FNMA”), Federal Home Loan Mortgage Corporation (“FHLMC”), and Government National Mortgage Association (“GNMA”), and $4,279 of these securities were collateralized by mortgage-backed securities issued or guaranteed by FNMA, FHLMC, or GNMA. The average interest rate of the mortgage-backed portfolio at December 31, 2017 was 2.9%. The average maturity at December 31, 2017 was approximately 5.3 years. The Company has not invested in any derivative securities.

Securities available for sale had a fair value at December 31, 2017 of $231,062. This fair value includes unrealized gains of approximately $5,085 and unrealized losses of approximately $1,054. Net unrealized gains totaled $4,031 on December 31, 2017 compared to net unrealized gains of $3,044 on December 31, 2016. The change in unrealized gains is primarily due to changes in market interest rates. Note 3 to the Consolidated Financial Statements provides additional information on unrealized gains and losses.

Premises and equipment, net of accumulated depreciation, decreased $309 from December 31, 2016 to December 31, 2017. The decrease is attributed to new purchases of $1,015, offset by disposals, net of gains of $72, depreciation of $1,249, and the transfer of $3 of assets to premises and equipment held for sale.

Bank owned life insurance (BOLI) increased $573 from December 31, 2016 to December 31, 2017. The difference is the result of increases in the cash surrender value of the underlying insurance policies.

Year-end deposit balances totaled $1,204,923 in 2017 compared to $1,121,103 in 2016, an increase of $83,820, or 7.5%. Overall, the increase in deposits at December 31, 2017 compared to December 31, 2016 included increases in noninterest bearing demand deposits of $16,376, or 4.7%, statement and passbook savings accounts of $51,047, or 13.3%, certificate of deposit accounts of $18,298, or 10.0%, offset in part by declines in interest bearing demand accounts of $79, or 0.0% and individual retirement accounts of $1,822, or 7.3%. Average deposit balances for 2017 were $1,236,663 compared to $1,210,283 for 2016, an increase of 2.2%. Noninterest bearing deposits averaged $450,648 for 2017, compared to $434,601 for 2016, increasing $16,047, or 3.7%. Savings, NOW, and MMDA accounts averaged $585,218 for 2017 compared to $566,589 for 2016. Average certificates of deposit decreased $8,296 to total an average balance of $200,797 for 2017.

See accompanying notes to consolidated financial statements

5

Borrowings from the FHLB of Cincinnati were $71,900 at December 31, 2017. The detail of these borrowings can be found in Note 10 and Note 11 to the Consolidated Financial Statements. The balance increased $23,400 from $48,500 at year-end 2016. The increase is due to an increase in overnight funds of $25,900. In addition, on January 11, 2017, an FHLB advance in the amount of $2,500 matured. This advance had terms of one hundred and twenty months with a fixed rate of 4.25%. The advance was not replaced.

Civista offers repurchase agreements in the form of sweep accounts to commercial checking account customers. These repurchase agreements totaled $21,755 at December 31, 2017 compared to $28,925 at December 31, 2016. U.S. Treasury securities and obligations of U.S. government agencies maintained under Civista’s control are pledged as collateral for the repurchase agreements. The detail related to these repurchase agreements can be found in Note 12 to the Consolidated Financial Statements.

Total shareholders’ equity increased $46,845, or 34.0%, during 2017 to $184,461. The increase in shareholders’ equity resulted primarily from the completion of the Company’s public offering of its common shares on February 24, 2017, which resulted in net proceeds of $32,821. Shareholders’ equity was also positively impacted by net income of $15,872, a decrease in the Company’s pension liability, net of tax, of $800, an increase in the fair value of securities available for sale, net of tax, of $612 and offset by dividends on preferred shares and common shares of $1,244 and $2,438, respectively. Additionally, $426 was recognized as stock-based compensation in connection with the grant of restricted common shares. For further explanation of these items, see Note 1, Note 15 and Note 16 to the Consolidated Financial Statements. The Company paid $0.25 per common share in dividends in 2017 compared to $0.22 per common share in dividends in 2016. Total outstanding common shares at December 31, 2017 were 10,198,475. Total outstanding common shares at December 31, 2016 were 8,343,509. The increase in common shares outstanding is the result of the Company’s public offering of 1,610,000 common shares completed on February 24, 2017, the conversion of 1,721 of the Company’s previously issued preferred shares into 220,108 common shares, the grant of 17,898 restricted common shares to certain officers under the Company’s 2014 Incentive Plan, the grant of 7,171 common shares to directors of the Company as a retainer for their service and the retirement of 211 common shares on September 22, 2017. The ratio of total shareholders’ equity to total assets was 12.1% and 9.9%, at December 31, 2017 and 2016, respectively.

Results of Operations

The operating results of the Company are affected by general economic conditions, the monetary and fiscal policies of federal agencies and the regulatory policies of agencies that regulate financial institutions. The Company’s cost of funds is influenced by interest rates on competing investments and general market rates of interest. Lending activities are influenced by the demand for real estate loans and other types of loans, which in turn is affected by the interest rates at which such loans are made, general economic conditions and the availability of funds for lending activities.

The Company’s net income primarily depends on its net interest income, which is the difference between the interest income earned on interest-earning assets, such as loans and securities, and interest expense incurred on interest-bearing liabilities, such as deposits and borrowings. The level of net interest income is dependent on the interest rate environment and the volume and composition of interest-earning assets and interest-bearing liabilities. Net income is also affected by provisions for loan losses, service charges, gains on the sale of assets, other non-interest income, noninterest expense and income taxes.

Comparison of Results of Operations for the Years Ended December 31, 2017 and December 31, 2016

Net Income

The Company’s net income for the year ended December 31, 2017 was $15,872, compared to $17,217 for the year ended December 31, 2016. The change in net income was the result of the items discussed in the following sections.

Net Interest Income

Net interest income for 2017 was $54,502, an increase of $4,243, or 8.4%, from 2016. Average earning assets increased 6.3% from 2016. Interest income increased $5,027, primarily due to increased loan volume. In addition, interest expense on interest-bearing liabilities increased $784. The Company continually examines its rate structure to ensure that its interest rates are competitive and reflective of the current rate environment in which it competes.

Total interest income increased $5,027, or 9.4%, from 2016. The increase was mainly a result of an increase in loan volume. Average loans increased $83,161 from 2016 to 2017. The yield on the Company’s loan portfolio increased 2 basis points from 2016. The average

See accompanying notes to consolidated financial statements

6

balance of the securities portfolio for 2017 compared to 2016 increased $20,753. Interest earned on the securities portfolio, including bank stocks, increased $913 from 2016 to 2017. Average balances in interest-bearing deposits in other banks decreased in 2017 by $20,366. The decrease in average balance is mainly due to a decrease in our tax refund processing balances in 2017.The timing of cash inflows and outflows leads to large, but temporary, fluctuations in cash on deposit.

Total interest expense increased $784 for 2017 compared to 2016. The total average balance of interest-bearing liabilities increased $32,822 while the average rate increased 7 basis point in 2017. Average interest-bearing deposits increased $10,333 from 2016 to 2017. While average balances in interest-bearing deposits increased, the average balance in time deposits declined $8,296 and the rate on time deposits increased approximately 14 basis points, which caused interest expense on certificates of deposit to increase by $221. Interest expense on FHLB borrowings increased $290 due to an increase in average balance of $26,019. The average balance in subordinated debentures did not change from 2016 to 2017, but the rate on these securities increased 52 basis points, resulting in an increase in interest expense of $151. Repurchase agreements decreased $3,533 in average balance from 2016 to 2017.

Refer to “Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rates and Interest Differential” and “Changes in Interest Income and Interest Expense Resulting from Changes in Volume and Changes in Rate” on pages 14 through 16 for further analysis of the impact of changes in interest-bearing assets and liabilities on the Company’s net interest income.

Provision and Allowance for Loan Losses

The following table contains information relating to the provision for loan losses, activity in and analysis of the allowance for loan losses as of and for each of the three years in the period ended December 31.

	As of and for year ended December 31,
	2017			2016			2015
Net loan charge-offs (recoveries)	$	171		$	(244)		$	1,107
Provision (credit) for loan losses charged to expense		—			(1,300)			1,200
Net loan charge-offs (recoveries) as a percent of    average outstanding loans		0.02	%		-0.02	%		0.11	%
Allowance for loan losses	$	13,134		$	13,305		$	14,361
Allowance for loan losses as a percent of year-end    outstanding loans		1.13	%		1.26	%		1.43	%
Impaired loans, excluding purchase credit impaired    loans (PCI)	$	3,460		$	6,539		$	7,354
Impaired loans as a percent of gross year-end loans (1)		0.30	%		0.62	%		0.73	%
Nonaccrual and 90 days or more past due loans,    excluding PCI	$	6,148		$	6,952		$	9,259
Nonaccrual and 90 days or more past due loans,    excluding PCI, as a percent of gross year-end loans (1)		0.53	%		0.66	%		0.92	%

(1) Nonperforming loans and impaired loans are defined differently. Some loans may be included in both categories, whereas other loans may only be included in one category. A loan is considered nonaccrual if it is maintained on a cash basis because of deterioration in the borrower’s financial condition, where payment in full of principal or interest is not expected and where the principal and interest have been in default for 90 days, unless the asset is both well-secured and in process of collection. A loan is considered impaired when it is probable that all of the interest and principal due will not be collected according to the terms of the original contractual agreement.

The Company’s policy is to maintain the allowance for loan losses at a level sufficient to provide for probable losses incurred in the current portfolio. Management believes the analysis of the allowance for loan losses supported a reserve of $13,134 at December 31, 2017.The Company provides for loan losses through regular provisions to the allowance for loan losses. The amount of the provision is affected by loan charge-offs, recoveries and changes in specific and general allocations required for the allowance for loan losses. A number of factors impact the provisions for loan losses, such as the level of higher risk loans in the portfolio, changes in practices related to loans, changes in collateral values and other factors. We continue to actively manage this process and have provided to maintain the reserve at a level that assures adequate coverage ratios.

See accompanying notes to consolidated financial statements

7

Provisions (credits) for loan losses totaled $0, ($1,300) and $1,200 in 2017, 2016 and 2015, respectively. No provision for loan losses was provided during 2017. During 2016, the Company received a payoff on a nonperforming loan. This particular loan had been analyzed previously and had been charged down based on a deterioration of real estate collateral values during the recent recession. As a result of the payoff of the loan, the Company recovered the charged-down amount of approximately $1,303. The result of the transaction was a reversal of $1,300 from the allowance for loan losses during 2016.  

Efforts are continually made to analyze each segment of the loan portfolio and quantify risk to assure that reserves are appropriate for each segment and the overall portfolio. Management specifically evaluates loans that are impaired, which includes restructured loans, to estimate potential loss. This analysis includes a review of the loss migration calculation for all loan categories as well as fluctuations and trends in various risk factors that have occurred within the portfolios’ economic life cycle. The analysis also includes assessment of qualitative factors such as credit trends, unemployment trends, vacancy trends and loan growth. The composition and overall level of the loan portfolio and charge-off activity are also factors used to determine the amount of the allowance for loan losses.

Management analyzes each impaired commercial and commercial real estate loan relationship with a balance of $350 or larger, on an individual basis and when it is in nonaccrual status or when an analysis of the borrower’s operating results and financial condition indicates that underlying cash flows are not adequate to meet its debt service requirements. Loans held for sale and leases are excluded from consideration as impaired. Loans are generally moved to nonaccrual status when 90 days or more past due. Impaired loans or portions thereof are charged-off when deemed uncollectible.

Noninterest Income

Noninterest income increased $202, or 1.3%, to $16,334 for the year ended December 31, 2017, from $16,132 for the comparable 2016 period. The increase was primarily due to increases in earnings on ATM fees of $210 and wealth management fees of $390 which were partially offset by decreases in net gain on sale of other real estate owned of $180 and other income of $156.

ATM fees increased primarily due to an increase in interchange income received during 2017. The wealth management fee income increase is related to an increase in assets under management as well as market conditions. Assets under management increased $48.8 million during 2017.  Sales of other real estate owned resulted in recognized losses of $28 on the sale of 6 properties in 2017 compared to gains of $152 on the sale of 9 properties in 2016.  Other income decreased primarily due to a decrease in swap related income.

Noninterest Expense

Noninterest expense increased $4,749, or 10.8%, to $48,604 for the year ended December 31, 2017, from $43,855 for the comparable 2016 period. The increase was primarily due to increases in compensation expense of $3,930, contracted data processing expense of $292, state franchise tax of $101, professional services expense of $405, ATM expenses of $242 and other operating expense of $175 which were partially offset by decreases in FDIC assessments of $109, amortization of intangible assets of $113 and marketing expense of $112.

Compensation expense increased mainly due to payroll and payroll related expenses resulting from an increase in full time equivalent (FTE) employees and annual pay increases. FTE employees increased 13, to 347 FTE, as compared to the same period of 2016. In addition, incentive based costs and employee insurance costs increased.  Pension costs increased due to a pension curtailment incurred upon the retirement of some senior executives.  Contracted data processing increased due to costs incurred to convert to new platform processing software for the wealth management department.  State franchise tax increased due to an increase in the Company’s equity capital.  Professional services expense increased due to recruitment activities, facilities management and professional services to analyze workflow systems.  ATM expense increased due to the expiration of vendor credits in 2016 and ATM card related expenses.  Other operating expense increased due to general increases in components of other operating expenses. The decrease in FDIC assessments is the result of a new lower assessment rate schedule that became effective in 2016.  Amortization of intangible assets decreased as a result of scheduled amortization of intangible assets associated with mergers.  A general decrease in marketing costs occurred in 2017.

Income Tax Expense

Federal income tax expense was $6,360 in 2017 compared to $6,619 in 2016. Federal income tax expense as a percentage of pre-tax income was 28.6% in 2017 compared to 27.8% in 2016. A lower federal effective tax rate than the statutory rate of 35% in 2017 and 2016 is primarily due to tax-exempt interest income from state and municipal investments, municipal loans, income from BOLI and low

See accompanying notes to consolidated financial statements

8

income housing credits. Federal income tax expense decreased in 2017 primarily due to a decrease in pre-tax income.  The increase in the effective tax rate in 2017 was result of a$511 charge to income tax expense as a result of changes in the federal corporate income tax rate from the Tax Cuts and Jobs Act.

Comparison of Results of Operations for the Years Ended December 31, 2016 and December 31, 2015

Net Income

The Company’s net income for the year ended December 31, 2016 was $17,217, compared to $12,745 for the year ended December 31, 2015. The change in net income was the result of the items discussed in the following sections.

Net Interest Income

Net interest income for 2016 was $50,259, an increase of $2,867, or 6.0%, from 2015. Average earning assets increased 6.8% from 2015. Although market rates in 2016 remained at record lows, interest income increased $2,866, primarily due to increased loan volume. In addition, interest expense on interest-bearing liabilities decreased $1. The Company continually examines its rate structure to ensure that its interest rates are competitive and reflective of the current rate environment in which it competes.

Total interest income for 2016 increased $2,866, or 5.7%, from 2015. The increase was mainly a result of an increase in loan volume. Average loans increased $44,433, while the yield on the Company’s loan portfolio increased 3 basis points from 2015 to 2016. The average balance of the securities portfolio for 2016 compared to 2015 increased $2,060. Interest earned on the security portfolio, including bank stocks, increased $170 from 2015 to 2016. Average balances in interest-bearing deposits in other banks increased in 2016 by $37,578 due to additional interest-earning cash on deposit related to the tax refund processing program in 2016.

Total interest expense decreased $1 for 2016 compared to 2015. The total average balance of interest-bearing liabilities decreased $7,144 while the average rate increased 1 basis point in 2016. Average interest-bearing deposits increased $8,597 from 2015 to 2016. While average balances in interest-bearing deposits increased, the average balance in time deposits declined $14,006 and the rate on time deposits declined approximately 2 basis points, which caused interest expense on deposits to decrease by $91. Interest expense on FHLB borrowings decreased $37 for 2016 due to a decline in average balance of $17,470. The average balance in subordinated debentures did not change from 2015 to 2016, but the rate on these securities increased 42 basis points, resulting in an increase in interest expense of $124. Repurchase agreements increased $1,681 in average balance from 2015 to 2016.

Refer to “Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rates and Interest Differential” and “Changes in Interest Income and Interest Expense Resulting from Changes in Volume and Changes in Rate” on pages 14 through 16 for further analysis of the impact of changes in interest-bearing assets and liabilities on the Company’s net interest income.

See accompanying notes to consolidated financial statements

9

Provision and Allowance for Loan Losses

The following table contains information relating to the provision for loan losses, activity in and analysis of the allowance for loan losses as of and for each of the three years in the period ended December 31.

	As of and for year ended December 31,
	2016			2015
Net loan charge-offs	$	(244)		$	1,107
Provision for loan losses charged to expense		(1,300)			1,200
Net loan charge-offs as a percent of average outstanding    loans		-0.02	%		0.11	%
Allowance for loan losses	$	13,305		$	14,361
Allowance for loan losses as a percent of year-end    outstanding loans		1.26	%		1.43	%
Impaired loans, excluding PCI loans	$	6,539		$	7,354
Impaired loans as a percent of gross year-end loans (1)		0.62	%		0.73	%
Nonaccrual and 90 days or more past due loans,    excluding PCI	$	6,952		$	9,259
Nonaccrual and 90 days or more past due loans, excluding    PCI, as a percent of gross year-end loans (1)		0.66	%		0.92	%

(1) Nonperforming loans and impaired loans are defined differently. Some loans may be included in both categories, whereas other loans may only be included in one category. A loan is considered nonaccrual if it is maintained on a cash basis because of deterioration in the borrower’s financial condition, where payment in full of principal or interest is not expected and where the principal and interest have been in default for 90 days, unless the asset is both well-secured and in process of collection. A loan is considered impaired when it is probable that all of the interest and principal due will not be collected according to the terms of the original contractual agreement.

The Company’s policy is to maintain the allowance for loan losses at a level sufficient to provide for probable losses incurred in the current portfolio. Management believes the analysis of the allowance for loan losses supported a reserve of $13,305 at December 31, 2016. The Company provides for loan losses through regular provisions to the allowance for loan losses. The amount of the provision is affected by loan charge-offs, recoveries and changes in specific and general allocations required for the allowance for loan losses. A number of factors impact the provisions for loan losses, such as the level of higher risk loans in the portfolio, changes in practices related to loans, changes in collateral values and other factors. We continue to actively manage this process and have provided to maintain the reserve at a level that assures adequate coverage ratios.

Provisions (credits) for loan losses totaled ($1,300), $1,200 and $1,500 in 2016, 2015 and 2014, respectively. The Company’s provision for loan losses decreased $2,500 during 2016. During 2016, the Company received a payoff on a nonperforming loan. This particular loan had been analyzed previously and had been charged down based on a deterioration of real estate collateral values during the recent recession. As a result of the payoff of the loan, the Company recovered the charged down amount of approximately $1,303. This loan payoff resulted in a reversal of $1,300 from the allowance for loan losses during 2016, compared to a $1,200 provision to allowance for loan losses in 2015. The decrease in provision for loan losses in 2016 is related to the decrease in net charge-offs compared to a year ago.

Efforts are continually made to analyze each segment of the loan portfolio and quantify risk to assure that reserves are appropriate for each segment and the overall portfolio. Management specifically evaluates loans that are impaired, which includes restructured loans, to estimate potential loss. This analysis includes a review of the loss migration calculation for all loan categories as well as fluctuations and trends in various risk factors that have occurred within the portfolios’ economic life cycle. The analysis also includes assessment of qualitative factors such as credit trends, unemployment trends, vacancy trends and loan growth. The composition and overall level of the loan portfolio and charge-off activity are also factors used to determine the amount of the allowance for loan losses.

Management analyzes each impaired commercial and commercial real estate loan relationship with a balance of $350 or larger, on an individual basis and when it is in nonaccrual status or when an analysis of the borrower’s operating results and financial condition indicates that underlying cash flows are not adequate to meet its debt service requirements. Loans held for sale and leases are excluded

See accompanying notes to consolidated financial statements

10

from consideration as impaired. Loans are generally moved to nonaccrual status when 90 days or more past due. Impaired loans or portions thereof are charged-off when deemed uncollectible.

Noninterest Income

Noninterest income increased $1,854, or 13.0%, to $16,132 for the year ended December 31, 2016, from $14,278 for the comparable 2015 period. The increase was primarily due to increases in earnings on service charges of $124, gain on sale of loans of $644, tax refund processing fees of $750 and other income of $303 which were partially offset by decreases in wealth management fees of $145 and net gain on sale of other real estate owned of $47.

Service charges increased in 2016 primarily due to income received related to the Company’s tax refund processing program. Tax refund processing fees increased in 2016 as a result of an increase in the volume of returns processed. Gain on sale of loans increased in 2016 due to an increase in volume of loans sold, as well as an increase in the premium earned. Volume was $69,475, up $19,838 or 40.0% as compared to the same period in 2015, due largely to favorable market conditions. In addition, the premium on loans sold increased 6 basis points as compared to the same period in 2015. Other income increased in 2016 primarily due to an increase in swap related income. The decrease in wealth management fee income is related to a general decrease in brokerage transactions. Sales of other real estate owned resulted in recognized gains of $152 on the sale of 9 properties in 2016 compared to gains of $199 on the sale of 17 properties in 2015.

Noninterest Expense

Noninterest expense increased $911, or 2.1%, to $43,855 for the year ended December 31, 2016, from $42,944 for the comparable 2015 period. The increase was primarily due to increases in compensation expense of $1,693, occupancy expense of $284 and equipment expense of $138 which were partially offset by decreases in contracted data processing expense of $275, FDIC assessments of $253, professional services expense of $566 and marketing expense of $110.

Compensation expense increased in 2016 mainly due to annual pay increases, incentive based costs and higher employee insurance costs, offset by a reduction in pension costs. Occupancy and equipment expenses increased in 2016 due to increases in building and equipment repair and maintenance, rent expense and real estate tax expense. Building and equipment repair and maintenance expenses increased in 2016 due to facility and technology improvement projects. Rent and real estate tax expense increased as a result of the Company’s acquisition of TCNB in 2015. The decrease in contracted data processing costs in 2016 was attributable to the increased core processing costs incurred in 2015 in connection with the acquisition of TCNB. The decrease in FDIC assessments in 2016 resulted from a new lower assessment rate schedule that became effective in 2016. The year-over-year decrease in professional services expense was attributable to the increased professional services costs incurred in 2015 in connection with the acquisition of TCNB, increased recruiting expenses and increased legal expenses related to the Company’s filing of a Form S-3 shelf registration statement with the SEC and matters related to the Special Meeting of Shareholders held on November 4, 2015 for the purpose of voting to eliminate preemptive rights and cumulative voting in the election of directors. A general decrease in marketing costs occurred in 2016.

Income Tax Expense

Federal income tax expense was $6,619 in 2016 compared to $4,781 in 2015. Federal income tax expense as a percentage of pre-tax income was 27.8% in 2016 compared to 27.3% in 2015. A lower federal effective tax rate than the statutory rate of 35% in 2016 and 34% in 2015 is primarily due to tax-exempt interest income from state and municipal investments, municipal loans, income from BOLI and low income housing credits. Federal income tax expense increased in 2016 primarily due to an increase in pre-tax income, which also led to the increase in the effective tax rate in 2016.

See accompanying notes to consolidated financial statements

11

Distribution of Assets, Liabilities and Shareholders’ Equity;

Interest Rates and Interest Differential

The following table sets forth, for the years ended December 31, 2017, 2016 and 2015, the distribution of assets, including interest amounts and average rates of major categories of interest-earning assets and interest-bearing liabilities (Amounts in thousands):

	2017								2016								2015
Assets	Average balance			Interest		Yield/ rate			Average balance			Interest		Yield/ rate			Average balance			Interest		Yield/ rate
Interest-earning assets:
Loans (1)(2)(3)(5)	$	1,109,069		$	51,198		4.62	%	$	1,025,908		$	47,186		4.60	%	$	981,475		$	44,784		4.57	%
Taxable securities (4)		144,685			3,745		2.62	%		137,179			3,319		2.47	%		139,762			3,232		2.31	%
Non-taxable    securities (4)(5)		89,564			3,153		5.50	%		76,317			2,666		5.61	%		71,674			2,583		5.70	%
Interest-bearing    deposits in other    banks		61,859			498		0.81	%		82,225			396		0.48	%		44,647			102		0.23	%
Total interest-    earning assets		1,405,177			58,594		4.30	%		1,321,629			53,567		4.18	%		1,237,558			50,701		4.23	%
Noninterest-earning assets:
Cash and due from    financial institutions		45,801								49,888								34,616
Premises and    equipment, net		18,027								17,101								16,081
Accrued interest    receivable		4,697								4,432								4,476
Intangible assets		28,605								29,213								28,568
Other assets		12,374								10,230								10,181
Bank owned life    insurance		24,819								23,449								19,854
Less allowance for loan    losses		(13,113	)							(14,225	)							(14,689	)
Total	$	1,526,387							$	1,441,717							$	1,336,645

(1) For purposes of these computations, the daily average loan amounts outstanding are net of unearned income and include loans held for sale.

(2) Included in loan interest income are loan fees of $421 in 2017, $537 in 2016 and $542 in 2015.

(3) Non-accrual loans are included in loan totals and do not have a material impact on the analysis presented.

(4) Average balance is computed using the carrying value of securities. The average yield has been computed using the historical amortized cost average balance for available-for-sale securities.

(5) Yield/Rate is calculated using the tax-equivalent adjustment of 35% for 2017 and 2016 and 34% for 2015.

See accompanying notes to consolidated financial statements

12

Distribution of Assets, Liabilities and Shareholders’ Equity;

Interest Rates and Interest Differential (Continued)

The following table sets forth, for the years ended December 31, 2017, 2016 and 2015, the distribution of liabilities and shareholders’ equity, including interest amounts and average rates of major categories of interest-earning assets and interest-bearing liabilities (Amounts in thousands):

	2017							2016							2015
Liabilities and Shareholders’ Equity	Average balance		Interest		Yield/ rate			Average balance		Interest		Yield/ rate			Average balance		Interest		Yield/ rate
Interest-bearing liabilities:
Savings and    interest-bearing    demand accounts	$	585,218	$	595		0.10	%	$	566,589	$	470		0.08	%	$	543,986	$	422		0.08	%
Certificates of deposit		200,797		1,747		0.87	%		209,093		1,526		0.73	%		223,099		1,665		0.75	%
Federal Home Loan Bank    advances		54,100		695		1.28	%		28,081		405		1.44	%		45,551		442		0.97	%
Securities sold under    repurchase agreements		18,234		18		0.10	%		21,767		22		0.10	%		20,086		20		0.10	%
Federal funds purchased		119		2		1.68	%		116		1		0.86	%		68		—		0.00	%
Subordinated debentures		29,427		1,035		3.52	%		29,427		884		3.00	%		29,427		760		2.58	%
Total interest-bearing    liabilities		887,895		4,092		0.46	%		855,073		3,308		0.39	%		862,217		3,309		0.38	%
Noninterest-bearing    liabilities:
Demand deposits		450,648							434,601							340,360
Other liabilities		15,081							18,598							13,718
		465,729							453,199							354,078
Shareholders’ equity		172,763							133,445							120,350
Total	$	1,526,387						$	1,441,717						$	1,336,645
Net interest income and    interest rate spread (1)			$	54,502		3.84	%			$	50,259		3.79	%			$	47,392		3.84	%
Net interest margin (2)						4.01	%						3.93	%						3.96	%

(1) Interest rate spread is calculated by subtracting the rate on average interest-bearing liabilities from the yield on average interest-earning assets.

(2) Net interest margin is calculated by dividing tax-equivalent adjusted net interest income by average interest-earning assets.

See accompanying notes to consolidated financial statements

13

Changes in Interest Income and Interest Expense

Resulting from Changes in Volume and Changes in Rate

The following table sets forth, for the periods indicated, a summary of the changes in interest income and interest expense resulting from changes in volume and changes in rate (Amounts in thousands):

	Increase (decrease) due to:
	Volume (1)			Rate (1)			Net
2017 compared to 2016
Interest income:
Loans	$	3,838		$	174		$	4,012
Taxable securities		215			211			426
Nontaxable securities		541			(54	)		487
Interest-bearing deposits in other banks		(116	)		218			102
Total interest income	$	4,478		$	549		$	5,027
Interest expense:
Savings and interest-bearing demand accounts	$	16		$	109		$	125
Certificates of deposit		(63	)		284			221
Federal Home Loan Bank advances		339			(49	)		290
Securities sold under repurchase agreements		(3	)		(1	)		(4	)
Federal funds purchased		—			1			1
Subordinated debentures		—			151			151
Total interest expense	$	289		$	495		$	784
Net interest income	$	4,189		$	54		$	4,243
2016 compared to 2015
Interest income:
Loans	$	2,041		$	361		$	2,402
Taxable securities		(62	)		149			87
Nontaxable securities		173			(90	)		83
Interest-bearing deposits in other banks		127			167			294
Total interest income	$	2,279		$	587		$	2,866
Interest expense:
Savings and interest-bearing demand accounts	$	18		$	30		$	48
Certificates of deposit		(103	)		(36	)		(139	)
Federal Home Loan Bank advances		(206	)		169			(37	)
Securities sold under repurchase agreements		2			—			2
Federal funds purchased		1			—			1
Subordinated debentures		—			124			124
Total interest expense	$	(288	)	$	287		$	(1	)
Net interest income	$	2,567		$	300		$	2,867

(1) The change in interest income and interest expense due to changes in both volume and rate, which cannot be segregated, has been allocated proportionately to the change due to volume and the change due to rate.

Liquidity and Capital Resources

Civista maintains a conservative liquidity position. All securities are classified as available for sale. At December 31, 2017, securities with maturities of one year or less totaled $8,765, or 3.8% of the total security portfolio. The available for sale portfolio helps to provide Civista with the ability to meet its funding needs. The Consolidated Statements of Cash Flows contained in the Consolidated Financial Statements detail the Company’s cash flows from operating activities resulting from net earnings.

See accompanying notes to consolidated financial statements

14

Net cash provided by operating activities for 2017, 2016 and 2015 was $20,819, $17,709 and $15,073, respectively. The primary additions to cash from operating activities are from changes in amortization of intangible assets, amortization of securities net of accretion, the provision for loan losses, depreciation and proceeds from sale of loans. In addition, in 2017 additions to cash from operating activities include other, net. The Company had a security that was purchased but not settled at December 31, 2017. The primary use of cash from operating activities is from loans originated for sale. Net cash used for investing activities was $146,180, $63,575 and $11,904 in 2017, 2016 and 2015, respectively, principally reflecting our loan and investment security activities. Deposit, borrowing and net proceeds from issuancesof common shares have comprised most of our financing activities, which resulted in net cash provided of $129,185, $47,000 and $2,534 for 2017, 2016 and 2015 respectively.

Future loan demand of Civista can be funded by increases in deposit accounts, proceeds from payments on existing loans, the maturity of securities and the sale of securities classified as available for sale. Additional sources of funds may also come from borrowing in the Federal Funds market and/or borrowing from the FHLB. As of December 31, 2017, Civista had total credit availability with the FHLB of $366,122 of which $91,500 was outstanding.

On a separate entity basis, CBI’s primary source of funds is dividends paid by its subsidiaries, primarily by Civista. Generally, subject to applicable minimum capital requirements, Civista may declare a dividend without the approval of the Federal Reserve Bank of Cleveland and the State of Ohio Department of Commerce, Division of Financial Institutions, provided the total dividends in a calendar year do not exceed the total of its profits for that year combined with its retained profits for the two preceding years. At December 31, 2017, Civista was able to pay dividends to CBI without obtaining regulatory approval. During 2017, Civista did not pay any dividends to CBI.

In addition to the restrictions placed on dividends by banking regulations, CBI is subject to restrictions on the payment of dividends as a result of CBI’s issuance of 1,000,000 depositary shares, each representing a 1/40th ownership interest in a Series B Preferred Share, of CBI on December 19, 2013. Under the terms of the Series B Preferred Shares, no dividends may be declared or paid on the common shares of CBI during any calendar quarter unless full dividends on the Series B Preferred Shares (and, therefore, the depositary shares) have been declared for that quarter and all dividends previously declared on the Series B Preferred Shares (and, therefore, the depositary shares) have been paid in full.

The Company manages its liquidity and capital through quarterly Asset/Liability Management Committee (ALCO) meetings. The ALCO discusses issues like those in the above paragraphs as well as others that may affect the future liquidity and capital position of the Company. The ALCO also examines interest rate risk and the effect that changes in rates will have on the Company. For more information about interest rate risk, please refer to the “Quantitative and Qualitative Disclosures about Market Risk” section.

Capital Adequacy

Shareholders’ equity totaled $184,461 at December 31, 2017 compared to $137,616 at December 31, 2016. The increase in shareholders’ equity resulted primarily from the completion of the Company’s public offering of its common shares on February 24, 2017, which resulted in net proceeds of $32,821. Shareholders’ equity was also positively impacted by net income of $15,872, which was offset by dividends on preferred shares and common shares of $1,244 and $2,438, respectively.  

During the first quarter of 2015, the Company adopted the new BASEL III regulatory capital framework as approved by the federal banking agencies. In addition to the existing regulatory capital rules, the final BASEL III rules also require the Company to now maintain minimum amounts and ratios of Common Equity Tier 1 (“CET1”) Capital to risk-weighted assets (as these terms are defined in the BASEL III rules). Under the BASEL III rules, the Company elected to opt-out of including accumulated other comprehensive income in regulatory capital. All of the Company’s capital ratios exceeded the regulatory minimum guidelines as of December 31, 2017 and 2016 as identified in the following table:

	Total Risk Based Capital			Tier I Risk Based Capital			CET1 Risk Based Capital			Leverage Ratio
Company Ratios—December 31, 2017		16.6	%		15.5	%		11.6	%		12.7	%
Company Ratios—December 31, 2016		14.2	%		13.0	%		8.6	%		10.6	%
For Capital Adequacy Purposes		8.0	%		6.0	%		4.5	%		4.0	%
To Be Well Capitalized Under Prompt Corrective    Action Provisions		10.0	%		8.0	%		6.5	%		5.0	%

See accompanying notes to consolidated financial statements

15

Common equity for the CET1 risk-based capital ratio includes common stock (plus related surplus) and retained earnings, plus limited amounts of minority interests in the form of common stock, less the majority of certain regulatory deductions.

Tier 1 capital includes common equity as defined for the CET1 risk-based capital ratio, plus certain non-cumulative preferred stock and related surplus, cumulative preferred stock and related surplus and trust preferred securities that have been grandfathered (but which are not permitted going forward), and limited amounts of minority interests in the form of additional Tier 1 capital instruments, less certain deductions.

Tier 2 capital, which can be included in the total capital ratio, includes certain capital instruments (such as subordinated debt) and limited amounts of the allowance for loan and lease losses, subject to new eligibility criteria, less applicable deductions.

The deductions from CET1 capital include goodwill and other intangibles, certain deferred tax assets, mortgage-servicing assets above certain levels, gains on sale in connection with a securitization, investments in a banking organization’s own capital instruments and investments in the capital of unconsolidated financial institutions (above certain levels). The deductions phase in from 2015 through 2019.

Under applicable regulatory guidelines, capital is compared to the relative risk related to the balance sheet. To derive the risk included in the balance sheet, one of several risk weights is applied to different balance sheet and off-balance sheet assets, primarily based on the relative credit risk of the counterparty. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Some of the risk weightings were changed effective January 1, 2015.

The new regulatory capital rules and regulations also place restrictions on the payment of capital distributions, including dividends, and certain discretionary bonus payments to executive officers if the company does not hold a capital conservation buffer of greater than 2.5 percent composed of CET1 capital above its minimum risk-based capital requirements, or if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5 percent at the beginning of the quarter. The capital conservation buffer phases in starting on January 1, 2016, at 0.625%. The implementation of Basel III is not expected to have a material impact on CBI’s or Civista’ capital ratios.

Effects of Inflation

The Company’s balance sheet is typical of financial institutions and reflects a net positive monetary position whereby monetary assets exceed monetary liabilities. Monetary assets and liabilities are those which can be converted to a fixed number of dollars and include cash assets, securities, loans, money market instruments, deposits and borrowed funds.

During periods of inflation, a net positive monetary position may result in an overall decline in purchasing power of an entity. No clear evidence exists of a relationship between the purchasing power of an entity’s net positive monetary position and its future earnings. Moreover, the Company’s ability to preserve the purchasing power of its net positive monetary position will be partly influenced by the effectiveness of its asset/liability management program. As part of the asset/liability management process, management reviews and monitors information and projections on inflation as published by the Federal Reserve Board and other sources. This information speaks to inflation as determined by its impact on consumer prices and also the correlation of inflation and interest rates. This information is but one component in an asset/liability management process designed to limit the impact of inflation on the Company. Management does not believe that the effect of inflation on its nonmonetary assets (primarily bank premises and equipment) is material as such assets are not held for resale and significant disposals are not anticipated.

Fair Value of Financial Instruments

The Company has disclosed the fair value of its financial instruments at December 31, 2017 and 2016 in Note 17 to the Consolidated Financial Statements. The fair value of loans at December 31, 2017 was 99.6% of the carrying value compared to 100.5% at December 31, 2016. The fair value of deposits at December 31, 2017 was 100.0% of the carrying value compared to 100.1% at December 31, 2016.

See accompanying notes to consolidated financial statements

16

Contractual Obligations

The following table represents significant fixed and determinable contractual obligations of the Company as of December 31, 2017.

Contractual Obligations	One year or less		One to three years		Three to five years		Over five years		Total
Deposits without a stated maturity	$	981,021	$	—	$	—	$	—	$	981,021
Certificates of deposit and IRAs		161,656		57,385		4,584		277		223,902
FHLB advances, securities sold under agreements to    repurchase and U.S. Treasury interest-bearing    demand note		88,655		5,000		—		—		93,655
Subordinated debentures (1)		—		—		—		29,427		29,427
Operating leases		571		705		127		—		1,403

(1) The subordinated debentures consist of $2,000, $2,500, $5,000, $7,500, and $12,500 debentures.

The Company has retail repurchase agreements with clients within its local market areas. These borrowings are collateralized with securities owned by the Company. See Note 12 to the Consolidated Financial Statements for further detail. The Company also has a cash management advance line of credit and outstanding letters of credit with the FHLB. For further discussion, refer to Note 10 and Note 11 to the Consolidated Financial Statements.

Quantitative and Qualitative Disclosures about Market Risk

The Company’s primary market risk exposure is interest-rate risk and, to a lesser extent, liquidity risk. All of the Company’s transactions are denominated in U.S. dollars with no specific foreign exchange exposure.

Interest-rate risk is the exposure of a banking organization’s financial condition to adverse movements in interest rates. Accepting this risk can be an important source of profitability and shareholder value. However, excessive levels of interest-rate risk can pose a significant threat to the Company’s earnings and capital base. Accordingly, effective risk management that maintains interest-rate risk at prudent levels is essential to the Company’s safety and soundness.

Evaluating a financial institution’s exposure to changes in interest rates includes assessing both the adequacy of the management process used to control interest-rate risk and the organization’s quantitative level of exposure. When assessing the interest-rate risk management process, the Company seeks to ensure that appropriate policies, procedures, management information systems and internal controls are in place to maintain interest-rate risk at prudent levels with consistency and continuity. Evaluating the quantitative level of interest rate risk exposure requires the Company to assess the existing and potential future effects of changes in interest rates on its consolidated financial condition, including capital adequacy, earnings, liquidity and, where appropriate, asset quality.

The Federal Reserve Board, together with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, adopted a Joint Agency Policy Statement on interest-rate risk, effective June 26, 1996. The policy statement provides guidance to examiners and bankers on sound practices for managing interest-rate risk, which will form the basis for ongoing evaluation of the adequacy of interest-rate risk management at supervised institutions. The policy statement also outlines fundamental elements of sound management that have been identified in prior Federal Reserve guidance and discusses the importance of these elements in the context of managing interest-rate risk. Specifically, theguidance emphasizes the need for active board of director and senior management oversight and a comprehensive risk-management process that effectively identifies, measures, and controls interest-rate risk. Financial institutions derive their income primarily from the excess of interest collected over interest paid. The rates of interest an institution earns on its assets and owes on its liabilities generally are established contractually for a period of time. Since market interest rates change over time, an institution is exposed to lower profit margins (or losses) if it cannot adapt to interest-rate changes. For example, assume that an institution’s assets carry intermediate- or long-term fixed rates and that those assets were funded with short-term liabilities. If market interest rates rise by the time the short-term liabilities must be refinanced, the increase in the institution’s interest expense on its liabilities may not be sufficiently offset if assets continue to earn at the long-term fixed rates. Accordingly, an institution’s profits could decrease on existing assets because the institution will have either lower net interest income or, possibly, net interest expense. Similar risks exist when assets are subject to contractual interest-rate ceilings, or rate sensitive assets are funded by longer-term, fixed-rate liabilities in a decreasing-rate environment.

See accompanying notes to consolidated financial statements

17

Several techniques may be used by an institution to minimize interest-rate risk. One approach used by the Company is to periodically analyze its assets and liabilities and make future financing and investment decisions based on payment streams, interest rates, contractual maturities, and estimated sensitivity to actual or potential changes in market interest rates. Such activities fall under the broad definition of asset/liability management. The Company’s primary asset/liability management technique is the measurement of the Company’s asset/liability gap, that is, the difference between the cash flow amounts of interest sensitive assets and liabilities that will be refinanced (or repriced) during a given period. For example, if the asset amount to be repriced exceeds the corresponding liability amount for a certain day, month, year, or longer period, the institution is in an asset sensitive gap position. In this situation, net interest income would increase if market interest rates rose or decrease if market interest rates fell.

If, alternatively, more liabilities than assets will reprice, the institution is in a liability sensitive position. Accordingly, net interest income would decline when rates rose and increase when rates fell. Also, these examples assume that interest rate changes for assets and liabilities are of the same magnitude, whereas actual interest rate changes generally differ in magnitude for assets and liabilities.

Several ways an institution can manage interest-rate risk include selling existing assets or repaying certain liabilities and matching repricing periods for new assets and liabilities, for example, by shortening terms of new loans or securities. Financial institutions are also subject to prepayment risk in falling rate environments. For example, mortgage loans and other financial assets may be prepaid by a debtor so that the debtor may refund its obligations at new, lower rates. The Company does not have significant derivative financial instruments and does not intend to purchase a significant amount of such instruments in the near future. Prepayments of assets carrying higher rates reduce the Company’s interest income and overall asset yields. A large portion of an institution’s liabilities may be short term or due on demand, while most of its assets may be invested in long term loans or securities. Accordingly, the Company seeks to have in place sources of cash to meet short-term demands. These funds can be obtained by increasing deposits, borrowing, or selling assets. Also, FHLB advances and wholesale borrowings may be used as important sources of liquidity for the Company.

The following table provides information about the Company’s financial instruments that are sensitive to changes in interest rates as of December 31, 2017 and 2016, based on certain prepayment and account decay assumptions that management believes are reasonable. The Company had derivative financial instruments as of December 31, 2017 and 2016. The changes in fair value of the assets and liabilities of the underlying contracts offset each other. For more information about derivative financial instruments see Note 24 to the Consolidated Financial Statements. Expected maturity date values for interest-bearing core deposits were calculated based on estimates of the period over which the deposits would be outstanding. The Company’s borrowings were tabulated by contractual maturity dates and without regard to any conversion or repricing dates.

Net Portfolio Value

	December 31, 2017								December 31, 2016
Change in Rates	Dollar Amount		Dollar Change			Percent Change			Dollar Amount		Dollar Change			Percent Change
+200bp	$	270,928	$	33,923			14	%	$	229,366	$	31,559			16	%
+100bp		261,071		24,066			10	%		219,008		21,201			11	%
Base		237,005		—			—			197,807		—			—
-100bp		223,526		(13,479	)		-6	%		186,624		(11,183	)		-6	%

The change in net portfolio value from December 31, 2016 to December 31, 2017, can be attributed to two factors.  While the yield curve has flattened from the end of the year, both the volume and mix of assets and funding sources has changed. The volume of loans, and to a lesser extent securities, have increased. The funding volume and mix has shifted toward deposits. The changes in the mix of assets, combined with the changes to liabilities has led to a small decrease in volatility. The increased volume of loans and securities led to the increase in the base. Beyond the change in the base level of net portfolio value, projected movements in rates, up or down, would also lead to changes in market values. The change in the rates up scenarios for both the 100 and 200 basis point movements would lead to a faster decrease in the fair value of liabilities, compared to assets. Accordingly we would see an increase in the net portfolio value. However, a downward change in rates would lead to a decrease in the net portfolio value as the fair value of liabilities would increase more quickly than the fair value of assets.  

See accompanying notes to consolidated financial statements

18

Critical Accounting Policies

Allowance for Loan Losses: The allowance for loan losses is regularly reviewed by management to determine that the amount is considered adequate to absorb probable losses in the loan portfolio. If not, an additional provision is made to increase the allowance. This evaluation includes specific loss estimates on certain individually reviewed impaired loans, the pooling of commercial credits risk graded as special mention and substandard that are not individually analyzed, and general loss estimates that are based upon the size, quality, and concentration characteristics of the various loan portfolios, adverse situations that may affect a borrower’s ability to repay, and current economic and industry conditions, among other items.

Those judgments and assumptions that are most critical to the application of this accounting policy are assessing the initial and on-going credit-worthiness of the borrower, the amount and timing of future cash flows of the borrower that are available for repayment of the loan, the sufficiency of underlying collateral, the enforceability of third-party guarantees, the frequency and subjectivity of loan reviews and risk ratings, emerging or changing trends that might not be fully captured in the historical loss experience, and charges against the allowance for actual losses that are greater than previously estimated. These judgments and assumptions are dependent upon or can be influenced by a variety of factors, including the breadth and depth of experience of lending officers, credit administration and the corporate loan review staff that periodically review the status of the loan, changing economic and industry conditions, changes in the financial condition of the borrower and changes in the value and availability of the underlying collateral and guarantees.

Note 1 and Note 5 to the Consolidated Financial Statements provide additional information regarding Allowance for Loan Losses.

Goodwill: The Company performs an evaluation of goodwill for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Management performed an evaluation of the Company’s goodwill during the fourth quarter of 2017. In performing its evaluation, management obtained several commonly used financial ratios from pending and completed purchase transactions for banks based in the Midwest. Management used these ratios to determine an implied fair value for the Company. The implied fair value exceeded the carrying value including goodwill. Therefore management concluded that goodwill was not impaired and made no adjustment in 2017.

Income Taxes: We determine our liabilities for income taxes based on current tax regulation. In estimating income taxes payable or receivable, we assess the relative merits and risks of the appropriate tax treatment considering statutory, judicial, and regulatory guidance in the context of each tax position. Accordingly, previously estimated liabilities are regularly reevaluated and adjusted through the provision for income taxes. Changes in the estimate of income taxes payable or receivable occur periodically due to changes in tax rates, interpretations of tax law, the status of examinations being conducted by various taxing authorities, and newly enacted statutory, judicial and regulatory guidance that impact the relative merits and risks of each tax position. These changes, when they occur, may affect the provision for income taxes as well as current and deferred income taxes, and may be significant to our statements of income and condition. The Tax Cut and Jobs Act, enacted on December 22, 2017, lowered the federal corporate income tax rate from 35% to 21% effective January 1, 2018.

Management’s determination of the realization of net deferred tax assets is based upon management’s judgment of various future events and uncertainties, including the timing and amount of future income, as well as the implementation of various tax planning strategies to maximize realization of the deferred tax assets. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized.

Other-Than-Temporary Impairment of Investment Securities: The Company performs a quarterly valuation to determine if a decline in the value of an investment security is other than temporary. Although the term “other than temporary” is not intended to indicate that the decline is permanent, it does indicate that the prospects for a near-term recovery of value are not necessarily favorable, or that there is lack of evidence to support fair values equal to or greater than the carrying value of the investment. Once a decline in value is determined to be other than temporary, the value of the security is reduced and a corresponding charge to earnings is recognized. Management utilizes criteria such as the magnitude and duration of the decline, in addition to the reasons underlying the decline, to determine whether the loss in value is other than temporary.

Pension Benefits: Pension costs and liabilities are dependent on assumptions used in calculating such amounts. These assumptions include discount rates, benefits earned, interest costs, expected return on plan assets, mortality rates, and other factors. In accordance with GAAP, actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect recognized expense and the recorded obligation of future periods. While management believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect the Company’s pension obligations and future expense. Our pension benefits are described further in Note 15 of the “Notes to Consolidated Financial Statements.”

See accompanying notes to consolidated financial statements

19

Management’s Report on Internal Control over Financial Reporting

We, as management of Civista Bancshares, Inc., are responsible for establishing and maintaining effective internal control over financial reporting that is designed to produce reliable financial statements in conformity with United States generally accepted accounting principles. The system of internal control over financial reporting as it relates to the financial statements is evaluated for effectiveness by management and tested for reliability through a program of internal audits. Actions are taken to correct potential deficiencies as they are identified. Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden and misstatements due to error or fraud may occur and not be detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of internal control will provide only reasonable assurance with respect to financial statement preparation.

Management assessed the Company’s system of internal control over financial reporting as of December 31, 2017, in relation to criteria for effective internal control over financial reporting as described in “2013 Internal Control – Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concludes that, as of December 31, 2017, its system of internal control over financial reporting is effective and meets the criteria of the “2013 Internal Control – Integrated Framework”. S.R. Snodgrass, P.C., independent registered public accounting firm, has issued an audit report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017.

Management is responsible for compliance with the federal and state laws and regulations concerning dividend restrictions and federal laws and regulations concerning loans to insiders designated by the FDIC as safety and soundness laws and regulations. Management has assessed compliance by the Company with the designated laws and regulations relating to safety and soundness. Based on the assessment, management believes that the Company complied, in all significant respects, with the designated laws and regulations related to safety and soundness for the year ended December 31, 2017.

Dennis G. Shaffer	Todd A. Michel
President and Chief Executive Officer	Senior Vice President, Controller
Sandusky, Ohio
March 6, 2018

See accompanying notes to consolidated financial statements

20

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

To the Shareholders and the Board of Directors of Civista Bancshares, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Civista Bancshares, Inc. and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. 

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2017, of the Company and our report dated March 6, 2018, expressed an unqualified opinion.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Report on Management’s Assessment of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Cranberry Township, Pennsylvania

March 6, 2018

See accompanying notes to consolidated financial statements

21

Report of Independent Registered Public Accounting Firm on Financial Statements

To the Shareholders and the Board of Directors of Civista Bancshares, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Civista Bancshares, Inc. and subsidiaries (the “Company”) as of December 31, 2017 and 2016; the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2017; and the related notes to the consolidated financial statements (collectively, the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, conformity with accounting principles generally accepted in the United States of America.  

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 6, 2018, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2009.

Cranberry Township, Pennsylvania

March 6, 2018

See accompanying notes to consolidated financial statements

22

This page left blank intentionally.

See accompanying notes to consolidated financial statements

23

CIVISTA BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS

December 31, 2017 and 2016

(Amounts in thousands, except share data)

	2017			2016
ASSETS
Cash and due from financial institutions	$	40,519		$	36,695
Securities available for sale		231,062			195,864
Loans held for sale		2,197			2,268
Loans, net of allowance of $13,134 and $13,305		1,151,527			1,042,201
Other securities		14,247			14,055
Premises and equipment, net		17,611			17,920
Accrued interest receivable		4,488			3,854
Goodwill		27,095			27,095
Other intangible assets		1,279			1,784
Bank owned life insurance		25,125			24,552
Other assets		10,707			10,975
Total assets	$	1,525,857		$	1,377,263
LIABILITIES
Deposits
Noninterest-bearing	$	361,964		$	345,588
Interest-bearing		842,959			775,515
Total deposits		1,204,923			1,121,103
Federal Home Loan Bank advances		71,900			48,500
Securities sold under agreements to repurchase		21,755			28,925
Subordinated debentures		29,427			29,427
Accrued expenses and other liabilities		13,391			11,692
Total liabilities		1,341,396			1,239,647
SHAREHOLDERS’ EQUITY
Preferred shares, no par value, 200,000 shares authorized Series    B Preferred shares, $1,000 liquidation preference, 18,760 shares issued at    December 31, 2017 and 20,481 shares issued at December 31, 2016, net    of issuance costs		17,358			18,950
Common shares, no par value, 20,000,000 shares authorized, 10,946,439    shares issued at December 31, 2017 and 9,091,473 shares issued at    December 31, 2016		153,810			118,975
Accumulated earnings		31,652			19,263
Treasury stock, 747,964 common shares at cost		(17,235	)		(17,235	)
Accumulated other comprehensive loss		(1,124	)		(2,337	)
Total shareholders’ equity		184,461			137,616
Total liabilities and shareholders’ equity	$	1,525,857		$	1,377,263

See accompanying notes to consolidated financial statements

24

CIVISTA BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

	2017			2016			2015
Interest and dividend income
Loans, including fees	$	51,198		$	47,186		$	44,784
Taxable securities		3,745			3,319			3,232
Tax-exempt securities		3,153			2,666			2,583
Federal funds sold and other		498			396			102
Total interest and dividend income		58,594			53,567			50,701
Interest expense
Deposits		2,342			1,996			2,087
Federal Home Loan Bank advances		695			405			442
Subordinated debentures		1,035			884			760
Securities sold under agreements to repurchase and other		20			23			20
Total interest expense		4,092			3,308			3,309
Net interest income		54,502			50,259			47,392
Provision (credit) for loan losses		—			(1,300	)		1,200
Net interest income after provision (credit) for loan losses		54,502			51,559			46,192
Noninterest income
Service charges		4,777			4,832			4,708
Net gain (loss) on sale of securities		12			19			(18	)
Net gain on sale of loans		1,745			1,750			1,106
ATM fees		2,304			2,094			1,986
Wealth management fees		3,068			2,678			2,823
Bank owned life insurance		573			563			467
Tax refund processing fees		2,750			2,750			2,000
Computer center item processing fees		246			251			267
Net gain (loss) on sale of other real estate owned		(28	)		152			199
Other		887			1,043			740
Total noninterest income		16,334			16,132			14,278
Noninterest expense
Compensation expense		29,253			25,323			23,630
Net occupancy expense		2,689			2,700			2,416
Equipment expense		1,564			1,641			1,503
Contracted data processing		1,838			1,546			1,821
FDIC Assessment		502			611			864
State franchise tax		1,024			923			847
Professional services		2,300			1,895			2,461
Amortization of intangible assets		586			699			711
ATM expense		847			605			674
Marketing expense		817			929			1,039
Repossession expense		279			253			508
Other operating expenses		6,905			6,730			6,470
Total noninterest expense		48,604			43,855			42,944
Income before income taxes		22,232			23,836			17,526
Income taxes		6,360			6,619			4,781
Net income		15,872			17,217			12,745
Preferred share dividends		1,244			1,501			1,577
Net income available to common shareholders	$	14,628		$	15,716		$	11,168
Earnings per common share, basic	$	1.48		$	1.96		$	1.43
Earnings per common share, diluted	$	1.28		$	1.57		$	1.17

See accompanying notes to consolidated financial statements

25

CIVISTA BANCSHARES, INC.

CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS

Years ended December 31, 2017, 2016 and 2015

(Amounts in thousands)

	2017			2016			2015
Net income	$	15,872		$	17,217		$	12,745
Other comprehensive income (loss):
Unrealized holding gains (loss) on available for sale securities		987			(2,342	)		(267	)
Tax effect		(375	)		796			91
Pension liability adjustment		1,129			(448	)		(412	)
Tax effect		(329	)		152			140
Total other comprehensive income (loss)		1,412			(1,842	)		(448	)
Comprehensive income	$	17,284		$	15,375		$	12,297

See accompanying notes to consolidated financial statements

26

CIVISTA BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Years ended December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

	Preferred Shares						Common Shares						Accumulated (Deficit)			Treasury			Accumulated Other Comprehensive			Total Shareholders’
	Shares			Amount			Shares			Amount			Earnings			Stock			Loss			Equity
Balance, December 31,    2014		25,000		$	23,132			7,707,917		$	114,365		$	(4,306	)	$	(17,235	)	$	(47	)	$	115,909
Net income														12,745									12,745
Other comprehensive loss																				(448	)		(448	)
Conversion of Series B    preferred shares to    common shares		(928	)		(859	)		118,678			859												—
Stock-based compensation								16,983			106												106
Cash dividends ($0.20 per    share)														(1,562	)								(1,562	)
Preferred share dividends														(1,577	)								(1,577	)
Balance, December 31,    2015		24,072		$	22,273			7,843,578		$	115,330		$	5,300		$	(17,235	)	$	(495	)	$	125,173
Net income														17,217									17,217
Other comprehensive loss																				(1,842	)		(1,842	)
Conversion of Series B    preferred shares to    common shares		(3,591	)		(3,323	)		459,192			3,322												(1	)
Stock-based compensation								40,739			323												323
Cash dividends ($0.22 per    share)														(1,753	)								(1,753	)
Preferred share dividends														(1,501	)								(1,501	)
Balance, December 31,    2016		20,481		$	18,950			8,343,509		$	118,975		$	19,263		$	(17,235	)	$	(2,337	)	$	137,616
Net income														15,872									15,872
Other comprehensive income																				1,412			1,412
Reclassification of certain income tax effects from accumulated other comprehensive loss													199							(199	)		—
Conversion of Series B    preferred shares to    common shares		(1,721	)		(1,592	)		220,108			1,592												—
Common share issuance, net of costs								1,610,000			32,821												32,821
Stock-based compensation								25,069			426												426
Cash dividends ($0.25 per    share)														(2,438	)								(2,438	)
Preferred share dividends														(1,244	)								(1,244	)
Retirement of common share								(211	)		(4	)											(4	)
Balance, December 31,    2017		18,760		$	17,358			10,198,475		$	153,810		$	31,652		$	(17,235	)	$	(1,124	)	$	184,461

See accompanying notes to consolidated financial statements

27

CIVISTA BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2017, 2016 and 2015

(Amounts in thousands)

	2017			2016			2015
Cash flows from operating activities:
Net income	$	15,872		$	17,217		$	12,745
Adjustments to reconcile net income to net cash from    operating activities
Security amortization, net		1,263			1,383			1,410
Depreciation		1,249			1,257			1,193
Amortization of intangible assets		586			699			711
Amortization (Accretion) of net deferred loan fees		317			(172	)		(155	)
Net (gain) loss on sale of securities		(12	)		(19	)		18
Provision (credit) for loan losses		—			(1,300	)		1,200
Loans originated for sale		(76,493	)		(67,295	)		(48,745	)
Proceeds from sale of loans		78,309			69,475			49,637
Net gain on sale of loans		(1,745	)		(1,750	)		(1,180	)
Net loss on sale of manufactured home loans		—			—			74
Net (gain) loss on sale of other real estate owned		28			(152	)		(199	)
Gain on sale of fixed assets		(67	)		(1	)		—
Increase in cash surrender value of bank owned life insurance		(573	)		(563	)		(467	)
Share-based compensation		426			323			106
Change in
Accrued interest payable		229			61			(11	)
Accrued interest receivable		(634	)		48			144
Deferred taxes		946			170			(410	)
Other, net		1,118			(1,672	)		(998	)
Net cash from operating activities		20,819			17,709			15,073
Cash flows used for investing activities:
Securities available for sale
Maturities, prepayments and calls		34,379			34,089			29,733
Sales		953			4,349			—
Purchases		(70,794	)		(41,759	)		(29,772	)
Redemption of other securities		—			—			138
Purchases of other securities		(192	)		(603	)		(288	)
Net cash from acquisition		—			—			926
Purchases of bank owned life insurance		—			(3,885	)		—
Net loan originations		(109,737	)		(52,022	)		(10,225	)
Loans purchased, installment		—			(1,643	)		(4,774	)
Proceeds from sale of manufactured homes		—			—			3,492
Proceeds from sale of OREO properties		87			333			865
Premises and equipment purchases		(1,015	)		(2,437	)		(1,999	)
Proceeds from sale of premises and equipment		139			3			—
Net cash used for investing activities		(146,180	)		(63,575	)		(11,904	)

See accompanying notes to consolidated financial statements

28

CIVISTA BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Years ended December 31, 2017, 2016 and 2015

(Amounts in thousands)

	2017			2016			2015
Cash flows from financing activities:
Increase (decrease) in deposits		83,820			69,070			(3,754	)
Net change in short-term FHLB advances		25,900			(22,700	)		11,000
Repayment of long-term FHLB advances		(2,500	)		—			(5,000	)
Net proceeds from issuance of common shares		32,821			—			—
Net change in securities sold under repurchase agreements		(7,170	)		3,885			3,427
Cash payment for repurchase of common shares		(4	)		—			—
Cash paid on fractional shares on conversion of preferred shares		—			(1	)		—
Cash dividends paid		(3,682	)		(3,254	)		(3,139	)
Net cash from financing activities		129,185			47,000			2,534
Increase in cash and due from financial institutions		3,824			1,134			5,703
Cash and due from financial institutions at beginning of year		36,695			35,561			29,858
Cash and due from financial institutions at end of year	$	40,519		$	36,695		$	35,561
Supplemental disclosures of cash flow information:
Interest paid	$	3,863		$	3,247		$	3,320
Income taxes paid		5,950			5,900			3,650
Transfer of loans from portfolio to other real estate owned		94			102			222
Transfer of premises to held-for-sale		3			202			—
Conversion of preferred shares to common shares		1,592			3,322			859
Securities purchased not settled		1,291			—			—
Acquisition of TCNB Financial Corp.
Noncash assets acquired:
Loans receivable							$	76,444
Other securities								716
Accrued interest receivable								194
Premises and equipment, net								1,738
Core deposit intangible								1,009
Other assets								472
Total non cash assets acquired								80,573
Liabilities assumed:
Deposits								86,869
Other liabilities								5
Total liabilities assumed								86,874
Net noncash liabilities acquired							$	6,301

See accompanying notes to consolidated financial statements

29

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the accounting policies adopted by Civista Bancshares, Inc., which have a significant effect on the Consolidated Financial Statements.

Nature of Operations and Principles of Consolidation: The Consolidated Financial Statements include the accounts of Civista Bancshares, Inc. (“CBI”) and its wholly-owned subsidiaries: Civista Bank (“Civista”), First Citizens Insurance Agency, Inc. (“FCIA”), Water Street Properties, Inc. (“WSP”), FC Refund Solutions, Inc. (“FCRS”) and CIVB Risk Management, Inc. (“CRMI”). First Citizens Capital LLC (“FCC”) is wholly-owned by Civista and holds inter-company debt. First Citizens Investments, Inc. (“FCI”) is wholly-owned by Civista and holds and manages its securities portfolio. The operations of FCI and FCC are located in Wilmington, Delaware. The above companies together are sometimes referred to as the “Company”. Intercompany balances and transactions are eliminated in consolidation.

The Company provides financial services through its offices in the Ohio counties of Erie, Crawford, Champaign, Cuyahoga, Franklin, Logan, Summit, Huron, Ottawa, Madison, Montgomery and Richland. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are residential mortgage, commercial, and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, our customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the area. Other financial instruments that potentially represent concentrations of credit risk include deposit accounts in other financial institutions.

FCIA was formed to allow the Company to participate in commission revenue generated through its third party insurance agreement. Insurance commission revenue was less than 1.0% of total revenue for the years ended December 31, 2017, 2016 and 2015. WSP was formed to hold repossessed assets of CBI’s subsidiaries. WSP revenue was less than 1% of total revenue for the years ended December 31, 2017, 2016 and 2015. FCRS was formed in 2012 and remained inactive for the periods presented.  CRMI was formed in 2017 to provide property and casualty insurance coverage to CBI and its’ subsidiaries for which insurance may not be currently available or economically feasible in the insurance marketplace.  CRMI revenue was less than 1% of total revenue for the year ended December 31, 2017.

Use of Estimates: To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. The allowance for loan losses, determination of goodwill impairment, fair values of financial instruments, valuation of deferred tax assets, pension obligations and other-than-temporary-impairment of securities are considered material estimates that are particularly susceptible to significant change in the near term.

Cash Flows: Cash and cash equivalents include cash on hand and demand deposits with financial institutions with original maturities of less than 90 days. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, federal funds purchased, short-term borrowings and repurchase agreements.

Securities: Debt securities are classified as available-for-sale when they might be sold before maturity. Equity securities with readily determinable fair values are also classified as available for sale. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.

30

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are based on the amortized cost of the security sold using the specific identification method.

U.S. generally accepted accounting principles (“GAAP”) guidance specifies that if (a) a company does not have the intent to sell a debt security prior to recovery and (b) it is more-likely-than-not that it will not have to sell the debt security prior to recovery, the security would not be considered other-than-temporarily impaired unless there is a credit loss. When an entity does not intend to sell the security, and it is more-likely-than-not the entity will not have to sell the security before recovery of its cost basis, it will recognize the credit component of other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. For held-to-maturity debt securities, the amount of other-than-temporary impairment recorded in other comprehensive income for the non-credit portion of a previous other-than-temporary impairment should be amortized prospectively over the remaining life of the security on the basis of the timing of future estimated cash flows of the security.

For available-for-sale debt securities that management has no intent to sell and believes that it more-likely-than-not will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the non-credit loss is recognized in accumulated other comprehensive income. The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections.

Other securities which include FHLB stock, Federal Reserve Bank (“FRB”) stock, Federal Agricultural Mortgage Corporation stock, Bankers’ Bancshares Inc. (“BB”) stock, and Norwalk Community Development Corp (“NCDC”) stock are carried at cost.

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market and loans that management no longer intends to hold for the foreseeable future, are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Interest income on consumer loans is discontinued when management determines future collection is unlikely. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued, but not received, for loans placed on nonaccrual, is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

31

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Purchased Loans: The Company purchases individual loans and groups of loans. Purchased loans that show evidence of credit deterioration since origination are recorded at the amount paid (or allocated fair value in a purchase business combination), such that there is no carryover of the seller’s allowance for loan losses. After acquisition, incurred losses are recognized by an increase in the allowance for loan losses.

Purchased loans are accounted for individually or aggregated into pools of loans based on common risk characteristics (e.g., credit score, loan type, and date of origination). The Company estimates the amount and timing of expected cash flows for each purchased loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). The excess of the loan’s, or pool’s, contractual principal and interest over expected cash flows is not recorded (nonaccretable difference).

Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded. If the present value of expected future cash flows is greater than the carrying amount, the excess is recognized as part of future interest income.

Allowance for Loan Losses: The allowance for loan losses (allowance) is calculated with the objective of maintaining a reserve sufficient to absorb inherent loan losses in the loan portfolio. Management establishes the allowance for loan losses based upon its evaluation of the pertinent factors underlying the types and quality of loans in the portfolio. In determining the allowance and the related provision for loan losses, the Company considers three principal elements: (i) specific impairment reserve allocations (valuation allowances) based upon probable losses identified during the review of impaired loans in the Commercial loan portfolio, (ii) allocations established for adversely-rated loans in the Commercial loan portfolio and nonaccrual Real Estate Residential, Consumer installment and Home Equity loans, (iii) allocations on all other loans based principally on the use of a three-year period for loss migration analysis. These allocations are adjusted for consideration of general economic and business conditions, credit quality and delinquency trends, collateral values, and recent loss experience for these similar pools of loans. The Company analyzes its loan portfolio each quarter to determine the appropriateness of its allowance for loan losses.

All commercial, commercial real estate and farm real estate loans are monitored on a regular basis with a detailed loan review completed for all loan relationships greater than $750. All commercial, commercial real estate and farm real estate loans that are 90 days past due or in nonaccrual status, are analyzed to determine if they are “impaired”, which means that it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. All loans that are delinquent 90 days are classified as substandard and placed on nonaccrual status unless they are well-secured and in the process of collection. The remaining loans are evaluated and segmented with loans with similar risk characteristics. The Company allocates reserves based on risk categories and portfolio segments described below, which conform to the Company’s asset classification policy. In reviewing risk within Civista’s loan portfolio, management has identified specific segments to categorize loan portfolio risk: (i) Commercial & Agriculture loans; (ii) Commercial Real Estate – Owner Occupied loans; (iii) Commercial Real Estate – Non-Owner Occupied loans; (iv) Residential Real Estate loans; (v) Real Estate Construction loans; (vi) Farm Real Estate loans; and (vii) Consumer and Other loans. Additional information related to economic factors can be found in Note 5.

32

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loan Charge-off Policies: All unsecured open- and closed-ended retail loans that become past due 90 days from the contractual due date are charged off in full. In lieu of charging off the entire loan balance, loans with non-real estate collateral may be written down to the net realizable value of the collateral, if repossession of collateral is assured and in process. For open- and closed-ended loans secured by residential real estate, a current assessment of fair value is made no later than 180 days past due. Any outstanding loan balance in excess of the net realizable value of the property is charged off. All other loans are generally charged down to the net realizable value when Civista recognizes the loan is permanently impaired, which is generally after the loan is 90 days past due.

Troubled Debt Restructurings: In certain situations based on economic or legal reasons related to a borrower’s financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered. The related loan is classified as a troubled debt restructuring (TDR). Management strives to identify borrowers in financial difficulty early and work with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. In addition to the allowance for the pooled portfolios, management has developed a separate reserve for loans that are identified as impaired through a TDR. These loans are excluded from pooled loss forecasts and a separate reserve is provided under the accounting guidance for loan impairment. Consumer loans whose terms have been modified in a TDR are also individually analyzed for estimated impairment.

Other Real Estate: Other real estate acquired through or instead of loan foreclosure is initially recorded at fair value less costs to sell when acquired, establishing a new cost basis and any deficiency in the value is charged off through the allowance. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed.

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using both accelerated and straight-line methods over the estimated useful life of the asset, ranging from three to seven years for furniture and equipment and seven to fifty years for buildings and improvements.

Federal Home Loan Bank Stock: Civista is a member of the FHLB of Cincinnati and as such, is required to maintain a minimum investment in stock of the FHLB that varies with the level of advances outstanding with the FHLB. The stock is bought from and sold to the FHLB based upon its $100 par value. The stock does not have a readily determinable fair value and as such is classified as restricted stock, carried at cost and evaluated for impairment by management. The stock’s value is determined by the ultimate recoverability of the par value rather than by recognizing temporary declines. The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following: (a) the significance of the decline in net assets of the FHLB as compared to the capital stock amount and the length of time this situation has persisted (b) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance (c) the impact of legislative and regulatory changes on the customer base of the FHLB and (d) the liquidity position of the FHLB. With consideration given to these factors, management concluded that the stock was not impaired at December 31, 2017 or 2016.

33

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Federal Reserve Bank Stock: Civista is a member of the Federal Reserve System. FRB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.

Bank Owned Life Insurance (BOLI) : Civista has purchased BOLI policies on certain key executives. BOLI is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Goodwill and Other Intangible Assets: Goodwill results from prior business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment will be recognized in the period identified.

Other intangible assets consist of core deposit intangibles arising from whole bank and branch acquisitions. These intangible assets are measured at fair value and then amortized on an accelerated method over their estimated useful lives, which range from five to twelve years.

Servicing Rights: Servicing rights are recognized as assets for the allocated value of retained servicing rights on loans sold. Servicing rights are initially recorded at fair value at the date of transfer. The valuation technique uses the present value of estimated future cash flows using current market discount rates. Servicing rights are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates and then, secondarily, prepayment characteristics. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment of a grouping is reported as a valuation allowance to the extent that fair value is less than the capitalized asset for the grouping.

Long-term Assets: Premises and equipment and other intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Repurchase Agreements: Substantially all repurchase agreement liabilities represent amounts advanced by various customers. Securities are pledged to cover these liabilities, which are not covered by federal deposit insurance.

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.

Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

The Company prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information.

34

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Stock-Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the grant date. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common shares at the date of the grant is used for restricted shares.

Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Retirement Plans: Pension expense is the net of service and interest cost, expected return on plan assets and amortization of gains and losses not immediately recognized. Employee 401(k) and profit sharing plan expense is the amount of matching contributions. Deferred compensation allocates the benefits over the years of service.

Earnings per Common Share: Basic earnings per share are net income available to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable related to convertible preferred shares. Treasury shares are not deemed outstanding for earnings per share calculations.

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale and changes in the funded status of the pension plan.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe that any such loss contingencies currently exist that will have a material effect on the financial statements.

Restrictions on Cash: Cash on hand or on deposit with the Federal Reserve Bank is required to meet regulatory reserve and clearing requirements. These balances do not earn interest.

Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by Civista to CBI or by CBI to shareholders. Additional information related to dividend restrictions can be found in Note 19.

35

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 17. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Operating Segments: While the Company’s chief decision makers monitor the revenue streams of the Company’s various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the Company’s financial service operations are considered by management to be aggregated in one reportable operating segment.

Business Combinations: At the date of acquisition the Company records the assets and liabilities of the acquired companies on the Consolidated Balance Sheets at their fair value. The results of operations for acquired companies are included in the Company’s Consolidated Statements of Operations beginning at the acquisition date. Expenses arising from acquisition activities are recorded in the Consolidated Statements of Operations during the period incurred.

Derivative Instruments and Hedging Activities: The Company enters into interest rate swap agreements to facilitate the risk management strategies of a small number of commercial banking customers. All derivatives are accounted for in accordance with ASC-815, Derivatives and Hedging. The Company mitigates the risk of entering into these agreements by entering into equal and offsetting swap agreements with highly rated third party financial institutions. The swap agreements are free-standing derivatives and are recorded at fair value in the Company’s Consolidated Balance Sheets. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes because the Company does not currently intend to execute a setoff with its counterparties. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral, usually in the form of marketable securities, is posted by the counterparty with net liability positions in accordance with contract thresholds.

Reclassifications: Some items in the prior year financial statements were reclassified to conform to the current presentation. Such reclassifications had no effect on net income or shareholders’ equity.

36

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Effect of Newly Issued but Not Yet Effective Accounting Standards:

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The Update’s core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this Update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. However, in August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) to defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. All other entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, we do not expect the new standard, or any of the amendments, to result in a material change from our current accounting for revenue because the majority of the Company’s financial instruments are not within the scope of Topic 606. However, we do expect that the standard will result in new disclosure requirements, which are currently being evaluated.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (g) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (h) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 will be effective for us on January 1, 2018 and will not have a significant impact on our financial statements.

37

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard in this Update requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. A short-term lease is defined as one in which: (a) the lease term is 12 months or less, and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact to the financial statements. Based on the Company’s preliminary analysis of its current portfolio, the impact to the Company’s balance sheet is estimated to result in less than a 1% increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which changes the impairment model for most financial assets. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the ASU is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

38

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which addresses eight specific cash flow issues with the objective of reducing diversity in practice. Among these include recognizing cash payments for debt prepayment or debt extinguishment as cash outflows for financing activities; cash proceeds received from the settlement of insurance claims should be classified on the basis of the related insurance coverage; and cash proceeds received from the settlement of bank-owned life insurance policies should be classified as cash inflows from investing activities while the cash payments for premiums on bank-owned policies may be classified as cash outflows for investing activities, operating activities, or a combination of investing and operating activities. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this Update should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business “ASU 2017-01”, which provides a more robust framework to use in determining when a set of assets and activities (collectively referred to as a “set”) is a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. Public business entities should apply the amendments in this Update to annual periods beginning after December 15, 2017, including interim periods within those periods. All other entities should apply the amendments to annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The amendments in this Update should be applied prospectively on or after the effective date.  The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment . To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. A public business entity that is a U.S. Securities and Exchange Commission (“SEC”) filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. A public business entity that is not an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2020. All other entities, including not-for-profit entities that are adopting the amendments in this Update should do so for their annual or any interim

39

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

goodwill impairment tests in fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20). The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) , which affects any entity that changes the terms or conditions of a share-based payment award. This Update amends the definition of modification by qualifying that modification accounting does not apply to changes to outstanding share-based payment awards that do not affect the total fair value, vesting requirements, or equity/liability classification of the awards. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivative and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down-round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down-round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down-round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down-round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down- round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options ), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Accounting Standards Codification, to a scope exception. Those amendments do not have an accounting effect.

40

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part I of this Update should be applied either retrospectively to outstanding financial instruments with a down-round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective or retrospectively to outstanding financial instruments with a down-round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 850), the objective of which is to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition, the amendments in this Update make certain targeted improvements to simplify the application and disclosure of the hedge accounting guidance in current general accepted accounting principles.  For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Early application is permitted in any period after issuance.  For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this Update. The amended presentation and disclosure guidance is required only prospectively.  The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.  The SEC Observer said that the SEC staff would not object if entities that are considered public business entities only because their financial statements or financial information is required to be included in another entity’s SEC filing use the effective dates for private companies when they adopt ASC 606, Revenue from Contracts with Customers, and ASC 842, Leases. The Update also supersedes certain SEC paragraphs in the Codification related to previous SEC staff announcements and moves other paragraphs, upon adoption of ASC 606 or ASC 842.  This Update is not expected to have a significant impact on the Company’s financial statements.

In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842), which provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date the entity adopts Topic 842; otherwise, an entity should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. The effective date and transition

41

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

requirements for the amendments are the same as the effective date and transition requirements in ASU 2016-02. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220).  On December 22, 2017, the U.S. federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (Tax Cuts and Jobs Act), which requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws.  The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.  The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted.  The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized.  The Company has elected to early adopt this standard as of December 31, 2017, which resulted in a one-time cumulative effect adjustment of $199 between retained earnings and accumulated other comprehensive income on the Consolidated Balance Sheet.  The adjustment had no impact on net income or any prior periods presented.

NOTE 2 - MERGER

On March 6, 2015, CBI completed the acquisition by merger of TCNB Financial Corp. (“TCNB”) in an all-cash transaction for aggregate consideration of $17,226, or $23.50 per share of TCNB stock. The Company and TCNB had first announced that they had entered into an agreement to merge in September of 2014. Immediately following the merger, TCNB’s banking subsidiary, The Citizens National Bank of Southwestern Ohio, was merged into CBI’s banking subsidiary, Civista Bank.

At the time of the merger, TCNB had total assets of $97,479, including $76,771 in loans, and $86,708 in deposits. The transaction was recorded as a purchase and, accordingly, the operating results of TCNB have been included in the Company’s Consolidated Financial Statements since the close of business on March 6, 2015. The aggregate of the purchase price over the fair value of the net assets acquired of approximately $5,375 was recorded as goodwill and will be evaluated for impairment on an annual basis.

Merger-related costs were $391 as of December 31, 2015. These costs were primarily included in salaries, wages and benefits, contracted data processing and professional services on the Consolidated Statements of Operations.

The following table presents financial information for the former TCNB included in the Consolidated Statements of Operations from the date of acquisition through December 31, 2015.

	Actual From Acquisition Date Through December 31, 2015 (in thousands)
Net interest income after provision for loan losses	$	3,155
Noninterest income		138
Net income		1,282

42

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 2 – MERGER (Continued)

The following table presents unaudited pro forma information for the periods ended December 31, 2017, 2016 and 2015 as if the acquisition of TCNB had occurred on January 1, 2015. This table has been prepared for comparative purposes only and is not indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results.

	Pro Formas (unaudited) Twelve months ended December 31,
	2017		2016		2015
Net interest income after provision for loan losses	$	54,456	$	51,389	$	46,852
Noninterest income		16,334		16,132		14,699
Net income		15,769		16,949		11,931
Pro forma earnings per share:
Basic	$	1.47	$	1.93	$	1.32
Diluted	$	1.28	$	1.55	$	1.09

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for TCNB. Core deposit intangibles will be amortized over periods of between five and ten years using an accelerated method. Goodwill will not be amortized, but instead will be evaluated for impairment.

	At March 6, 2015
Total purchase price	$	17,226
Net assets acquired:
Cash and short-term investments		18,152
Loans, net		76,444
Other securities		716
Premises and equipment		1,738
Accrued interest receivable		194
Core deposit intangible		1,009
Other assets		472
Noninterest-bearing deposits		(18,263	)
Interest-bearing deposits		(68,606	)
Other liabilities		(5	)
		11,851
Goodwill	$	5,375

The assets and liabilities acquired in the TCNB merger were measured at fair value. Management made certain estimates and exercised judgment in accounting for the acquisition. The following is a description of the methods used to determine fair value of significant assets and liabilities at the acquisition date:

Cash and short-term investments: The Company acquired $18.2 million in cash and short-term investments, which management deemed to reflect fair value based on the short term nature of the asset.

Loans: The Company acquired $76.4 million in loans receivable with and without evidence of credit quality deterioration. The loans consisted of Commercial loans, Commercial Real Estate loans, and Residential Real Estate loans including home equity secured lines of credit, as well as Real Estate Construction, Farm Real Estate loans and

43

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 2 – MERGER (Continued)

Consumer and other loans. The fair value of the performing loan portfolio includes separate adjustments to reflect a credit risk and marketability component and a yield component reflecting the differential between portfolio and market yields. Additionally, certain loans were valued based on their observable sales price. Loans acquired with credit deterioration of $831 were individually evaluated to estimate credit losses and a net recovery amount for each loan. The net cash flows for each loan were then discounted to present value using a risk-adjusted market rate.

Deposits: The Company acquired $86.9 million in deposits. Savings and transaction accounts are variable, have no stated maturity and can be withdrawn on short notice with no penalty. Therefore, the fair value of such deposits is considered equal to the carrying value. The fair value of CD’s is determined by comparing the contractual cost of the CD’s to the market rates with corresponding maturities. The valuation adjustment reflects the present value of the difference between the cash flows attributable to the CD’s based on contractual and market rates. The core deposit intangible is determined by the present value difference of the net cost of the core deposit versus the same amount for an alternative funding source.

44

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 3 - SECURITIES

The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive loss were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2017
U.S. Treasury securities and obligations of    U.S.government agencies	$	30,450	$	100	$	(192	)	$	30,357
Obligations of states and political subdivisions		114,002		4,226		(172	)		118,056
Mortgage-back securities in government sponsored    entities		82,098		408		(690	)		81,817
Total debt securities		226,550		4,734		(1,054	)		230,230
Equity securities in financial institutions		481		351		—			832
Total	$	227,031	$	5,085	$	(1,054	)	$	231,062

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2016
U.S. Treasury securities and obligations of    U.S.government agencies	$	37,406	$	117	$	(77	)	$	37,446
Obligations of states and political subdivisions		92,177		3,395		(574	)		94,998
Mortgage-back securities in government sponsored    entities		62,756		483		(597	)		62,642
Total debt securities		192,339		3,995		(1,248	)		195,086
Equity securities in financial institutions		481		297		—			778
Total	$	192,820	$	4,292	$	(1,248	)	$	195,864

The amortized cost and fair value of securities at year end 2017 by contractual maturity were as follows. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

	Available for sale
	Amortized Cost		Fair Value
Due in one year or less	$	8,787	$	8,765
Due from one to five years		27,662		27,691
Due from five to ten years		30,167		31,622
Due after ten years		77,836		80,335
Mortgage-backed securities in government sponsored    entities		82,098		81,817
Equity securities in financial institutions		481		832
Total	$	227,031	$	231,062

45

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 3 – SECURITIES (Continued)

Securities with a carrying value of $122,862 and $139,179 were pledged as of December 31, 2017 and 2016, respectively, to secure public deposits, other deposits and liabilities as required or permitted by law.

Proceeds from sales of securities, gross realized gains and gross realized losses were as follows:

	2017		2016		2015
Sale proceeds	$	953	$	4,349	$	—
Gross realized gains		—		18		—
Gross realized losses		—		—		—
Gains (losses) from securities called or settled by the    issuer		12		1		(18	)

Debt securities with unrealized losses at year end 2017 and 2016 not recognized in income are as follows:

2017	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury securities and obligations of    U.S. government agencies	$	20,449	$	(100	)	$	6,617	$	(92	)	$	27,066	$	(192	)
Obligations of states and political subdivisions		4,057		(41	)		7,309		(131	)		11,366		(172	)
Mortgage-backed securities in gov’t sponsored    entities		29,534		(195	)		22,199		(495	)		51,733		(690	)
Total temporarily impaired	$	54,040	$	(336	)	$	36,125	$	(718	)	$	90,165	$	(1,054	)

2016	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury securities and obligations of    U.S. government agencies	$	13,271	$	(61	)	$	893	$	(16	)	$	14,164	$	(77	)
Obligations of states and political subdivisions		17,167		(558	)		519		(16	)		17,686		(574	)
Mortgage-backed securities in gov’t sponsored    entities		35,453		(566	)		2,849		(31	)		38,302		(597	)
Total temporarily impaired	$	65,891	$	(1,185	)	$	4,261	$	(63	)	$	70,152	$	(1,248	)

The Company periodically evaluates securities for other-than-temporary impairment. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses that are determined to be temporary in nature are recorded, net of tax, in accumulated other comprehensive loss on the Consolidated Balance Sheet.

The Company has assessed each available-for-sale security position for credit impairment. Factors considered in determining whether a loss is temporary include:

• The length of time and the extent to which fair value has been below cost;

• The severity of impairment;

• The cause of the impairment and the financial condition and near-term prospects of the issuer;

46

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 3 – SECURITIES (Continued)

• If the Company intends to sell the investment;

• If it’s more-likely-than-not the Company will be required to sell the investment before recovering its amortized cost basis; and

• If the Company does not expect to recover the investment’s entire amortized cost basis (even if the Company does not intend to sell the investment).

The Company’s review for impairment generally entails:

• Identification and evaluation of investments that have indications of impairment;

• Analysis of individual investments that have fair values less than amortized cost, including consideration of length of time each investment has been in unrealized loss position and the expected recovery period;

• Evaluation of factors or triggers that could cause individual investments to qualify as having other-than-temporary impairment; and

• Documentation of these analyses, as required by policy.

At December 31, 2017, the Company owned 78 securities that were considered temporarily impaired. The unrealized losses on these securities have not been recognized into income because the issuers’ bonds are of high credit quality, management has the intent and ability to hold these securities for the foreseeable future, and the decline in fair value is largely due to changes in market interest rates. The Company also considers sector specific credit rating changes in its analysis. The fair value is expected to recover as the securities approach their maturity date or reset date. The Company does not intend to sell until recovery and does not believe selling will be required before recovery.

NOTE 4 - LOANS

Loans at year-end were as follows:

	2017			2016
Commercial and Agriculture	$	152,473		$	135,462
Commercial Real Estate - owner occupied		164,099			161,364
Commercial Real Estate - non-owner occupied		425,623			395,931
Residential Real Estate		268,735			247,308
Real Estate Construction		97,531			56,293
Farm Real Estate		39,461			41,170
Consumer and Other		16,739			17,978
Total Loans		1,164,661			1,055,506
Allowance for loan losses		(13,134	)		(13,305	)
Net loans	$	1,151,527		$	1,042,201

Included in total loans above are deferred loan fees of $223 at December 31, 2017 and deferred loan costs of $94 at December 31, 2016.

47

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 4 – LOANS (Continued)

Loans to principal officers, directors, and their affiliates at year-end 2017 and 2016 were as follows:

	2017			2016
Balance - Beginning of year	$	14,389		$	15,147
New loans and advances		2,344			850
Repayments		(1,256	)		(1,575	)
Effect of changes to related parties		(1,475	)		(33	)
Balance - End of year	$	14,002		$	14,389

NOTE 5 - ALLOWANCE FOR LOAN LOSSES

Management has an established methodology to determine the adequacy of the allowance for loan losses that assesses the risks and losses inherent in the loan portfolio. For purposes of determining the allowance for loan losses, the Company has segmented certain loans in the portfolio by product type. Loans are segmented into the following pools: Commercial and Agriculture loans, Commercial Real Estate – Owner Occupied loans, Commercial Real Estate – Non-owner Occupied loans, Residential Real Estate loans, Real Estate Construction loans, Farm Real Estate loans and Consumer and Other loans. Loss migration rates for each risk category are calculated and used as the basis for calculating loan loss allowance allocations. Loss migration rates are calculated over a three-year period for all portfolio segments. Management also considers certain economic factors for trends that management uses to account for the qualitative and environmental changes in risk, which affects the level of the reserve. The following economic factors are analyzed:

• Changes in lending policies and procedures

• Changes in experience and depth of lending and management staff

• Changes in quality of credit review system

• Changes in the nature and volume of the loan portfolio

• Changes in past due, classified and nonaccrual loans and TDRs

• Changes in economic and business conditions

• Changes in competition or legal and regulatory requirements

• Changes in concentrations within the loan portfolio

• Changes in the underlying collateral for collateral dependent loans

The total allowance reflects management’s estimate of loan losses inherent in the loan portfolio at the consolidated balance sheet date. The Company considers the allowance for loan losses of $13,134 adequate to cover loan losses inherent in the loan portfolio, at December 31, 2017. The following tables present, by portfolio segment, the changes in the allowance for loan losses, the ending allocation of the allowance for loan losses and the loan balances outstanding for the years ended December 31, 2017, 2016 and 2015. The changes can be impacted by overall loan volume, adversely graded loans, historical charge-offs and economic factors.

48

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Allowance for loan losses:

December 31, 2017	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	2,018	$	(11	)	$	372	$	(817	)	$	1,562
Commercial Real Estate:
Owner Occupied		2,171		(328	)		69		131			2,043
Non-Owner Occupied		4,606		(38	)		46		693			5,307
Residential Real Estate		3,089		(400	)		194		(973	)		1,910
Real Estate Construction		420		—			44		370			834
Farm Real Estate		442		—			3		(15	)		430
Consumer and Other		314		(165	)		43		98			290
Unallocated		245		—			—		513			758
Total	$	13,305	$	(942	)	$	771	$	—		$	13,134

For the year ended December 31, 2017, the allowance for Commercial & Agriculture loans was reduced by a decrease in general reserves as a result of lower loss rates. The result was represented as a decrease in the provision. The allowance for Commercial Real Estate – Owner Occupied loans was reduced by a decrease in general reserves and charge-offs. The allowance for Commercial Real Estate – Non-Owner Occupied loans increased due to an increase in general reserves required for this type as a result of higher loan balances.  The allowance for Residential Real Estate loans was reduced by a decrease in general reserves required for this type as a result of a decrease in loss rates, represented by a decrease in the provision. The allowance for Real Estate Construction loans increased due to higher outstanding loan balances for this type of loan. The allowance for Farm Real Estate loans was reduced by a decrease in general reserves required for this type as a result of lower outstanding loan balances. The result was represented as a decrease in the provision. Management feels that the unallocated amount is appropriate and within the relevant range for the allowance that is reflective of the risk in the portfolio.

49

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Allowance for loan losses:

December 31, 2016	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	1,478	$	(880	)	$	105	$	1,315		$	2,018
Commercial Real Estate:
Owner Occupied		2,467		(228	)		56		(124	)		2,171
Non-Owner Occupied		4,657		(23	)		1,372		(1,400	)		4,606
Residential Real Estate		4,086		(455	)		479		(1,021	)		3,089
Real Estate Construction		371		(115	)		12		152			420
Farm Real Estate		538		—			—		(96	)		442
Consumer and Other		382		(125	)		46		11			314
Unallocated		382		—			—		(137	)		245
Total	$	14,361	$	(1,826	)	$	2,070	$	(1,300	)	$	13,305

For the year ended December 31, 2016, the increase in allowance for Commercial & Agriculture loans was due to an increase in general reserves as a result of higher balances and higher loss rates in criticized loans. The result was represented as an increase in the provision. The allowance for Commercial Real Estate – Owner Occupied loans was reduced not only by a decrease in specific reserves required for this type, but also by a decrease in general reserves due to decreases in classified, non-accrual loans and lower loss rates for this type. The result of these changes was represented as a decrease in the provision. The decrease in allowance for Commercial Real Estate – Non-Owner Occupied loans was the result of a decrease in general reserves required as a result of lower loss rates and improvement in past due, classified and non-accrual loans for this type. In addition, a payoff on a previously charged down loan was received resulting in a recovery of approximately $1,303. The net result was represented as a decrease in the provision. The allowance for Residential Real Estate loans was reduced by a decrease in general reserves required for this type as a result of a decrease in loss rates, represented by a decrease in the provision. The allowance for Real Estate Construction loans increased due to an increase in loss rates for this type of loan, which was represented as an increase in the provision. The allowance for Farm Real Estate loans was reduced by a decrease in general reserves required for this type as a result of lower outstanding loan balances and a decrease in loss rates. The result of these changes was represented as a decrease in the provision. Management feels that the unallocated amount is appropriate and within the relevant range for the allowance that is reflective of the risk in the portfolio.

50

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Allowance for loan losses:

December 31, 2015	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	1,819	$	(190	)	$	182	$	(333	)	$	1,478
Commercial Real Estate:
Owner Occupied		2,221		(523	)		187		582			2,467
Non-Owner Occupied		4,334		(81	)		115		289			4,657
Residential Real Estate		3,747		(1,135	)		331		1,143			4,086
Real Estate Construction		428		—			5		(62	)		371
Farm Real Estate		822		—			76		(360	)		538
Consumer and Other		200		(120	)		46		256			382
Unallocated		697		—			—		(315	)		382
Total	$	14,268	$	(2,049	)	$	942	$	1,200		$	14,361

For the year ended December 31, 2015, the allowance for Commercial and Agriculture loans was reduced due to decreases in specific reserves for impaired loans of $625. The decrease in specific reserves for impaired loans was primarily the result of the resolution of an impaired loan. The Company did not incur losses with this resolution. The result was represented as a decrease in the provision. The increase in the allowance for Commercial Real Estate—Owner Occupied loans was the result of an increase in loss migration rates, which is attributable to the change in the lookback period to a three-year period. The increase in the allowance for Commercial Real Estate – Non–Owner Occupied loans was the result of an increase in loss migration rates, which is attributable to the change in the lookback period to a three-year period. The ending reserve balance for Residential Real Estate loans increased from the end of the previous year due to an increase in loss migration rates, which is attributable to the change in the look-back period to a three-year period. The allowance for Real Estate Construction loans decreased as a result of decreasing loan balances. The allowance for Farm Real Estate loans decreased as a result of decreasing loan balances and loss rates offset by an increase in classified loans. The increase in the allowance for Consumer and other loans increased due to an increase in loss rates, which is attributable to the change in the look-back period. Unallocated reserves declined due to a change in the Company’s lookback period. As described above, the Company changed from a two-year lookback period to a three-year lookback period when calculating all but one segment’s loss migration rates during the third quarter of 2015. The change in methodology resulted in a decline in the unallocated balance with corresponding increase in allocated balances within the reserve calculation. While loan balances were up, loss rates continued to trend downward, exclusive of the change in methodology, resulting in a lower allowance balance. While criticized loans increased slightly, we saw significant improvement in nonperforming loan balances resulting in a decline in specific reserves for impaired loans. As of December 31, 2015, management felt that the unallocated amount was appropriate and within the relevant range for the allowance that was reflective of the risk in the portfolio.

51

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

The following tables present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of December 31, 2017 and December 31, 2016.

December 31, 2017	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	82	$	4	$	1,476	$	1,562
Commercial Real Estate:
Owner Occupied		—		6		2,037		2,043
Non-Owner Occupied		—		—		5,307		5,307
Residential Real Estate		44		109		1,757		1,910
Real Estate Construction		—		—		834		834
Farm Real Estate		—		6		424		430
Consumer and Other		—		—		290		290
Unallocated		—		—		758		758
Total	$	126	$	125	$	12,883	$	13,134
Outstanding loan balances:
Commercial & Agriculture	$	87	$	438	$	151,948	$	152,473
Commercial Real Estate:
Owner Occupied		—		1,010		163,089		164,099
Non-Owner Occupied		—		44		425,579		425,623
Residential Real Estate		128		1,360		267,247		268,735
Real Estate Construction		—		—		97,531		97,531
Farm Real Estate		—		608		38,853		39,461
Consumer and Other		—		—		16,739		16,739
Total	$	215	$	3,460	$	1,160,986	$	1,164,661

52

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

December 31, 2016	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	86	$	82	$	1,850	$	2,018
Commercial Real Estate:
Owner Occupied		—		4		2,167		2,171
Non-Owner Occupied		—		—		4,606		4,606
Residential Real Estate		89		102		2,898		3,089
Real Estate Construction		—		—		420		420
Farm Real Estate		—		—		442		442
Consumer and Other		—		—		314		314
Unallocated		—		—		245		245
Total	$	175	$	188	$	12,942	$	13,305
Outstanding loan balances:
Commercial & Agriculture	$	88	$	1,983	$	133,391	$	135,462
Commercial Real Estate:
Owner Occupied		—		1,896		159,468		161,364
Non-Owner Occupied		—		359		395,572		395,931
Residential Real Estate		168		1,686		245,454		247,308
Real Estate Construction		—		—		56,293		56,293
Farm Real Estate		—		614		40,556		41,170
Consumer and Other		—		1		17,977		17,978
Total	$	256	$	6,539	$	1,048,711	$	1,055,506

The following tables represent credit exposures by internally assigned risk ratings for the periods ended December 31, 2017 and 2016. The remaining loans in the Residential Real Estate, Real Estate Construction and Consumer and Other loan categories that are not assigned a risk grade are presented in a separate table below. The risk rating analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all. The Company’s internal credit risk rating system is based on experiences with similarly graded loans.

The Company’s internally assigned grades are as follows:

• Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

• Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

• Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that Civista will sustain some loss if the deficiencies are not corrected.

• Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

53

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

• Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

• Unrated – Generally, Residential Real Estate, Real Estate Construction and Consumer and Other loans are not risk-graded, except when collateral is used for a business purpose.

December 31, 2017	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	140,842	$	8,412	$	3,219	$	—	$	152,473
Commercial Real Estate:
Owner Occupied		155,756		1,166		7,177		—		164,099
Non-Owner Occupied		422,363		2,321		939		—		425,623
Residential Real Estate		62,628		1,997		5,873		—		70,498
Real Estate Construction		91,545		15		27		—		91,587
Farm Real Estate		25,228		11,236		2,997		—		39,461
Consumer and Other		1,312		—		70		—		1,382
Total	$	899,674	$	25,147	$	20,302	$	—	$	945,123

December 31, 2016	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	127,867	$	4,300	$	3,295	$	—	$	135,462
Commercial Real Estate:
Owner Occupied		151,659		4,016		5,689		—		161,364
Non-Owner Occupied		393,592		1,676		663		—		395,931
Residential Real Estate		59,015		1,661		6,911		—		67,587
Real Estate Construction		50,678		16		27		—		50,721
Farm Real Estate		31,814		5,673		3,683		—		41,170
Consumer and Other		2,135		—		109		—		2,244
Total	$	816,760	$	17,342	$	20,377	$	—	$	854,479

54

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

The following tables present performing and nonperforming loans based solely on payment activity for the years ended December 31, 2017 and December 31, 2016 that have not been assigned an internal risk grade. The types of loans presented here are not assigned a risk grade unless there is evidence of a problem. Payment activity is reviewed by management on a monthly basis to evaluate performance. Loans are considered to be nonperforming when they become 90 days past due or if management thinks that we may not collect all of our principal and interest. Nonperforming loans also include certain loans that have been modified in Troubled Debt Restructurings (TDRs) where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions due to economic status. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months.

December 31, 2017	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	198,237	$	5,944	$	15,341	$	219,522
Nonperforming		—		—		16		16
Total	$	198,237	$	5,944	$	15,357	$	219,538

December 31, 2016	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	179,721	$	5,572	$	15,725	$	201,018
Nonperforming		—		—		9		9
Total	$	179,721	$	5,572	$	15,734	$	201,027

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of December 31, 2017 and 2016.

December 31, 2017	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	575	$	2	$	685	$	1,262	$	151,124	$	87	$	152,473	$	—
Commercial Real Estate:
Owner Occupied		897		104		484		1,485		162,614		—		164,099		—
Non-Owner Occupied		133		—		470		603		425,020		—		425,623		—
Residential Real Estate		1,613		229		785		2,627		265,980		128		268,735		—
Real Estate Construction		—		—		27		27		97,504		—		97,531		—
Farm Real Estate		27		—		186		213		39,248		—		39,461		—
Consumer and Other		92		96		16		204		16,535		—		16,739		16
Total	$	3,337	$	431	$	2,653	$	6,421	$	1,158,025	$	215	$	1,164,661	$	16

55

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

December 31, 2016	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	156	$	20	$	152	$	328	$	135,046	$	88	$	135,462	$	—
Commercial Real Estate:
Owner Occupied		722		553		280		1,555		159,809		—		161,364		—
Non-Owner Occupied		147		—		316		463		395,468		—		395,931		—
Residential Real Estate		1,812		507		1,049		3,368		243,772		168		247,308		—
Real Estate Construction		—		—		27		27		56,266		—		56,293		—
Farm Real Estate		93		—		—		93		41,077		—		41,170		—
Consumer and Other		215		31		31		277		17,701		—		17,978		9
Total	$	3,145	$	1,111	$	1,855	$	6,111	$	1,049,139	$	256	$	1,055,506	$	9

The following table presents loans on nonaccrual status, excluding purchased credit-impaired (PCI) loans, as of December 31, 2017 and 2016.

	2017		2016
Commercial & Agriculture	$	887	$	1,622
Commercial Real Estate:
Owner Occupied		1,476		1,461
Non-Owner Occupied		711		464
Residential Real Estate		2,778		3,266
Real Estate Construction		27		27
Farm Real Estate		186		2
Consumer and Other		67		101
Total	$	6,132	$	6,943

Nonaccrual Loans: Loans are considered for nonaccrual status upon reaching 90 days delinquency, unless the loan is well secured and in the process of collection, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans. When a loan is placed on nonaccrual status, previously accrued but unpaid interest is deducted from interest income. A loan may be returned to accruing status only if one of three conditions are met: the loan is well-secured and none of the principal and interest has been past due for a minimum of 90 days; the loan is a TDR and the borrower has made a minimum of six months payments; or the principal and interest payments are reasonably assured and a sustained period of performance has occurred, generally six months. The gross interest income that would have been recorded on nonaccrual loans in 2017, 2016 and 2015 if the loans had been current in accordance with their original terms and had been outstanding throughout the period or since origination, if held for part of the period, was $712, $701 and $1,761, respectively. The amount of interest income on such loans recognized on a cash basis was $139 in 2017, $1,138 in 2016 and $766 in 2015.

56

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Modifications: A modification of a loan constitutes a TDR when the Company for economic or legal reasons related to a borrower’s financial difficulties grants a concession to the borrower that it would not otherwise consider. The Company offers various types of concessions when modifying a loan, however, forgiveness of principal is rarely granted. Commercial Real Estate loans modified in a TDR often involve reducing the interest rate lower than the current market rate for new debt with similar risk. Real Estate loans modified in a TDR were primarily comprised of interest rate reductions where monthly payments were lowered to accommodate the borrowers’ financial needs.

Loans modified in a TDR are typically already on non-accrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance. As a result, loans modified in a TDR may have the financial effect of increasing the specific allowance associated with the loan. An allowance for impaired loans that have been modified in a TDR are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates. TDRs accounted for $169 of the allowance for loan losses as of December 31, 2017, $278 as of December 31, 2016 and $286 as of December 31, 2015.

Loan modifications that are considered TDRs completed during the twelve month periods ended December 31, 2017, 2016 and 2015 were as follows:

	For the Twelve Month Period Ended December 31, 2017
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		1		13		13
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Consumer and Other		—		—		—
Total Loan Modifications		1	$	13	$	13

57

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

	For the Twelve Month Period Ended December 31, 2016
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		4	$	529	$	529
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		2		308		308
Real Estate Construction		—		—		—
Farm Real Estate		3		700		700
Consumer and Other		—		—		—
Total Loan Modifications		9	$	1,537	$	1,537

	For the Twelve Month Period Ended December 31, 2015
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		—		—		—
Real Estate Construction		1		41		41
Farm Real Estate		—		—		—
Consumer and Other		—		—		—
Total Loan Modifications		1	$	41	$	41

Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-accrual loan. Recidivism occurs at a notably higher rate than do defaults on new originations loans, so modified loans present a higher risk of loss than do new origination loans. During the periods ended December 31, 2017 and 2016, there were no defaults on loans that were modified and considered TDRs during the previous twelve months. During the twelve month period ended December 31, 2015, there was one default, totaling $107, on loans which were modified and considered TDRs during the previous twelve months.

58

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Impaired Loans: Larger (greater than $350) commercial loan, commercial real estate loan and farm real estate loan relationships, all TDRs and residential real estate and consumer loans that are part of a larger relationship are tested for impairment. These loans are analyzed to determine if it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance.

The following tables include the recorded investment and unpaid principal balances for impaired financing receivables, excluding PCI loans, with the associated allowance amount, if applicable, as of December 31, 2017 and 2016.

	December 31, 2017						December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial & Agriculture	$	—	$	—			$	1,230	$	1,751
Commercial Real Estate:
Owner Occupied		693		913				1,658		1,803
Non-Owner Occupied		44		48				359		386
Residential Real Estate		977		1,049				1,259		1,590
Farm Real Estate		148		148				614		614
Consumer and Other		—		—				1		1
Total		1,862		2,158				5,121		6,145
With an allowance recorded:
Commercial & Agriculture		438		438	$	4		753		1,303	$	82
Commercial Real Estate:
Owner Occupied		317		317		6		238		238		4
Non-Owner Occupied		—		—		—		—		—		—
Residential Real Estate		383		387		109		427		431		102
Farm Real Estate		460		460		6		—		—		—
Total		1,598		1,602		125		1,418		1,972		188
Total:
Commercial & Agriculture		438		438		4		1,983		3,054		82
Commercial Real Estate:
Owner Occupied		1,010		1,230		6		1,896		2,041		4
Non-Owner Occupied		44		48		—		359		386		—
Residential Real Estate		1,360		1,436		109		1,686		2,021		102
Farm Real Estate		608		608		6		614		614		—
Consumer and Other		—		—		—		1		1		—
Total	$	3,460	$	3,760	$	125	$	6,539	$	8,117	$	188

59

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

The following tables include the average recorded investment and interest income recognized for impaired financing receivables as of, and for the years ended, December 31, 2017, 2016 and 2015.

For the year ended:	December 31, 2017				December 31, 2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	1,375	$	34	$	2,036	$	40
Commercial Real Estate:
Owner Occupied		1,507		75		1,847		862
Non-Owner Occupied		233		6		1,039		83
Residential Real Estate		1,515		73		1,787		175
Real Estate Construction		—		—		—		1
Farm Real Estate		613		28		1,006		95
Consumer and Other		—		—		2		—
Total	$	5,243	$	216	$	7,717	$	1,256

For the year ended:	December 31, 2015
	Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	1,519	$	54
Commercial Real Estate:
Owner Occupied		2,738		139
Non-Owner Occupied		1,946		32
Residential Real Estate		2,544		103
Real Estate Construction		16		—
Farm Real Estate		653		56
Consumer and Other		4		—
Total	$	9,420	$	384

Foreclosed assets acquired in settlement of loans are carried at fair value less estimated costs to sell and are included in other assets on the Consolidated Balance Sheet. As of December 31, 2017 and 2016, a total of $16 and $37, respectively of foreclosed assets were included with other assets. As of December 31, 2017, included within the foreclosed assets is $16 of consumer residential mortgages that were foreclosed on or received via a deed in lieu transaction prior to the period end. As of December 31, 2017 and 2016, the Company had initiated formal foreclosure procedures on $239 and $710, respectively of consumer residential mortgages.

60

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Changes in the amortizable yield for PCI loans were as follows, since acquisition:

	At December 31, 2017			At December 31, 2016
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	49		$	80
Acquisition of PCI loans		—			—
Accretion		(34	)		(31	)
Balance at end of period	$	15		$	49

The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30:

	At December 31, 2017		At December 31, 2016
	Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)		Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)
	(In Thousands)
Outstanding balance	$	775	$	850
Carrying amount		215		256

There has been $126 and $175 in allowance for loan losses recorded for acquired loans with or without specific evidence of deterioration in credit quality as of December 31, 2017 and 2016, respectively.

61

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 6 - OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in each component of accumulated other comprehensive loss, net of tax, as of December 31, 2017, 2016 and 2015.

	For the Year Ended December 31, 2017									For the Year Ended December 31, 2016									For the Year Ended December 31, 2015
	Unrealized Gains and Losses on Available for Sale Securities			Defined Benefit Pension Items			Total			Unrealized Gains and Losses on Available for Sale Securities			Defined Benefit Pension Items			Total			Unrealized Gains and Losses on Available for Sale Securities			Defined Benefit Pension Items			Total
Beginning balance	$	2,008		$	(4,345	)	$	(2,337	)	$	3,554		$	(4,049	)	$	(495	)	$	3,730		$	(3,777	)	$	(47	)
Other comprehensive    income (loss) before    reclassifications		620			553			1,173			(1,533	)		(511	)		(2,044	)		(188	)		(449	)		(637	)
Amounts reclassified from    accumulated other    comprehensive loss		(8	)		247			239			(13	)		215			202			12			177			189
Net current-period other    comprehensive income    (loss)		612			800			1,412			(1,546	)		(296	)		(1,842	)		(176	)		(272	)		(448	)
Reclassification of certain income tax effects from accumulated other comprehensive loss		565			(764	)		(199	)		—			—			—			—			—			—
Ending balance	$	3,185		$	(4,309	)	$	(1,124	)	$	2,008		$	(4,345	)	$	(2,337	)	$	3,554		$	(4,049	)	$	(495	)

The following table presents the amounts reclassified out of each component of accumulated other comprehensive loss as of December 31, 2017, 2016 and 2015.

	Amount Reclassified from Accumulated Other Comprehensive Loss (a)
	For the year ended December 31,
Details about Accumulated Other Comprehensive Loss Components	2017				2016				2015				Affected Line Item in the Statement Where Net Income is Presented
Unrealized gains (losses) on available-for-sale    securities	$	12			$	19			$	(18	)		Net gain (loss) on sale of securities
Tax effect		(4	)			(6	)			6			Income taxes
		8				13				(12	)
Amortization of defined benefit pension items
Actuarial losses		(380	)	(b)		(326	)	(b)		(270	)	(b)	Salaries, wages and benefits
Tax effect		133				111				93			Income taxes
		(247	)			(215	)			(177	)
Total reclassifications for the period	$	(239	)		$	(202	)		$	(189	)

(a) Amounts in parentheses indicate expenses and other amounts indicate income.

(b) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost.

62

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 7 - PREMISES AND EQUIPMENT

Year-end premises and equipment were as follows:

	2017			2016
Land and improvements	$	5,022		$	5,094
Buildings and improvements		21,221			20,266
Furniture and equipment		17,004			16,070
Total		43,247			41,430
Accumulated depreciation		(25,636	)		(23,510	)
Premises and equipment, net	$	17,611		$	17,920

Depreciation expense was $1,249, $1,257 and $1,193 for 2017, 2016 and 2015, respectively.

Rent expense was $580, $540 and $506 for 2017, 2016 and 2015, respectively. Rent commitments under non-cancelable operating leases at December 31, 2017 were as follows, before considering renewal options that generally are present.

2018	$	571
2019		479
2020		226
2021		91
2022		36
Total	$	1,403

The rent commitments listed above are primarily for the leasing of seven financial services branches.

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS

There has been no change in the carrying amount of goodwill of $27,095 for the years ended December 31, 2017 and December 31, 2016.

Management performs an evaluation of goodwill for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Management performed an evaluation of the Company’s goodwill during the fourth quarter of 2017. Based on this test, management concluded that the Company’s goodwill was not impaired at December 31, 2017.

63

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS (Continued)

Acquired intangible assets were as follows as of year end.

	2017						2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets(1):
MSRs	$	1,065	$	322	$	743	$	912	$	250	$	662
Core deposit intangibles		7,274		6,738		536		7,274		6,152		1,122
Total amortized intangible assets	$	8,339	$	7,060	$	1,279	$	8,186	$	6,402	$	1,784

(1) Excludes fully amortized intangible assets

Aggregate core deposit intangible amortization expense was $586, $699 and $711 for 2017, 2016 and 2015, respectively.

Aggregate mortgage servicing rights amortization was $72, $74 and $29 for 2017, 2016 and 2015, respectively.

Estimated amortization expense for each of the next five years and thereafter is as follows:

	MSRs		Core deposit intangibles		Total
2018	$	41	$	111	$	152
2019		41		88		129
2020		41		71		112
2021		41		68		109
2022		41		68		109
Thereafter		538		130		668
	$	743	$	536	$	1,279

NOTE 9 - INTEREST-BEARING DEPOSITS

Interest-bearing deposits as of December 31, 2017 and 2016 were as follows:

	2017		2016
Demand	$	183,680	$	183,759
Statement and Passbook Savings		435,377		384,330
Certificates of Deposit:
$250 and over		8,206		13,640
Other		192,455		168,723
Individual Retirement Accounts		23,241		25,063
Total	$	842,959	$	775,515

64

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 9 - INTEREST-BEARING DEPOSITS (Continued)

Scheduled maturities of certificates of deposit, including IRA’s at December 31, 2017 were as follows:

2018	$	161,656
2019		41,926
2020		15,459
2021		3,382
2022		1,202
Thereafter		277
Total	$	223,902

Deposits from the Company’s principal officers, directors, and their affiliates at year-end 2017 and 2016 were $9,633 and $9,209, respectively.

As of December 31, 2017, CDs and IRAs totaling $9,141 met or exceeded the FDIC’s insurance limit of $250,000.

NOTE 10 - SHORT-TERM BORROWINGS

Short-term borrowings, which consist of federal funds purchased and other short-term borrowings are summarized as follows:

	At December 31, 2017						At December 31, 2016
	Federal Funds Purchased			Short-term Borrowings			Federal Funds Purchased			Short-term Borrowings
Outstanding balance at year end	$	—		$	56,900		$	—		$	31,000
Maximum indebtedness during the year		20,000			115,050			20,000			70,400
Average balance during the year		119			38,825			116			10,483
Average rate paid during the year		1.68	%		1.12	%		0.86	%		0.42	%
Interest rate on year end balance		—			1.42	%		—			0.64	%

	At December 31, 2015
	Federal Funds Purchased			Short-term Borrowings
Outstanding balance at year end	$	—		$	53,700
Maximum indebtedness during the year		—			64,700
Average balance during the year		69			26,880
Average rate paid during the year		0.53	%		0.20	%
Interest rate on year end balance		—			0.35	%

Average balance during the year represent daily averages. Average interest rates represent interest expense divided by the related average balances.

These borrowing transactions can range from overnight to six months in maturity. The average maturity was one day at December 31, 2017, 2016 and 2015.

NOTE 11 - FEDERAL HOME LOAN BANK ADVANCES

Long term advances from the FHLB were $15,000 at December 31, 2017 and $17,500 at December 31, 2016. Outstanding balances have maturity dates ranging from February 2018 to October 2019 and fixed rates ranging from 1.50% to 2.10%. The average rate on outstanding advances was 1.70% at December 31, 2017.

65

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 11 - FEDERAL HOME LOAN BANK ADVANCES (Continued)

Scheduled principal reductions of FHLB advances outstanding at December 31, 2017 were as follows:

2018	$	10,000
2019		5,000
Total	$	15,000

In addition to the borrowings, the Company had outstanding letters of credit with the FHLB totaling $19,600 at year-end 2017 and 2016, respectively used for pledging to secure public funds. FHLB borrowings and the letters of credit were collateralized by FHLB stock and by $137,250 and $102,150 of residential mortgage loans under a blanket lien arrangement at year-end 2017 and 2016, respectively.

The Company had a FHLB maximum borrowing capacity of $366,122 as of December 31, 2017, with remaining borrowing capacity of approximately $274,622. The borrowing arrangement with the FHLB is subject to annual renewal. The maximum borrowing capacity is recalculated at least quarterly.

NOTE 12 - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase are used to facilitate the needs of our customers as well as to facilitate our short-term funding needs. Securities sold under repurchase agreements are carried at the amount of cash received in association with the agreement. We continuously monitor the collateral levels and may be required, from time to time, to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents.

The following table presents detail regarding the securities pledged as collateral under repurchase agreements as of December 31, 2017 and 2016. All of the repurchase agreements are overnight agreements.

	December 31, 2017		December 31, 2016
Securities pledged for repurchase agreements:
U.S. Treasury securities	$	874	$	1,761
Obligations of U.S. government agencies		20,881		27,164
Total securities pledged	$	21,755	$	28,925
Gross amount of recognized liabilities for    repurchase agreements	$	21,755	$	28,925
Amounts related to agreements not included in    offsetting disclosures above	$	—	$	—

Information concerning securities sold under agreements to repurchase was as follows:

	2017			2016			2015
Outstanding balance at year end	$	21,755		$	28,925		$	25,040
Average balance during the year		18,234			21,767			20,086
Average interest rate during the year		0.10	%		0.10	%		0.10	%
Maximum month-end balance during the year	$	23,889		$	28,925		$	25,040
Weighted average interest rate at year end		0.10	%		0.10	%		0.10	%

66

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 13 - SUBORDINATED DEBENTURES

Trusts formed by the Company issued floating rate trust preferred securities, in the amounts of $5,000 and $7,500, through special purpose entities as part of pooled offerings of such securities. The Company issued subordinated debentures to the trusts in exchange for the proceeds of the offerings, which debentures represent the sole assets of the trusts. The Company may redeem the subordinated debentures, in whole but not in part, at face value. In April 2007, the Company elected to redeem and refinance the $5,000 floating rate subordinated debenture. The refinancing was done at face value and resulted in a 2.00% reduction in the floating rate. The new subordinated debenture has a 30-year maturity and is redeemable, in whole or in part, anytime without penalty. The replacement subordinated debenture does not have any deferred issuance cost associated with it. The interest rate at December 31, 2017 on the $7,500 debenture was 4.48% and the $5,000 debenture was 2.92%.

Additionally, the Company formed an additional trust that issued $12,500 of 6.05% fixed rate trust preferred securities for five years, then becoming floating rate trust preferred securities, through a special purpose entity as part of a pooled offering of such securities. The Company issued subordinated debentures to the trusts in exchange for the proceeds of the offerings, which debentures represent the sole assets of the trusts. The Company may redeem the subordinated debentures at face value without penalty. The current rate on the $12,500 subordinated debenture is 3.58%.

Finally, the Company acquired two additional trust preferred securities as part of its acquisition of Futura Banc Corp (Futura) in December 2007. Futura TPF Trust I and Futura TPF Trust II were formed in June of 2005 in the amounts of $2,500 and $1,927, respectively. Futura had issued subordinated debentures to the trusts in exchange for ownership of all of the common security of the trusts and the proceeds of the preferred securities sold by the trusts. The Company may redeem the subordinated debentures, in whole or in part, in a principal amount with integral multiples of $1,000, at 100% of the principal amount, plus accrued and unpaid interest. The subordinated debentures mature on June 15, 2035. The subordinated debentures are also redeemable in whole or in part from time to time, upon the occurrence of specific events defined within the trust indenture. The current rate on the $2,500 subordinated debenture is variable at 2.98%. In June 2010, the rate on the $1,927 subordinated debenture switched from a fixed rate to a floating rate. The current rate on the $1,927 subordinated debenture is 2.98%.

NOTE 14 - INCOME TAXES

Income taxes were as follows for the years ended December 31:

	2017		2016		2015
Current	$	5,414	$	6,449	$	5,191
Deferred		435		170		(410	)
Change in corporate tax rate		511		—		—
Income taxes	$	6,360	$	6,619	$	4,781

Effective tax rates differ from the statutory federal income tax rate of 35% in 2017 and 2016 and 34% in 2015 due to the following:

	2017			2016			2015
Income taxes computed at the statutory federal tax    rate	$	7,781		$	8,343		$	5,959
Add (subtract) tax effect of:
Nontaxable interest income, net of nondeductible    interest expense		(1,107	)		(946	)		(900	)
Low income housing tax credit		(686	)		(435	)		(303	)
Cash surrender value of BOLI		(201	)		(197	)		(159	)
Change in corporate tax rate		511			—			—
Other		62			(146	)		184
Income tax expense	$	6,360		$	6,619		$	4,781

67

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 14 - INCOME TAXES (Continued)

The Tax Cut and Jobs Act, enacted on December 22, 2017, lowered the federal corporate income tax rate from 35% to 21% effective January 1, 2018.  As a result, the carrying value of net deferred tax assets was reduced, which increased income tax expense by $511.

Year-end deferred tax assets and liabilities were due to the following:

	2017			2016
Deferred tax assets
Allowance for loan losses	$	2,848		$	4,640
Deferred compensation		1,213			1,762
Intangible assets		95			187
Pension costs		—			277
Other		141			102
Deferred tax asset		4,297			6,968
Deferred tax liabilities
Tax depreciation in excess of book depreciation		(275	)		(97	)
Discount accretion on securities		(43	)		(58	)
Purchase accounting adjustments		(536	)		(1,091	)
FHLB stock dividends		(1,053	)		(1,705	)
Unrealized gain on securities available for sale		(847	)		(1,035	)
Pension costs		(293	)		—
Prepaids		(320	)		—
Other		(166	)		(256	)
Deferred tax liability		(3,533	)		(4,242	)
Net deferred tax asset	$	764		$	2,726

No valuation allowance was established at December 31, 2017 and 2016, due to the Company’s ability to carryback to taxes paid in previous years and certain tax strategies, coupled with the anticipated future income as evidenced by the Company’s earning potential.

The Company and its subsidiaries are subject to U.S. federal income tax. The Company is subject to tax in Ohio based upon its net worth.

There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. The Company’s federal tax returns for taxable years through 2012 have been closed for purposes of examination by the Internal Revenue Service.

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 $805, $734 and $667 in 2017, 2016 and 2015, 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.

68

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 15 - RETIREMENT PLANS (Continued)

In October 2015, the Company, on behalf of it and its subsidiaries, entered into Pension Shortfall Agreements (the “Shortfall Agreements”) with ten employees of the Bank. 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 $18 in 2017, $201 in 2016 and $364 in 2015. Included in pension shortfall expense was interest expense, totaling $18, $11 and $10 in 2017, 2016 and 2015, respectively, which was also recorded in and credited to the accounts of the ten individuals covered by this plan.

Information about the pension plan is as follows:

	2017			2016
Change in benefit obligation:
Beginning benefit obligation	$	16,964		$	16,328
Service cost		—			—
Interest cost		679			689
Curtailment gain		—			—
Settlement loss		46			51
Actuarial (gain)/loss		986			669
Benefits paid		(759	)		(773	)
Ending benefit obligation		17,916			16,964
Change in plan assets, at fair value:
Beginning plan assets		16,150			15,647
Actual return		1,947			802
Employer contribution		2,000			500
Benefits paid		(759	)		(773	)
Administrative expenses		(32	)		(26	)
Ending plan assets		19,306			16,150
Funded status at end of year	$	1,390		$	(814	)

Amounts recognized in accumulated other comprehensive loss at December 31, consist of unrecognized actuarial loss of $4,070, net of $2,191 tax in 2017 and $4,345, net of $2,238 tax in 2016.

The accumulated benefit obligation for the defined benefit pension plan was $17,916 at December 31, 2017 and $16,964 at December 31, 2016.

The components of net periodic pension expense were as follows:

	2017			2016			2015
Service cost	$	—		$	—		$	—
Interest cost		679			689			604
Expected return on plan assets		(1,178	)		(1,090	)		(1,088	)
Net amortization and deferral		380			326			270
Net periodic pension cost (benefit)	$	(119	)	$	(75	)	$	(214	)
Net loss (gain) recognized in other comprehensive    loss	$	(322	)	$	448		$	412
Total recognized in net periodic benefit cost    and other comprehensive loss (before tax)	$	(441	)	$	373		$	198

69

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 15 - RETIREMENT PLANS (Continued)

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 $380.  The Company incurred settlement costs in 2017, 2016 and 2015 of $237, $259 and $415, respectively.

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

	2017			2016			2015
Discount rate on benefit obligation		3.51	%		4.00	%		4.16	%
Long-term rate of return on plan assets		7.00	%		7.00	%		7.00	%
Rate of compensation increase		0.00	%		0.00	%		0.00	%

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

	2017			2016			2015
Discount rate on benefit obligation		4.00	%		4.16	%		3.69	%
Long-term rate of return on plan assets		7.00	%		7.00	%		7.00	%
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 2017, 2016 and 2015 was zero.

The Company’s pension plan asset allocation at year-end 2017 and 2016 and target allocation for 2018 by asset category are as follows:

	Target Allocation		Percentage of Plan Assets at Year-end
Asset Category	2018		2017			2016
Equity securities	20-50	%		48.0	%		47.5	%
Debt securities	30-60			51.9			52.1
Money market funds	20-30			0.1			0.4
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 four diversified investment funds, which include two equity funds, one money market fund and one bond fund. 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 7.00% in 2017 and 2016. 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 2018. Employer contributions totaled $2,000 in 2017. Increased contributions and increased plan assets offset by increased benefit obligations led to a change in funded status from $(814) at December 31, 2016 to $1,390 at December 31, 2017.

70

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 15 - RETIREMENT PLANS (Continued)

The following tables set forth by level, within the fair value hierarchy, the pension plan’s assets at fair value as of December 31, 2017 and 2016:

	December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Cash	$	113	$	—	$	—	$	113
Bond mutual funds		23		—		—		23
Common/collective trust:
Bonds		9,980		—		—		9,980
Equities		6,654		—		—		6,654
Equity market funds:
International		750		—		—		750
Large cap		1,085		—		—		1,085
Mid cap		269		—		—		269
Small cap		432		—		—		432
Total assets at fair value	$	19,306	$	—	$	—	$	19,306

Investment in equity securities, debt securities, money market funds and mutual funds are valued at the closing price reported on the active market on which the individual securities are traded.

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:

2018	$	1,903
2019		1,127
2020		650
2021		913
2022		1,182
2023 through 2027		4,723
Total	$	10,498

Supplemental Retirement Plan

Civista established a supplemental retirement plan (“SERP”) in 2013, which covers key members of management. 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, 2017, was $2,308, compared to $1,984 at December 31, 2016. The expense related to the SERP was $365, $243 and $299 for 2017, 2016 and 2015, respectively. Distributions to participants made in 2017, 2016 and 2015 totaled $41, $34, and $22, respectively.

71

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 16 - EQUITY INCENTIVE PLAN

At the Company’s 2014 annual meeting, the shareholders adopted the Company’s 2014 Incentive Plan (“2014 Incentive Plan”). The 2014 Incentive Plan authorizes the Company to grant options, stock awards, stock units and other awards for up to 375,000 common shares of the Company. There were 292,209 shares available for grants under this plan at December 31, 2017.

During each of the last two years, the Board of Directors has awarded restricted common shares to senior officers of the Company. The restricted shares vest ratably over a three-year period following the grant date. The product of the number of restricted shares granted and the grant date market price of the Company’s common shares determines the fair value of restricted shares under the Company’s 2014 Incentive Plan. Management recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period for the entire award.

On January 4, 2016, directors of the Company’s banking subsidiary, Civista, were paid a retainer in the form of non-restricted common shares of the Company. The aggregate of 2,730 common shares were issued to Civista directors as payment of their retainer for their service on the Civista Board of Directors covering the period up to the 2016 Annual Meeting. This issuance was expensed in its entirety when the shares were issued in the amount of $32.

On May 17, 2016, directors of the Company’s banking subsidiary, Civista, were paid a retainer in the form of non-restricted common shares of the Company. The aggregate of 12,285 common shares were issued to Civista directors as payment of their retainer for their service on the Civista Board of Directors covering the period up to the 2017 Annual Meeting. This issuance was expensed in its entirety when the shares were issued in the amount of $130.

On May 16, 2017, directors of the Company’s banking subsidiary, Civista, were paid a retainer in the form of non-restricted common shares of the Company. The aggregate of 6,804 common shares were issued to Civista directors as payment of their retainer for their service on the Civista Board of Directors covering the period up to the 2018 Annual Meeting. This issuance was expensed in its entirety when the shares were issued in the amount of $144.

Finally, on September 11, 2017, a newly appointed director of the Company’s banking subsidiary, Civista, was paid a retainer in the form of non-restricted common shares of the Company. The aggregate of 367 common shares was issued as payment of her retainer for her service on the Civista Board of Directors covering the period up to the 2018 Annual Meeting. This issuance was expensed in its entirety when the shares were issued in the amount of $8.

No options had been granted under the 2014 Incentive Plan as of December 31, 2017 and 2016.

The Company classifies share-based compensation for employees with “Salaries, wages and benefits” in the Consolidated Statements of Operations.

The following is a summary of the status of the Company’s restricted shares, and changes therein during the twelve months ended December 31, 2017 and 2016:

	December 31, 2017					December 31, 2016
	Number of Restricted Shares			Weighted Average Grant Date Fair Value		Number of Restricted Shares			Weighted Average Grant Date Fair Value
Nonvested at beginning of period		37,050		$	10.77		16,983		$	10.82
Granted		17,898			22.15		28,864			10.75
Vested		(12,810	)		10.76		(5,657	)		10.82
Forfeited		—			—		(3,140	)		10.87
Nonvested at end of period		42,138			15.60		37,050			10.77

72

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 16 - EQUITY INCENTIVE PLAN (Continued)

The following is a summary of the status of the Company’s awarded restricted shares as of December 31, 2017:

At December 31, 2017
Date of Award	Shares		Remaining Expense		Remaining Vesting Period (Years)
January 15, 2016		10,260	$	66		3.00
March 11, 2016		15,748		33		1.00
March 20, 2017		11,713		110		2.00
March 20, 2017		6,185		108		4.00
		43,906	$	317		2.79

During the twelve months ended December 31, 2017, the Company recorded $274 of share-based compensation expense and $152 of director retainer fees for shares granted under the 2014 Incentive Plan. At December 31, 2017, the total compensation cost related to unvested awards not yet recognized is $317, which is expected to be recognized over the weighted average remaining life of the grants of 2.79 years.

NOTE 17 - FAIR VALUE MEASUREMENT

U.S. generally accepted accounting principles establish a hierarchal disclosure framework associated with the level of observable pricing utilized in measuring assets and liabilities at fair value. The three broad levels defined by the hierarchy are as follows: Level 1: Quoted prices for identical assets in active markets that are identifiable on the measurement date; Level 2: Significant other observable inputs, such as quoted prices for similar assets, quoted prices in markets that are not active and other inputs that are observable or can be corroborated by observable market data; Level 3: Significant unobservable inputs that reflect the Company’s own view about the assumptions that market participants would use in pricing an asset.

Securities: The fair values of securities available for sale are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

Equity securities: The Company’s equity securities are not actively traded in an open market. The fair values of these equity securities available for sale are determined by using market data inputs for similar securities that are observable. (Level 2 inputs).

Fair value swap asset/liability: The fair value of the swap asset and liability is based on an external derivative model using data inputs as of the valuation date and classified Level 2.

Impaired loans: The Company has measured impairment on impaired loans generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties. In some cases, management may adjust the appraised value due to the age of the appraisal, changes in market conditions, or observable deterioration of the property since the appraisal was completed. Additionally, management makes estimates about expected costs to sell the property which are also included in the net realizable value. If the fair value of the collateral dependent loan is less than the carrying amount of the loan, a specific reserve for the loan is made in the allowance for loan losses or a charge-off is taken to reduce the loan to the fair value of the collateral (less estimated selling costs) and the loan is included in the table above as a Level 3 measurement.

73

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 17 - FAIR VALUE MEASUREMENT (Continued)

Other real estate owned: OREO is carried at the lower of cost or fair value, which is measured at the date foreclosure. If the fair value of the collateral exceeds the carrying amount of the loan, no charge-off or adjustment is necessary, the loan is not considered to be carried at fair value, and is therefore not included in the table below. If the fair value of the collateral is less than the carrying amount of the loan, management will charge the loan down to its estimated realizable value. Management may adjust the appraised value due to the age of the appraisal, changes in market conditions, or observable deterioration of the property since the appraisal was completed. In these cases, the properties are categorized in the below table as Level 3 measurements since these adjustments are considered to be unobservable inputs. Income and expenses from operations are included in other operating expenses. Further declines in the fair value of the collateral subsequent to foreclosure are included in net gain on sale of other real estate owned.

Assets measured at fair value are summarized below.

Fair Value Measurements at December 31, 2017 Using:

	(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Treasury securities and obligations of    U.S. Government agencies	$	—	$	30,357	$	—
Obligations of states and political subdivisions		—		118,056		—
Mortgage-backed securities in government    sponsored entities		—		81,817		—
Equity securities in financial institutions		—		832		—
Fair value swap asset		—		1,560		—
Liabilities measured at fair value on a recurring    basis:
Fair value swap liability		—		1,560		—
Assets measured at fair value on a nonrecurring    basis:
Impaired Loans	$	—	$	—	$	1,040
Other Real Estate Owned		—		—		16

Fair Value Measurements at December 31, 2016 Using:

	(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Treasury securities and obligations of    U.S. Government agencies	$	—	$	37,446	$	—
Obligations of states and political subdivisions		—		94,998		—
Mortgage-backed securities in government    sponsored entities		—		62,642		—
Equity securities in financial institutions		—		778		—
Fair value swap asset		—		1,839		—
Liabilities measured at fair value on a recurring    basis:
Fair value swap liability		—		1,839		—
Assets measured at fair value on a nonrecurring    basis:
Impaired Loans	$	—	$	—	$	952
Other Real Estate Owned		—		—		37

74

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 17 - FAIR VALUE MEASUREMENT (Continued)

The following tables presents quantitative information about the Level 3 significant unobservable inputs for assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2017 and 2016.

	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2017	Fair Value		Valuation Technique	Unobservable Input	Range	Weighted Average
Impaired loans	$	1,040	Appraisal of collateral	Appraisal adjustments	0% - 30%	16%
				Liquidation expense	0% - 10%	8%
				Holding period	0 - 30 months	20 months
Other real estate owned	$	16	Appraisal of collateral	Appraisal adjustments	10% - 30%		10%
				Liquidation expense	0% - 10%		10%

	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2016	Fair Value		Valuation Technique	Unobservable Input	Range	Weighted Average
Impaired loans	$	952	Appraisal of collateral	Appraisal adjustments	10% - 67%	64%
				Liquidation expense	0% - 10%	4%
				Holding period	0 - 30 months	19 months
Other real estate owned	$	37	Appraisal of collateral	Appraisal adjustments	10% - 30%		10%
				Liquidation expense	0% - 10%		10%

The carrying amount and fair value of financial instruments were as follows:

December 31, 2017	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from financial institutions	$	40,519	$	40,519	$	40,519	$	—	$	—
Securities available for sale		231,062		231,062		—		231,062		—
Loans, held for sale		2,197		2,197		2,197		—		—
Loans, net of allowance for loan losses		1,151,527		1,146,969		—		—		1,146,969
Other securities		14,247		14,247		14,247		—		—
Bank owned life insurance		25,125		25,125		25,125		—		—
Accrued interest receivable		4,336		4,336		4,336		—		—
Swap asset		1,560		1,560		—		1,560		—
Financial Liabilities:
Nonmaturing deposits		981,021		981,021		981,021		—		—
Time deposits		223,902		223,626		—		—		223,626
Short-term FHLB advances		56,900		56,900		56,900		—		—
Long-term FHLB advances		15,000		14,964		—		—		14,964
Securities sold under agreement to repurchase		21,755		21,755		21,755		—		—
Subordinated debentures		29,427		31,052		—		—		31,052
Accrued interest payable		410		410		410		—		—
Swap liability		1,560		1,560		—		1,560		—

75

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 17 - FAIR VALUE MEASUREMENT (Continued)

December 31, 2016	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from financial institutions	$	36,695	$	36,695	$	36,695	$	—	$	—
Securities available for sale		195,864		195,864		—		195,864		—
Loans, held for sale		2,268		2,268		2,268		—		—
Loans, net of allowance for loan losses		1,042,201		1,047,329		—		—		1,047,329
Other securities		14,055		14,055		14,055		—		—
Bank owned life insurance		24,552		24,552		24,552		—		—
Accrued interest receivable		3,854		3,854		3,854		—		—
Swap asset		1,839		1,839		—		1,839		—
Financial Liabilities:
Nonmaturing deposits		913,677		913,677		913,677		—		—
Time deposits		207,426		207,784		—		—		207,784
Short-term FHLB advances		31,000		31,000		31,000		—		—
Long-term FHLB advances		17,500		17,553		—		—		17,553
Securities sold under agreement to repurchase		28,925		28,925		28,925		—		—
Subordinated debentures		29,427		27,414		—		—		27,414
Accrued interest payable		181		181		181		—		—
Swap liability		1,839		1,839		—		1,839		—

The fair value approximates carrying amount for all items except those described below. Fair value for securities is based on quoted market values for the individual securities or for equivalent securities. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the cash flow analysis or underlying collateral values. For swaps, fair value of the swap asset and liability is based on an external derivative model using data inputs as of the valuation date. Fair value of debt is based on current rates for similar financing. The fair value of off-balance-sheet items is based on the current fees or cost that would be charged to enter into or terminate such arrangements and are considered nominal.

For certain homogeneous categories of loans, such as some residential mortgages, credit card receivables, and other consumer loans, fair value is estimated using the quoted market prices for securities backed by similar loans, adjusted for differences in loan characteristics. The fair value of other types of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

76

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 18 - COMMITMENTS, CONTINGENCIES AND OFF-BALANCE-SHEET RISK

Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.

The contractual amount of financial instruments with off-balance-sheet risk was as follows at year-end.

	2017				2016
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to extend credit:
Lines of credit and construction loans	$	4,982	$	286,925	$	6,905	$	202,923
Overdraft protection		7		33,353		5		29,075
Letters of credit		624		2,637		600		349
	$	5,613	$	322,915	$	7,510	$	232,347

Commitments to make loans are generally made for a period of one year or less. Fixed-rate loan commitments included above had interest rates ranging from 2.88% to 10.25% at December 31, 2017 and 3.25% to 8.50% at December 31, 2016. Maturities extend up to 30 years.

Civista is required to maintain certain reserve balances on hand in accordance with the Federal Reserve Board requirements. The average reserve balance maintained in accordance with such requirements was $4,112 on December 31, 2017 and $2,887 on December 31, 2016.

NOTE 19 - CAPITAL REQUIREMENTS AND RESTRICTION ON RETAINED EARNINGS

The Company (consolidated) and Civista collectively, the (“Companies”) are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory-and possibly additional discretionary-actions by regulators that, if undertaken, could have a direct material effect on the Companies’ financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Companies must meet specific capital guidelines that involve quantitative measures of the Companies’ assets, liabilities, and certain off-balance-sheet items as calculated under U.S. GAAP, regulatory reporting requirements, and regulatory capital standards. The Companies’ capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulatory capital standards to ensure capital adequacy require the Companies to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital to risk-weighted assets, common equity Tier 1 capital to total risk-weighted assets, and of Tier 1 capital to average assets. Management believes, as of December 31, 2017, that the Companies met all capital adequacy requirements to which they were subject.

77

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 19 - CAPITAL REQUIREMENTS AND RESTRICTION ON RETAINED EARNINGS (Continued)

As of December 31, 2017, and 2016, the most recent notification from the Federal Reserve Bank categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Companies must maintain minimum total risk-based capital, Tier 1 risk-based capital, common equity Tier 1 risk-based capital, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the institution’s category.

The Company’s and Civista’s actual capital levels and minimum required capital levels at December 31, 2017 and 2016 were as follows:

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Purposes
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2017
Total Risk Based Capital
Consolidated	$	200,772		16.6	%	$	97,025		8.0	%	n/a		n/a
Civista		161,394		13.3			96,880		8.0		$	121,100		10.0	%
Tier I Risk Based Capital
Consolidated		187,638		15.5			72,769		6.0		n/a		n/a
Civista		147,473		12.2			72,660		6.0			96,880		8.0
CET1 Risk Based Capital
Consolidated		140,853		11.6			54,576		4.5		n/a		n/a
Civista		136,760		11.3			54,495		4.5			78,715		6.5
Leverage
Consolidated		187,638		12.7			59,089		4.0		n/a		n/a
Civista		147,473		10.0			59,031		4.0			73,788		5.0
2016
Total Risk Based Capital
Consolidated	$	155,145		14.2	%	$	87,436		8.0	%	n/a		n/a
Civista		145,270		13.3			87,334		8.0		$	109,168		10.0	%
Tier I Risk Based Capital
Consolidated		141,840		13.0			65,577		6.0		n/a		n/a
Civista		131,391		12.0			65,501		6.0			87,334		8.0
CET1 Risk Based Capital
Consolidated		93,463		8.6			49,183		4.5		n/a		n/a
Civista		120,465		11.0			49,126		4.5			70,959		6.5
Leverage
Consolidated		141,840		10.6			53,774		4.0		n/a		n/a
Civista		131,391		9.8			53,717		4.0			67,146		5.0

CBI’s primary source of funds for paying dividends to its shareholders and for operating expense is the cash accumulated from dividends received from Civista. Payment of dividends by Civista to CBI is subject to restrictions by Civista’s regulatory agencies. These restrictions generally limit dividends to the current and prior two years retained earnings as defined by the regulations. In addition, dividends may not reduce capital levels below minimum regulatory requirements. At December 31, 2017, Civista had $36,440 net profits available to pay dividends to CBI.

78

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 20 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

Condensed financial information of CBI follows:

	December 31,
Condensed Balance Sheets	2017			2016
Assets:
Cash	$	29,908		$	4,747
Securities available for sale		832			778
Investment in bank subsidiary		167,192			149,965
Investment in nonbank subsidiaries		12,928			12,635
Other assets		5,212			1,226
Total assets	$	216,072		$	169,351
Liabilities:
Deferred income taxes and other liabilities	$	2,184		$	2,308
Subordinated debentures		29,427			29,427
Total liabilities		31,611			31,735
Shareholders’ Equity:
Preferred stock		17,358			18,950
Common stock		153,810			118,975
Accumulated earnings		31,652			19,263
Treasury Stock		(17,235	)		(17,235	)
Accumulated other comprehensive loss		(1,124	)		(2,337	)
Total shareholders’ equity		184,461			137,616
Total liabilities and shareholders’ equity	$	216,072		$	169,351

	For the years ended December 31,
Condensed Statements of Operations	2017			2016			2015
Dividends from bank subsidiaries	$	—		$	—		$	14,226
Interest expense		(1,035	)		(884	)		(760	)
Pension expense		(925	)		(184	)		(388	)
Other expense, net		(1,071	)		(920	)		(1,755	)
Income (loss) before equity in undistributed net    earnings of subsidiaries		(3,031	)		(1,988	)		11,323
Income tax benefit		1,407			676			959
Equity in undistributed net earnings of subsidiaries		17,496			18,529			463
Net income	$	15,872		$	17,217		$	12,745
Comprehensive income	$	17,284		$	15,375		$	12,297

79

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 20 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Continued)

	For the years ended December 31,
Condensed Statements of Cash Flows	2017			2016			2015
Operating activities:
Net income	$	15,872		$	17,217		$	12,745
Adjustment to reconcile net income to net cash    from (used for) operating activities:
Change in other assets and other liabilities		(2,147	)		1,821			1,324
Gain on sale of fixed asets		(66	)		—			—
Equity in undistributed net earnings of    subsidiaries		(17,496	)		(18,529	)		(463	)
Net cash (used for) from operating activities		(3,837	)		509			13,606
Investing activities:
Proceeds from sale of premises and equipment	138				—			—
Acquisition and additional capitalization of    subsidiary, net of cash acquired		(275	)		—			(16,637	)
Net cash used for investing activities		(137	)		—			(16,637	)
Financing activities:
Cash paid on fractional shares on preferred stock    conversion to common stock		—			(1	)		—
Net proceeds from common stock issuance		32,821			—			—
Payment to repurchase common stock		(4	)		—			—
Cash dividends paid		(3,682	)		(3,254	)		(3,139	)
Net cash from (used for) financing activities		29,135			(3,255	)		(3,139	)
Net change in cash and cash equivalents		25,161			(2,746	)		(6,170	)
Cash and cash equivalents at beginning of year		4,747			7,493			13,663
Cash and cash equivalents at end of year	$	29,908		$	4,747		$	7,493

NOTE 21 - PREFERRED SHARES

On December 19, 2013, the Company completed the sale of 1,000,000 depositary shares, each representing a 1/40th ownership interest in a 6.50% Noncumulative Redeemable Convertible Perpetual Preferred Share, Series B, of the Company, with a liquidation preference of $1,000 per share (equivalent to $25.00 per depositary share). The Company sold the maximum of 1,000,000 depositary shares in the offering, resulting in gross proceeds to the Company of $25,000.

Using proceeds from the sale of the depositary shares, the Company redeemed all of its outstanding Series A Preferred Shares for an aggregate purchase price of $22,857, which redemption was completed as of February 15, 2014.

As of December 31, 2017, a total of 750,382 depository shares were outstanding.

80

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 22 - EARNINGS PER COMMON SHARE

The factors used in the earnings per share computation follow.

	2017		2016		2015
Basic
Net income	$	15,872	$	17,217	$	12,745
Preferred stock dividends		1,244		1,501		1,577
Net income available to common    shareholders—basic	$	14,628	$	15,716	$	11,168
Weighted average common shares    outstanding—basic		9,906,856		8,010,399		7,822,369
Basic earnings per share	$	1.48	$	1.96	$	1.43
Diluted
Net income available to common    shareholders—basic	$	14,628	$	15,716	$	11,168
Preferred stock dividends on convertible    preferred stock		1,244		1,501		1,577
Net income available to common    shareholders—diluted	$	15,872	$	17,217	$	12,745
Weighted average common shares outstanding    for earnings per common share basic		9,906,856		8,010,399		7,822,369
Add: dilutive effects of convertible preferred    shares		2,445,760		2,940,562		3,095,966
Average shares and dilutive potential    common shares outstanding—diluted		12,352,616		10,950,961		10,918,335
Diluted earnings per share	$	1.28	$	1.57	$	1.17

Basic earnings per common share are calculated by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share include the dilutive effect, if any, of additional potential common shares issuable under the equity incentive plan, computed using the treasury stock method, and the impact of the Company’s convertible preferred shares using the “if converted” method.

81

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 23 - QUARTERLY FINANCIAL DATA (UNAUDITED)

	Interest Income		Net Interest Income		Net Income		Basic Earnings per Common Share		Diluted Earnings per Common Share
2017
First quarter (1)(2)	$	13,692	$	12,892	$	4,635	$	0.47	$	0.40
Second quarter (3)(4)		14,228		13,367		3,596		0.32		0.29
Third quarter (3)		14,836		13,680		3,660		0.33		0.29
Fourth quarter (3)(5)		15,838		14,563		3,981		0.36		0.30
2016
First quarter (1)(2)	$	13,053	$	12,235	$	4,725	$	0.55	$	0.43
Second quarter (5)(6)		13,739		12,940		5,181		0.61		0.47
Third quarter (7)		13,370		12,526		3,680		0.41		0.34
Fourth quarter (8)		13,405		12,558		3,631		0.39		0.33

(1) Interest income and net interest income increased due to loan volume and rate and volume on interest-bearing deposits in other banks.

(2) Net income increased due to fees on tax refund processing program.

(3) Interest income and net interest income increased due to increases in loan volume and rate.

(4) Net income decreased due to a decrease in fees on the tax refund processing program.

(5) Interest income and net interest income increased due to interest recoveries on non-performing loans.

(6) Net income increased due to interest recoveries and provision credit.

(7) Interest income, net interest income and net income decreased due to previous quarter interest recoveries and provision credit.

(8) Interest income and net interest income increased due to loan volume and interest recoveries.

NOTE 24 - DERIVATIVE HEDGING INSTRUMENTS

To accommodate customer need and to support the Company’s asset/liability positioning, on occasion we enter into interest rate swaps with a customer and a bank counterparty. The Company enters into a floating rate loan and a fixed rate swap with our customer. Simultaneously, the Company enters into an offsetting fixed rate swap with a bank counterparty. In connection with each swap transaction, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay a bank counterparty the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. These transactions allow the Company’s customer to effectively convert variable rate loans to fixed rate loans. Since the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts offset each other and do not significantly impact the Company’s results of operations.

82

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

NOTE 24 - DERIVATIVE HEDGING INSTRUMENTS (Continued)

The following table summarizes the Company’s interest rate swap positions and the impact of a 1 basis point change in interest rates as of December 31, 2017.

	Notional Amount			Weighted Average Rate Received/ (Paid)			Impact of a 1 basis point change in interest rates			Repricing Frequency
Derivative Assets	$	66,227			5.08	%	$	36		Monthly
Derivative Liabilities		(66,227	)		-5.08	%		(36	)	Monthly
Net Exposure	$	—					$	—

The following table summarizes the Company’s interest rate swap positions and the impact of a 1 basis point change in interest rates as of December 31, 2016.

	Notional Amount			Weighted Average Rate Received/ (Paid)			Impact of a 1 basis point change in interest rates			Repricing Frequency
Derivative Assets	$	52,975			5.07	%	$	30		Monthly
Derivative Liabilities		(52,975	)		-5.07	%		(30	)	Monthly
Net Exposure	$	—					$	—

The Company monitors and controls all derivative products with a comprehensive Board of Director approved commercial loan swap policy. All hedge transactions must be approved in advance by the Lenders Loan Committee or the Directors Loan Committee of the Board of Directors.

NOTE 25 – QUALIFIED AFFORDABLE HOUSING PROJECT INVESTMENTS

The Company invests in qualified affordable housing projects. At December 31, 2017 and 2016, the balance of the Company’s investments in qualified affordable housing projects was $3,204 and $2,754, respectively. These balances are reflected in the other assets line on the Consolidated Balance Sheet. The unfunded commitments related to the investments in qualified affordable housing projects totaled $4,510 and $2,313 at December 31, 2017 and 2016, respectively.

During the years ended December 31, 2017 and 2016, the Company recognized amortization expense with respect to its investments in qualified affordable housing projects of $354 and $304, respectively, which was included within pre-tax income on the Consolidated Statements of Operations.

Additionally, during the years ended December 31, 2017 and 2016, the Company recognized tax credits and other benefits from its investments in affordable housing tax credits of $686 and $538, respectively. During the years ended December 31, 2017 and 2016, the Company did not incur impairment losses related to its investment in qualified affordable housing projects.

83

CIVISTA BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

(Amounts in thousands, except share data)

This page left blank intentionally.

84

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF REGISTRANT

Subsidiary	Jurisdiction of Organization
Civista Bank	Ohio
First Citizens Insurance Agency, Inc.	Ohio
Water Street Properties, Inc.	Ohio
FC Refund Solutions, Inc.	Ohio
First Citizens Investments, Inc.	Delaware
First Citizens Capital LLC	Delaware
CIVB Risk Management, Inc.	Delaware
First Citizens Statutory Trust II	Connecticut
First Citizens Statutory Trust III	Delaware
First Citizens Statutory Trust IV	Delaware
Futura TPF Trust I	Delaware
Futura TPF Trust II	Delaware

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors of Civista Bancshares, Inc.

We consent to the incorporation by reference in Registration Statements File Nos. 333-202316 and 333-99089 on Form S-8 and File No. 333-205828 on Form S-3 of Civista Bancshares, Inc. of our report dated March 6, 2018, relating to our audit of the consolidated financial statements and internal control over financial reporting, which appears in the Annual Report to Shareholders, which is incorporated by reference in this Annual Report on Form 10-K of Civista Bancshares, Inc. for the year ended December 31, 2017.

/s/ S.R. Snodgrass, P.C.

Cranberry Township, Pennsylvania

March 8, 2018

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer

0BCERTIFICATIONS FOR ANNUAL REPORT ON FORM 10-K

I, Dennis G. Shaffer, certify that:

1. I have reviewed this Annual Report on Form 10-K of Civista Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and  have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to  adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Signature and Title: /s/ Dennis G. Shaffer, President, CEO Date:    March 8, 2018

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer

1BCERTIFICATIONS FOR ANNUAL REPORT ON FORM 10-K

I, Todd A. Michel, certify that:

1. I have reviewed this Annual Report on Form 10-K of Civista Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and  have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to  adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Signature and Title: /s/ Todd A. Michel, Senior Vice President, Controller   Date: March 8, 2018  

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Civista Bancshares, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2017, as filed with the Securities and Exchange Commission on the date of this certification (the Report), I, Dennis G. Shaffer, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Dennis G. Shaffer

Dennis G. Shaffer

Chief Executive Officer

March 8, 2018

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Civista Bancshares, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2017, as filed with the Securities and Exchange Commission on the date of this certification (the Report), I, Todd A. Michel, Senior Vice President and Controllerof the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Todd A. Michel

Todd A. Michel

Senior Vice President, Controller  

March 8, 2018

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Feb. 28, 2018	Jun. 30, 2017
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Trading Symbol	Civb
Entity Registrant Name	CIVISTA BANCSHARES, INC.
Entity Central Index Key	0000944745
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		10,209,021
Entity Public Float			$ 202,025,476

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
ASSETS
Cash and due from financial institutions	$ 40,519	$ 36,695
Securities available for sale	231,062	195,864
Loans held for sale	2,197	2,268
Loans, net of allowance of $13,134 and $13,305	1,151,527	1,042,201
Other securities	14,247	14,055
Premises and equipment, net	17,611	17,920
Accrued interest receivable	4,488	3,854
Goodwill	27,095	27,095
Other intangible assets	1,279	1,784
Bank owned life insurance	25,125	24,552
Other assets	10,707	10,975
Total assets	1,525,857	1,377,263
Deposits
Noninterest-bearing	361,964	345,588
Interest-bearing	842,959	775,515
Total deposits	1,204,923	1,121,103
Federal Home Loan Bank advances	71,900	48,500
Securities sold under agreements to repurchase	21,755	28,925
Subordinated debentures	29,427	29,427
Accrued expenses and other liabilities	13,391	11,692
Total liabilities	1,341,396	1,239,647
SHAREHOLDERS’ EQUITY
Preferred shares, no par value, 200,000 shares authorized Series B Preferred shares, $1,000 liquidation preference, 18,760 shares issued at December 31, 2017 and 20,481 shares issued at December 31, 2016, net of issuance costs	17,358	18,950
Common shares, no par value, 20,000,000 shares authorized, 10,946,439 shares issued at December 31, 2017 and 9,091,473 shares issued at December 31, 2016	153,810	118,975
Accumulated earnings	31,652	19,263
Treasury stock, 747,964 common shares at cost	(17,235)	(17,235)
Accumulated other comprehensive loss	(1,124)	(2,337)
Total shareholders’ equity	184,461	137,616
Total liabilities and shareholders’ equity	$ 1,525,857	$ 1,377,263

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Statement Of Financial Position [Abstract]
Allowance for loan losses	$ 13,134	$ 13,305
Preferred stock, no par value
Preferred stock, shares authorized	200,000	200,000
Preferred stock, liquidation preference	$ 1,000	$ 1,000
Preferred stock, shares issued	18,760	20,481
Common stock, no par value
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	10,946,439	9,091,473
Treasury stock, shares	747,964	747,964

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest and dividend income
Loans, including fees	$ 51,198	$ 47,186	$ 44,784
Taxable securities	3,745	3,319	3,232
Tax-exempt securities	3,153	2,666	2,583
Federal funds sold and other	498	396	102
Total interest and dividend income	58,594	53,567	50,701
Interest expense
Deposits	2,342	1,996	2,087
Federal Home Loan Bank advances	695	405	442
Subordinated debentures	1,035	884	760
Securities sold under agreements to repurchase and other	20	23	20
Total interest expense	4,092	3,308	3,309
Net interest income	54,502	50,259	47,392
Provision (credit) for loan losses		(1,300)	1,200
Net interest income after provision (credit) for loan losses	54,502	51,559	46,192
Noninterest income
Service charges	4,777	4,832	4,708
Net gain (loss) on sale of securities	12	19	(18)
Net gain on sale of loans	1,745	1,750	1,106
ATM fees	2,304	2,094	1,986
Wealth management fees	3,068	2,678	2,823
Bank owned life insurance	573	563	467
Tax refund processing fees	2,750	2,750	2,000
Computer center item processing fees	246	251	267
Net gain (loss) on sale of other real estate owned	(28)	152	199
Other	887	1,043	740
Total noninterest income	16,334	16,132	14,278
Noninterest expense
Compensation expense	29,253	25,323	23,630
Net occupancy expense	2,689	2,700	2,416
Equipment expense	1,564	1,641	1,503
Contracted data processing	1,838	1,546	1,821
FDIC Assessment	502	611	864
State franchise tax	1,024	923	847
Professional services	2,300	1,895	2,461
Amortization of intangible assets	586	699	711
ATM expense	847	605	674
Marketing expense	817	929	1,039
Repossession expense	279	253	508
Other operating expenses	6,905	6,730	6,470
Total noninterest expense	48,604	43,855	42,944
Income before income taxes	22,232	23,836	17,526
Income taxes	6,360	6,619	4,781
Net income	15,872	17,217	12,745
Preferred share dividends	1,244	1,501	1,577
Net income available to common shareholders	$ 14,628	$ 15,716	$ 11,168
Earnings per common share, basic	$ 1.48	$ 1.96	$ 1.43
Earnings per common share, diluted	$ 1.28	$ 1.57	$ 1.17

XML

Consolidated Comprehensive Income statements - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 15,872	$ 17,217	$ 12,745
Other comprehensive income (loss):
Unrealized holding gains (loss) on available for sale securities	987	(2,342)	(267)
Tax effect	(375)	796	91
Pension liability adjustment	1,129	(448)	(412)
Tax effect	(329)	152	140
Total other comprehensive income (loss)	1,412	(1,842)	(448)
Comprehensive income	$ 17,284	$ 15,375	$ 12,297

XML

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Preferred Shares [Member]	Common Shares [Member]	Accumulated (Deficit) Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Loss [Member]
Beginning balance at Dec. 31, 2014	$ 115,909	$ 23,132	$ 114,365	$ (4,306)	$ (17,235)	$ (47)
Balance, shares at Dec. 31, 2014		25,000	7,707,917
Net income	12,745			12,745
Other comprehensive income (loss)	(448)					(448)
Conversion of Series B preferred shares to common shares		$ (859)	$ 859
Conversion of Series B preferred shares to common shares, shares		(928)	118,678
Stock-based compensation	106		$ 106
Stock-based compensation, shares			16,983
Cash dividends ($0.20, $0.22, and $0.25 per share for the year 2015, 2016 and 2017 respectively)	(1,562)			(1,562)
Preferred share dividends	(1,577)			(1,577)
Ending balance at Dec. 31, 2015	125,173	$ 22,273	$ 115,330	5,300	(17,235)	(495)
Balance, shares at Dec. 31, 2015		24,072	7,843,578
Net income	17,217			17,217
Other comprehensive income (loss)	(1,842)					(1,842)
Conversion of Series B preferred shares to common shares	(1)	$ (3,323)	$ 3,322
Conversion of Series B preferred shares to common shares, shares		(3,591)	459,192
Stock-based compensation	323		$ 323
Stock-based compensation, shares			40,739
Cash dividends ($0.20, $0.22, and $0.25 per share for the year 2015, 2016 and 2017 respectively)	(1,753)			(1,753)
Preferred share dividends	(1,501)			(1,501)
Ending balance at Dec. 31, 2016	137,616	$ 18,950	$ 118,975	19,263	(17,235)	(2,337)
Balance, shares at Dec. 31, 2016		20,481	8,343,509
Net income	15,872			15,872
Other comprehensive income (loss)	1,412					1,412
Reclassification of certain income tax effects from accumulated other comprehensive loss	199			199		(199)
Conversion of Series B preferred shares to common shares		$ (1,592)	$ 1,592
Conversion of Series B preferred shares to common shares, shares		(1,721)	220,108
Common share issuance, net of costs	32,821		$ 32,821
Common stock issuance, net of costs, shares			1,610,000
Stock-based compensation	426		$ 426
Stock-based compensation, shares			25,069
Cash dividends ($0.20, $0.22, and $0.25 per share for the year 2015, 2016 and 2017 respectively)	(2,438)			(2,438)
Preferred share dividends	(1,244)			(1,244)
Retirement of common share	(4)		$ (4)
Retirement of common stock, shares			(211)
Ending balance at Dec. 31, 2017	$ 184,461	$ 17,358	$ 153,810	$ 31,652	$ (17,235)	$ (1,124)
Balance, shares at Dec. 31, 2017		18,760	10,198,475

XML

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accumulated (Deficit) Earnings [Member]
Common stock dividends per share	$ 0.25	$ 0.22	$ 0.20

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ 15,872	$ 17,217	$ 12,745
Adjustments to reconcile net income to net cash from operating activities
Security amortization, net	1,263	1,383	1,410
Depreciation	1,249	1,257	1,193
Amortization of intangible assets	586	699	711
Amortization (Accretion) of net deferred loan fees	317	(172)	(155)
Net (gain) loss on sale of securities	(12)	(19)	18
Provision (credit) for loan losses		(1,300)	1,200
Loans originated for sale	(76,493)	(67,295)	(48,745)
Proceeds from sale of loans	78,309	69,475	49,637
Net gain on sale of loans	(1,745)	(1,750)	(1,180)
Net loss on sale of manufactured home loans			74
Net (gain) loss on sale of other real estate owned	28	(152)	(199)
Gain on sale of fixed assets	(67)	(1)
Increase in cash surrender value of bank owned life insurance	(573)	(563)	(467)
Share-based compensation	426	323	106
Change in Accrued interest payable	229	61	(11)
Accrued interest receivable	(634)	48	144
Deferred taxes	946	170	(410)
Other, net	1,118	(1,672)	(998)
Net cash from operating activities	20,819	17,709	15,073
Cash flows used for investing activities:
Maturities and calls of securities, available-for-sale	34,379	34,089	29,733
Sale of securities, available for sale	953	4,349
Purchases of securities, available-for-sale	(70,794)	(41,759)	(29,772)
Redemption of other securities			138
Purchases of other securities	(192)	(603)	(288)
Net cash from acquisition			926
Purchases of bank owned life insurance		(3,885)
Net loan originations	(109,737)	(52,022)	(10,225)
Loans purchased, installment		(1,643)	(4,774)
Proceeds from sale of manufactured homes			3,492
Proceeds from sale of OREO properties	87	333	865
Premises and equipment purchases	(1,015)	(2,437)	(1,999)
Proceeds from sale of premises and equipment	139	3
Net cash used for investing activities	(146,180)	(63,575)	(11,904)
Cash flows from financing activities:
Increase (decrease) in deposits	83,820	69,070	(3,754)
Net change in short-term FHLB advances	25,900	(22,700)	11,000
Repayment of long-term FHLB advances	(2,500)		(5,000)
Net proceeds from issuance of common shares	32,821
Net change in securities sold under repurchase agreements	(7,170)	3,885	3,427
Cash payment for repurchase of common shares	(4)
Cash paid on fractional shares on conversion of preferred shares		(1)
Cash dividends paid	(3,682)	(3,254)	(3,139)
Net cash from financing activities	129,185	47,000	2,534
Increase in cash and due from financial institutions	3,824	1,134	5,703
Cash and due from financial institutions at beginning of year	36,695	35,561	29,858
Cash and due from financial institutions at end of year	40,519	36,695	35,561
Supplemental disclosures of cash flow information:
Interest paid	3,863	3,247	3,320
Income taxes paid	5,950	5,900	3,650
Transfer of loans from portfolio to other real estate owned	94	102	222
Transfer of premises to held-for-sale	3	202
Conversion of preferred shares to common shares	1,592	$ 3,322	859
Securities purchased not settled	$ 1,291
Noncash assets acquired:
Loans receivable			76,444
Other securities			716
Accrued interest receivable			194
Premises and equipment, net			1,738
Core deposit intangible			1,009
Other assets			472
Total non cash assets acquired			80,573
Liabilities assumed:
Deposits			86,869
Other liabilities			5
Total liabilities assumed			86,874
Net noncash liabilities acquired			$ 6,301

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the accounting policies adopted by Civista Bancshares, Inc., which have a significant effect on the Consolidated Financial Statements.

Nature of Operations and Principles of Consolidation: The Consolidated Financial Statements include the accounts of Civista Bancshares, Inc. (“CBI”) and its wholly-owned subsidiaries: Civista Bank (“Civista”), First Citizens Insurance Agency, Inc. (“FCIA”), Water Street Properties, Inc. (“WSP”), FC Refund Solutions, Inc. (“FCRS”) and CIVB Risk Management, Inc. (“CRMI”). First Citizens Capital LLC (“FCC”) is wholly-owned by Civista and holds inter-company debt. First Citizens Investments, Inc. (“FCI”) is wholly-owned by Civista and holds and manages its securities portfolio. The operations of FCI and FCC are located in Wilmington, Delaware. The above companies together are sometimes referred to as the “Company”. Intercompany balances and transactions are eliminated in consolidation.

The Company provides financial services through its offices in the Ohio counties of Erie, Crawford, Champaign, Cuyahoga, Franklin, Logan, Summit, Huron, Ottawa, Madison, Montgomery and Richland. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are residential mortgage, commercial, and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, our customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the area. Other financial instruments that potentially represent concentrations of credit risk include deposit accounts in other financial institutions.

FCIA was formed to allow the Company to participate in commission revenue generated through its third party insurance agreement. Insurance commission revenue was less than 1.0% of total revenue for the years ended December 31, 2017, 2016 and 2015. WSP was formed to hold repossessed assets of CBI’s subsidiaries. WSP revenue was less than 1% of total revenue for the years ended December 31, 2017, 2016 and 2015. FCRS was formed in 2012 and remained inactive for the periods presented.  CRMI was formed in 2017 to provide property and casualty insurance coverage to CBI and its’ subsidiaries for which insurance may not be currently available or economically feasible in the insurance marketplace.  CRMI revenue was less than 1% of total revenue for the year ended December 31, 2017.

Use of Estimates: To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. The allowance for loan losses, determination of goodwill impairment, fair values of financial instruments, valuation of deferred tax assets, pension obligations and other-than-temporary-impairment of securities are considered material estimates that are particularly susceptible to significant change in the near term.

Cash Flows: Cash and cash equivalents include cash on hand and demand deposits with financial institutions with original maturities of less than 90 days. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, federal funds purchased, short-term borrowings and repurchase agreements.

Securities: Debt securities are classified as available-for-sale when they might be sold before maturity. Equity securities with readily determinable fair values are also classified as available for sale. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are based on the amortized cost of the security sold using the specific identification method.

U.S. generally accepted accounting principles (“GAAP”) guidance specifies that if (a) a company does not have the intent to sell a debt security prior to recovery and (b) it is more-likely-than-not that it will not have to sell the debt security prior to recovery, the security would not be considered other-than-temporarily impaired unless there is a credit loss. When an entity does not intend to sell the security, and it is more-likely-than-not the entity will not have to sell the security before recovery of its cost basis, it will recognize the credit component of other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. For held-to-maturity debt securities, the amount of other-than-temporary impairment recorded in other comprehensive income for the non-credit portion of a previous other-than-temporary impairment should be amortized prospectively over the remaining life of the security on the basis of the timing of future estimated cash flows of the security.

For available-for-sale debt securities that management has no intent to sell and believes that it more-likely-than-not will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the non-credit loss is recognized in accumulated other comprehensive income. The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections.

Other securities which include FHLB stock, Federal Reserve Bank (“FRB”) stock, Federal Agricultural Mortgage Corporation stock, Bankers’ Bancshares Inc. (“BB”) stock, and Norwalk Community Development Corp (“NCDC”) stock are carried at cost.

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market and loans that management no longer intends to hold for the foreseeable future, are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Interest income on consumer loans is discontinued when management determines future collection is unlikely. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued, but not received, for loans placed on nonaccrual, is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Purchased Loans: The Company purchases individual loans and groups of loans. Purchased loans that show evidence of credit deterioration since origination are recorded at the amount paid (or allocated fair value in a purchase business combination), such that there is no carryover of the seller’s allowance for loan losses. After acquisition, incurred losses are recognized by an increase in the allowance for loan losses.

Purchased loans are accounted for individually or aggregated into pools of loans based on common risk characteristics (e.g., credit score, loan type, and date of origination). The Company estimates the amount and timing of expected cash flows for each purchased loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). The excess of the loan’s, or pool’s, contractual principal and interest over expected cash flows is not recorded (nonaccretable difference).

Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded. If the present value of expected future cash flows is greater than the carrying amount, the excess is recognized as part of future interest income.

Allowance for Loan Losses: The allowance for loan losses (allowance) is calculated with the objective of maintaining a reserve sufficient to absorb inherent loan losses in the loan portfolio. Management establishes the allowance for loan losses based upon its evaluation of the pertinent factors underlying the types and quality of loans in the portfolio. In determining the allowance and the related provision for loan losses, the Company considers three principal elements: (i) specific impairment reserve allocations (valuation allowances) based upon probable losses identified during the review of impaired loans in the Commercial loan portfolio, (ii) allocations established for adversely-rated loans in the Commercial loan portfolio and nonaccrual Real Estate Residential, Consumer installment and Home Equity loans, (iii) allocations on all other loans based principally on the use of a three-year period for loss migration analysis. These allocations are adjusted for consideration of general economic and business conditions, credit quality and delinquency trends, collateral values, and recent loss experience for these similar pools of loans. The Company analyzes its loan portfolio each quarter to determine the appropriateness of its allowance for loan losses.

All commercial, commercial real estate and farm real estate loans are monitored on a regular basis with a detailed loan review completed for all loan relationships greater than $750. All commercial, commercial real estate and farm real estate loans that are 90 days past due or in nonaccrual status, are analyzed to determine if they are “impaired”, which means that it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. All loans that are delinquent 90 days are classified as substandard and placed on nonaccrual status unless they are well-secured and in the process of collection. The remaining loans are evaluated and segmented with loans with similar risk characteristics. The Company allocates reserves based on risk categories and portfolio segments described below, which conform to the Company’s asset classification policy. In reviewing risk within Civista’s loan portfolio, management has identified specific segments to categorize loan portfolio risk: (i) Commercial & Agriculture loans; (ii) Commercial Real Estate – Owner Occupied loans; (iii) Commercial Real Estate – Non-Owner Occupied loans; (iv) Residential Real Estate loans; (v) Real Estate Construction loans; (vi) Farm Real Estate loans; and (vii) Consumer and Other loans. Additional information related to economic factors can be found in Note 5.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loan Charge-off Policies: All unsecured open- and closed-ended retail loans that become past due 90 days from the contractual due date are charged off in full. In lieu of charging off the entire loan balance, loans with non-real estate collateral may be written down to the net realizable value of the collateral, if repossession of collateral is assured and in process. For open- and closed-ended loans secured by residential real estate, a current assessment of fair value is made no later than 180 days past due. Any outstanding loan balance in excess of the net realizable value of the property is charged off. All other loans are generally charged down to the net realizable value when Civista recognizes the loan is permanently impaired, which is generally after the loan is 90 days past due.

Troubled Debt Restructurings: In certain situations based on economic or legal reasons related to a borrower’s financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered. The related loan is classified as a troubled debt restructuring (TDR). Management strives to identify borrowers in financial difficulty early and work with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. In addition to the allowance for the pooled portfolios, management has developed a separate reserve for loans that are identified as impaired through a TDR. These loans are excluded from pooled loss forecasts and a separate reserve is provided under the accounting guidance for loan impairment. Consumer loans whose terms have been modified in a TDR are also individually analyzed for estimated impairment.

Other Real Estate: Other real estate acquired through or instead of loan foreclosure is initially recorded at fair value less costs to sell when acquired, establishing a new cost basis and any deficiency in the value is charged off through the allowance. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed.

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using both accelerated and straight-line methods over the estimated useful life of the asset, ranging from three to seven years for furniture and equipment and seven to fifty years for buildings and improvements.

Federal Home Loan Bank Stock: Civista is a member of the FHLB of Cincinnati and as such, is required to maintain a minimum investment in stock of the FHLB that varies with the level of advances outstanding with the FHLB. The stock is bought from and sold to the FHLB based upon its $100 par value. The stock does not have a readily determinable fair value and as such is classified as restricted stock, carried at cost and evaluated for impairment by management. The stock’s value is determined by the ultimate recoverability of the par value rather than by recognizing temporary declines. The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following: (a) the significance of the decline in net assets of the FHLB as compared to the capital stock amount and the length of time this situation has persisted (b) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance (c) the impact of legislative and regulatory changes on the customer base of the FHLB and (d) the liquidity position of the FHLB. With consideration given to these factors, management concluded that the stock was not impaired at December 31, 2017 or 2016.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Federal Reserve Bank Stock: Civista is a member of the Federal Reserve System. FRB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.

Bank Owned Life Insurance (BOLI) : Civista has purchased BOLI policies on certain key executives. BOLI is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Goodwill and Other Intangible Assets: Goodwill results from prior business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment will be recognized in the period identified.

Other intangible assets consist of core deposit intangibles arising from whole bank and branch acquisitions. These intangible assets are measured at fair value and then amortized on an accelerated method over their estimated useful lives, which range from five to twelve years.

Servicing Rights: Servicing rights are recognized as assets for the allocated value of retained servicing rights on loans sold. Servicing rights are initially recorded at fair value at the date of transfer. The valuation technique uses the present value of estimated future cash flows using current market discount rates. Servicing rights are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates and then, secondarily, prepayment characteristics. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment of a grouping is reported as a valuation allowance to the extent that fair value is less than the capitalized asset for the grouping.

Long-term Assets: Premises and equipment and other intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Repurchase Agreements: Substantially all repurchase agreement liabilities represent amounts advanced by various customers. Securities are pledged to cover these liabilities, which are not covered by federal deposit insurance.

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.

Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

The Company prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Stock-Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the grant date. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common shares at the date of the grant is used for restricted shares.

Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Retirement Plans: Pension expense is the net of service and interest cost, expected return on plan assets and amortization of gains and losses not immediately recognized. Employee 401(k) and profit sharing plan expense is the amount of matching contributions. Deferred compensation allocates the benefits over the years of service.

Earnings per Common Share: Basic earnings per share are net income available to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable related to convertible preferred shares. Treasury shares are not deemed outstanding for earnings per share calculations.

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale and changes in the funded status of the pension plan.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe that any such loss contingencies currently exist that will have a material effect on the financial statements.

Restrictions on Cash: Cash on hand or on deposit with the Federal Reserve Bank is required to meet regulatory reserve and clearing requirements. These balances do not earn interest.

Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by Civista to CBI or by CBI to shareholders. Additional information related to dividend restrictions can be found in Note 19.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 17. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Operating Segments: While the Company’s chief decision makers monitor the revenue streams of the Company’s various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the Company’s financial service operations are considered by management to be aggregated in one reportable operating segment.

Business Combinations: At the date of acquisition the Company records the assets and liabilities of the acquired companies on the Consolidated Balance Sheets at their fair value. The results of operations for acquired companies are included in the Company’s Consolidated Statements of Operations beginning at the acquisition date. Expenses arising from acquisition activities are recorded in the Consolidated Statements of Operations during the period incurred.

Derivative Instruments and Hedging Activities: The Company enters into interest rate swap agreements to facilitate the risk management strategies of a small number of commercial banking customers. All derivatives are accounted for in accordance with ASC-815, Derivatives and Hedging. The Company mitigates the risk of entering into these agreements by entering into equal and offsetting swap agreements with highly rated third party financial institutions. The swap agreements are free-standing derivatives and are recorded at fair value in the Company’s Consolidated Balance Sheets. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes because the Company does not currently intend to execute a setoff with its counterparties. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral, usually in the form of marketable securities, is posted by the counterparty with net liability positions in accordance with contract thresholds.

Reclassifications: Some items in the prior year financial statements were reclassified to conform to the current presentation. Such reclassifications had no effect on net income or shareholders’ equity.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Effect of Newly Issued but Not Yet Effective Accounting Standards:

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The Update’s core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this Update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. However, in August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) to defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. All other entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, we do not expect the new standard, or any of the amendments, to result in a material change from our current accounting for revenue because the majority of the Company’s financial instruments are not within the scope of Topic 606. However, we do expect that the standard will result in new disclosure requirements, which are currently being evaluated.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (g) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (h) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 will be effective for us on January 1, 2018 and will not have a significant impact on our financial statements.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard in this Update requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. A short-term lease is defined as one in which: (a) the lease term is 12 months or less, and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact to the financial statements. Based on the Company’s preliminary analysis of its current portfolio, the impact to the Company’s balance sheet is estimated to result in less than a 1% increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which changes the impairment model for most financial assets. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the ASU is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which addresses eight specific cash flow issues with the objective of reducing diversity in practice. Among these include recognizing cash payments for debt prepayment or debt extinguishment as cash outflows for financing activities; cash proceeds received from the settlement of insurance claims should be classified on the basis of the related insurance coverage; and cash proceeds received from the settlement of bank-owned life insurance policies should be classified as cash inflows from investing activities while the cash payments for premiums on bank-owned policies may be classified as cash outflows for investing activities, operating activities, or a combination of investing and operating activities. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this Update should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business “ASU 2017-01”, which provides a more robust framework to use in determining when a set of assets and activities (collectively referred to as a “set”) is a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. Public business entities should apply the amendments in this Update to annual periods beginning after December 15, 2017, including interim periods within those periods. All other entities should apply the amendments to annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The amendments in this Update should be applied prospectively on or after the effective date.  The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment . To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. A public business entity that is a U.S. Securities and Exchange Commission (“SEC”) filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. A public business entity that is not an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2020. All other entities, including not-for-profit entities that are adopting the amendments in this Update should do so for their annual or any interim

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

goodwill impairment tests in fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20). The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) , which affects any entity that changes the terms or conditions of a share-based payment award. This Update amends the definition of modification by qualifying that modification accounting does not apply to changes to outstanding share-based payment awards that do not affect the total fair value, vesting requirements, or equity/liability classification of the awards. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivative and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down-round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down-round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down-round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down-round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down- round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options ), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Accounting Standards Codification, to a scope exception. Those amendments do not have an accounting effect.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part I of this Update should be applied either retrospectively to outstanding financial instruments with a down-round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective or retrospectively to outstanding financial instruments with a down-round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 850), the objective of which is to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition, the amendments in this Update make certain targeted improvements to simplify the application and disclosure of the hedge accounting guidance in current general accepted accounting principles.  For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Early application is permitted in any period after issuance.  For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this Update. The amended presentation and disclosure guidance is required only prospectively.  The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.  The SEC Observer said that the SEC staff would not object if entities that are considered public business entities only because their financial statements or financial information is required to be included in another entity’s SEC filing use the effective dates for private companies when they adopt ASC 606, Revenue from Contracts with Customers, and ASC 842, Leases. The Update also supersedes certain SEC paragraphs in the Codification related to previous SEC staff announcements and moves other paragraphs, upon adoption of ASC 606 or ASC 842.  This Update is not expected to have a significant impact on the Company’s financial statements.

In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842), which provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date the entity adopts Topic 842; otherwise, an entity should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. The effective date and transition

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

requirements for the amendments are the same as the effective date and transition requirements in ASU 2016-02. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220).  On December 22, 2017, the U.S. federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (Tax Cuts and Jobs Act), which requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws.  The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.  The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted.  The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized.  The Company has elected to early adopt this standard as of December 31, 2017, which resulted in a one-time cumulative effect adjustment of $199 between retained earnings and accumulated other comprehensive income on the Consolidated Balance Sheet.  The adjustment had no impact on net income or any prior periods presented.

XML

Merger

12 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Merger

NOTE 2 - MERGER

On March 6, 2015, CBI completed the acquisition by merger of TCNB Financial Corp. (“TCNB”) in an all-cash transaction for aggregate consideration of $17,226, or $23.50 per share of TCNB stock. The Company and TCNB had first announced that they had entered into an agreement to merge in September of 2014. Immediately following the merger, TCNB’s banking subsidiary, The Citizens National Bank of Southwestern Ohio, was merged into CBI’s banking subsidiary, Civista Bank.

At the time of the merger, TCNB had total assets of $97,479, including $76,771 in loans, and $86,708 in deposits. The transaction was recorded as a purchase and, accordingly, the operating results of TCNB have been included in the Company’s Consolidated Financial Statements since the close of business on March 6, 2015. The aggregate of the purchase price over the fair value of the net assets acquired of approximately $5,375 was recorded as goodwill and will be evaluated for impairment on an annual basis.

Merger-related costs were $391 as of December 31, 2015. These costs were primarily included in salaries, wages and benefits, contracted data processing and professional services on the Consolidated Statements of Operations.

The following table presents financial information for the former TCNB included in the Consolidated Statements of Operations from the date of acquisition through December 31, 2015.

	Actual From Acquisition Date Through December 31, 2015 (in thousands)
Net interest income after provision for loan losses	$	3,155
Noninterest income		138
Net income		1,282

NOTE 2 – MERGER (Continued)

The following table presents unaudited pro forma information for the periods ended December 31, 2017, 2016 and 2015 as if the acquisition of TCNB had occurred on January 1, 2015. This table has been prepared for comparative purposes only and is not indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results.

	Pro Formas (unaudited) Twelve months ended December 31,
	2017		2016		2015
Net interest income after provision for loan losses	$	54,456	$	51,389	$	46,852
Noninterest income		16,334		16,132		14,699
Net income		15,769		16,949		11,931
Pro forma earnings per share:
Basic	$	1.47	$	1.93	$	1.32
Diluted	$	1.28	$	1.55	$	1.09

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for TCNB. Core deposit intangibles will be amortized over periods of between five and ten years using an accelerated method. Goodwill will not be amortized, but instead will be evaluated for impairment.

	At March 6, 2015
Total purchase price	$	17,226
Net assets acquired:
Cash and short-term investments		18,152
Loans, net		76,444
Other securities		716
Premises and equipment		1,738
Accrued interest receivable		194
Core deposit intangible		1,009
Other assets		472
Noninterest-bearing deposits		(18,263	)
Interest-bearing deposits		(68,606	)
Other liabilities		(5	)
		11,851
Goodwill	$	5,375

The assets and liabilities acquired in the TCNB merger were measured at fair value. Management made certain estimates and exercised judgment in accounting for the acquisition. The following is a description of the methods used to determine fair value of significant assets and liabilities at the acquisition date:

Cash and short-term investments: The Company acquired $18.2 million in cash and short-term investments, which management deemed to reflect fair value based on the short term nature of the asset.

Loans: The Company acquired $76.4 million in loans receivable with and without evidence of credit quality deterioration. The loans consisted of Commercial loans, Commercial Real Estate loans, and Residential Real Estate loans including home equity secured lines of credit, as well as Real Estate Construction, Farm Real Estate loans and

NOTE 2 – MERGER (Continued)

Consumer and other loans. The fair value of the performing loan portfolio includes separate adjustments to reflect a credit risk and marketability component and a yield component reflecting the differential between portfolio and market yields. Additionally, certain loans were valued based on their observable sales price. Loans acquired with credit deterioration of $831 were individually evaluated to estimate credit losses and a net recovery amount for each loan. The net cash flows for each loan were then discounted to present value using a risk-adjusted market rate.

Deposits: The Company acquired $86.9 million in deposits. Savings and transaction accounts are variable, have no stated maturity and can be withdrawn on short notice with no penalty. Therefore, the fair value of such deposits is considered equal to the carrying value. The fair value of CD’s is determined by comparing the contractual cost of the CD’s to the market rates with corresponding maturities. The valuation adjustment reflects the present value of the difference between the cash flows attributable to the CD’s based on contractual and market rates. The core deposit intangible is determined by the present value difference of the net cost of the core deposit versus the same amount for an alternative funding source.

XML

Securities

12 Months Ended

Dec. 31, 2017

Investments Debt And Equity Securities [Abstract]

Securities

NOTE 3 - SECURITIES

The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive loss were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2017
U.S. Treasury securities and obligations of    U.S.government agencies	$	30,450	$	100	$	(192	)	$	30,357
Obligations of states and political subdivisions		114,002		4,226		(172	)		118,056
Mortgage-back securities in government sponsored    entities		82,098		408		(690	)		81,817
Total debt securities		226,550		4,734		(1,054	)		230,230
Equity securities in financial institutions		481		351		—			832
Total	$	227,031	$	5,085	$	(1,054	)	$	231,062

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2016
U.S. Treasury securities and obligations of    U.S.government agencies	$	37,406	$	117	$	(77	)	$	37,446
Obligations of states and political subdivisions		92,177		3,395		(574	)		94,998
Mortgage-back securities in government sponsored    entities		62,756		483		(597	)		62,642
Total debt securities		192,339		3,995		(1,248	)		195,086
Equity securities in financial institutions		481		297		—			778
Total	$	192,820	$	4,292	$	(1,248	)	$	195,864

The amortized cost and fair value of securities at year end 2017 by contractual maturity were as follows. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

	Available for sale
	Amortized Cost		Fair Value
Due in one year or less	$	8,787	$	8,765
Due from one to five years		27,662		27,691
Due from five to ten years		30,167		31,622
Due after ten years		77,836		80,335
Mortgage-backed securities in government sponsored    entities		82,098		81,817
Equity securities in financial institutions		481		832
Total	$	227,031	$	231,062

NOTE 3 – SECURITIES (Continued)

Securities with a carrying value of $122,862 and $139,179 were pledged as of December 31, 2017 and 2016, respectively, to secure public deposits, other deposits and liabilities as required or permitted by law.

Proceeds from sales of securities, gross realized gains and gross realized losses were as follows:

	2017		2016		2015
Sale proceeds	$	953	$	4,349	$	—
Gross realized gains		—		18		—
Gross realized losses		—		—		—
Gains (losses) from securities called or settled by the    issuer		12		1		(18	)

Debt securities with unrealized losses at year end 2017 and 2016 not recognized in income are as follows:

2017	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury securities and obligations of    U.S. government agencies	$	20,449	$	(100	)	$	6,617	$	(92	)	$	27,066	$	(192	)
Obligations of states and political subdivisions		4,057		(41	)		7,309		(131	)		11,366		(172	)
Mortgage-backed securities in gov’t sponsored    entities		29,534		(195	)		22,199		(495	)		51,733		(690	)
Total temporarily impaired	$	54,040	$	(336	)	$	36,125	$	(718	)	$	90,165	$	(1,054	)

2016	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury securities and obligations of    U.S. government agencies	$	13,271	$	(61	)	$	893	$	(16	)	$	14,164	$	(77	)
Obligations of states and political subdivisions		17,167		(558	)		519		(16	)		17,686		(574	)
Mortgage-backed securities in gov’t sponsored    entities		35,453		(566	)		2,849		(31	)		38,302		(597	)
Total temporarily impaired	$	65,891	$	(1,185	)	$	4,261	$	(63	)	$	70,152	$	(1,248	)

The Company periodically evaluates securities for other-than-temporary impairment. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses that are determined to be temporary in nature are recorded, net of tax, in accumulated other comprehensive loss on the Consolidated Balance Sheet.

The Company has assessed each available-for-sale security position for credit impairment. Factors considered in determining whether a loss is temporary include:

• The length of time and the extent to which fair value has been below cost;

• The severity of impairment;

• The cause of the impairment and the financial condition and near-term prospects of the issuer;

NOTE 3 – SECURITIES (Continued)

• If the Company intends to sell the investment;

• If it’s more-likely-than-not the Company will be required to sell the investment before recovering its amortized cost basis; and

• If the Company does not expect to recover the investment’s entire amortized cost basis (even if the Company does not intend to sell the investment).

The Company’s review for impairment generally entails:

• Identification and evaluation of investments that have indications of impairment;

• Analysis of individual investments that have fair values less than amortized cost, including consideration of length of time each investment has been in unrealized loss position and the expected recovery period;

• Evaluation of factors or triggers that could cause individual investments to qualify as having other-than-temporary impairment; and

• Documentation of these analyses, as required by policy.

At December 31, 2017, the Company owned 78 securities that were considered temporarily impaired. The unrealized losses on these securities have not been recognized into income because the issuers’ bonds are of high credit quality, management has the intent and ability to hold these securities for the foreseeable future, and the decline in fair value is largely due to changes in market interest rates. The Company also considers sector specific credit rating changes in its analysis. The fair value is expected to recover as the securities approach their maturity date or reset date. The Company does not intend to sell until recovery and does not believe selling will be required before recovery.

XML

Loans

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Loans

NOTE 4 - LOANS

Loans at year-end were as follows:

	2017			2016
Commercial and Agriculture	$	152,473		$	135,462
Commercial Real Estate - owner occupied		164,099			161,364
Commercial Real Estate - non-owner occupied		425,623			395,931
Residential Real Estate		268,735			247,308
Real Estate Construction		97,531			56,293
Farm Real Estate		39,461			41,170
Consumer and Other		16,739			17,978
Total Loans		1,164,661			1,055,506
Allowance for loan losses		(13,134	)		(13,305	)
Net loans	$	1,151,527		$	1,042,201

Included in total loans above are deferred loan fees of $223 at December 31, 2017 and deferred loan costs of $94 at December 31, 2016.

NOTE 4 – LOANS (Continued)

Loans to principal officers, directors, and their affiliates at year-end 2017 and 2016 were as follows:

	2017			2016
Balance - Beginning of year	$	14,389		$	15,147
New loans and advances		2,344			850
Repayments		(1,256	)		(1,575	)
Effect of changes to related parties		(1,475	)		(33	)
Balance - End of year	$	14,002		$	14,389

XML

Allowance for Loan Losses

12 Months Ended

Dec. 31, 2017

Text Block [Abstract]

Allowance for Loan Losses

NOTE 5 - ALLOWANCE FOR LOAN LOSSES

Management has an established methodology to determine the adequacy of the allowance for loan losses that assesses the risks and losses inherent in the loan portfolio. For purposes of determining the allowance for loan losses, the Company has segmented certain loans in the portfolio by product type. Loans are segmented into the following pools: Commercial and Agriculture loans, Commercial Real Estate – Owner Occupied loans, Commercial Real Estate – Non-owner Occupied loans, Residential Real Estate loans, Real Estate Construction loans, Farm Real Estate loans and Consumer and Other loans. Loss migration rates for each risk category are calculated and used as the basis for calculating loan loss allowance allocations. Loss migration rates are calculated over a three-year period for all portfolio segments. Management also considers certain economic factors for trends that management uses to account for the qualitative and environmental changes in risk, which affects the level of the reserve. The following economic factors are analyzed:

• Changes in lending policies and procedures

• Changes in experience and depth of lending and management staff

• Changes in quality of credit review system

• Changes in the nature and volume of the loan portfolio

• Changes in past due, classified and nonaccrual loans and TDRs

• Changes in economic and business conditions

• Changes in competition or legal and regulatory requirements

• Changes in concentrations within the loan portfolio

• Changes in the underlying collateral for collateral dependent loans

The total allowance reflects management’s estimate of loan losses inherent in the loan portfolio at the consolidated balance sheet date. The Company considers the allowance for loan losses of $13,134 adequate to cover loan losses inherent in the loan portfolio, at December 31, 2017. The following tables present, by portfolio segment, the changes in the allowance for loan losses, the ending allocation of the allowance for loan losses and the loan balances outstanding for the years ended December 31, 2017, 2016 and 2015. The changes can be impacted by overall loan volume, adversely graded loans, historical charge-offs and economic factors.

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Allowance for loan losses:

December 31, 2017	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	2,018	$	(11	)	$	372	$	(817	)	$	1,562
Commercial Real Estate:
Owner Occupied		2,171		(328	)		69		131			2,043
Non-Owner Occupied		4,606		(38	)		46		693			5,307
Residential Real Estate		3,089		(400	)		194		(973	)		1,910
Real Estate Construction		420		—			44		370			834
Farm Real Estate		442		—			3		(15	)		430
Consumer and Other		314		(165	)		43		98			290
Unallocated		245		—			—		513			758
Total	$	13,305	$	(942	)	$	771	$	—		$	13,134

For the year ended December 31, 2017, the allowance for Commercial & Agriculture loans was reduced by a decrease in general reserves as a result of lower loss rates. The result was represented as a decrease in the provision. The allowance for Commercial Real Estate – Owner Occupied loans was reduced by a decrease in general reserves and charge-offs. The allowance for Commercial Real Estate – Non-Owner Occupied loans increased due to an increase in general reserves required for this type as a result of higher loan balances.  The allowance for Residential Real Estate loans was reduced by a decrease in general reserves required for this type as a result of a decrease in loss rates, represented by a decrease in the provision. The allowance for Real Estate Construction loans increased due to higher outstanding loan balances for this type of loan. The allowance for Farm Real Estate loans was reduced by a decrease in general reserves required for this type as a result of lower outstanding loan balances. The result was represented as a decrease in the provision. Management feels that the unallocated amount is appropriate and within the relevant range for the allowance that is reflective of the risk in the portfolio.

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Allowance for loan losses:

December 31, 2016	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	1,478	$	(880	)	$	105	$	1,315		$	2,018
Commercial Real Estate:
Owner Occupied		2,467		(228	)		56		(124	)		2,171
Non-Owner Occupied		4,657		(23	)		1,372		(1,400	)		4,606
Residential Real Estate		4,086		(455	)		479		(1,021	)		3,089
Real Estate Construction		371		(115	)		12		152			420
Farm Real Estate		538		—			—		(96	)		442
Consumer and Other		382		(125	)		46		11			314
Unallocated		382		—			—		(137	)		245
Total	$	14,361	$	(1,826	)	$	2,070	$	(1,300	)	$	13,305

For the year ended December 31, 2016, the increase in allowance for Commercial & Agriculture loans was due to an increase in general reserves as a result of higher balances and higher loss rates in criticized loans. The result was represented as an increase in the provision. The allowance for Commercial Real Estate – Owner Occupied loans was reduced not only by a decrease in specific reserves required for this type, but also by a decrease in general reserves due to decreases in classified, non-accrual loans and lower loss rates for this type. The result of these changes was represented as a decrease in the provision. The decrease in allowance for Commercial Real Estate – Non-Owner Occupied loans was the result of a decrease in general reserves required as a result of lower loss rates and improvement in past due, classified and non-accrual loans for this type. In addition, a payoff on a previously charged down loan was received resulting in a recovery of approximately $1,303. The net result was represented as a decrease in the provision. The allowance for Residential Real Estate loans was reduced by a decrease in general reserves required for this type as a result of a decrease in loss rates, represented by a decrease in the provision. The allowance for Real Estate Construction loans increased due to an increase in loss rates for this type of loan, which was represented as an increase in the provision. The allowance for Farm Real Estate loans was reduced by a decrease in general reserves required for this type as a result of lower outstanding loan balances and a decrease in loss rates. The result of these changes was represented as a decrease in the provision. Management feels that the unallocated amount is appropriate and within the relevant range for the allowance that is reflective of the risk in the portfolio.

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Allowance for loan losses:

December 31, 2015	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	1,819	$	(190	)	$	182	$	(333	)	$	1,478
Commercial Real Estate:
Owner Occupied		2,221		(523	)		187		582			2,467
Non-Owner Occupied		4,334		(81	)		115		289			4,657
Residential Real Estate		3,747		(1,135	)		331		1,143			4,086
Real Estate Construction		428		—			5		(62	)		371
Farm Real Estate		822		—			76		(360	)		538
Consumer and Other		200		(120	)		46		256			382
Unallocated		697		—			—		(315	)		382
Total	$	14,268	$	(2,049	)	$	942	$	1,200		$	14,361

For the year ended December 31, 2015, the allowance for Commercial and Agriculture loans was reduced due to decreases in specific reserves for impaired loans of $625. The decrease in specific reserves for impaired loans was primarily the result of the resolution of an impaired loan. The Company did not incur losses with this resolution. The result was represented as a decrease in the provision. The increase in the allowance for Commercial Real Estate—Owner Occupied loans was the result of an increase in loss migration rates, which is attributable to the change in the lookback period to a three-year period. The increase in the allowance for Commercial Real Estate – Non–Owner Occupied loans was the result of an increase in loss migration rates, which is attributable to the change in the lookback period to a three-year period. The ending reserve balance for Residential Real Estate loans increased from the end of the previous year due to an increase in loss migration rates, which is attributable to the change in the look-back period to a three-year period. The allowance for Real Estate Construction loans decreased as a result of decreasing loan balances. The allowance for Farm Real Estate loans decreased as a result of decreasing loan balances and loss rates offset by an increase in classified loans. The increase in the allowance for Consumer and other loans increased due to an increase in loss rates, which is attributable to the change in the look-back period. Unallocated reserves declined due to a change in the Company’s lookback period. As described above, the Company changed from a two-year lookback period to a three-year lookback period when calculating all but one segment’s loss migration rates during the third quarter of 2015. The change in methodology resulted in a decline in the unallocated balance with corresponding increase in allocated balances within the reserve calculation. While loan balances were up, loss rates continued to trend downward, exclusive of the change in methodology, resulting in a lower allowance balance. While criticized loans increased slightly, we saw significant improvement in nonperforming loan balances resulting in a decline in specific reserves for impaired loans. As of December 31, 2015, management felt that the unallocated amount was appropriate and within the relevant range for the allowance that was reflective of the risk in the portfolio.

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

The following tables present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of December 31, 2017 and December 31, 2016.

December 31, 2017	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	82	$	4	$	1,476	$	1,562
Commercial Real Estate:
Owner Occupied		—		6		2,037		2,043
Non-Owner Occupied		—		—		5,307		5,307
Residential Real Estate		44		109		1,757		1,910
Real Estate Construction		—		—		834		834
Farm Real Estate		—		6		424		430
Consumer and Other		—		—		290		290
Unallocated		—		—		758		758
Total	$	126	$	125	$	12,883	$	13,134
Outstanding loan balances:
Commercial & Agriculture	$	87	$	438	$	151,948	$	152,473
Commercial Real Estate:
Owner Occupied		—		1,010		163,089		164,099
Non-Owner Occupied		—		44		425,579		425,623
Residential Real Estate		128		1,360		267,247		268,735
Real Estate Construction		—		—		97,531		97,531
Farm Real Estate		—		608		38,853		39,461
Consumer and Other		—		—		16,739		16,739
Total	$	215	$	3,460	$	1,160,986	$	1,164,661

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

December 31, 2016	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	86	$	82	$	1,850	$	2,018
Commercial Real Estate:
Owner Occupied		—		4		2,167		2,171
Non-Owner Occupied		—		—		4,606		4,606
Residential Real Estate		89		102		2,898		3,089
Real Estate Construction		—		—		420		420
Farm Real Estate		—		—		442		442
Consumer and Other		—		—		314		314
Unallocated		—		—		245		245
Total	$	175	$	188	$	12,942	$	13,305
Outstanding loan balances:
Commercial & Agriculture	$	88	$	1,983	$	133,391	$	135,462
Commercial Real Estate:
Owner Occupied		—		1,896		159,468		161,364
Non-Owner Occupied		—		359		395,572		395,931
Residential Real Estate		168		1,686		245,454		247,308
Real Estate Construction		—		—		56,293		56,293
Farm Real Estate		—		614		40,556		41,170
Consumer and Other		—		1		17,977		17,978
Total	$	256	$	6,539	$	1,048,711	$	1,055,506

The following tables represent credit exposures by internally assigned risk ratings for the periods ended December 31, 2017 and 2016. The remaining loans in the Residential Real Estate, Real Estate Construction and Consumer and Other loan categories that are not assigned a risk grade are presented in a separate table below. The risk rating analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all. The Company’s internal credit risk rating system is based on experiences with similarly graded loans.

The Company’s internally assigned grades are as follows:

• Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

• Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

• Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that Civista will sustain some loss if the deficiencies are not corrected.

• Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

• Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

• Unrated – Generally, Residential Real Estate, Real Estate Construction and Consumer and Other loans are not risk-graded, except when collateral is used for a business purpose.

December 31, 2017	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	140,842	$	8,412	$	3,219	$	—	$	152,473
Commercial Real Estate:
Owner Occupied		155,756		1,166		7,177		—		164,099
Non-Owner Occupied		422,363		2,321		939		—		425,623
Residential Real Estate		62,628		1,997		5,873		—		70,498
Real Estate Construction		91,545		15		27		—		91,587
Farm Real Estate		25,228		11,236		2,997		—		39,461
Consumer and Other		1,312		—		70		—		1,382
Total	$	899,674	$	25,147	$	20,302	$	—	$	945,123

December 31, 2016	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	127,867	$	4,300	$	3,295	$	—	$	135,462
Commercial Real Estate:
Owner Occupied		151,659		4,016		5,689		—		161,364
Non-Owner Occupied		393,592		1,676		663		—		395,931
Residential Real Estate		59,015		1,661		6,911		—		67,587
Real Estate Construction		50,678		16		27		—		50,721
Farm Real Estate		31,814		5,673		3,683		—		41,170
Consumer and Other		2,135		—		109		—		2,244
Total	$	816,760	$	17,342	$	20,377	$	—	$	854,479

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

The following tables present performing and nonperforming loans based solely on payment activity for the years ended December 31, 2017 and December 31, 2016 that have not been assigned an internal risk grade. The types of loans presented here are not assigned a risk grade unless there is evidence of a problem. Payment activity is reviewed by management on a monthly basis to evaluate performance. Loans are considered to be nonperforming when they become 90 days past due or if management thinks that we may not collect all of our principal and interest. Nonperforming loans also include certain loans that have been modified in Troubled Debt Restructurings (TDRs) where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions due to economic status. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months.

December 31, 2017	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	198,237	$	5,944	$	15,341	$	219,522
Nonperforming		—		—		16		16
Total	$	198,237	$	5,944	$	15,357	$	219,538

December 31, 2016	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	179,721	$	5,572	$	15,725	$	201,018
Nonperforming		—		—		9		9
Total	$	179,721	$	5,572	$	15,734	$	201,027

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of December 31, 2017 and 2016.

December 31, 2017	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	575	$	2	$	685	$	1,262	$	151,124	$	87	$	152,473	$	—
Commercial Real Estate:
Owner Occupied		897		104		484		1,485		162,614		—		164,099		—
Non-Owner Occupied		133		—		470		603		425,020		—		425,623		—
Residential Real Estate		1,613		229		785		2,627		265,980		128		268,735		—
Real Estate Construction		—		—		27		27		97,504		—		97,531		—
Farm Real Estate		27		—		186		213		39,248		—		39,461		—
Consumer and Other		92		96		16		204		16,535		—		16,739		16
Total	$	3,337	$	431	$	2,653	$	6,421	$	1,158,025	$	215	$	1,164,661	$	16

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

December 31, 2016	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	156	$	20	$	152	$	328	$	135,046	$	88	$	135,462	$	—
Commercial Real Estate:
Owner Occupied		722		553		280		1,555		159,809		—		161,364		—
Non-Owner Occupied		147		—		316		463		395,468		—		395,931		—
Residential Real Estate		1,812		507		1,049		3,368		243,772		168		247,308		—
Real Estate Construction		—		—		27		27		56,266		—		56,293		—
Farm Real Estate		93		—		—		93		41,077		—		41,170		—
Consumer and Other		215		31		31		277		17,701		—		17,978		9
Total	$	3,145	$	1,111	$	1,855	$	6,111	$	1,049,139	$	256	$	1,055,506	$	9

The following table presents loans on nonaccrual status, excluding purchased credit-impaired (PCI) loans, as of December 31, 2017 and 2016.

	2017		2016
Commercial & Agriculture	$	887	$	1,622
Commercial Real Estate:
Owner Occupied		1,476		1,461
Non-Owner Occupied		711		464
Residential Real Estate		2,778		3,266
Real Estate Construction		27		27
Farm Real Estate		186		2
Consumer and Other		67		101
Total	$	6,132	$	6,943

Nonaccrual Loans: Loans are considered for nonaccrual status upon reaching 90 days delinquency, unless the loan is well secured and in the process of collection, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans. When a loan is placed on nonaccrual status, previously accrued but unpaid interest is deducted from interest income. A loan may be returned to accruing status only if one of three conditions are met: the loan is well-secured and none of the principal and interest has been past due for a minimum of 90 days; the loan is a TDR and the borrower has made a minimum of six months payments; or the principal and interest payments are reasonably assured and a sustained period of performance has occurred, generally six months. The gross interest income that would have been recorded on nonaccrual loans in 2017, 2016 and 2015 if the loans had been current in accordance with their original terms and had been outstanding throughout the period or since origination, if held for part of the period, was $712, $701 and $1,761, respectively. The amount of interest income on such loans recognized on a cash basis was $139 in 2017, $1,138 in 2016 and $766 in 2015.

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Modifications: A modification of a loan constitutes a TDR when the Company for economic or legal reasons related to a borrower’s financial difficulties grants a concession to the borrower that it would not otherwise consider. The Company offers various types of concessions when modifying a loan, however, forgiveness of principal is rarely granted. Commercial Real Estate loans modified in a TDR often involve reducing the interest rate lower than the current market rate for new debt with similar risk. Real Estate loans modified in a TDR were primarily comprised of interest rate reductions where monthly payments were lowered to accommodate the borrowers’ financial needs.

Loans modified in a TDR are typically already on non-accrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance. As a result, loans modified in a TDR may have the financial effect of increasing the specific allowance associated with the loan. An allowance for impaired loans that have been modified in a TDR are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates. TDRs accounted for $169 of the allowance for loan losses as of December 31, 2017, $278 as of December 31, 2016 and $286 as of December 31, 2015.

Loan modifications that are considered TDRs completed during the twelve month periods ended December 31, 2017, 2016 and 2015 were as follows:

	For the Twelve Month Period Ended December 31, 2017
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		1		13		13
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Consumer and Other		—		—		—
Total Loan Modifications		1	$	13	$	13

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

	For the Twelve Month Period Ended December 31, 2016
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		4	$	529	$	529
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		2		308		308
Real Estate Construction		—		—		—
Farm Real Estate		3		700		700
Consumer and Other		—		—		—
Total Loan Modifications		9	$	1,537	$	1,537

	For the Twelve Month Period Ended December 31, 2015
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		—		—		—
Real Estate Construction		1		41		41
Farm Real Estate		—		—		—
Consumer and Other		—		—		—
Total Loan Modifications		1	$	41	$	41

Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-accrual loan. Recidivism occurs at a notably higher rate than do defaults on new originations loans, so modified loans present a higher risk of loss than do new origination loans. During the periods ended December 31, 2017 and 2016, there were no defaults on loans that were modified and considered TDRs during the previous twelve months. During the twelve month period ended December 31, 2015, there was one default, totaling $107, on loans which were modified and considered TDRs during the previous twelve months.

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Impaired Loans: Larger (greater than $350) commercial loan, commercial real estate loan and farm real estate loan relationships, all TDRs and residential real estate and consumer loans that are part of a larger relationship are tested for impairment. These loans are analyzed to determine if it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance.

The following tables include the recorded investment and unpaid principal balances for impaired financing receivables, excluding PCI loans, with the associated allowance amount, if applicable, as of December 31, 2017 and 2016.

	December 31, 2017						December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial & Agriculture	$	—	$	—			$	1,230	$	1,751
Commercial Real Estate:
Owner Occupied		693		913				1,658		1,803
Non-Owner Occupied		44		48				359		386
Residential Real Estate		977		1,049				1,259		1,590
Farm Real Estate		148		148				614		614
Consumer and Other		—		—				1		1
Total		1,862		2,158				5,121		6,145
With an allowance recorded:
Commercial & Agriculture		438		438	$	4		753		1,303	$	82
Commercial Real Estate:
Owner Occupied		317		317		6		238		238		4
Non-Owner Occupied		—		—		—		—		—		—
Residential Real Estate		383		387		109		427		431		102
Farm Real Estate		460		460		6		—		—		—
Total		1,598		1,602		125		1,418		1,972		188
Total:
Commercial & Agriculture		438		438		4		1,983		3,054		82
Commercial Real Estate:
Owner Occupied		1,010		1,230		6		1,896		2,041		4
Non-Owner Occupied		44		48		—		359		386		—
Residential Real Estate		1,360		1,436		109		1,686		2,021		102
Farm Real Estate		608		608		6		614		614		—
Consumer and Other		—		—		—		1		1		—
Total	$	3,460	$	3,760	$	125	$	6,539	$	8,117	$	188

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

The following tables include the average recorded investment and interest income recognized for impaired financing receivables as of, and for the years ended, December 31, 2017, 2016 and 2015.

For the year ended:	December 31, 2017				December 31, 2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	1,375	$	34	$	2,036	$	40
Commercial Real Estate:
Owner Occupied		1,507		75		1,847		862
Non-Owner Occupied		233		6		1,039		83
Residential Real Estate		1,515		73		1,787		175
Real Estate Construction		—		—		—		1
Farm Real Estate		613		28		1,006		95
Consumer and Other		—		—		2		—
Total	$	5,243	$	216	$	7,717	$	1,256

For the year ended:	December 31, 2015
	Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	1,519	$	54
Commercial Real Estate:
Owner Occupied		2,738		139
Non-Owner Occupied		1,946		32
Residential Real Estate		2,544		103
Real Estate Construction		16		—
Farm Real Estate		653		56
Consumer and Other		4		—
Total	$	9,420	$	384

Foreclosed assets acquired in settlement of loans are carried at fair value less estimated costs to sell and are included in other assets on the Consolidated Balance Sheet. As of December 31, 2017 and 2016, a total of $16 and $37, respectively of foreclosed assets were included with other assets. As of December 31, 2017, included within the foreclosed assets is $16 of consumer residential mortgages that were foreclosed on or received via a deed in lieu transaction prior to the period end. As of December 31, 2017 and 2016, the Company had initiated formal foreclosure procedures on $239 and $710, respectively of consumer residential mortgages.

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Changes in the amortizable yield for PCI loans were as follows, since acquisition:

	At December 31, 2017			At December 31, 2016
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	49		$	80
Acquisition of PCI loans		—			—
Accretion		(34	)		(31	)
Balance at end of period	$	15		$	49

The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30:

	At December 31, 2017		At December 31, 2016
	Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)		Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)
	(In Thousands)
Outstanding balance	$	775	$	850
Carrying amount		215		256

There has been $126 and $175 in allowance for loan losses recorded for acquired loans with or without specific evidence of deterioration in credit quality as of December 31, 2017 and 2016, respectively.

XML

Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Other Comprehensive Income (Loss)

NOTE 6 - OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in each component of accumulated other comprehensive loss, net of tax, as of December 31, 2017, 2016 and 2015.

	For the Year Ended December 31, 2017									For the Year Ended December 31, 2016									For the Year Ended December 31, 2015
	Unrealized Gains and Losses on Available for Sale Securities			Defined Benefit Pension Items			Total			Unrealized Gains and Losses on Available for Sale Securities			Defined Benefit Pension Items			Total			Unrealized Gains and Losses on Available for Sale Securities			Defined Benefit Pension Items			Total
Beginning balance	$	2,008		$	(4,345	)	$	(2,337	)	$	3,554		$	(4,049	)	$	(495	)	$	3,730		$	(3,777	)	$	(47	)
Other comprehensive    income (loss) before    reclassifications		620			553			1,173			(1,533	)		(511	)		(2,044	)		(188	)		(449	)		(637	)
Amounts reclassified from    accumulated other    comprehensive loss		(8	)		247			239			(13	)		215			202			12			177			189
Net current-period other    comprehensive income    (loss)		612			800			1,412			(1,546	)		(296	)		(1,842	)		(176	)		(272	)		(448	)
Reclassification of certain income tax effects from accumulated other comprehensive loss		565			(764	)		(199	)		—			—			—			—			—			—
Ending balance	$	3,185		$	(4,309	)	$	(1,124	)	$	2,008		$	(4,345	)	$	(2,337	)	$	3,554		$	(4,049	)	$	(495	)

The following table presents the amounts reclassified out of each component of accumulated other comprehensive loss as of December 31, 2017, 2016 and 2015.

	Amount Reclassified from Accumulated Other Comprehensive Loss (a)
	For the year ended December 31,
Details about Accumulated Other Comprehensive Loss Components	2017				2016				2015				Affected Line Item in the Statement Where Net Income is Presented
Unrealized gains (losses) on available-for-sale    securities	$	12			$	19			$	(18	)		Net gain (loss) on sale of securities
Tax effect		(4	)			(6	)			6			Income taxes
		8				13				(12	)
Amortization of defined benefit pension items
Actuarial losses		(380	)	(b)		(326	)	(b)		(270	)	(b)	Salaries, wages and benefits
Tax effect		133				111				93			Income taxes
		(247	)			(215	)			(177	)
Total reclassifications for the period	$	(239	)		$	(202	)		$	(189	)

(a) Amounts in parentheses indicate expenses and other amounts indicate income.

(b) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost.

XML

Premises and Equipment

12 Months Ended

Dec. 31, 2017

Property Plant And Equipment [Abstract]

Premises and Equipment

NOTE 7 - PREMISES AND EQUIPMENT

Year-end premises and equipment were as follows:

	2017			2016
Land and improvements	$	5,022		$	5,094
Buildings and improvements		21,221			20,266
Furniture and equipment		17,004			16,070
Total		43,247			41,430
Accumulated depreciation		(25,636	)		(23,510	)
Premises and equipment, net	$	17,611		$	17,920

Depreciation expense was $1,249, $1,257 and $1,193 for 2017, 2016 and 2015, respectively.

Rent expense was $580, $540 and $506 for 2017, 2016 and 2015, respectively. Rent commitments under non-cancelable operating leases at December 31, 2017 were as follows, before considering renewal options that generally are present.

2018	$	571
2019		479
2020		226
2021		91
2022		36
Total	$	1,403

The rent commitments listed above are primarily for the leasing of seven financial services branches.

XML

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS

There has been no change in the carrying amount of goodwill of $27,095 for the years ended December 31, 2017 and December 31, 2016.

Management performs an evaluation of goodwill for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Management performed an evaluation of the Company’s goodwill during the fourth quarter of 2017. Based on this test, management concluded that the Company’s goodwill was not impaired at December 31, 2017.

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS (Continued)

Acquired intangible assets were as follows as of year end.

	2017						2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets(1):
MSRs	$	1,065	$	322	$	743	$	912	$	250	$	662
Core deposit intangibles		7,274		6,738		536		7,274		6,152		1,122
Total amortized intangible assets	$	8,339	$	7,060	$	1,279	$	8,186	$	6,402	$	1,784

(1) Excludes fully amortized intangible assets

Aggregate core deposit intangible amortization expense was $586, $699 and $711 for 2017, 2016 and 2015, respectively.

Aggregate mortgage servicing rights amortization was $72, $74 and $29 for 2017, 2016 and 2015, respectively.

Estimated amortization expense for each of the next five years and thereafter is as follows:

	MSRs		Core deposit intangibles		Total
2018	$	41	$	111	$	152
2019		41		88		129
2020		41		71		112
2021		41		68		109
2022		41		68		109
Thereafter		538		130		668
	$	743	$	536	$	1,279

XML

Interest-Bearing Deposits

12 Months Ended

Dec. 31, 2017

Text Block [Abstract]

Interest-Bearing Deposits

NOTE 9 - INTEREST-BEARING DEPOSITS

Interest-bearing deposits as of December 31, 2017 and 2016 were as follows:

	2017		2016
Demand	$	183,680	$	183,759
Statement and Passbook Savings		435,377		384,330
Certificates of Deposit:
$250 and over		8,206		13,640
Other		192,455		168,723
Individual Retirement Accounts		23,241		25,063
Total	$	842,959	$	775,515

NOTE 9 - INTEREST-BEARING DEPOSITS (Continued)

Scheduled maturities of certificates of deposit, including IRA’s at December 31, 2017 were as follows:

2018	$	161,656
2019		41,926
2020		15,459
2021		3,382
2022		1,202
Thereafter		277
Total	$	223,902

Deposits from the Company’s principal officers, directors, and their affiliates at year-end 2017 and 2016 were $9,633 and $9,209, respectively.

As of December 31, 2017, CDs and IRAs totaling $9,141 met or exceeded the FDIC’s insurance limit of $250,000.

XML

Short-Term Borrowings

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Short-Term Borrowings

NOTE 10 - SHORT-TERM BORROWINGS

Short-term borrowings, which consist of federal funds purchased and other short-term borrowings are summarized as follows:

	At December 31, 2017						At December 31, 2016
	Federal Funds Purchased			Short-term Borrowings			Federal Funds Purchased			Short-term Borrowings
Outstanding balance at year end	$	—		$	56,900		$	—		$	31,000
Maximum indebtedness during the year		20,000			115,050			20,000			70,400
Average balance during the year		119			38,825			116			10,483
Average rate paid during the year		1.68	%		1.12	%		0.86	%		0.42	%
Interest rate on year end balance		—			1.42	%		—			0.64	%

	At December 31, 2015
	Federal Funds Purchased			Short-term Borrowings
Outstanding balance at year end	$	—		$	53,700
Maximum indebtedness during the year		—			64,700
Average balance during the year		69			26,880
Average rate paid during the year		0.53	%		0.20	%
Interest rate on year end balance		—			0.35	%

Average balance during the year represent daily averages. Average interest rates represent interest expense divided by the related average balances.

These borrowing transactions can range from overnight to six months in maturity. The average maturity was one day at December 31, 2017, 2016 and 2015.

XML

Federal Home Loan Bank Advances

12 Months Ended

Dec. 31, 2017

Banking And Thrift [Abstract]

Federal Home Loan Bank Advances

NOTE 11 - FEDERAL HOME LOAN BANK ADVANCES

Long term advances from the FHLB were $15,000 at December 31, 2017 and $17,500 at December 31, 2016. Outstanding balances have maturity dates ranging from February 2018 to October 2019 and fixed rates ranging from 1.50% to 2.10%. The average rate on outstanding advances was 1.70% at December 31, 2017.

NOTE 11 - FEDERAL HOME LOAN BANK ADVANCES (Continued)

Scheduled principal reductions of FHLB advances outstanding at December 31, 2017 were as follows:

2018	$	10,000
2019		5,000
Total	$	15,000

In addition to the borrowings, the Company had outstanding letters of credit with the FHLB totaling $19,600 at year-end 2017 and 2016, respectively used for pledging to secure public funds. FHLB borrowings and the letters of credit were collateralized by FHLB stock and by $137,250 and $102,150 of residential mortgage loans under a blanket lien arrangement at year-end 2017 and 2016, respectively.

The Company had a FHLB maximum borrowing capacity of $366,122 as of December 31, 2017, with remaining borrowing capacity of approximately $274,622. The borrowing arrangement with the FHLB is subject to annual renewal. The maximum borrowing capacity is recalculated at least quarterly.

XML

Securities Sold Under Agreements to Repurchase

12 Months Ended

Dec. 31, 2017

Brokers And Dealers [Abstract]

Securities Sold Under Agreements to Repurchase

NOTE 12 - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase are used to facilitate the needs of our customers as well as to facilitate our short-term funding needs. Securities sold under repurchase agreements are carried at the amount of cash received in association with the agreement. We continuously monitor the collateral levels and may be required, from time to time, to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents.

The following table presents detail regarding the securities pledged as collateral under repurchase agreements as of December 31, 2017 and 2016. All of the repurchase agreements are overnight agreements.

	December 31, 2017		December 31, 2016
Securities pledged for repurchase agreements:
U.S. Treasury securities	$	874	$	1,761
Obligations of U.S. government agencies		20,881		27,164
Total securities pledged	$	21,755	$	28,925
Gross amount of recognized liabilities for    repurchase agreements	$	21,755	$	28,925
Amounts related to agreements not included in    offsetting disclosures above	$	—	$	—

Information concerning securities sold under agreements to repurchase was as follows:

	2017			2016			2015
Outstanding balance at year end	$	21,755		$	28,925		$	25,040
Average balance during the year		18,234			21,767			20,086
Average interest rate during the year		0.10	%		0.10	%		0.10	%
Maximum month-end balance during the year	$	23,889		$	28,925		$	25,040
Weighted average interest rate at year end		0.10	%		0.10	%		0.10	%

XML

Subordinated Debentures

12 Months Ended

Dec. 31, 2017

Brokers And Dealers [Abstract]

Subordinated Debentures

NOTE 13 - SUBORDINATED DEBENTURES

Trusts formed by the Company issued floating rate trust preferred securities, in the amounts of $5,000 and $7,500, through special purpose entities as part of pooled offerings of such securities. The Company issued subordinated debentures to the trusts in exchange for the proceeds of the offerings, which debentures represent the sole assets of the trusts. The Company may redeem the subordinated debentures, in whole but not in part, at face value. In April 2007, the Company elected to redeem and refinance the $5,000 floating rate subordinated debenture. The refinancing was done at face value and resulted in a 2.00% reduction in the floating rate. The new subordinated debenture has a 30-year maturity and is redeemable, in whole or in part, anytime without penalty. The replacement subordinated debenture does not have any deferred issuance cost associated with it. The interest rate at December 31, 2017 on the $7,500 debenture was 4.48% and the $5,000 debenture was 2.92%.

Additionally, the Company formed an additional trust that issued $12,500 of 6.05% fixed rate trust preferred securities for five years, then becoming floating rate trust preferred securities, through a special purpose entity as part of a pooled offering of such securities. The Company issued subordinated debentures to the trusts in exchange for the proceeds of the offerings, which debentures represent the sole assets of the trusts. The Company may redeem the subordinated debentures at face value without penalty. The current rate on the $12,500 subordinated debenture is 3.58%.

Finally, the Company acquired two additional trust preferred securities as part of its acquisition of Futura Banc Corp (Futura) in December 2007. Futura TPF Trust I and Futura TPF Trust II were formed in June of 2005 in the amounts of $2,500 and $1,927, respectively. Futura had issued subordinated debentures to the trusts in exchange for ownership of all of the common security of the trusts and the proceeds of the preferred securities sold by the trusts. The Company may redeem the subordinated debentures, in whole or in part, in a principal amount with integral multiples of $1,000, at 100% of the principal amount, plus accrued and unpaid interest. The subordinated debentures mature on June 15, 2035. The subordinated debentures are also redeemable in whole or in part from time to time, upon the occurrence of specific events defined within the trust indenture. The current rate on the $2,500 subordinated debenture is variable at 2.98%. In June 2010, the rate on the $1,927 subordinated debenture switched from a fixed rate to a floating rate. The current rate on the $1,927 subordinated debenture is 2.98%.

XML

Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 14 - INCOME TAXES

Income taxes were as follows for the years ended December 31:

	2017		2016		2015
Current	$	5,414	$	6,449	$	5,191
Deferred		435		170		(410	)
Change in corporate tax rate		511		—		—
Income taxes	$	6,360	$	6,619	$	4,781

Effective tax rates differ from the statutory federal income tax rate of 35% in 2017 and 2016 and 34% in 2015 due to the following:

	2017			2016			2015
Income taxes computed at the statutory federal tax    rate	$	7,781		$	8,343		$	5,959
Add (subtract) tax effect of:
Nontaxable interest income, net of nondeductible    interest expense		(1,107	)		(946	)		(900	)
Low income housing tax credit		(686	)		(435	)		(303	)
Cash surrender value of BOLI		(201	)		(197	)		(159	)
Change in corporate tax rate		511			—			—
Other		62			(146	)		184
Income tax expense	$	6,360		$	6,619		$	4,781

NOTE 14 - INCOME TAXES (Continued)

The Tax Cut and Jobs Act, enacted on December 22, 2017, lowered the federal corporate income tax rate from 35% to 21% effective January 1, 2018.  As a result, the carrying value of net deferred tax assets was reduced, which increased income tax expense by $511.

Year-end deferred tax assets and liabilities were due to the following:

	2017			2016
Deferred tax assets
Allowance for loan losses	$	2,848		$	4,640
Deferred compensation		1,213			1,762
Intangible assets		95			187
Pension costs		—			277
Other		141			102
Deferred tax asset		4,297			6,968
Deferred tax liabilities
Tax depreciation in excess of book depreciation		(275	)		(97	)
Discount accretion on securities		(43	)		(58	)
Purchase accounting adjustments		(536	)		(1,091	)
FHLB stock dividends		(1,053	)		(1,705	)
Unrealized gain on securities available for sale		(847	)		(1,035	)
Pension costs		(293	)		—
Prepaids		(320	)		—
Other		(166	)		(256	)
Deferred tax liability		(3,533	)		(4,242	)
Net deferred tax asset	$	764		$	2,726

No valuation allowance was established at December 31, 2017 and 2016, due to the Company’s ability to carryback to taxes paid in previous years and certain tax strategies, coupled with the anticipated future income as evidenced by the Company’s earning potential.

The Company and its subsidiaries are subject to U.S. federal income tax. The Company is subject to tax in Ohio based upon its net worth.

There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. The Company’s federal tax returns for taxable years through 2012 have been closed for purposes of examination by the Internal Revenue Service.

XML

Retirement Plans

12 Months Ended

Dec. 31, 2017

Compensation And Retirement Disclosure [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 $805, $734 and $667 in 2017, 2016 and 2015, 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.

NOTE 15 - RETIREMENT PLANS (Continued)

In October 2015, the Company, on behalf of it and its subsidiaries, entered into Pension Shortfall Agreements (the “Shortfall Agreements”) with ten employees of the Bank. 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 $18 in 2017, $201 in 2016 and $364 in 2015. Included in pension shortfall expense was interest expense, totaling $18, $11 and $10 in 2017, 2016 and 2015, respectively, which was also recorded in and credited to the accounts of the ten individuals covered by this plan.

Information about the pension plan is as follows:

	2017			2016
Change in benefit obligation:
Beginning benefit obligation	$	16,964		$	16,328
Service cost		—			—
Interest cost		679			689
Curtailment gain		—			—
Settlement loss		46			51
Actuarial (gain)/loss		986			669
Benefits paid		(759	)		(773	)
Ending benefit obligation		17,916			16,964
Change in plan assets, at fair value:
Beginning plan assets		16,150			15,647
Actual return		1,947			802
Employer contribution		2,000			500
Benefits paid		(759	)		(773	)
Administrative expenses		(32	)		(26	)
Ending plan assets		19,306			16,150
Funded status at end of year	$	1,390		$	(814	)

Amounts recognized in accumulated other comprehensive loss at December 31, consist of unrecognized actuarial loss of $4,070, net of $2,191 tax in 2017 and $4,345, net of $2,238 tax in 2016.

The accumulated benefit obligation for the defined benefit pension plan was $17,916 at December 31, 2017 and $16,964 at December 31, 2016.

The components of net periodic pension expense were as follows:

	2017			2016			2015
Service cost	$	—		$	—		$	—
Interest cost		679			689			604
Expected return on plan assets		(1,178	)		(1,090	)		(1,088	)
Net amortization and deferral		380			326			270
Net periodic pension cost (benefit)	$	(119	)	$	(75	)	$	(214	)
Net loss (gain) recognized in other comprehensive    loss	$	(322	)	$	448		$	412
Total recognized in net periodic benefit cost    and other comprehensive loss (before tax)	$	(441	)	$	373		$	198

NOTE 15 - RETIREMENT PLANS (Continued)

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 $380.  The Company incurred settlement costs in 2017, 2016 and 2015 of $237, $259 and $415, respectively.

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

	2017			2016			2015
Discount rate on benefit obligation		3.51	%		4.00	%		4.16	%
Long-term rate of return on plan assets		7.00	%		7.00	%		7.00	%
Rate of compensation increase		0.00	%		0.00	%		0.00	%

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

	2017			2016			2015
Discount rate on benefit obligation		4.00	%		4.16	%		3.69	%
Long-term rate of return on plan assets		7.00	%		7.00	%		7.00	%
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 2017, 2016 and 2015 was zero.

The Company’s pension plan asset allocation at year-end 2017 and 2016 and target allocation for 2018 by asset category are as follows:

	Target Allocation		Percentage of Plan Assets at Year-end
Asset Category	2018		2017			2016
Equity securities	20-50	%		48.0	%		47.5	%
Debt securities	30-60			51.9			52.1
Money market funds	20-30			0.1			0.4
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 four diversified investment funds, which include two equity funds, one money market fund and one bond fund. 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 7.00% in 2017 and 2016. 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 2018. Employer contributions totaled $2,000 in 2017. Increased contributions and increased plan assets offset by increased benefit obligations led to a change in funded status from $(814) at December 31, 2016 to $1,390 at December 31, 2017.

NOTE 15 - RETIREMENT PLANS (Continued)

The following tables set forth by level, within the fair value hierarchy, the pension plan’s assets at fair value as of December 31, 2017 and 2016:

	December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Cash	$	113	$	—	$	—	$	113
Bond mutual funds		23		—		—		23
Common/collective trust:
Bonds		9,980		—		—		9,980
Equities		6,654		—		—		6,654
Equity market funds:
International		750		—		—		750
Large cap		1,085		—		—		1,085
Mid cap		269		—		—		269
Small cap		432		—		—		432
Total assets at fair value	$	19,306	$	—	$	—	$	19,306

Investment in equity securities, debt securities, money market funds and mutual funds are valued at the closing price reported on the active market on which the individual securities are traded.

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:

2018	$	1,903
2019		1,127
2020		650
2021		913
2022		1,182
2023 through 2027		4,723
Total	$	10,498

Supplemental Retirement Plan

Civista established a supplemental retirement plan (“SERP”) in 2013, which covers key members of management. 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, 2017, was $2,308, compared to $1,984 at December 31, 2016. The expense related to the SERP was $365, $243 and $299 for 2017, 2016 and 2015, respectively. Distributions to participants made in 2017, 2016 and 2015 totaled $41, $34, and $22, respectively.

XML

Equity Incentive Plan

12 Months Ended

Dec. 31, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Equity Incentive Plan

NOTE 16 - EQUITY INCENTIVE PLAN

At the Company’s 2014 annual meeting, the shareholders adopted the Company’s 2014 Incentive Plan (“2014 Incentive Plan”). The 2014 Incentive Plan authorizes the Company to grant options, stock awards, stock units and other awards for up to 375,000 common shares of the Company. There were 292,209 shares available for grants under this plan at December 31, 2017.

During each of the last two years, the Board of Directors has awarded restricted common shares to senior officers of the Company. The restricted shares vest ratably over a three-year period following the grant date. The product of the number of restricted shares granted and the grant date market price of the Company’s common shares determines the fair value of restricted shares under the Company’s 2014 Incentive Plan. Management recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period for the entire award.

On January 4, 2016, directors of the Company’s banking subsidiary, Civista, were paid a retainer in the form of non-restricted common shares of the Company. The aggregate of 2,730 common shares were issued to Civista directors as payment of their retainer for their service on the Civista Board of Directors covering the period up to the 2016 Annual Meeting. This issuance was expensed in its entirety when the shares were issued in the amount of $32.

On May 17, 2016, directors of the Company’s banking subsidiary, Civista, were paid a retainer in the form of non-restricted common shares of the Company. The aggregate of 12,285 common shares were issued to Civista directors as payment of their retainer for their service on the Civista Board of Directors covering the period up to the 2017 Annual Meeting. This issuance was expensed in its entirety when the shares were issued in the amount of $130.

On May 16, 2017, directors of the Company’s banking subsidiary, Civista, were paid a retainer in the form of non-restricted common shares of the Company. The aggregate of 6,804 common shares were issued to Civista directors as payment of their retainer for their service on the Civista Board of Directors covering the period up to the 2018 Annual Meeting. This issuance was expensed in its entirety when the shares were issued in the amount of $144.

Finally, on September 11, 2017, a newly appointed director of the Company’s banking subsidiary, Civista, was paid a retainer in the form of non-restricted common shares of the Company. The aggregate of 367 common shares was issued as payment of her retainer for her service on the Civista Board of Directors covering the period up to the 2018 Annual Meeting. This issuance was expensed in its entirety when the shares were issued in the amount of $8.

No options had been granted under the 2014 Incentive Plan as of December 31, 2017 and 2016.

The Company classifies share-based compensation for employees with “Salaries, wages and benefits” in the Consolidated Statements of Operations.

The following is a summary of the status of the Company’s restricted shares, and changes therein during the twelve months ended December 31, 2017 and 2016:

	December 31, 2017					December 31, 2016
	Number of Restricted Shares			Weighted Average Grant Date Fair Value		Number of Restricted Shares			Weighted Average Grant Date Fair Value
Nonvested at beginning of period		37,050		$	10.77		16,983		$	10.82
Granted		17,898			22.15		28,864			10.75
Vested		(12,810	)		10.76		(5,657	)		10.82
Forfeited		—			—		(3,140	)		10.87
Nonvested at end of period		42,138			15.60		37,050			10.77

NOTE 16 - EQUITY INCENTIVE PLAN (Continued)

The following is a summary of the status of the Company’s awarded restricted shares as of December 31, 2017:

At December 31, 2017
Date of Award	Shares		Remaining Expense		Remaining Vesting Period (Years)
January 15, 2016		10,260	$	66		3.00
March 11, 2016		15,748		33		1.00
March 20, 2017		11,713		110		2.00
March 20, 2017		6,185		108		4.00
		43,906	$	317		2.79

During the twelve months ended December 31, 2017, the Company recorded $274 of share-based compensation expense and $152 of director retainer fees for shares granted under the 2014 Incentive Plan. At December 31, 2017, the total compensation cost related to unvested awards not yet recognized is $317, which is expected to be recognized over the weighted average remaining life of the grants of 2.79 years.

XML

Fair Value Measurement

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurement

NOTE 17 - FAIR VALUE MEASUREMENT

U.S. generally accepted accounting principles establish a hierarchal disclosure framework associated with the level of observable pricing utilized in measuring assets and liabilities at fair value. The three broad levels defined by the hierarchy are as follows: Level 1: Quoted prices for identical assets in active markets that are identifiable on the measurement date; Level 2: Significant other observable inputs, such as quoted prices for similar assets, quoted prices in markets that are not active and other inputs that are observable or can be corroborated by observable market data; Level 3: Significant unobservable inputs that reflect the Company’s own view about the assumptions that market participants would use in pricing an asset.

Securities: The fair values of securities available for sale are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

Equity securities: The Company’s equity securities are not actively traded in an open market. The fair values of these equity securities available for sale are determined by using market data inputs for similar securities that are observable. (Level 2 inputs).

Fair value swap asset/liability: The fair value of the swap asset and liability is based on an external derivative model using data inputs as of the valuation date and classified Level 2.

Impaired loans: The Company has measured impairment on impaired loans generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties. In some cases, management may adjust the appraised value due to the age of the appraisal, changes in market conditions, or observable deterioration of the property since the appraisal was completed. Additionally, management makes estimates about expected costs to sell the property which are also included in the net realizable value. If the fair value of the collateral dependent loan is less than the carrying amount of the loan, a specific reserve for the loan is made in the allowance for loan losses or a charge-off is taken to reduce the loan to the fair value of the collateral (less estimated selling costs) and the loan is included in the table above as a Level 3 measurement.

NOTE 17 - FAIR VALUE MEASUREMENT (Continued)

Other real estate owned: OREO is carried at the lower of cost or fair value, which is measured at the date foreclosure. If the fair value of the collateral exceeds the carrying amount of the loan, no charge-off or adjustment is necessary, the loan is not considered to be carried at fair value, and is therefore not included in the table below. If the fair value of the collateral is less than the carrying amount of the loan, management will charge the loan down to its estimated realizable value. Management may adjust the appraised value due to the age of the appraisal, changes in market conditions, or observable deterioration of the property since the appraisal was completed. In these cases, the properties are categorized in the below table as Level 3 measurements since these adjustments are considered to be unobservable inputs. Income and expenses from operations are included in other operating expenses. Further declines in the fair value of the collateral subsequent to foreclosure are included in net gain on sale of other real estate owned.

Assets measured at fair value are summarized below.

Fair Value Measurements at December 31, 2017 Using:

	(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Treasury securities and obligations of    U.S. Government agencies	$	—	$	30,357	$	—
Obligations of states and political subdivisions		—		118,056		—
Mortgage-backed securities in government    sponsored entities		—		81,817		—
Equity securities in financial institutions		—		832		—
Fair value swap asset		—		1,560		—
Liabilities measured at fair value on a recurring    basis:
Fair value swap liability		—		1,560		—
Assets measured at fair value on a nonrecurring    basis:
Impaired Loans	$	—	$	—	$	1,040
Other Real Estate Owned		—		—		16

Fair Value Measurements at December 31, 2016 Using:

	(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Treasury securities and obligations of    U.S. Government agencies	$	—	$	37,446	$	—
Obligations of states and political subdivisions		—		94,998		—
Mortgage-backed securities in government    sponsored entities		—		62,642		—
Equity securities in financial institutions		—		778		—
Fair value swap asset		—		1,839		—
Liabilities measured at fair value on a recurring    basis:
Fair value swap liability		—		1,839		—
Assets measured at fair value on a nonrecurring    basis:
Impaired Loans	$	—	$	—	$	952
Other Real Estate Owned		—		—		37

NOTE 17 - FAIR VALUE MEASUREMENT (Continued)

The following tables presents quantitative information about the Level 3 significant unobservable inputs for assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2017 and 2016.

	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2017	Fair Value		Valuation Technique	Unobservable Input	Range	Weighted Average
Impaired loans	$	1,040	Appraisal of collateral	Appraisal adjustments	0% - 30%	16%
				Liquidation expense	0% - 10%	8%
				Holding period	0 - 30 months	20 months
Other real estate owned	$	16	Appraisal of collateral	Appraisal adjustments	10% - 30%		10%
				Liquidation expense	0% - 10%		10%

	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2016	Fair Value		Valuation Technique	Unobservable Input	Range	Weighted Average
Impaired loans	$	952	Appraisal of collateral	Appraisal adjustments	10% - 67%	64%
				Liquidation expense	0% - 10%	4%
				Holding period	0 - 30 months	19 months
Other real estate owned	$	37	Appraisal of collateral	Appraisal adjustments	10% - 30%		10%
				Liquidation expense	0% - 10%		10%

The carrying amount and fair value of financial instruments were as follows:

December 31, 2017	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from financial institutions	$	40,519	$	40,519	$	40,519	$	—	$	—
Securities available for sale		231,062		231,062		—		231,062		—
Loans, held for sale		2,197		2,197		2,197		—		—
Loans, net of allowance for loan losses		1,151,527		1,146,969		—		—		1,146,969
Other securities		14,247		14,247		14,247		—		—
Bank owned life insurance		25,125		25,125		25,125		—		—
Accrued interest receivable		4,336		4,336		4,336		—		—
Swap asset		1,560		1,560		—		1,560		—
Financial Liabilities:
Nonmaturing deposits		981,021		981,021		981,021		—		—
Time deposits		223,902		223,626		—		—		223,626
Short-term FHLB advances		56,900		56,900		56,900		—		—
Long-term FHLB advances		15,000		14,964		—		—		14,964
Securities sold under agreement to repurchase		21,755		21,755		21,755		—		—
Subordinated debentures		29,427		31,052		—		—		31,052
Accrued interest payable		410		410		410		—		—
Swap liability		1,560		1,560		—		1,560		—

NOTE 17 - FAIR VALUE MEASUREMENT (Continued)

December 31, 2016	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from financial institutions	$	36,695	$	36,695	$	36,695	$	—	$	—
Securities available for sale		195,864		195,864		—		195,864		—
Loans, held for sale		2,268		2,268		2,268		—		—
Loans, net of allowance for loan losses		1,042,201		1,047,329		—		—		1,047,329
Other securities		14,055		14,055		14,055		—		—
Bank owned life insurance		24,552		24,552		24,552		—		—
Accrued interest receivable		3,854		3,854		3,854		—		—
Swap asset		1,839		1,839		—		1,839		—
Financial Liabilities:
Nonmaturing deposits		913,677		913,677		913,677		—		—
Time deposits		207,426		207,784		—		—		207,784
Short-term FHLB advances		31,000		31,000		31,000		—		—
Long-term FHLB advances		17,500		17,553		—		—		17,553
Securities sold under agreement to repurchase		28,925		28,925		28,925		—		—
Subordinated debentures		29,427		27,414		—		—		27,414
Accrued interest payable		181		181		181		—		—
Swap liability		1,839		1,839		—		1,839		—

The fair value approximates carrying amount for all items except those described below. Fair value for securities is based on quoted market values for the individual securities or for equivalent securities. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the cash flow analysis or underlying collateral values. For swaps, fair value of the swap asset and liability is based on an external derivative model using data inputs as of the valuation date. Fair value of debt is based on current rates for similar financing. The fair value of off-balance-sheet items is based on the current fees or cost that would be charged to enter into or terminate such arrangements and are considered nominal.

For certain homogeneous categories of loans, such as some residential mortgages, credit card receivables, and other consumer loans, fair value is estimated using the quoted market prices for securities backed by similar loans, adjusted for differences in loan characteristics. The fair value of other types of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

XML

Commitments, Contingencies and Off-Balance-Sheet Risk

12 Months Ended

Dec. 31, 2017

Commitments And Contingencies Disclosure [Abstract]

Commitments, Contingencies and Off-Balance-Sheet Risk

NOTE 18 - COMMITMENTS, CONTINGENCIES AND OFF-BALANCE-SHEET RISK

Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.

The contractual amount of financial instruments with off-balance-sheet risk was as follows at year-end.

	2017				2016
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to extend credit:
Lines of credit and construction loans	$	4,982	$	286,925	$	6,905	$	202,923
Overdraft protection		7		33,353		5		29,075
Letters of credit		624		2,637		600		349
	$	5,613	$	322,915	$	7,510	$	232,347

Commitments to make loans are generally made for a period of one year or less. Fixed-rate loan commitments included above had interest rates ranging from 2.88% to 10.25% at December 31, 2017 and 3.25% to 8.50% at December 31, 2016. Maturities extend up to 30 years.

Civista is required to maintain certain reserve balances on hand in accordance with the Federal Reserve Board requirements. The average reserve balance maintained in accordance with such requirements was $4,112 on December 31, 2017 and $2,887 on December 31, 2016.

XML

Capital Requirements and Restriction on Retained Earnings

12 Months Ended

Dec. 31, 2017

Text Block [Abstract]

Capital Requirements and Restriction on Retained Earnings

NOTE 19 - CAPITAL REQUIREMENTS AND RESTRICTION ON RETAINED EARNINGS

The Company (consolidated) and Civista collectively, the (“Companies”) are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory-and possibly additional discretionary-actions by regulators that, if undertaken, could have a direct material effect on the Companies’ financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Companies must meet specific capital guidelines that involve quantitative measures of the Companies’ assets, liabilities, and certain off-balance-sheet items as calculated under U.S. GAAP, regulatory reporting requirements, and regulatory capital standards. The Companies’ capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulatory capital standards to ensure capital adequacy require the Companies to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital to risk-weighted assets, common equity Tier 1 capital to total risk-weighted assets, and of Tier 1 capital to average assets. Management believes, as of December 31, 2017, that the Companies met all capital adequacy requirements to which they were subject.

NOTE 19 - CAPITAL REQUIREMENTS AND RESTRICTION ON RETAINED EARNINGS (Continued)

As of December 31, 2017, and 2016, the most recent notification from the Federal Reserve Bank categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Companies must maintain minimum total risk-based capital, Tier 1 risk-based capital, common equity Tier 1 risk-based capital, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the institution’s category.

The Company’s and Civista’s actual capital levels and minimum required capital levels at December 31, 2017 and 2016 were as follows:

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Purposes
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2017
Total Risk Based Capital
Consolidated	$	200,772		16.6	%	$	97,025		8.0	%	n/a		n/a
Civista		161,394		13.3			96,880		8.0		$	121,100		10.0	%
Tier I Risk Based Capital
Consolidated		187,638		15.5			72,769		6.0		n/a		n/a
Civista		147,473		12.2			72,660		6.0			96,880		8.0
CET1 Risk Based Capital
Consolidated		140,853		11.6			54,576		4.5		n/a		n/a
Civista		136,760		11.3			54,495		4.5			78,715		6.5
Leverage
Consolidated		187,638		12.7			59,089		4.0		n/a		n/a
Civista		147,473		10.0			59,031		4.0			73,788		5.0
2016
Total Risk Based Capital
Consolidated	$	155,145		14.2	%	$	87,436		8.0	%	n/a		n/a
Civista		145,270		13.3			87,334		8.0		$	109,168		10.0	%
Tier I Risk Based Capital
Consolidated		141,840		13.0			65,577		6.0		n/a		n/a
Civista		131,391		12.0			65,501		6.0			87,334		8.0
CET1 Risk Based Capital
Consolidated		93,463		8.6			49,183		4.5		n/a		n/a
Civista		120,465		11.0			49,126		4.5			70,959		6.5
Leverage
Consolidated		141,840		10.6			53,774		4.0		n/a		n/a
Civista		131,391		9.8			53,717		4.0			67,146		5.0

CBI’s primary source of funds for paying dividends to its shareholders and for operating expense is the cash accumulated from dividends received from Civista. Payment of dividends by Civista to CBI is subject to restrictions by Civista’s regulatory agencies. These restrictions generally limit dividends to the current and prior two years retained earnings as defined by the regulations. In addition, dividends may not reduce capital levels below minimum regulatory requirements. At December 31, 2017, Civista had $36,440 net profits available to pay dividends to CBI.

XML

Parent Company Only Condensed Financial Information

12 Months Ended

Dec. 31, 2017

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Parent Company Only Condensed Financial Information

NOTE 20 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

Condensed financial information of CBI follows:

	December 31,
Condensed Balance Sheets	2017			2016
Assets:
Cash	$	29,908		$	4,747
Securities available for sale		832			778
Investment in bank subsidiary		167,192			149,965
Investment in nonbank subsidiaries		12,928			12,635
Other assets		5,212			1,226
Total assets	$	216,072		$	169,351
Liabilities:
Deferred income taxes and other liabilities	$	2,184		$	2,308
Subordinated debentures		29,427			29,427
Total liabilities		31,611			31,735
Shareholders’ Equity:
Preferred stock		17,358			18,950
Common stock		153,810			118,975
Accumulated earnings		31,652			19,263
Treasury Stock		(17,235	)		(17,235	)
Accumulated other comprehensive loss		(1,124	)		(2,337	)
Total shareholders’ equity		184,461			137,616
Total liabilities and shareholders’ equity	$	216,072		$	169,351

	For the years ended December 31,
Condensed Statements of Operations	2017			2016			2015
Dividends from bank subsidiaries	$	—		$	—		$	14,226
Interest expense		(1,035	)		(884	)		(760	)
Pension expense		(925	)		(184	)		(388	)
Other expense, net		(1,071	)		(920	)		(1,755	)
Income (loss) before equity in undistributed net    earnings of subsidiaries		(3,031	)		(1,988	)		11,323
Income tax benefit		1,407			676			959
Equity in undistributed net earnings of subsidiaries		17,496			18,529			463
Net income	$	15,872		$	17,217		$	12,745
Comprehensive income	$	17,284		$	15,375		$	12,297

NOTE 20 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Continued)

	For the years ended December 31,
Condensed Statements of Cash Flows	2017			2016			2015
Operating activities:
Net income	$	15,872		$	17,217		$	12,745
Adjustment to reconcile net income to net cash    from (used for) operating activities:
Change in other assets and other liabilities		(2,147	)		1,821			1,324
Gain on sale of fixed asets		(66	)		—			—
Equity in undistributed net earnings of    subsidiaries		(17,496	)		(18,529	)		(463	)
Net cash (used for) from operating activities		(3,837	)		509			13,606
Investing activities:
Proceeds from sale of premises and equipment	138				—			—
Acquisition and additional capitalization of    subsidiary, net of cash acquired		(275	)		—			(16,637	)
Net cash used for investing activities		(137	)		—			(16,637	)
Financing activities:
Cash paid on fractional shares on preferred stock    conversion to common stock		—			(1	)		—
Net proceeds from common stock issuance		32,821			—			—
Payment to repurchase common stock		(4	)		—			—
Cash dividends paid		(3,682	)		(3,254	)		(3,139	)
Net cash from (used for) financing activities		29,135			(3,255	)		(3,139	)
Net change in cash and cash equivalents		25,161			(2,746	)		(6,170	)
Cash and cash equivalents at beginning of year		4,747			7,493			13,663
Cash and cash equivalents at end of year	$	29,908		$	4,747		$	7,493

XML

Preferred Shares

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Preferred Shares

NOTE 21 - PREFERRED SHARES

On December 19, 2013, the Company completed the sale of 1,000,000 depositary shares, each representing a 1/40th ownership interest in a 6.50% Noncumulative Redeemable Convertible Perpetual Preferred Share, Series B, of the Company, with a liquidation preference of $1,000 per share (equivalent to $25.00 per depositary share). The Company sold the maximum of 1,000,000 depositary shares in the offering, resulting in gross proceeds to the Company of $25,000.

Using proceeds from the sale of the depositary shares, the Company redeemed all of its outstanding Series A Preferred Shares for an aggregate purchase price of $22,857, which redemption was completed as of February 15, 2014.

As of December 31, 2017, a total of 750,382 depository shares were outstanding.

XML

Earnings per Common Share

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Earnings per Common Share

NOTE 22 - EARNINGS PER COMMON SHARE

The factors used in the earnings per share computation follow.

	2017		2016		2015
Basic
Net income	$	15,872	$	17,217	$	12,745
Preferred stock dividends		1,244		1,501		1,577
Net income available to common    shareholders—basic	$	14,628	$	15,716	$	11,168
Weighted average common shares    outstanding—basic		9,906,856		8,010,399		7,822,369
Basic earnings per share	$	1.48	$	1.96	$	1.43
Diluted
Net income available to common    shareholders—basic	$	14,628	$	15,716	$	11,168
Preferred stock dividends on convertible    preferred stock		1,244		1,501		1,577
Net income available to common    shareholders—diluted	$	15,872	$	17,217	$	12,745
Weighted average common shares outstanding    for earnings per common share basic		9,906,856		8,010,399		7,822,369
Add: dilutive effects of convertible preferred    shares		2,445,760		2,940,562		3,095,966
Average shares and dilutive potential    common shares outstanding—diluted		12,352,616		10,950,961		10,918,335
Diluted earnings per share	$	1.28	$	1.57	$	1.17

Basic earnings per common share are calculated by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share include the dilutive effect, if any, of additional potential common shares issuable under the equity incentive plan, computed using the treasury stock method, and the impact of the Company’s convertible preferred shares using the “if converted” method.

XML

Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

NOTE 23 - QUARTERLY FINANCIAL DATA (UNAUDITED)

	Interest Income		Net Interest Income		Net Income		Basic Earnings per Common Share		Diluted Earnings per Common Share
2017
First quarter (1)(2)	$	13,692	$	12,892	$	4,635	$	0.47	$	0.40
Second quarter (3)(4)		14,228		13,367		3,596		0.32		0.29
Third quarter (3)		14,836		13,680		3,660		0.33		0.29
Fourth quarter (3)(5)		15,838		14,563		3,981		0.36		0.30
2016
First quarter (1)(2)	$	13,053	$	12,235	$	4,725	$	0.55	$	0.43
Second quarter (5)(6)		13,739		12,940		5,181		0.61		0.47
Third quarter (7)		13,370		12,526		3,680		0.41		0.34
Fourth quarter (8)		13,405		12,558		3,631		0.39		0.33

(1) Interest income and net interest income increased due to loan volume and rate and volume on interest-bearing deposits in other banks.

(2) Net income increased due to fees on tax refund processing program.

(3) Interest income and net interest income increased due to increases in loan volume and rate.

(4) Net income decreased due to a decrease in fees on the tax refund processing program.

(5) Interest income and net interest income increased due to interest recoveries on non-performing loans.

(6) Net income increased due to interest recoveries and provision credit.

(7) Interest income, net interest income and net income decreased due to previous quarter interest recoveries and provision credit.

(8) Interest income and net interest income increased due to loan volume and interest recoveries.

XML

Derivative Hedging Instruments

12 Months Ended

Dec. 31, 2017

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Hedging Instruments

NOTE 24 - DERIVATIVE HEDGING INSTRUMENTS

To accommodate customer need and to support the Company’s asset/liability positioning, on occasion we enter into interest rate swaps with a customer and a bank counterparty. The Company enters into a floating rate loan and a fixed rate swap with our customer. Simultaneously, the Company enters into an offsetting fixed rate swap with a bank counterparty. In connection with each swap transaction, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay a bank counterparty the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. These transactions allow the Company’s customer to effectively convert variable rate loans to fixed rate loans. Since the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts offset each other and do not significantly impact the Company’s results of operations.

NOTE 24 - DERIVATIVE HEDGING INSTRUMENTS (Continued)

The following table summarizes the Company’s interest rate swap positions and the impact of a 1 basis point change in interest rates as of December 31, 2017.

	Notional Amount			Weighted Average Rate Received/ (Paid)			Impact of a 1 basis point change in interest rates			Repricing Frequency
Derivative Assets	$	66,227			5.08	%	$	36		Monthly
Derivative Liabilities		(66,227	)		-5.08	%		(36	)	Monthly
Net Exposure	$	—					$	—

The following table summarizes the Company’s interest rate swap positions and the impact of a 1 basis point change in interest rates as of December 31, 2016.

	Notional Amount			Weighted Average Rate Received/ (Paid)			Impact of a 1 basis point change in interest rates			Repricing Frequency
Derivative Assets	$	52,975			5.07	%	$	30		Monthly
Derivative Liabilities		(52,975	)		-5.07	%		(30	)	Monthly
Net Exposure	$	—					$	—

The Company monitors and controls all derivative products with a comprehensive Board of Director approved commercial loan swap policy. All hedge transactions must be approved in advance by the Lenders Loan Committee or the Directors Loan Committee of the Board of Directors.

XML

Qualified Affordable Housing Project Investments

12 Months Ended

Dec. 31, 2017

Federal Home Loan Banks [Abstract]

Qualified Affordable Housing Project Investments

NOTE 25 – QUALIFIED AFFORDABLE HOUSING PROJECT INVESTMENTS

The Company invests in qualified affordable housing projects. At December 31, 2017 and 2016, the balance of the Company’s investments in qualified affordable housing projects was $3,204 and $2,754, respectively. These balances are reflected in the other assets line on the Consolidated Balance Sheet. The unfunded commitments related to the investments in qualified affordable housing projects totaled $4,510 and $2,313 at December 31, 2017 and 2016, respectively.

During the years ended December 31, 2017 and 2016, the Company recognized amortization expense with respect to its investments in qualified affordable housing projects of $354 and $304, respectively, which was included within pre-tax income on the Consolidated Statements of Operations.

Additionally, during the years ended December 31, 2017 and 2016, the Company recognized tax credits and other benefits from its investments in affordable housing tax credits of $686 and $538, respectively. During the years ended December 31, 2017 and 2016, the Company did not incur impairment losses related to its investment in qualified affordable housing projects.

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Nature of Operations and Principles of Consolidation

Nature of Operations and Principles of Consolidation: The Consolidated Financial Statements include the accounts of Civista Bancshares, Inc. (“CBI”) and its wholly-owned subsidiaries: Civista Bank (“Civista”), First Citizens Insurance Agency, Inc. (“FCIA”), Water Street Properties, Inc. (“WSP”), FC Refund Solutions, Inc. (“FCRS”) and CIVB Risk Management, Inc. (“CRMI”). First Citizens Capital LLC (“FCC”) is wholly-owned by Civista and holds inter-company debt. First Citizens Investments, Inc. (“FCI”) is wholly-owned by Civista and holds and manages its securities portfolio. The operations of FCI and FCC are located in Wilmington, Delaware. The above companies together are sometimes referred to as the “Company”. Intercompany balances and transactions are eliminated in consolidation.

The Company provides financial services through its offices in the Ohio counties of Erie, Crawford, Champaign, Cuyahoga, Franklin, Logan, Summit, Huron, Ottawa, Madison, Montgomery and Richland. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are residential mortgage, commercial, and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, our customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the area. Other financial instruments that potentially represent concentrations of credit risk include deposit accounts in other financial institutions.

FCIA was formed to allow the Company to participate in commission revenue generated through its third party insurance agreement. Insurance commission revenue was less than 1.0% of total revenue for the years ended December 31, 2017, 2016 and 2015. WSP was formed to hold repossessed assets of CBI’s subsidiaries. WSP revenue was less than 1% of total revenue for the years ended December 31, 2017, 2016 and 2015. FCRS was formed in 2012 and remained inactive for the periods presented.  CRMI was formed in 2017 to provide property and casualty insurance coverage to CBI and its’ subsidiaries for which insurance may not be currently available or economically feasible in the insurance marketplace.  CRMI revenue was less than 1% of total revenue for the year ended December 31, 2017.

Use of Estimates

Use of Estimates: To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. The allowance for loan losses, determination of goodwill impairment, fair values of financial instruments, valuation of deferred tax assets, pension obligations and other-than-temporary-impairment of securities are considered material estimates that are particularly susceptible to significant change in the near term.

Cash Flows

Cash Flows: Cash and cash equivalents include cash on hand and demand deposits with financial institutions with original maturities of less than 90 days. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, federal funds purchased, short-term borrowings and repurchase agreements.

Securities

Securities: Debt securities are classified as available-for-sale when they might be sold before maturity. Equity securities with readily determinable fair values are also classified as available for sale. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are based on the amortized cost of the security sold using the specific identification method.

U.S. generally accepted accounting principles (“GAAP”) guidance specifies that if (a) a company does not have the intent to sell a debt security prior to recovery and (b) it is more-likely-than-not that it will not have to sell the debt security prior to recovery, the security would not be considered other-than-temporarily impaired unless there is a credit loss. When an entity does not intend to sell the security, and it is more-likely-than-not the entity will not have to sell the security before recovery of its cost basis, it will recognize the credit component of other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. For held-to-maturity debt securities, the amount of other-than-temporary impairment recorded in other comprehensive income for the non-credit portion of a previous other-than-temporary impairment should be amortized prospectively over the remaining life of the security on the basis of the timing of future estimated cash flows of the security.

For available-for-sale debt securities that management has no intent to sell and believes that it more-likely-than-not will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the non-credit loss is recognized in accumulated other comprehensive income. The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections.

Other securities which include FHLB stock, Federal Reserve Bank (“FRB”) stock, Federal Agricultural Mortgage Corporation stock, Bankers’ Bancshares Inc. (“BB”) stock, and Norwalk Community Development Corp (“NCDC”) stock are carried at cost.

Loans Held for Sale

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market and loans that management no longer intends to hold for the foreseeable future, are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.

Loans

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Interest income on consumer loans is discontinued when management determines future collection is unlikely. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued, but not received, for loans placed on nonaccrual, is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Purchased Loans

Purchased Loans: The Company purchases individual loans and groups of loans. Purchased loans that show evidence of credit deterioration since origination are recorded at the amount paid (or allocated fair value in a purchase business combination), such that there is no carryover of the seller’s allowance for loan losses. After acquisition, incurred losses are recognized by an increase in the allowance for loan losses.

Purchased loans are accounted for individually or aggregated into pools of loans based on common risk characteristics (e.g., credit score, loan type, and date of origination). The Company estimates the amount and timing of expected cash flows for each purchased loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). The excess of the loan’s, or pool’s, contractual principal and interest over expected cash flows is not recorded (nonaccretable difference).

Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded. If the present value of expected future cash flows is greater than the carrying amount, the excess is recognized as part of future interest income.

Allowance for Loan Losses

Allowance for Loan Losses: The allowance for loan losses (allowance) is calculated with the objective of maintaining a reserve sufficient to absorb inherent loan losses in the loan portfolio. Management establishes the allowance for loan losses based upon its evaluation of the pertinent factors underlying the types and quality of loans in the portfolio. In determining the allowance and the related provision for loan losses, the Company considers three principal elements: (i) specific impairment reserve allocations (valuation allowances) based upon probable losses identified during the review of impaired loans in the Commercial loan portfolio, (ii) allocations established for adversely-rated loans in the Commercial loan portfolio and nonaccrual Real Estate Residential, Consumer installment and Home Equity loans, (iii) allocations on all other loans based principally on the use of a three-year period for loss migration analysis. These allocations are adjusted for consideration of general economic and business conditions, credit quality and delinquency trends, collateral values, and recent loss experience for these similar pools of loans. The Company analyzes its loan portfolio each quarter to determine the appropriateness of its allowance for loan losses.

All commercial, commercial real estate and farm real estate loans are monitored on a regular basis with a detailed loan review completed for all loan relationships greater than $750. All commercial, commercial real estate and farm real estate loans that are 90 days past due or in nonaccrual status, are analyzed to determine if they are “impaired”, which means that it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. All loans that are delinquent 90 days are classified as substandard and placed on nonaccrual status unless they are well-secured and in the process of collection. The remaining loans are evaluated and segmented with loans with similar risk characteristics. The Company allocates reserves based on risk categories and portfolio segments described below, which conform to the Company’s asset classification policy. In reviewing risk within Civista’s loan portfolio, management has identified specific segments to categorize loan portfolio risk: (i) Commercial & Agriculture loans; (ii) Commercial Real Estate – Owner Occupied loans; (iii) Commercial Real Estate – Non-Owner Occupied loans; (iv) Residential Real Estate loans; (v) Real Estate Construction loans; (vi) Farm Real Estate loans; and (vii) Consumer and Other loans. Additional information related to economic factors can be found in Note 5.

Loan Charge-off Policies

Loan Charge-off Policies: All unsecured open- and closed-ended retail loans that become past due 90 days from the contractual due date are charged off in full. In lieu of charging off the entire loan balance, loans with non-real estate collateral may be written down to the net realizable value of the collateral, if repossession of collateral is assured and in process. For open- and closed-ended loans secured by residential real estate, a current assessment of fair value is made no later than 180 days past due. Any outstanding loan balance in excess of the net realizable value of the property is charged off. All other loans are generally charged down to the net realizable value when Civista recognizes the loan is permanently impaired, which is generally after the loan is 90 days past due.

Troubled Debt Restructurings

Troubled Debt Restructurings: In certain situations based on economic or legal reasons related to a borrower’s financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered. The related loan is classified as a troubled debt restructuring (TDR). Management strives to identify borrowers in financial difficulty early and work with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. In addition to the allowance for the pooled portfolios, management has developed a separate reserve for loans that are identified as impaired through a TDR. These loans are excluded from pooled loss forecasts and a separate reserve is provided under the accounting guidance for loan impairment. Consumer loans whose terms have been modified in a TDR are also individually analyzed for estimated impairment.

Other Real Estate

Other Real Estate: Other real estate acquired through or instead of loan foreclosure is initially recorded at fair value less costs to sell when acquired, establishing a new cost basis and any deficiency in the value is charged off through the allowance. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed.

Premises and Equipment

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using both accelerated and straight-line methods over the estimated useful life of the asset, ranging from three to seven years for furniture and equipment and seven to fifty years for buildings and improvements.

Federal Home Loan Bank Stock

Federal Home Loan Bank Stock: Civista is a member of the FHLB of Cincinnati and as such, is required to maintain a minimum investment in stock of the FHLB that varies with the level of advances outstanding with the FHLB. The stock is bought from and sold to the FHLB based upon its $100 par value. The stock does not have a readily determinable fair value and as such is classified as restricted stock, carried at cost and evaluated for impairment by management. The stock’s value is determined by the ultimate recoverability of the par value rather than by recognizing temporary declines. The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following: (a) the significance of the decline in net assets of the FHLB as compared to the capital stock amount and the length of time this situation has persisted (b) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance (c) the impact of legislative and regulatory changes on the customer base of the FHLB and (d) the liquidity position of the FHLB. With consideration given to these factors, management concluded that the stock was not impaired at December 31, 2017 or 2016.

Federal Reserve Bank Stock

Federal Reserve Bank Stock: Civista is a member of the Federal Reserve System. FRB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.

Bank Owned Life Insurance (BOLI)

Bank Owned Life Insurance (BOLI) : Civista has purchased BOLI policies on certain key executives. BOLI is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets: Goodwill results from prior business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment will be recognized in the period identified.

Other intangible assets consist of core deposit intangibles arising from whole bank and branch acquisitions. These intangible assets are measured at fair value and then amortized on an accelerated method over their estimated useful lives, which range from five to twelve years.

Servicing Rights

Servicing Rights: Servicing rights are recognized as assets for the allocated value of retained servicing rights on loans sold. Servicing rights are initially recorded at fair value at the date of transfer. The valuation technique uses the present value of estimated future cash flows using current market discount rates. Servicing rights are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates and then, secondarily, prepayment characteristics. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment of a grouping is reported as a valuation allowance to the extent that fair value is less than the capitalized asset for the grouping.

Long-term Assets

Long-term Assets: Premises and equipment and other intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Repurchase Agreements

Repurchase Agreements: Substantially all repurchase agreement liabilities represent amounts advanced by various customers. Securities are pledged to cover these liabilities, which are not covered by federal deposit insurance.

Loan Commitments and Related Financial Instruments

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.

Income Taxes

Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

The Company prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Stock-Based Compensation

Stock-Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the grant date. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common shares at the date of the grant is used for restricted shares.

Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Retirement Plans

Retirement Plans: Pension expense is the net of service and interest cost, expected return on plan assets and amortization of gains and losses not immediately recognized. Employee 401(k) and profit sharing plan expense is the amount of matching contributions. Deferred compensation allocates the benefits over the years of service.

Earnings per Common Share

Earnings per Common Share: Basic earnings per share are net income available to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable related to convertible preferred shares. Treasury shares are not deemed outstanding for earnings per share calculations.

Comprehensive Income

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale and changes in the funded status of the pension plan.

Loss Contingencies

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe that any such loss contingencies currently exist that will have a material effect on the financial statements.

Restrictions on Cash

Restrictions on Cash: Cash on hand or on deposit with the Federal Reserve Bank is required to meet regulatory reserve and clearing requirements. These balances do not earn interest.

Dividend Restriction

Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by Civista to CBI or by CBI to shareholders. Additional information related to dividend restrictions can be found in Note 19.

Fair Value of Financial Instruments

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 17. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Operating Segments

Operating Segments: While the Company’s chief decision makers monitor the revenue streams of the Company’s various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the Company’s financial service operations are considered by management to be aggregated in one reportable operating segment.

Business Combinations

Business Combinations: At the date of acquisition the Company records the assets and liabilities of the acquired companies on the Consolidated Balance Sheets at their fair value. The results of operations for acquired companies are included in the Company’s Consolidated Statements of Operations beginning at the acquisition date. Expenses arising from acquisition activities are recorded in the Consolidated Statements of Operations during the period incurred.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities: The Company enters into interest rate swap agreements to facilitate the risk management strategies of a small number of commercial banking customers. All derivatives are accounted for in accordance with ASC-815, Derivatives and Hedging. The Company mitigates the risk of entering into these agreements by entering into equal and offsetting swap agreements with highly rated third party financial institutions. The swap agreements are free-standing derivatives and are recorded at fair value in the Company’s Consolidated Balance Sheets. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes because the Company does not currently intend to execute a setoff with its counterparties. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral, usually in the form of marketable securities, is posted by the counterparty with net liability positions in accordance with contract thresholds.

Reclassifications

Reclassifications: Some items in the prior year financial statements were reclassified to conform to the current presentation. Such reclassifications had no effect on net income or shareholders’ equity.

Effect of Newly Issued but Not Yet Effective Accounting Standards

Effect of Newly Issued but Not Yet Effective Accounting Standards:

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The Update’s core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this Update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. However, in August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) to defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. All other entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, we do not expect the new standard, or any of the amendments, to result in a material change from our current accounting for revenue because the majority of the Company’s financial instruments are not within the scope of Topic 606. However, we do expect that the standard will result in new disclosure requirements, which are currently being evaluated.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (g) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (h) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 will be effective for us on January 1, 2018 and will not have a significant impact on our financial statements.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard in this Update requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. A short-term lease is defined as one in which: (a) the lease term is 12 months or less, and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact to the financial statements. Based on the Company’s preliminary analysis of its current portfolio, the impact to the Company’s balance sheet is estimated to result in less than a 1% increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which changes the impairment model for most financial assets. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the ASU is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which addresses eight specific cash flow issues with the objective of reducing diversity in practice. Among these include recognizing cash payments for debt prepayment or debt extinguishment as cash outflows for financing activities; cash proceeds received from the settlement of insurance claims should be classified on the basis of the related insurance coverage; and cash proceeds received from the settlement of bank-owned life insurance policies should be classified as cash inflows from investing activities while the cash payments for premiums on bank-owned policies may be classified as cash outflows for investing activities, operating activities, or a combination of investing and operating activities. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this Update should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business “ASU 2017-01”, which provides a more robust framework to use in determining when a set of assets and activities (collectively referred to as a “set”) is a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. Public business entities should apply the amendments in this Update to annual periods beginning after December 15, 2017, including interim periods within those periods. All other entities should apply the amendments to annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The amendments in this Update should be applied prospectively on or after the effective date.  The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment . To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. A public business entity that is a U.S. Securities and Exchange Commission (“SEC”) filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. A public business entity that is not an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2020. All other entities, including not-for-profit entities that are adopting the amendments in this Update should do so for their annual or any interim

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

goodwill impairment tests in fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20). The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) , which affects any entity that changes the terms or conditions of a share-based payment award. This Update amends the definition of modification by qualifying that modification accounting does not apply to changes to outstanding share-based payment awards that do not affect the total fair value, vesting requirements, or equity/liability classification of the awards. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivative and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down-round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down-round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down-round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down-round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down- round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options ), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Accounting Standards Codification, to a scope exception. Those amendments do not have an accounting effect.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part I of this Update should be applied either retrospectively to outstanding financial instruments with a down-round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective or retrospectively to outstanding financial instruments with a down-round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 850), the objective of which is to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition, the amendments in this Update make certain targeted improvements to simplify the application and disclosure of the hedge accounting guidance in current general accepted accounting principles.  For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Early application is permitted in any period after issuance.  For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this Update. The amended presentation and disclosure guidance is required only prospectively.  The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.  The SEC Observer said that the SEC staff would not object if entities that are considered public business entities only because their financial statements or financial information is required to be included in another entity’s SEC filing use the effective dates for private companies when they adopt ASC 606, Revenue from Contracts with Customers, and ASC 842, Leases. The Update also supersedes certain SEC paragraphs in the Codification related to previous SEC staff announcements and moves other paragraphs, upon adoption of ASC 606 or ASC 842.  This Update is not expected to have a significant impact on the Company’s financial statements.

In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842), which provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date the entity adopts Topic 842; otherwise, an entity should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. The effective date and transition

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

requirements for the amendments are the same as the effective date and transition requirements in ASU 2016-02. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220).  On December 22, 2017, the U.S. federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (Tax Cuts and Jobs Act), which requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws.  The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.  The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted.  The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized.  The Company has elected to early adopt this standard as of December 31, 2017, which resulted in a one-time cumulative effect adjustment of $199 between retained earnings and accumulated other comprehensive income on the Consolidated Balance Sheet.  The adjustment had no impact on net income or any prior periods presented.

XML

Merger (Tables)

12 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Schedule of Financial Information for Former TCNB Included in Consolidated Statement of Operations

The following table presents financial information for the former TCNB included in the Consolidated Statements of Operations from the date of acquisition through December 31, 2015.

	Actual From Acquisition Date Through December 31, 2015 (in thousands)
Net interest income after provision for loan losses	$	3,155
Noninterest income		138
Net income		1,282

Business Acquisition, Unaudited Pro Forma Information

The following table presents unaudited pro forma information for the periods ended December 31, 2017, 2016 and 2015 as if the acquisition of TCNB had occurred on January 1, 2015. This table has been prepared for comparative purposes only and is not indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results.

	Pro Formas (unaudited) Twelve months ended December 31,
	2017		2016		2015
Net interest income after provision for loan losses	$	54,456	$	51,389	$	46,852
Noninterest income		16,334		16,132		14,699
Net income		15,769		16,949		11,931
Pro forma earnings per share:
Basic	$	1.47	$	1.93	$	1.32
Diluted	$	1.28	$	1.55	$	1.09

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for TCNB. Core deposit intangibles will be amortized over periods of between five and ten years using an accelerated method. Goodwill will not be amortized, but instead will be evaluated for impairment.

	At March 6, 2015
Total purchase price	$	17,226
Net assets acquired:
Cash and short-term investments		18,152
Loans, net		76,444
Other securities		716
Premises and equipment		1,738
Accrued interest receivable		194
Core deposit intangible		1,009
Other assets		472
Noninterest-bearing deposits		(18,263	)
Interest-bearing deposits		(68,606	)
Other liabilities		(5	)
		11,851
Goodwill	$	5,375

XML

Securities (Tables)

12 Months Ended

Dec. 31, 2017

Investments Debt And Equity Securities [Abstract]

Available for Sale Securities

The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive loss were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2017
U.S. Treasury securities and obligations of    U.S.government agencies	$	30,450	$	100	$	(192	)	$	30,357
Obligations of states and political subdivisions		114,002		4,226		(172	)		118,056
Mortgage-back securities in government sponsored    entities		82,098		408		(690	)		81,817
Total debt securities		226,550		4,734		(1,054	)		230,230
Equity securities in financial institutions		481		351		—			832
Total	$	227,031	$	5,085	$	(1,054	)	$	231,062

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2016
U.S. Treasury securities and obligations of    U.S.government agencies	$	37,406	$	117	$	(77	)	$	37,446
Obligations of states and political subdivisions		92,177		3,395		(574	)		94,998
Mortgage-back securities in government sponsored    entities		62,756		483		(597	)		62,642
Total debt securities		192,339		3,995		(1,248	)		195,086
Equity securities in financial institutions		481		297		—			778
Total	$	192,820	$	4,292	$	(1,248	)	$	195,864

Fair Value of Securities by Contractual Maturity

The amortized cost and fair value of securities at year end 2017 by contractual maturity were as follows. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

	Available for sale
	Amortized Cost		Fair Value
Due in one year or less	$	8,787	$	8,765
Due from one to five years		27,662		27,691
Due from five to ten years		30,167		31,622
Due after ten years		77,836		80,335
Mortgage-backed securities in government sponsored    entities		82,098		81,817
Equity securities in financial institutions		481		832
Total	$	227,031	$	231,062

Proceeds from Sales of Securities, Gross Realized Gains and Losses

Proceeds from sales of securities, gross realized gains and gross realized losses were as follows:

	2017		2016		2015
Sale proceeds	$	953	$	4,349	$	—
Gross realized gains		—		18		—
Gross realized losses		—		—		—
Gains (losses) from securities called or settled by the    issuer		12		1		(18	)

Securities with Unrealized Losses Not Recognized in Income

Debt securities with unrealized losses at year end 2017 and 2016 not recognized in income are as follows:

2017	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury securities and obligations of    U.S. government agencies	$	20,449	$	(100	)	$	6,617	$	(92	)	$	27,066	$	(192	)
Obligations of states and political subdivisions		4,057		(41	)		7,309		(131	)		11,366		(172	)
Mortgage-backed securities in gov’t sponsored    entities		29,534		(195	)		22,199		(495	)		51,733		(690	)
Total temporarily impaired	$	54,040	$	(336	)	$	36,125	$	(718	)	$	90,165	$	(1,054	)

2016	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury securities and obligations of    U.S. government agencies	$	13,271	$	(61	)	$	893	$	(16	)	$	14,164	$	(77	)
Obligations of states and political subdivisions		17,167		(558	)		519		(16	)		17,686		(574	)
Mortgage-backed securities in gov’t sponsored    entities		35,453		(566	)		2,849		(31	)		38,302		(597	)
Total temporarily impaired	$	65,891	$	(1,185	)	$	4,261	$	(63	)	$	70,152	$	(1,248	)

XML

Loans (Tables)

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Loan Balances

Loans at year-end were as follows:

	2017			2016
Commercial and Agriculture	$	152,473		$	135,462
Commercial Real Estate - owner occupied		164,099			161,364
Commercial Real Estate - non-owner occupied		425,623			395,931
Residential Real Estate		268,735			247,308
Real Estate Construction		97,531			56,293
Farm Real Estate		39,461			41,170
Consumer and Other		16,739			17,978
Total Loans		1,164,661			1,055,506
Allowance for loan losses		(13,134	)		(13,305	)
Net loans	$	1,151,527		$	1,042,201

Loans to Directors and Executive Officers Including Immediate Families

Loans to principal officers, directors, and their affiliates at year-end 2017 and 2016 were as follows:

	2017			2016
Balance - Beginning of year	$	14,389		$	15,147
New loans and advances		2,344			850
Repayments		(1,256	)		(1,575	)
Effect of changes to related parties		(1,475	)		(33	)
Balance - End of year	$	14,002		$	14,389

XML

Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2017

Text Block [Abstract]

Changes in the Allowance for Loan Losses and Loan Balances Outstanding

The following tables present, by portfolio segment, the changes in the allowance for loan losses, the ending allocation of the allowance for loan losses and the loan balances outstanding for the years ended December 31, 2017, 2016 and 2015. The changes can be impacted by overall loan volume, adversely graded loans, historical charge-offs and economic factors

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Allowance for loan losses:

December 31, 2017	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	2,018	$	(11	)	$	372	$	(817	)	$	1,562
Commercial Real Estate:
Owner Occupied		2,171		(328	)		69		131			2,043
Non-Owner Occupied		4,606		(38	)		46		693			5,307
Residential Real Estate		3,089		(400	)		194		(973	)		1,910
Real Estate Construction		420		—			44		370			834
Farm Real Estate		442		—			3		(15	)		430
Consumer and Other		314		(165	)		43		98			290
Unallocated		245		—			—		513			758
Total	$	13,305	$	(942	)	$	771	$	—		$	13,134

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Allowance for loan losses:

December 31, 2016	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	1,478	$	(880	)	$	105	$	1,315		$	2,018
Commercial Real Estate:
Owner Occupied		2,467		(228	)		56		(124	)		2,171
Non-Owner Occupied		4,657		(23	)		1,372		(1,400	)		4,606
Residential Real Estate		4,086		(455	)		479		(1,021	)		3,089
Real Estate Construction		371		(115	)		12		152			420
Farm Real Estate		538		—			—		(96	)		442
Consumer and Other		382		(125	)		46		11			314
Unallocated		382		—			—		(137	)		245
Total	$	14,361	$	(1,826	)	$	2,070	$	(1,300	)	$	13,305

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Allowance for loan losses:

December 31, 2015	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	1,819	$	(190	)	$	182	$	(333	)	$	1,478
Commercial Real Estate:
Owner Occupied		2,221		(523	)		187		582			2,467
Non-Owner Occupied		4,334		(81	)		115		289			4,657
Residential Real Estate		3,747		(1,135	)		331		1,143			4,086
Real Estate Construction		428		—			5		(62	)		371
Farm Real Estate		822		—			76		(360	)		538
Consumer and Other		200		(120	)		46		256			382
Unallocated		697		—			—		(315	)		382
Total	$	14,268	$	(2,049	)	$	942	$	1,200		$	14,361

The following tables present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of December 31, 2017 and December 31, 2016.

December 31, 2017	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	82	$	4	$	1,476	$	1,562
Commercial Real Estate:
Owner Occupied		—		6		2,037		2,043
Non-Owner Occupied		—		—		5,307		5,307
Residential Real Estate		44		109		1,757		1,910
Real Estate Construction		—		—		834		834
Farm Real Estate		—		6		424		430
Consumer and Other		—		—		290		290
Unallocated		—		—		758		758
Total	$	126	$	125	$	12,883	$	13,134
Outstanding loan balances:
Commercial & Agriculture	$	87	$	438	$	151,948	$	152,473
Commercial Real Estate:
Owner Occupied		—		1,010		163,089		164,099
Non-Owner Occupied		—		44		425,579		425,623
Residential Real Estate		128		1,360		267,247		268,735
Real Estate Construction		—		—		97,531		97,531
Farm Real Estate		—		608		38,853		39,461
Consumer and Other		—		—		16,739		16,739
Total	$	215	$	3,460	$	1,160,986	$	1,164,661

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

December 31, 2016	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	86	$	82	$	1,850	$	2,018
Commercial Real Estate:
Owner Occupied		—		4		2,167		2,171
Non-Owner Occupied		—		—		4,606		4,606
Residential Real Estate		89		102		2,898		3,089
Real Estate Construction		—		—		420		420
Farm Real Estate		—		—		442		442
Consumer and Other		—		—		314		314
Unallocated		—		—		245		245
Total	$	175	$	188	$	12,942	$	13,305
Outstanding loan balances:
Commercial & Agriculture	$	88	$	1,983	$	133,391	$	135,462
Commercial Real Estate:
Owner Occupied		—		1,896		159,468		161,364
Non-Owner Occupied		—		359		395,572		395,931
Residential Real Estate		168		1,686		245,454		247,308
Real Estate Construction		—		—		56,293		56,293
Farm Real Estate		—		614		40,556		41,170
Consumer and Other		—		1		17,977		17,978
Total	$	256	$	6,539	$	1,048,711	$	1,055,506

Credit Exposures by Internally Assigned Grades

December 31, 2017	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	140,842	$	8,412	$	3,219	$	—	$	152,473
Commercial Real Estate:
Owner Occupied		155,756		1,166		7,177		—		164,099
Non-Owner Occupied		422,363		2,321		939		—		425,623
Residential Real Estate		62,628		1,997		5,873		—		70,498
Real Estate Construction		91,545		15		27		—		91,587
Farm Real Estate		25,228		11,236		2,997		—		39,461
Consumer and Other		1,312		—		70		—		1,382
Total	$	899,674	$	25,147	$	20,302	$	—	$	945,123

December 31, 2016	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	127,867	$	4,300	$	3,295	$	—	$	135,462
Commercial Real Estate:
Owner Occupied		151,659		4,016		5,689		—		161,364
Non-Owner Occupied		393,592		1,676		663		—		395,931
Residential Real Estate		59,015		1,661		6,911		—		67,587
Real Estate Construction		50,678		16		27		—		50,721
Farm Real Estate		31,814		5,673		3,683		—		41,170
Consumer and Other		2,135		—		109		—		2,244
Total	$	816,760	$	17,342	$	20,377	$	—	$	854,479

Performing and Nonperforming Loans

Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months.

December 31, 2017	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	198,237	$	5,944	$	15,341	$	219,522
Nonperforming		—		—		16		16
Total	$	198,237	$	5,944	$	15,357	$	219,538

December 31, 2016	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	179,721	$	5,572	$	15,725	$	201,018
Nonperforming		—		—		9		9
Total	$	179,721	$	5,572	$	15,734	$	201,027

Aging Analysis of Past Due Loans

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of December 31, 2017 and 2016.

December 31, 2017	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	575	$	2	$	685	$	1,262	$	151,124	$	87	$	152,473	$	—
Commercial Real Estate:
Owner Occupied		897		104		484		1,485		162,614		—		164,099		—
Non-Owner Occupied		133		—		470		603		425,020		—		425,623		—
Residential Real Estate		1,613		229		785		2,627		265,980		128		268,735		—
Real Estate Construction		—		—		27		27		97,504		—		97,531		—
Farm Real Estate		27		—		186		213		39,248		—		39,461		—
Consumer and Other		92		96		16		204		16,535		—		16,739		16
Total	$	3,337	$	431	$	2,653	$	6,421	$	1,158,025	$	215	$	1,164,661	$	16

December 31, 2016	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	156	$	20	$	152	$	328	$	135,046	$	88	$	135,462	$	—
Commercial Real Estate:
Owner Occupied		722		553		280		1,555		159,809		—		161,364		—
Non-Owner Occupied		147		—		316		463		395,468		—		395,931		—
Residential Real Estate		1,812		507		1,049		3,368		243,772		168		247,308		—
Real Estate Construction		—		—		27		27		56,266		—		56,293		—
Farm Real Estate		93		—		—		93		41,077		—		41,170		—
Consumer and Other		215		31		31		277		17,701		—		17,978		9
Total	$	3,145	$	1,111	$	1,855	$	6,111	$	1,049,139	$	256	$	1,055,506	$	9

Summary of Nonaccrual Loans Excluding Purchased Credit-Impaired (PCI) Loans

The following table presents loans on nonaccrual status, excluding purchased credit-impaired (PCI) loans, as of December 31, 2017 and 2016.

	2017		2016
Commercial & Agriculture	$	887	$	1,622
Commercial Real Estate:
Owner Occupied		1,476		1,461
Non-Owner Occupied		711		464
Residential Real Estate		2,778		3,266
Real Estate Construction		27		27
Farm Real Estate		186		2
Consumer and Other		67		101
Total	$	6,132	$	6,943

Schedule of Troubled Debt Restructurings

Loan modifications that are considered TDRs completed during the twelve month periods ended December 31, 2017, 2016 and 2015 were as follows:

	For the Twelve Month Period Ended December 31, 2017
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		1		13		13
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Consumer and Other		—		—		—
Total Loan Modifications		1	$	13	$	13

	For the Twelve Month Period Ended December 31, 2016
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		4	$	529	$	529
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		2		308		308
Real Estate Construction		—		—		—
Farm Real Estate		3		700		700
Consumer and Other		—		—		—
Total Loan Modifications		9	$	1,537	$	1,537

	For the Twelve Month Period Ended December 31, 2015
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		—		—		—
Real Estate Construction		1		41		41
Farm Real Estate		—		—		—
Consumer and Other		—		—		—
Total Loan Modifications		1	$	41	$	41

Impaired Financing Receivables Excluding PCI Loans

The following tables include the recorded investment and unpaid principal balances for impaired financing receivables, excluding PCI loans, with the associated allowance amount, if applicable, as of December 31, 2017 and 2016.

	December 31, 2017						December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial & Agriculture	$	—	$	—			$	1,230	$	1,751
Commercial Real Estate:
Owner Occupied		693		913				1,658		1,803
Non-Owner Occupied		44		48				359		386
Residential Real Estate		977		1,049				1,259		1,590
Farm Real Estate		148		148				614		614
Consumer and Other		—		—				1		1
Total		1,862		2,158				5,121		6,145
With an allowance recorded:
Commercial & Agriculture		438		438	$	4		753		1,303	$	82
Commercial Real Estate:
Owner Occupied		317		317		6		238		238		4
Non-Owner Occupied		—		—		—		—		—		—
Residential Real Estate		383		387		109		427		431		102
Farm Real Estate		460		460		6		—		—		—
Total		1,598		1,602		125		1,418		1,972		188
Total:
Commercial & Agriculture		438		438		4		1,983		3,054		82
Commercial Real Estate:
Owner Occupied		1,010		1,230		6		1,896		2,041		4
Non-Owner Occupied		44		48		—		359		386		—
Residential Real Estate		1,360		1,436		109		1,686		2,021		102
Farm Real Estate		608		608		6		614		614		—
Consumer and Other		—		—		—		1		1		—
Total	$	3,460	$	3,760	$	125	$	6,539	$	8,117	$	188

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

The following tables include the average recorded investment and interest income recognized for impaired financing receivables as of, and for the years ended, December 31, 2017, 2016 and 2015.

For the year ended:	December 31, 2017				December 31, 2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	1,375	$	34	$	2,036	$	40
Commercial Real Estate:
Owner Occupied		1,507		75		1,847		862
Non-Owner Occupied		233		6		1,039		83
Residential Real Estate		1,515		73		1,787		175
Real Estate Construction		—		—		—		1
Farm Real Estate		613		28		1,006		95
Consumer and Other		—		—		2		—
Total	$	5,243	$	216	$	7,717	$	1,256

For the year ended:	December 31, 2015
	Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	1,519	$	54
Commercial Real Estate:
Owner Occupied		2,738		139
Non-Owner Occupied		1,946		32
Residential Real Estate		2,544		103
Real Estate Construction		16		—
Farm Real Estate		653		56
Consumer and Other		4		—
Total	$	9,420	$	384

Schedule of Changes in Amortized Yield for PCI Loans

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

Changes in the amortizable yield for PCI loans were as follows, since acquisition:

	At December 31, 2017			At December 31, 2016
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	49		$	80
Acquisition of PCI loans		—			—
Accretion		(34	)		(31	)
Balance at end of period	$	15		$	49

Schedule of Loans Acquired and Accounted

The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30:

	At December 31, 2017		At December 31, 2016
	Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)		Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)
	(In Thousands)
Outstanding balance	$	775	$	850
Carrying amount		215		256

XML

Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Changes in Each Component of Accumulated Other Comprehensive Loss, Net of Tax

The following table presents the changes in each component of accumulated other comprehensive loss, net of tax, as of December 31, 2017, 2016 and 2015.

	For the Year Ended December 31, 2017									For the Year Ended December 31, 2016									For the Year Ended December 31, 2015
	Unrealized Gains and Losses on Available for Sale Securities			Defined Benefit Pension Items			Total			Unrealized Gains and Losses on Available for Sale Securities			Defined Benefit Pension Items			Total			Unrealized Gains and Losses on Available for Sale Securities			Defined Benefit Pension Items			Total
Beginning balance	$	2,008		$	(4,345	)	$	(2,337	)	$	3,554		$	(4,049	)	$	(495	)	$	3,730		$	(3,777	)	$	(47	)
Other comprehensive    income (loss) before    reclassifications		620			553			1,173			(1,533	)		(511	)		(2,044	)		(188	)		(449	)		(637	)
Amounts reclassified from    accumulated other    comprehensive loss		(8	)		247			239			(13	)		215			202			12			177			189
Net current-period other    comprehensive income    (loss)		612			800			1,412			(1,546	)		(296	)		(1,842	)		(176	)		(272	)		(448	)
Reclassification of certain income tax effects from accumulated other comprehensive loss		565			(764	)		(199	)		—			—			—			—			—			—
Ending balance	$	3,185		$	(4,309	)	$	(1,124	)	$	2,008		$	(4,345	)	$	(2,337	)	$	3,554		$	(4,049	)	$	(495	)

Amounts Reclassified Out of Each Component of Accumulated Other Comprehensive Loss

The following table presents the amounts reclassified out of each component of accumulated other comprehensive loss as of December 31, 2017, 2016 and 2015.

	Amount Reclassified from Accumulated Other Comprehensive Loss (a)
	For the year ended December 31,
Details about Accumulated Other Comprehensive Loss Components	2017				2016				2015				Affected Line Item in the Statement Where Net Income is Presented
Unrealized gains (losses) on available-for-sale    securities	$	12			$	19			$	(18	)		Net gain (loss) on sale of securities
Tax effect		(4	)			(6	)			6			Income taxes
		8				13				(12	)
Amortization of defined benefit pension items
Actuarial losses		(380	)	(b)		(326	)	(b)		(270	)	(b)	Salaries, wages and benefits
Tax effect		133				111				93			Income taxes
		(247	)			(215	)			(177	)
Total reclassifications for the period	$	(239	)		$	(202	)		$	(189	)

(a) Amounts in parentheses indicate expenses and other amounts indicate income.

(b) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost.

XML

Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Property Plant And Equipment [Abstract]

Year-End Premises and Equipment

Year-end premises and equipment were as follows:

	2017			2016
Land and improvements	$	5,022		$	5,094
Buildings and improvements		21,221			20,266
Furniture and equipment		17,004			16,070
Total		43,247			41,430
Accumulated depreciation		(25,636	)		(23,510	)
Premises and equipment, net	$	17,611		$	17,920

Rent Commitments Under Non-Cancelable Operating Leases

Rent expense was $580, $540 and $506 for 2017, 2016 and 2015, respectively. Rent commitments under non-cancelable operating leases at December 31, 2017 were as follows, before considering renewal options that generally are present.

2018	$	571
2019		479
2020		226
2021		91
2022		36
Total	$	1,403

XML

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Acquired Intangible Assets

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS (Continued)

Acquired intangible assets were as follows as of year end.

	2017						2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets(1):
MSRs	$	1,065	$	322	$	743	$	912	$	250	$	662
Core deposit intangibles		7,274		6,738		536		7,274		6,152		1,122
Total amortized intangible assets	$	8,339	$	7,060	$	1,279	$	8,186	$	6,402	$	1,784

(1) Excludes fully amortized intangible assets

Schedule of Estimated Amortization Expense

Estimated amortization expense for each of the next five years and thereafter is as follows:

	MSRs		Core deposit intangibles		Total
2018	$	41	$	111	$	152
2019		41		88		129
2020		41		71		112
2021		41		68		109
2022		41		68		109
Thereafter		538		130		668
	$	743	$	536	$	1,279

XML

Interest-Bearing Deposits (Tables)

12 Months Ended

Dec. 31, 2017

Text Block [Abstract]

Summary of Interest-Bearing Deposits

Interest-bearing deposits as of December 31, 2017 and 2016 were as follows:

	2017		2016
Demand	$	183,680	$	183,759
Statement and Passbook Savings		435,377		384,330
Certificates of Deposit:
$250 and over		8,206		13,640
Other		192,455		168,723
Individual Retirement Accounts		23,241		25,063
Total	$	842,959	$	775,515

Scheduled Maturities of Certificates of Deposit

Scheduled maturities of certificates of deposit, including IRA’s at December 31, 2017 were as follows:

2018	$	161,656
2019		41,926
2020		15,459
2021		3,382
2022		1,202
Thereafter		277
Total	$	223,902

XML

Short-Term Borrowings (Tables)

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Summary of Federal Funds Purchased and Other Short-term Borrowings

Short-term borrowings, which consist of federal funds purchased and other short-term borrowings are summarized as follows:

	At December 31, 2017						At December 31, 2016
	Federal Funds Purchased			Short-term Borrowings			Federal Funds Purchased			Short-term Borrowings
Outstanding balance at year end	$	—		$	56,900		$	—		$	31,000
Maximum indebtedness during the year		20,000			115,050			20,000			70,400
Average balance during the year		119			38,825			116			10,483
Average rate paid during the year		1.68	%		1.12	%		0.86	%		0.42	%
Interest rate on year end balance		—			1.42	%		—			0.64	%

	At December 31, 2015
	Federal Funds Purchased			Short-term Borrowings
Outstanding balance at year end	$	—		$	53,700
Maximum indebtedness during the year		—			64,700
Average balance during the year		69			26,880
Average rate paid during the year		0.53	%		0.20	%
Interest rate on year end balance		—			0.35	%

XML

Federal Home Loan Bank Advances (Tables)

12 Months Ended

Dec. 31, 2017

Banking And Thrift [Abstract]

Scheduled Principal Reductions of Federal Home Loan Bank Advances Outstanding

NOTE 11 - FEDERAL HOME LOAN BANK ADVANCES (Continued)

Scheduled principal reductions of FHLB advances outstanding at December 31, 2017 were as follows:

2018	$	10,000
2019		5,000
Total	$	15,000

XML

Securities Sold Under Agreements to Repurchase (Tables)

12 Months Ended

Dec. 31, 2017

Brokers And Dealers [Abstract]

Summary of Securities Pledged as Collateral Under Repurchase Agreements

The following table presents detail regarding the securities pledged as collateral under repurchase agreements as of December 31, 2017 and 2016. All of the repurchase agreements are overnight agreements.

	December 31, 2017		December 31, 2016
Securities pledged for repurchase agreements:
U.S. Treasury securities	$	874	$	1,761
Obligations of U.S. government agencies		20,881		27,164
Total securities pledged	$	21,755	$	28,925
Gross amount of recognized liabilities for    repurchase agreements	$	21,755	$	28,925
Amounts related to agreements not included in    offsetting disclosures above	$	—	$	—

Schedule of Securities Sold Under Agreements to Repurchase

Information concerning securities sold under agreements to repurchase was as follows:

	2017			2016			2015
Outstanding balance at year end	$	21,755		$	28,925		$	25,040
Average balance during the year		18,234			21,767			20,086
Average interest rate during the year		0.10	%		0.10	%		0.10	%
Maximum month-end balance during the year	$	23,889		$	28,925		$	25,040
Weighted average interest rate at year end		0.10	%		0.10	%		0.10	%

XML

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Income Tax

Income taxes were as follows for the years ended December 31:

	2017		2016		2015
Current	$	5,414	$	6,449	$	5,191
Deferred		435		170		(410	)
Change in corporate tax rate		511		—		—
Income taxes	$	6,360	$	6,619	$	4,781

Effective Tax Rates Differ from Statutory Federal Income Tax Rate

Effective tax rates differ from the statutory federal income tax rate of 35% in 2017 and 2016 and 34% in 2015 due to the following:

	2017			2016			2015
Income taxes computed at the statutory federal tax    rate	$	7,781		$	8,343		$	5,959
Add (subtract) tax effect of:
Nontaxable interest income, net of nondeductible    interest expense		(1,107	)		(946	)		(900	)
Low income housing tax credit		(686	)		(435	)		(303	)
Cash surrender value of BOLI		(201	)		(197	)		(159	)
Change in corporate tax rate		511			—			—
Other		62			(146	)		184
Income tax expense	$	6,360		$	6,619		$	4,781

Summary of Deferred Tax Assets and Liabilities

Year-end deferred tax assets and liabilities were due to the following:

	2017			2016
Deferred tax assets
Allowance for loan losses	$	2,848		$	4,640
Deferred compensation		1,213			1,762
Intangible assets		95			187
Pension costs		—			277
Other		141			102
Deferred tax asset		4,297			6,968
Deferred tax liabilities
Tax depreciation in excess of book depreciation		(275	)		(97	)
Discount accretion on securities		(43	)		(58	)
Purchase accounting adjustments		(536	)		(1,091	)
FHLB stock dividends		(1,053	)		(1,705	)
Unrealized gain on securities available for sale		(847	)		(1,035	)
Pension costs		(293	)		—
Prepaids		(320	)		—
Other		(166	)		(256	)
Deferred tax liability		(3,533	)		(4,242	)
Net deferred tax asset	$	764		$	2,726

XML

Retirement Plans (Tables)

12 Months Ended

Dec. 31, 2017

Information about Pension Plan

Information about the pension plan is as follows:

	2017			2016
Change in benefit obligation:
Beginning benefit obligation	$	16,964		$	16,328
Service cost		—			—
Interest cost		679			689
Curtailment gain		—			—
Settlement loss		46			51
Actuarial (gain)/loss		986			669
Benefits paid		(759	)		(773	)
Ending benefit obligation		17,916			16,964
Change in plan assets, at fair value:
Beginning plan assets		16,150			15,647
Actual return		1,947			802
Employer contribution		2,000			500
Benefits paid		(759	)		(773	)
Administrative expenses		(32	)		(26	)
Ending plan assets		19,306			16,150
Funded status at end of year	$	1,390		$	(814	)

Components of Net Periodic Pension Expense

The components of net periodic pension expense were as follows:

	2017			2016			2015
Service cost	$	—		$	—		$	—
Interest cost		679			689			604
Expected return on plan assets		(1,178	)		(1,090	)		(1,088	)
Net amortization and deferral		380			326			270
Net periodic pension cost (benefit)	$	(119	)	$	(75	)	$	(214	)
Net loss (gain) recognized in other comprehensive    loss	$	(322	)	$	448		$	412
Total recognized in net periodic benefit cost    and other comprehensive loss (before tax)	$	(441	)	$	373		$	198

Schedule of Target Allocation and Expected Long-Term Rate of Return by Asset Category

The Company’s pension plan asset allocation at year-end 2017 and 2016 and target allocation for 2018 by asset category are as follows:

	Target Allocation		Percentage of Plan Assets at Year-end
Asset Category	2018		2017			2016
Equity securities	20-50	%		48.0	%		47.5	%
Debt securities	30-60			51.9			52.1
Money market funds	20-30			0.1			0.4
Total				100.0	%		100.0	%

Plan's Assets at Fair Value Hierarchy

The following tables set forth by level, within the fair value hierarchy, the pension plan’s assets at fair value as of December 31, 2017 and 2016:

	December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Cash	$	113	$	—	$	—	$	113
Bond mutual funds		23		—		—		23
Common/collective trust:
Bonds		9,980		—		—		9,980
Equities		6,654		—		—		6,654
Equity market funds:
International		750		—		—		750
Large cap		1,085		—		—		1,085
Mid cap		269		—		—		269
Small cap		432		—		—		432
Total assets at fair value	$	19,306	$	—	$	—	$	19,306

Summary of Expected Benefit Payments

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

2018	$	1,903
2019		1,127
2020		650
2021		913
2022		1,182
2023 through 2027		4,723
Total	$	10,498

Benefit Obligations [Member]

Weighted Average Assumptions Used to Determine Benefit Obligations

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

	2017			2016			2015
Discount rate on benefit obligation		3.51	%		4.00	%		4.16	%
Long-term rate of return on plan assets		7.00	%		7.00	%		7.00	%
Rate of compensation increase		0.00	%		0.00	%		0.00	%

Net Periodic Pension Cost [Member]

Weighted Average Assumptions Used to Determine Benefit Obligations

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

	2017			2016			2015
Discount rate on benefit obligation		4.00	%		4.16	%		3.69	%
Long-term rate of return on plan assets		7.00	%		7.00	%		7.00	%
Rate of compensation increase		0.00	%		0.00	%		0.00	%

XML

Equity Incentive Plan (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Company's Restricted Stock

The following is a summary of the status of the Company’s restricted shares, and changes therein during the twelve months ended December 31, 2017 and 2016:

	December 31, 2017					December 31, 2016
	Number of Restricted Shares			Weighted Average Grant Date Fair Value		Number of Restricted Shares			Weighted Average Grant Date Fair Value
Nonvested at beginning of period		37,050		$	10.77		16,983		$	10.82
Granted		17,898			22.15		28,864			10.75
Vested		(12,810	)		10.76		(5,657	)		10.82
Forfeited		—			—		(3,140	)		10.87
Nonvested at end of period		42,138			15.60		37,050			10.77

NOTE 16 - EQUITY INCENTIVE PLAN (Continued)

The following is a summary of the status of the Company’s awarded restricted shares as of December 31, 2017:

At December 31, 2017
Date of Award	Shares		Remaining Expense		Remaining Vesting Period (Years)
January 15, 2016		10,260	$	66		3.00
March 11, 2016		15,748		33		1.00
March 20, 2017		11,713		110		2.00
March 20, 2017		6,185		108		4.00
		43,906	$	317		2.79

XML

Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value

Assets measured at fair value are summarized below.

Fair Value Measurements at December 31, 2017 Using:

	(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Treasury securities and obligations of    U.S. Government agencies	$	—	$	30,357	$	—
Obligations of states and political subdivisions		—		118,056		—
Mortgage-backed securities in government    sponsored entities		—		81,817		—
Equity securities in financial institutions		—		832		—
Fair value swap asset		—		1,560		—
Liabilities measured at fair value on a recurring    basis:
Fair value swap liability		—		1,560		—
Assets measured at fair value on a nonrecurring    basis:
Impaired Loans	$	—	$	—	$	1,040
Other Real Estate Owned		—		—		16

Fair Value Measurements at December 31, 2016 Using:

	(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Treasury securities and obligations of    U.S. Government agencies	$	—	$	37,446	$	—
Obligations of states and political subdivisions		—		94,998		—
Mortgage-backed securities in government    sponsored entities		—		62,642		—
Equity securities in financial institutions		—		778		—
Fair value swap asset		—		1,839		—
Liabilities measured at fair value on a recurring    basis:
Fair value swap liability		—		1,839		—
Assets measured at fair value on a nonrecurring    basis:
Impaired Loans	$	—	$	—	$	952
Other Real Estate Owned		—		—		37

Quantitative Information about Level 3 Fair Value Measurements

NOTE 17 - FAIR VALUE MEASUREMENT (Continued)

The following tables presents quantitative information about the Level 3 significant unobservable inputs for assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2017 and 2016.

	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2017	Fair Value		Valuation Technique	Unobservable Input	Range	Weighted Average
Impaired loans	$	1,040	Appraisal of collateral	Appraisal adjustments	0% - 30%	16%
				Liquidation expense	0% - 10%	8%
				Holding period	0 - 30 months	20 months
Other real estate owned	$	16	Appraisal of collateral	Appraisal adjustments	10% - 30%		10%
				Liquidation expense	0% - 10%		10%

	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2016	Fair Value		Valuation Technique	Unobservable Input	Range	Weighted Average
Impaired loans	$	952	Appraisal of collateral	Appraisal adjustments	10% - 67%	64%
				Liquidation expense	0% - 10%	4%
				Holding period	0 - 30 months	19 months
Other real estate owned	$	37	Appraisal of collateral	Appraisal adjustments	10% - 30%		10%
				Liquidation expense	0% - 10%		10%

Carrying Amount and Fair Value of Financial Instruments

The carrying amount and fair value of financial instruments were as follows:

December 31, 2017	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from financial institutions	$	40,519	$	40,519	$	40,519	$	—	$	—
Securities available for sale		231,062		231,062		—		231,062		—
Loans, held for sale		2,197		2,197		2,197		—		—
Loans, net of allowance for loan losses		1,151,527		1,146,969		—		—		1,146,969
Other securities		14,247		14,247		14,247		—		—
Bank owned life insurance		25,125		25,125		25,125		—		—
Accrued interest receivable		4,336		4,336		4,336		—		—
Swap asset		1,560		1,560		—		1,560		—
Financial Liabilities:
Nonmaturing deposits		981,021		981,021		981,021		—		—
Time deposits		223,902		223,626		—		—		223,626
Short-term FHLB advances		56,900		56,900		56,900		—		—
Long-term FHLB advances		15,000		14,964		—		—		14,964
Securities sold under agreement to repurchase		21,755		21,755		21,755		—		—
Subordinated debentures		29,427		31,052		—		—		31,052
Accrued interest payable		410		410		410		—		—
Swap liability		1,560		1,560		—		1,560		—

NOTE 17 - FAIR VALUE MEASUREMENT (Continued)

December 31, 2016	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from financial institutions	$	36,695	$	36,695	$	36,695	$	—	$	—
Securities available for sale		195,864		195,864		—		195,864		—
Loans, held for sale		2,268		2,268		2,268		—		—
Loans, net of allowance for loan losses		1,042,201		1,047,329		—		—		1,047,329
Other securities		14,055		14,055		14,055		—		—
Bank owned life insurance		24,552		24,552		24,552		—		—
Accrued interest receivable		3,854		3,854		3,854		—		—
Swap asset		1,839		1,839		—		1,839		—
Financial Liabilities:
Nonmaturing deposits		913,677		913,677		913,677		—		—
Time deposits		207,426		207,784		—		—		207,784
Short-term FHLB advances		31,000		31,000		31,000		—		—
Long-term FHLB advances		17,500		17,553		—		—		17,553
Securities sold under agreement to repurchase		28,925		28,925		28,925		—		—
Subordinated debentures		29,427		27,414		—		—		27,414
Accrued interest payable		181		181		181		—		—
Swap liability		1,839		1,839		—		1,839		—

XML

Commitments, Contingencies and Off-Balance-Sheet Risk (Tables)

12 Months Ended

Dec. 31, 2017

Commitments And Contingencies Disclosure [Abstract]

Contractual Amounts of Financial Instruments with Off-Balance-Sheet Risk

The contractual amount of financial instruments with off-balance-sheet risk was as follows at year-end.

	2017				2016
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to extend credit:
Lines of credit and construction loans	$	4,982	$	286,925	$	6,905	$	202,923
Overdraft protection		7		33,353		5		29,075
Letters of credit		624		2,637		600		349
	$	5,613	$	322,915	$	7,510	$	232,347

XML

Capital Requirements and Restriction on Retained Earnings (Tables)

12 Months Ended

Dec. 31, 2017

Text Block [Abstract]

Actual Capital Levels and Minimum Required Capital Levels

The Company’s and Civista’s actual capital levels and minimum required capital levels at December 31, 2017 and 2016 were as follows:

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Purposes
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2017
Total Risk Based Capital
Consolidated	$	200,772		16.6	%	$	97,025		8.0	%	n/a		n/a
Civista		161,394		13.3			96,880		8.0		$	121,100		10.0	%
Tier I Risk Based Capital
Consolidated		187,638		15.5			72,769		6.0		n/a		n/a
Civista		147,473		12.2			72,660		6.0			96,880		8.0
CET1 Risk Based Capital
Consolidated		140,853		11.6			54,576		4.5		n/a		n/a
Civista		136,760		11.3			54,495		4.5			78,715		6.5
Leverage
Consolidated		187,638		12.7			59,089		4.0		n/a		n/a
Civista		147,473		10.0			59,031		4.0			73,788		5.0
2016
Total Risk Based Capital
Consolidated	$	155,145		14.2	%	$	87,436		8.0	%	n/a		n/a
Civista		145,270		13.3			87,334		8.0		$	109,168		10.0	%
Tier I Risk Based Capital
Consolidated		141,840		13.0			65,577		6.0		n/a		n/a
Civista		131,391		12.0			65,501		6.0			87,334		8.0
CET1 Risk Based Capital
Consolidated		93,463		8.6			49,183		4.5		n/a		n/a
Civista		120,465		11.0			49,126		4.5			70,959		6.5
Leverage
Consolidated		141,840		10.6			53,774		4.0		n/a		n/a
Civista		131,391		9.8			53,717		4.0			67,146		5.0

XML

Parent Company Only Condensed Financial Information (Tables)

12 Months Ended

Dec. 31, 2017

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Schedule of Condensed Balance Sheets

	December 31,
Condensed Balance Sheets	2017			2016
Assets:
Cash	$	29,908		$	4,747
Securities available for sale		832			778
Investment in bank subsidiary		167,192			149,965
Investment in nonbank subsidiaries		12,928			12,635
Other assets		5,212			1,226
Total assets	$	216,072		$	169,351
Liabilities:
Deferred income taxes and other liabilities	$	2,184		$	2,308
Subordinated debentures		29,427			29,427
Total liabilities		31,611			31,735
Shareholders’ Equity:
Preferred stock		17,358			18,950
Common stock		153,810			118,975
Accumulated earnings		31,652			19,263
Treasury Stock		(17,235	)		(17,235	)
Accumulated other comprehensive loss		(1,124	)		(2,337	)
Total shareholders’ equity		184,461			137,616
Total liabilities and shareholders’ equity	$	216,072		$	169,351

Schedule of Condensed Statements of Operations

	For the years ended December 31,
Condensed Statements of Operations	2017			2016			2015
Dividends from bank subsidiaries	$	—		$	—		$	14,226
Interest expense		(1,035	)		(884	)		(760	)
Pension expense		(925	)		(184	)		(388	)
Other expense, net		(1,071	)		(920	)		(1,755	)
Income (loss) before equity in undistributed net    earnings of subsidiaries		(3,031	)		(1,988	)		11,323
Income tax benefit		1,407			676			959
Equity in undistributed net earnings of subsidiaries		17,496			18,529			463
Net income	$	15,872		$	17,217		$	12,745
Comprehensive income	$	17,284		$	15,375		$	12,297

Schedule of Condensed Statements of Cash Flows

	For the years ended December 31,
Condensed Statements of Cash Flows	2017			2016			2015
Operating activities:
Net income	$	15,872		$	17,217		$	12,745
Adjustment to reconcile net income to net cash    from (used for) operating activities:
Change in other assets and other liabilities		(2,147	)		1,821			1,324
Gain on sale of fixed asets		(66	)		—			—
Equity in undistributed net earnings of    subsidiaries		(17,496	)		(18,529	)		(463	)
Net cash (used for) from operating activities		(3,837	)		509			13,606
Investing activities:
Proceeds from sale of premises and equipment	138				—			—
Acquisition and additional capitalization of    subsidiary, net of cash acquired		(275	)		—			(16,637	)
Net cash used for investing activities		(137	)		—			(16,637	)
Financing activities:
Cash paid on fractional shares on preferred stock    conversion to common stock		—			(1	)		—
Net proceeds from common stock issuance		32,821			—			—
Payment to repurchase common stock		(4	)		—			—
Cash dividends paid		(3,682	)		(3,254	)		(3,139	)
Net cash from (used for) financing activities		29,135			(3,255	)		(3,139	)
Net change in cash and cash equivalents		25,161			(2,746	)		(6,170	)
Cash and cash equivalents at beginning of year		4,747			7,493			13,663
Cash and cash equivalents at end of year	$	29,908		$	4,747		$	7,493

XML

Earnings per Common Share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings per Common Share

The factors used in the earnings per share computation follow.

	2017		2016		2015
Basic
Net income	$	15,872	$	17,217	$	12,745
Preferred stock dividends		1,244		1,501		1,577
Net income available to common    shareholders—basic	$	14,628	$	15,716	$	11,168
Weighted average common shares    outstanding—basic		9,906,856		8,010,399		7,822,369
Basic earnings per share	$	1.48	$	1.96	$	1.43
Diluted
Net income available to common    shareholders—basic	$	14,628	$	15,716	$	11,168
Preferred stock dividends on convertible    preferred stock		1,244		1,501		1,577
Net income available to common    shareholders—diluted	$	15,872	$	17,217	$	12,745
Weighted average common shares outstanding    for earnings per common share basic		9,906,856		8,010,399		7,822,369
Add: dilutive effects of convertible preferred    shares		2,445,760		2,940,562		3,095,966
Average shares and dilutive potential    common shares outstanding—diluted		12,352,616		10,950,961		10,918,335
Diluted earnings per share	$	1.28	$	1.57	$	1.17

XML

Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Data

	Interest Income		Net Interest Income		Net Income		Basic Earnings per Common Share		Diluted Earnings per Common Share
2017
First quarter (1)(2)	$	13,692	$	12,892	$	4,635	$	0.47	$	0.40
Second quarter (3)(4)		14,228		13,367		3,596		0.32		0.29
Third quarter (3)		14,836		13,680		3,660		0.33		0.29
Fourth quarter (3)(5)		15,838		14,563		3,981		0.36		0.30
2016
First quarter (1)(2)	$	13,053	$	12,235	$	4,725	$	0.55	$	0.43
Second quarter (5)(6)		13,739		12,940		5,181		0.61		0.47
Third quarter (7)		13,370		12,526		3,680		0.41		0.34
Fourth quarter (8)		13,405		12,558		3,631		0.39		0.33

(1) Interest income and net interest income increased due to loan volume and rate and volume on interest-bearing deposits in other banks.

(2) Net income increased due to fees on tax refund processing program.

(3) Interest income and net interest income increased due to increases in loan volume and rate.

(4) Net income decreased due to a decrease in fees on the tax refund processing program.

(5) Interest income and net interest income increased due to interest recoveries on non-performing loans.

(6) Net income increased due to interest recoveries and provision credit.

(7) Interest income, net interest income and net income decreased due to previous quarter interest recoveries and provision credit.

(8) Interest income and net interest income increased due to loan volume and interest recoveries.

XML

Derivative Hedging Instruments (Tables)

12 Months Ended

Dec. 31, 2017

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Summary of Interest Rate Swap Transactions

The following table summarizes the Company’s interest rate swap positions and the impact of a 1 basis point change in interest rates as of December 31, 2017.

	Notional Amount			Weighted Average Rate Received/ (Paid)			Impact of a 1 basis point change in interest rates			Repricing Frequency
Derivative Assets	$	66,227			5.08	%	$	36		Monthly
Derivative Liabilities		(66,227	)		-5.08	%		(36	)	Monthly
Net Exposure	$	—					$	—

The following table summarizes the Company’s interest rate swap positions and the impact of a 1 basis point change in interest rates as of December 31, 2016.

	Notional Amount			Weighted Average Rate Received/ (Paid)			Impact of a 1 basis point change in interest rates			Repricing Frequency
Derivative Assets	$	52,975			5.07	%	$	30		Monthly
Derivative Liabilities		(52,975	)		-5.07	%		(30	)	Monthly
Net Exposure	$	—					$	—

XML

Summary of Significant Accounting Policies - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2017 USD ($) Segment $ / shares	Dec. 31, 2016	Dec. 31, 2015
Significant Accounting Policies [Line Items]
Allowance for loan losses related to commercial, commercial real estate and farm real estate loans	$ 750,000
Number of days reaching which loans are considered for nonaccrual status	90 days
Federal Home Loan Bank par value | $ / shares	$ 100
Number of operating segments | Segment	1
ASU 2018-02 [Member]
Significant Accounting Policies [Line Items]
Cumulative effect adjustment between retained earnings and accumulated other comprehensive income	$ 199,000
Unsecured Debt [Member]
Significant Accounting Policies [Line Items]
Retail loans past due charge off period	90 days
Secured Debt [Member]
Significant Accounting Policies [Line Items]
Residential real estate loans past due assessment of value period	180 days
Other Debt [Member]
Significant Accounting Policies [Line Items]
Loans past due charged down to the net realizable value period	90 days
Maximum [Member]
Significant Accounting Policies [Line Items]
Percentage of insurance commission revenue of total revenue	1.00%	1.00%	1.00%
Original maturities for cash and cash equivalents	90 days
Estimated useful life of intangible assets	12 years
Percentage of increase on assets due to new accounting standard updates	1.00%
Percentage of increase on liabilities due to new accounting standard updates	1.00%
Maximum [Member] | Furniture and Equipment [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of asset	7 years
Maximum [Member] | Buildings and Improvements [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of asset	50 years
Maximum [Member] | WSP [Member]
Significant Accounting Policies [Line Items]
Percentage of insurance commission revenue of total revenue	1.00%	1.00%	1.00%
Maximum [Member] | CIVB Risk Management, Inc. [Member]
Significant Accounting Policies [Line Items]
Percentage of insurance commission revenue of total revenue	1.00%
Minimum [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of intangible assets	5 years
Minimum [Member] | Furniture and Equipment [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of asset	3 years
Minimum [Member] | Buildings and Improvements [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of asset	7 years

XML

Merger - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Mar. 06, 2015	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Business Combinations [Line Items]
Goodwill			$ 27,095	$ 27,095
Merger related costs		$ 391
TCNB Financial Corp [Member]
Business Combinations [Line Items]
Cash paid for acquisition	$ 17,226
Acquisition value per share	$ 23.50
Total assets of TCNB prior to the merger	$ 97,479
Assets, loan	76,771
Assets, Deposit	86,708
Goodwill	5,375
Cash and short-term investments acquired	18,152
Loans acquired	76,444
Loans acquired with credit deterioration	831
Deposits acquired	$ 86,900
Minimum [Member]
Business Combinations [Line Items]
Core deposit intangibles and other intangibles, amortization period	5 years
Maximum [Member]
Business Combinations [Line Items]
Core deposit intangibles and other intangibles, amortization period	10 years

XML

Merger - Schedule of Financial Information for Former TCNB Financial Corp Included in Consolidated Statement of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended								10 Months Ended	12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Net interest income after provision for loan losses										$ 54,502	$ 51,559	$ 46,192
Noninterest income										16,334	16,132	14,278
Net income	$ 3,981	$ 3,660	$ 3,596	$ 4,635	$ 3,631	$ 3,680	$ 5,181	$ 4,725		$ 15,872	$ 17,217	$ 12,745
Former TCNB Financial Corp [Member]
Business Acquisition [Line Items]
Net interest income after provision for loan losses									$ 3,155
Noninterest income									138
Net income									$ 1,282

XML

Merger - Business Acquisition, Unaudited Pro Forma Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Business Combination, Separately Recognized Transactions [Line Items]
Net interest income after provision for loan losses									$ 54,502	$ 51,559	$ 46,192
Noninterest income									16,334	16,132	14,278
Net income	$ 3,981	$ 3,660	$ 3,596	$ 4,635	$ 3,631	$ 3,680	$ 5,181	$ 4,725	$ 15,872	$ 17,217	$ 12,745
Basic	$ 0.36	$ 0.33	$ 0.32	$ 0.47	$ 0.39	$ 0.41	$ 0.61	$ 0.55	$ 1.48	$ 1.96	$ 1.43
Diluted	$ 0.30	$ 0.29	$ 0.29	$ 0.40	$ 0.33	$ 0.34	$ 0.47	$ 0.43	$ 1.28	$ 1.57	$ 1.17
Pro Forma [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Net interest income after provision for loan losses									$ 54,456	$ 51,389	$ 46,852
Noninterest income									16,334	16,132	14,699
Net income									$ 15,769	$ 16,949	$ 11,931
Basic									$ 1.47	$ 1.93	$ 1.32
Diluted									$ 1.28	$ 1.55	$ 1.09

XML

Merger - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Mar. 06, 2015	Dec. 31, 2017	Dec. 31, 2016
Net assets acquired:
Goodwill		$ 27,095	$ 27,095
TCNB Financial Corp [Member]
Business Acquisition [Line Items]
Total purchase price	$ 17,226
Net assets acquired:
Cash and short-term investments	18,152
Loans, net	76,444
Other securities	716
Premises and equipment	1,738
Accrued interest receivable	194
Core deposit intangible	1,009
Other assets	472
Noninterest-bearing deposits	(18,263)
Interest-bearing deposits	(68,606)
Other liabilities	(5)
Net assets acquired	11,851
Goodwill	$ 5,375

XML

Securities - Available for Sale Securities (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 227,031	$ 192,820
Gross Unrealized Gains	5,085	4,292
Gross Unrealized Losses	(1,054)	(1,248)
Fair Value	231,062	195,864
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	30,450	37,406
Gross Unrealized Gains	100	117
Gross Unrealized Losses	(192)	(77)
Fair Value	30,357	37,446
Obligations of States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	114,002	92,177
Gross Unrealized Gains	4,226	3,395
Gross Unrealized Losses	(172)	(574)
Fair Value	118,056	94,998
Mortgage-back Securities in Government Sponsored Entities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	82,098	62,756
Gross Unrealized Gains	408	483
Gross Unrealized Losses	(690)	(597)
Fair Value	81,817	62,642
Total Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	226,550	192,339
Gross Unrealized Gains	4,734	3,995
Gross Unrealized Losses	(1,054)	(1,248)
Fair Value	230,230	195,086
Equity Securities in Financial Institutions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	481	481
Gross Unrealized Gains	351	297
Fair Value	$ 832	$ 778

XML

Securities - Amortized Cost and Fair Value of Securities by Contractual Maturity (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Investments Debt And Equity Securities [Abstract]
Amortized Cost, Due in one year or less	$ 8,787
Amortized Cost, Due from one to five years	27,662
Amortized Cost, Due from five to ten years	30,167
Amortized Cost, Due after ten years	77,836
Amortized Cost, Mortgage-backed securities in government sponsored entities	82,098
Amortized Cost, Equity securities in financial institutions	481
Amortized Cost	227,031	$ 192,820
Fair Value, Due in one year or less	8,765
Fair Value, Due from one to five years	27,691
Fair Value, Due from five to ten years	31,622
Fair Value, Due after ten years	80,335
Fair Value, Mortgage-backed securities in government sponsored entities	81,817
Fair Value, Equity securities in financial institutions	832
Fair Value, Total	$ 231,062	$ 195,864

XML

Securities - Additional Information (Detail) $ in Thousands	Dec. 31, 2017 USD ($) Security	Dec. 31, 2016 USD ($)
Investments Debt And Equity Securities [Abstract]
Carrying value of pledged securities | $	$ 122,862	$ 139,179
Number of securities in portfolio with unrealized losses | Security	78

XML

Securities - Proceeds from Sales of Securities, Gross Realized Gains and Losses (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Investments Debt And Equity Securities [Abstract]
Sale proceeds	$ 953	$ 4,349	$ 0
Gross realized gains	0	18	0
Gross realized losses	0	0	0
Gains (losses) from securities called or settled by the issuer	$ 12	$ 1	$ (18)

XML

Securities - Securities with Unrealized Losses Not Recognized in Income (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
12 Months or less, Fair Value	$ 54,040	$ 65,891
12 Months or less, Unrealized Loss	(336)	(1,185)
More than 12 months, Fair Value	36,125	4,261
More than 12 months, Unrealized Loss	(718)	(63)
Total Fair Value	90,165	70,152
Total Unrealized Loss	(1,054)	(1,248)
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
12 Months or less, Fair Value	20,449	13,271
12 Months or less, Unrealized Loss	(100)	(61)
More than 12 months, Fair Value	6,617	893
More than 12 months, Unrealized Loss	(92)	(16)
Total Fair Value	27,066	14,164
Total Unrealized Loss	(192)	(77)
Obligations of States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
12 Months or less, Fair Value	4,057	17,167
12 Months or less, Unrealized Loss	(41)	(558)
More than 12 months, Fair Value	7,309	519
More than 12 months, Unrealized Loss	(131)	(16)
Total Fair Value	11,366	17,686
Total Unrealized Loss	(172)	(574)
Mortgage-backed Securities in Government Sponsored Entities [Member]
Schedule of Available-for-sale Securities [Line Items]
12 Months or less, Fair Value	29,534	35,453
12 Months or less, Unrealized Loss	(195)	(566)
More than 12 months, Fair Value	22,199	2,849
More than 12 months, Unrealized Loss	(495)	(31)
Total Fair Value	51,733	38,302
Total Unrealized Loss	$ (690)	$ (597)

XML

Loans - Loan Balances (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Accounts Notes And Loans Receivable [Line Items]
Total Loans	$ 1,164,661	$ 1,055,506
Allowance for loan losses	(13,134)	(13,305)
Net loans	1,151,527	1,042,201
Commercial and Agriculture [Member]
Accounts Notes And Loans Receivable [Line Items]
Total Loans	152,473	135,462
Commercial Real Estate Owner Occupied [Member]
Accounts Notes And Loans Receivable [Line Items]
Total Loans	164,099	161,364
Commercial Real Estate Non Owner Occupied [Member]
Accounts Notes And Loans Receivable [Line Items]
Total Loans	425,623	395,931
Residential Real Estate [Member]
Accounts Notes And Loans Receivable [Line Items]
Total Loans	268,735	247,308
Real Estate Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
Total Loans	97,531	56,293
Farm Real Estate [Member]
Accounts Notes And Loans Receivable [Line Items]
Total Loans	39,461	41,170
Consumer and Other [Member]
Accounts Notes And Loans Receivable [Line Items]
Total Loans	$ 16,739	$ 17,978

XML

Loans - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Receivables [Abstract]
Deferred loan fees and costs	$ 223	$ 94

XML

Loans - Loans to Directors and Executive Officers Including Immediate Families (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Receivables Other Related Parties And Retainage [Abstract]
Balance - Beginning of year	$ 14,389	$ 15,147
New loans and advances	2,344	850
Repayments	(1,256)	(1,575)
Effect of changes to related parties	(1,475)	(33)
Balance - End of year	$ 14,002	$ 14,389

XML

Allowance for Loan Losses - Additional Information (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) SecurityLoan	Dec. 31, 2016 USD ($) SecurityLoan	Dec. 31, 2015 USD ($) SecurityLoan
Accounts Notes And Loans Receivable [Line Items]
Period for calculating Loss migration rates of portfolio segments	3 years		3 years
Allowance for loan losses	$ 13,134	$ 13,305
Proceeds from payoff on previously charged-off loans		1,303
Number of days past due for loans to be considered as nonperforming	90 days
Reasonable period for nonperforming TDRs to be returned to performing status	6 months
Number of days reaching where loans are considered for nonaccrual status	90 days
Conditions where loans are considered for nonaccrual status	A loan may be returned to accruing status only if one of three conditions are met: the loan is well-secured and none of the principal and interest has been past due for a minimum of 90 days; the loan is a TDR and the borrower has made a minimum of six months payments; or the principal and interest payments are reasonably assured and a sustained period of performance has occurred, generally six months.
Gross interest income recorded on nonaccrual loans	$ 712	701	$ 1,761
Interest income on nonaccrual loans recognized on cash basis	$ 139	$ 1,138	$ 766
Defaulted loans | SecurityLoan	0	0	1
Total loans modified and considered TDRs			$ 107
Impaired loans	greater than $350
Foreclosed assets	$ 16	$ 37
Allowance for loan losses recorded for acquired loans	126	175
Residential Mortgage [Member]
Accounts Notes And Loans Receivable [Line Items]
Foreclosed assets	16
Residential mortgages in process of foreclosure	239	710
TDRs [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses	$ 169	$ 278	286
Commercial and Agriculture [Member]
Accounts Notes And Loans Receivable [Line Items]
Decreases allowance for loans			$ (625)
Commercial Real Estate Owner Occupied [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses look back period			3 years
Commercial Real Estate Non Owner Occupied [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses look back period			3 years
Residential Real Estate [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses look back period			3 years

XML

Allowance for Loan Losses - Changes in the Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounts Notes And Loans Receivable [Line Items]
Beginning balance	$ 13,305	$ 14,361	$ 14,268
Charge-offs	(942)	(1,826)	(2,049)
Recoveries	771	2,070	942
Provision (Credit)		(1,300)	1,200
Ending Balance	13,134	13,305	14,361
Commercial and Agriculture [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance	2,018	1,478	1,819
Charge-offs	(11)	(880)	(190)
Recoveries	372	105	182
Provision (Credit)	(817)	1,315	(333)
Ending Balance	1,562	2,018	1,478
Commercial Real Estate Owner Occupied [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance	2,171	2,467	2,221
Charge-offs	(328)	(228)	(523)
Recoveries	69	56	187
Provision (Credit)	131	(124)	582
Ending Balance	2,043	2,171	2,467
Commercial Real Estate Non Owner Occupied [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance	4,606	4,657	4,334
Charge-offs	(38)	(23)	(81)
Recoveries	46	1,372	115
Provision (Credit)	693	(1,400)	289
Ending Balance	5,307	4,606	4,657
Residential Real Estate [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance	3,089	4,086	3,747
Charge-offs	(400)	(455)	(1,135)
Recoveries	194	479	331
Provision (Credit)	(973)	(1,021)	1,143
Ending Balance	1,910	3,089	4,086
Real Estate Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance	420	371	428
Charge-offs		(115)
Recoveries	44	12	5
Provision (Credit)	370	152	(62)
Ending Balance	834	420	371
Farm Real Estate [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance	442	538	822
Recoveries	3		76
Provision (Credit)	(15)	(96)	(360)
Ending Balance	430	442	538
Consumer and Other [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance	314	382	200
Charge-offs	(165)	(125)	(120)
Recoveries	43	46	46
Provision (Credit)	98	11	256
Ending Balance	290	314	382
Unallocated [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance	245	382	697
Provision (Credit)	513	(137)	(315)
Ending Balance	$ 758	$ 245	$ 382

XML

Allowance for Loan Losses - Ending Allocation of Allowance for Loan Losses and Loan Balances Outstanding (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses, Individually evaluated for impairment	$ 125	$ 188
Allowance for loan losses, Collectively evaluated for impairment	12,883	12,942
Allowance for loan losses, Total	13,134	13,305	$ 14,361	$ 14,268
Outstanding loan balances, Individually evaluated for impairment	3,460	6,539
Outstanding loan balances, Collectively evaluated for impairment	1,160,986	1,048,711
Outstanding loan balances, Total	1,164,661	1,055,506
Receivables Acquired with Deteriorated Credit Quality [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans acquired with credit deterioration	126	175
Loan balance of loans acquired with credit deterioration	215	256
Commercial and Agriculture [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses, Individually evaluated for impairment	4	82
Allowance for loan losses, Collectively evaluated for impairment	1,476	1,850
Allowance for loan losses, Total	1,562	2,018	1,478	1,819
Outstanding loan balances, Individually evaluated for impairment	438	1,983
Outstanding loan balances, Collectively evaluated for impairment	151,948	133,391
Outstanding loan balances, Total	152,473	135,462
Commercial and Agriculture [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans acquired with credit deterioration	82	86
Loan balance of loans acquired with credit deterioration	87	88
Commercial Real Estate Owner Occupied [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses, Individually evaluated for impairment	6	4
Allowance for loan losses, Collectively evaluated for impairment	2,037	2,167
Allowance for loan losses, Total	2,043	2,171	2,467	2,221
Outstanding loan balances, Individually evaluated for impairment	1,010	1,896
Outstanding loan balances, Collectively evaluated for impairment	163,089	159,468
Outstanding loan balances, Total	164,099	161,364
Commercial Real Estate Non Owner Occupied [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses, Collectively evaluated for impairment	5,307	4,606
Allowance for loan losses, Total	5,307	4,606	4,657	4,334
Outstanding loan balances, Individually evaluated for impairment	44	359
Outstanding loan balances, Collectively evaluated for impairment	425,579	395,572
Outstanding loan balances, Total	425,623	395,931
Residential Real Estate [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses, Individually evaluated for impairment	109	102
Allowance for loan losses, Collectively evaluated for impairment	1,757	2,898
Allowance for loan losses, Total	1,910	3,089	4,086	3,747
Outstanding loan balances, Individually evaluated for impairment	1,360	1,686
Outstanding loan balances, Collectively evaluated for impairment	267,247	245,454
Outstanding loan balances, Total	268,735	247,308
Residential Real Estate [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans acquired with credit deterioration	44	89
Loan balance of loans acquired with credit deterioration	128	168
Real Estate Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses, Collectively evaluated for impairment	834	420
Allowance for loan losses, Total	834	420	371	428
Outstanding loan balances, Collectively evaluated for impairment	97,531	56,293
Outstanding loan balances, Total	97,531	56,293
Farm Real Estate [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses, Individually evaluated for impairment	6
Allowance for loan losses, Collectively evaluated for impairment	424	442
Allowance for loan losses, Total	430	442	538	822
Outstanding loan balances, Individually evaluated for impairment	608	614
Outstanding loan balances, Collectively evaluated for impairment	38,853	40,556
Outstanding loan balances, Total	39,461	41,170
Consumer and Other [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses, Collectively evaluated for impairment	290	314
Allowance for loan losses, Total	290	314	382	200
Outstanding loan balances, Individually evaluated for impairment		1
Outstanding loan balances, Collectively evaluated for impairment	16,739	17,977
Outstanding loan balances, Total	16,739	17,978
Unallocated [Member]
Accounts Notes And Loans Receivable [Line Items]
Allowance for loan losses, Collectively evaluated for impairment	758	245
Allowance for loan losses, Total	$ 758	$ 245	$ 382	$ 697

XML

Allowance for Loan Losses - Credit Exposures by Internally Assigned Grades (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	$ 945,123	$ 854,479
Commercial and Agriculture [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	152,473	135,462
Commercial Real Estate Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	164,099	161,364
Commercial Real Estate Non Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	425,623	395,931
Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	70,498	67,587
Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	91,587	50,721
Farm Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	39,461	41,170
Consumer and Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	1,382	2,244
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	899,674	816,760
Pass [Member] | Commercial and Agriculture [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	140,842	127,867
Pass [Member] | Commercial Real Estate Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	155,756	151,659
Pass [Member] | Commercial Real Estate Non Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	422,363	393,592
Pass [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	62,628	59,015
Pass [Member] | Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	91,545	50,678
Pass [Member] | Farm Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	25,228	31,814
Pass [Member] | Consumer and Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	1,312	2,135
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	25,147	17,342
Special Mention [Member] | Commercial and Agriculture [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	8,412	4,300
Special Mention [Member] | Commercial Real Estate Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	1,166	4,016
Special Mention [Member] | Commercial Real Estate Non Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	2,321	1,676
Special Mention [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	1,997	1,661
Special Mention [Member] | Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	15	16
Special Mention [Member] | Farm Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	11,236	5,673
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	20,302	20,377
Substandard [Member] | Commercial and Agriculture [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	3,219	3,295
Substandard [Member] | Commercial Real Estate Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	7,177	5,689
Substandard [Member] | Commercial Real Estate Non Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	939	663
Substandard [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	5,873	6,911
Substandard [Member] | Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	27	27
Substandard [Member] | Farm Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	2,997	3,683
Substandard [Member] | Consumer and Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans with credit exposures as assigned an internal risk grade	$ 70	$ 109

XML

Allowance for Loan Losses - Performing and Nonperforming Loans (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment [Line Items]
Performing	$ 219,522	$ 201,018
Nonperforming	16	9
Total	219,538	201,027
Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Performing	198,237	179,721
Total	198,237	179,721
Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Performing	5,944	5,572
Total	5,944	5,572
Consumer and Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Performing	15,341	15,725
Nonperforming	16	9
Total	$ 15,357	$ 15,734

XML

Allowance for Loan Losses - Aging Analysis of Past Due Loans (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 6,421	$ 6,111
Current	1,158,025	1,049,139
Total Loans	1,164,661	1,055,506
Past Due 90 Days and Accruing	16	9
30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,337	3,145
60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	431	1,111
90 Days or Greater [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,653	1,855
Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Purchased Credit-Impaired Loans	215	256
Commercial and Agriculture [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,262	328
Current	151,124	135,046
Total Loans	152,473	135,462
Commercial and Agriculture [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	575	156
Commercial and Agriculture [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2	20
Commercial and Agriculture [Member] | 90 Days or Greater [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	685	152
Commercial and Agriculture [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Purchased Credit-Impaired Loans	87	88
Commercial Real Estate Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,485	1,555
Current	162,614	159,809
Total Loans	164,099	161,364
Commercial Real Estate Owner Occupied [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	897	722
Commercial Real Estate Owner Occupied [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	104	553
Commercial Real Estate Owner Occupied [Member] | 90 Days or Greater [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	484	280
Commercial Real Estate Non Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	603	463
Current	425,020	395,468
Total Loans	425,623	395,931
Commercial Real Estate Non Owner Occupied [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	133	147
Commercial Real Estate Non Owner Occupied [Member] | 90 Days or Greater [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	470	316
Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,627	3,368
Current	265,980	243,772
Total Loans	268,735	247,308
Residential Real Estate [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,613	1,812
Residential Real Estate [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	229	507
Residential Real Estate [Member] | 90 Days or Greater [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	785	1,049
Residential Real Estate [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Purchased Credit-Impaired Loans	128	168
Real Estate Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	27	27
Current	97,504	56,266
Total Loans	97,531	56,293
Real Estate Construction [Member] | 90 Days or Greater [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	27	27
Farm Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	213	93
Current	39,248	41,077
Total Loans	39,461	41,170
Farm Real Estate [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	27	93
Farm Real Estate [Member] | 90 Days or Greater [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	186
Consumer and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	204	277
Current	16,535	17,701
Total Loans	16,739	17,978
Past Due 90 Days and Accruing	16	9
Consumer and Other [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	92	215
Consumer and Other [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	96	31
Consumer and Other [Member] | 90 Days or Greater [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 16	$ 31

XML

Allowance for Loan Losses - Summary of Nonaccrual Loans Excluding Purchased Credit-Impaired (PCI) Loans (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment [Line Items]
Total, Non-Accrual Status	$ 6,132	$ 6,943
Commercial and Agriculture [Member]
Financing Receivable, Recorded Investment [Line Items]
Total, Non-Accrual Status	887	1,622
Commercial Real Estate Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Total, Non-Accrual Status	1,476	1,461
Commercial Real Estate Non Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Total, Non-Accrual Status	711	464
Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total, Non-Accrual Status	2,778	3,266
Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total, Non-Accrual Status	27	27
Farm Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total, Non-Accrual Status	186	2
Consumer and Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total, Non-Accrual Status	$ 67	$ 101

XML

Allowance for Loan Losses - Schedule of Troubled Debt Restructurings (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) Contract	Dec. 31, 2016 USD ($) Contract	Dec. 31, 2015 USD ($) Contract
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of Contracts | Contract	1	9	1
Pre- Modification Outstanding Recorded Investment	$ 13	$ 1,537	$ 41
Post-Modification Outstanding Recorded Investment	$ 13	$ 1,537	$ 41
Commercial and Agriculture [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of Contracts | Contract		4
Pre- Modification Outstanding Recorded Investment		$ 529
Post-Modification Outstanding Recorded Investment		$ 529
Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of Contracts | Contract	1	2
Pre- Modification Outstanding Recorded Investment	$ 13	$ 308
Post-Modification Outstanding Recorded Investment	$ 13	$ 308
Real Estate Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of Contracts | Contract			1
Pre- Modification Outstanding Recorded Investment			$ 41
Post-Modification Outstanding Recorded Investment			$ 41
Farm Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of Contracts | Contract		3
Pre- Modification Outstanding Recorded Investment		$ 700
Post-Modification Outstanding Recorded Investment		$ 700

XML

Allowance for Loan Losses - Impaired Financing Receivables Excluding PCI Loans - Recorded Investment and Unpaid Principal Balances (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Financing Receivable, Impaired [Line Items]
Impaired financing receivables, with no related allowance recorded, Recorded Investment	$ 1,862	$ 5,121
Impaired financing receivables, with no related allowance recorded, Unpaid Principal Balance	2,158	6,145
Impaired financing receivables, with an allowance recorded, Recorded Investment	1,598	1,418
Impaired financing receivables, with an allowance recorded, Unpaid Principal Balance	1,602	1,972
Impaired financing receivables, with an allowance recorded, Related Allowance	125	188
Impaired financing receivables, Recorded Investment, Total	3,460	6,539
Impaired financing receivables, Unpaid Principal Balance, Total	3,760	8,117
Impaired financing receivables, Related Allowance, Total	125	188
Commercial and Agriculture [Member]
Financing Receivable, Impaired [Line Items]
Impaired financing receivables, with no related allowance recorded, Recorded Investment		1,230
Impaired financing receivables, with no related allowance recorded, Unpaid Principal Balance		1,751
Impaired financing receivables, with an allowance recorded, Recorded Investment	438	753
Impaired financing receivables, with an allowance recorded, Unpaid Principal Balance	438	1,303
Impaired financing receivables, with an allowance recorded, Related Allowance	4	82
Impaired financing receivables, Recorded Investment, Total	438	1,983
Impaired financing receivables, Unpaid Principal Balance, Total	438	3,054
Impaired financing receivables, Related Allowance, Total	4	82
Commercial Real Estate Owner Occupied [Member]
Financing Receivable, Impaired [Line Items]
Impaired financing receivables, with no related allowance recorded, Recorded Investment	693	1,658
Impaired financing receivables, with no related allowance recorded, Unpaid Principal Balance	913	1,803
Impaired financing receivables, with an allowance recorded, Recorded Investment	317	238
Impaired financing receivables, with an allowance recorded, Unpaid Principal Balance	317	238
Impaired financing receivables, with an allowance recorded, Related Allowance	6	4
Impaired financing receivables, Recorded Investment, Total	1,010	1,896
Impaired financing receivables, Unpaid Principal Balance, Total	1,230	2,041
Impaired financing receivables, Related Allowance, Total	6	4
Commercial Real Estate Non Owner Occupied [Member]
Financing Receivable, Impaired [Line Items]
Impaired financing receivables, with no related allowance recorded, Recorded Investment	44	359
Impaired financing receivables, with no related allowance recorded, Unpaid Principal Balance	48	386
Impaired financing receivables, Recorded Investment, Total	44	359
Impaired financing receivables, Unpaid Principal Balance, Total	48	386
Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Impaired financing receivables, with no related allowance recorded, Recorded Investment	977	1,259
Impaired financing receivables, with no related allowance recorded, Unpaid Principal Balance	1,049	1,590
Impaired financing receivables, with an allowance recorded, Recorded Investment	383	427
Impaired financing receivables, with an allowance recorded, Unpaid Principal Balance	387	431
Impaired financing receivables, with an allowance recorded, Related Allowance	109	102
Impaired financing receivables, Recorded Investment, Total	1,360	1,686
Impaired financing receivables, Unpaid Principal Balance, Total	1,436	2,021
Impaired financing receivables, Related Allowance, Total	109	102
Farm Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Impaired financing receivables, with no related allowance recorded, Recorded Investment	148	614
Impaired financing receivables, with no related allowance recorded, Unpaid Principal Balance	148	614
Impaired financing receivables, with an allowance recorded, Recorded Investment	460
Impaired financing receivables, with an allowance recorded, Unpaid Principal Balance	460
Impaired financing receivables, with an allowance recorded, Related Allowance	6
Impaired financing receivables, Recorded Investment, Total	608	614
Impaired financing receivables, Unpaid Principal Balance, Total	608	614
Impaired financing receivables, Related Allowance, Total	$ 6
Consumer and Other [Member]
Financing Receivable, Impaired [Line Items]
Impaired financing receivables, with no related allowance recorded, Recorded Investment		1
Impaired financing receivables, with no related allowance recorded, Unpaid Principal Balance		1
Impaired financing receivables, Recorded Investment, Total		1
Impaired financing receivables, Unpaid Principal Balance, Total		$ 1

XML

Allowance for Loan Losses - Impaired Loans - Average Recorded Investment and Interest Income Recognized (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 5,243	$ 7,717	$ 9,420
Interest Income Recognized	216	1,256	384
Commercial and Agriculture [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	1,375	2,036	1,519
Interest Income Recognized	34	40	54
Commercial Real Estate Owner Occupied [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	1,507	1,847	2,738
Interest Income Recognized	75	862	139
Commercial Real Estate Non Owner Occupied [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	233	1,039	1,946
Interest Income Recognized	6	83	32
Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	1,515	1,787	2,544
Interest Income Recognized	73	175	103
Real Estate Construction [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment			16
Interest Income Recognized		1
Farm Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	613	1,006	653
Interest Income Recognized	$ 28	95	56
Consumer and Other [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment		$ 2	$ 4

XML

Allowance for Loan Losses - Schedule of Changes in Amortized Yield for PCI Loans (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Accretable Yield Movement Schedule Roll Forward
Balance at beginning of period	$ 49	$ 80
Acquisition of PCI loans	0	0
Accretion	(34)	(31)
Balance at end of period	$ 15	$ 49

XML

Allowance for Loan Losses - Schedule of Loans Acquired and Accounted (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Receivables [Abstract]
Outstanding balance	$ 775	$ 850
Carrying amount	$ 215	$ 256

XML

Other Comprehensive Income (Loss) - Changes in Each Component of Accumulated Other Comprehensive Loss, Net of Tax (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 137,616	$ 125,173	$ 115,909
Amounts reclassified from accumulated other comprehensive loss	239	202	189
Total other comprehensive income (loss)	1,412	(1,842)	(448)
Reclassification of certain income tax effects from accumulated other comprehensive loss	199
Ending balance	184,461	137,616	125,173
Unrealized Gains (Losses) on Available-for-Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	2,008	3,554	3,730
Other comprehensive income (loss) before reclassifications	620	(1,533)	(188)
Amounts reclassified from accumulated other comprehensive loss	(8)	(13)	12
Total other comprehensive income (loss)	612	(1,546)	(176)
Reclassification of certain income tax effects from accumulated other comprehensive loss	565
Ending balance	3,185	2,008	3,554
Defined Benefit Pension Items [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(4,345)	(4,049)	(3,777)
Other comprehensive income (loss) before reclassifications	553	(511)	(449)
Amounts reclassified from accumulated other comprehensive loss	247	215	177
Total other comprehensive income (loss)	800	(296)	(272)
Reclassification of certain income tax effects from accumulated other comprehensive loss	(764)
Ending balance	(4,309)	(4,345)	(4,049)
Accumulated Other Comprehensive Loss [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(2,337)	(495)	(47)
Other comprehensive income (loss) before reclassifications	1,173	(2,044)	(637)
Amounts reclassified from accumulated other comprehensive loss	239	202	189
Total other comprehensive income (loss)	1,412	(1,842)	(448)
Reclassification of certain income tax effects from accumulated other comprehensive loss	(199)
Ending balance	$ (1,124)	$ (2,337)	$ (495)

XML

Other Comprehensive Income (Loss) - Amounts Reclassified Out of Each Component of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net gain (loss) on sale of securities	$ (12)	$ (19)	$ 18
Income taxes	6,360	6,619	4,781
Net of tax	(14,628)	(15,716)	(11,168)
Reclassifications, net of tax	(239)	(202)	(189)
Unrealized Gains (Losses) on Available-for-Sale Securities [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, net of tax	8	13	(12)
Unrealized Gains (Losses) on Available-for-Sale Securities [Member] | Reclassification out of Accumulated Other Comprehensive Loss [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net gain (loss) on sale of securities	12	19	(18)
Income taxes	(4)	(6)	6
Net of tax	(8)	(13)	12
Accumulated Defined Benefit Plans Adjustment, Actuarial Losses [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Salaries, wages and benefits	(380)	(326)	(270)
Defined Benefit Pension Items [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income taxes	133	111	93
Reclassifications, net of tax	$ (247)	$ (215)	$ (177)

XML

Premises and Equipment - Year-End Premises and Equipment (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 43,247	$ 41,430
Accumulated depreciation	(25,636)	(23,510)
Premises and equipment, net	17,611	17,920
Land and Improvements [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	5,022	5,094
Buildings and Improvements [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	21,221	20,266
Furniture and Equipment [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 17,004	$ 16,070

XML

Premises and Equipment - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property Plant And Equipment [Abstract]
Depreciation	$ 1,249	$ 1,257	$ 1,193
Rent expense	$ 580	$ 540	$ 506

XML

Premises and Equipment - Rent Commitments Under Non-cancelable Operating Leases (Detail) $ in Thousands	Dec. 31, 2017 USD ($)
Leases [Abstract]
2018	$ 571
2019	479
2020	226
2021	91
2022	36
Total	$ 1,403

XML

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill	$ 27,095,000	$ 27,095,000
Change in carrying amount of goodwill	0	0
Amortization of core deposit intangible assets	586,000	699,000	$ 711,000
Aggregate mortgage servicing rights amortization	$ 72,000	$ 74,000	$ 29,000

XML

Goodwill and Intangible Assets - Schedule of Acquired Intangible Assets (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Acquired Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 8,339	$ 8,186
Accumulated Amortization	7,060	6,402
Net Carrying Amount	1,279	1,784
MSRs [Member]
Acquired Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,065	912
Accumulated Amortization	322	250
Net Carrying Amount	743	662
Core deposit intangibles [Member]
Acquired Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	7,274	7,274
Accumulated Amortization	6,738	6,152
Net Carrying Amount	$ 536	$ 1,122

XML

Goodwill and Intangible Assets - Schedule of Estimated Amortization Expense (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Acquired Finite Lived Intangible Assets [Line Items]
2018	$ 152
2019	129
2020	112
2021	109
2022	109
Thereafter	668
Net Carrying Amount	1,279	$ 1,784
MSRs [Member]
Acquired Finite Lived Intangible Assets [Line Items]
2018	41
2019	41
2020	41
2021	41
2022	41
Thereafter	538
Net Carrying Amount	743	662
Core deposit intangibles [Member]
Acquired Finite Lived Intangible Assets [Line Items]
2018	111
2019	88
2020	71
2021	68
2022	68
Thereafter	130
Net Carrying Amount	$ 536	$ 1,122

XML

Interest-Bearing Deposits - Summary of Interest-Bearing Deposits (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Banking And Thrift [Abstract]
Demand	$ 183,680	$ 183,759
Statement and Passbook Savings	435,377	384,330
$250 and over	8,206	13,640
Certificates of Deposit: Other	192,455	168,723
Individual Retirement Accounts	23,241	25,063
Total	$ 842,959	$ 775,515

XML

Interest-Bearing Deposits - Scheduled Maturities of Certificates of Deposit (Detail) $ in Thousands	Dec. 31, 2017 USD ($)
Banking And Thrift [Abstract]
2018	$ 161,656
2019	41,926
2020	15,459
2021	3,382
2022	1,202
Thereafter	277
Total	$ 223,902

XML

Interest-Bearing Deposits - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deposits [Line Items]
Total deposits	$ 1,204,923	$ 1,121,103
Total of CDs and IRAs	9,141
Principal officers, directors, and their affiliates [Member]
Deposits [Line Items]
Total deposits	$ 9,633	$ 9,209

XML

Short-Term Borrowings - Summary of Federal Funds Purchased and Other Short-term Borrowings (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Federal Funds Purchased [Member]
Short-term Debt [Line Items]
Maximum indebtedness during the year	$ 20,000,000	$ 20,000,000
Average balance during the year	$ 119,000	$ 116,000	$ 69,000
Average rate paid during the year	1.68%	0.86%	0.53%
Short Term Borrowings [Member]
Short-term Debt [Line Items]
Outstanding balance at year end	$ 56,900,000	$ 31,000,000	$ 53,700,000
Maximum indebtedness during the year	115,050,000	70,400,000	64,700,000
Average balance during the year	$ 38,825,000	$ 10,483,000	$ 26,880,000
Average rate paid during the year	1.12%	0.42%	0.20%
Interest rate on year end balance	1.42%	0.64%	0.35%

XML

Federal Home Loan Bank Advances - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Advances from FHLB	$ 15,000	$ 17,500
Maturities, year from	2018
Maturities, year to	2019
Outstanding letters of credit with FHLB	$ 19,600	19,600
FHLB borrowings collateralized by residential mortgage loans	137,250	$ 102,150
FHLB maximum borrowing capacity	366,122
FHLB remaining borrowing capacity	$ 274,622
Minimum [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Maturities from February 2018 through October 2019, fixed rates	1.50%
Maximum [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Maturities from February 2018 through October 2019, fixed rates	2.10%
Weighted Average [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Maturities from February 2018 through October 2019, fixed rates	1.70%

XML

Federal Home Loan Bank Advances - Scheduled Principal Reductions of Federal Home Loan Bank Advances Outstanding (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Banking And Thrift [Abstract]
2018	$ 10,000
2019	5,000
Total	$ 15,000	$ 17,500

XML

Securities Sold Under Agreements To Repurchase - Summary of Securities Pledged as Collateral Under Repurchase Agreements (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Offsetting Liabilities [Line Items]
Total securities pledged	$ 21,755	$ 28,925	$ 25,040
Gross amount of recognized liabilities for repurchase agreements	21,755	28,925
Amounts related to agreements not included in offsetting disclosures above	0	0
U.S.Treasury Securities [Member]
Offsetting Liabilities [Line Items]
Total securities pledged	874	1,761
Obligations of U.S. Government Agencies [Member]
Offsetting Liabilities [Line Items]
Total securities pledged	$ 20,881	$ 27,164

XML

Securities Sold Under Agreements to Repurchase - Schedule of Securities Sold Under Agreements to Repurchase (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Outstanding balance at year end	$ 21,755	$ 28,925	$ 25,040
Average balance during the year	$ 18,234	$ 21,767	$ 20,086
Average interest rate during the year	0.10%	0.10%	0.10%
Maximum month-end balance during the year	$ 23,889	$ 28,925	$ 25,040
Weighted average interest rate at year end	0.10%	0.10%	0.10%

XML

Subordinated Debentures - Additional Information (Detail)	1 Months Ended	12 Months Ended
	Apr. 30, 2007 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2007 Trust_Preferred_Securities
Subordinated Borrowing [Line Items]
Redeem and refinance of floating rate subordinated debenture	$ 5,000,000
Refinancing at face value, reduction rate		2.00%
Subordinated debenture, maturity period		30 years
Subordinated debentures, principal amount percentage		100.00%
Minimum [Member]
Subordinated Borrowing [Line Items]
Subordinated debentures may redeem part of principal amount		$ 1,000,000
Futura Ban Corp [Member]
Subordinated Borrowing [Line Items]
Number of additional trust preferred securities acquired | Trust_Preferred_Securities			2
3.58% Debenture [Member]
Subordinated Borrowing [Line Items]
Debt, face amount		$ 12,500,000
Debt, interest rate		3.58%
Redemption of subordinated debentures description		The Company may redeem the subordinated debentures, in whole or in part, in a principal amount with integral multiples of $1,000, at 100% of the principal amount, plus accrued and unpaid interest.
Subordinated Debentures [Member]
Subordinated Borrowing [Line Items]
Subordinated debenture, maturity date		Jun. 15, 2035
4.48% Debenture [Member]
Subordinated Borrowing [Line Items]
Debt, face amount		$ 7,500,000
Debt, interest rate		4.48%
2.92% Debenture [Member]
Subordinated Borrowing [Line Items]
Debt, face amount		$ 5,000,000
Debt, interest rate		2.92%
6.05% Fixed Rate Trust Preferred Securities [Member]
Subordinated Borrowing [Line Items]
Debt, face amount		$ 12,500,000
Debt, interest rate		6.05%
Subordinated debenture, maturity term		5 years
2.98% Debenture [Member] | Futura TPF Trust I [Member]
Subordinated Borrowing [Line Items]
Debt, face amount		$ 2,500,000
Debt instrument, variable interest rate percentage		2.98%
2.98% Debenture [Member] | Futura TPF Trust II [Member]
Subordinated Borrowing [Line Items]
Debt, face amount		$ 1,927,000
Debt instrument, variable interest rate percentage		2.98%
Subordinated Debenture [Member]
Subordinated Borrowing [Line Items]
Issuance of Trust Preferred Securities in exchange for Subordinated Debentures		$ 5,000,000
Trust Preferred Securities [Member]
Subordinated Borrowing [Line Items]
Issuance of Trust Preferred Securities in exchange for Subordinated Debentures		7,500,000
Trust Preferred Securities [Member] | Futura TPF Trust I [Member]
Subordinated Borrowing [Line Items]
Acquired trust preferred securities		2,500,000
Trust Preferred Securities [Member] | Futura TPF Trust II [Member]
Subordinated Borrowing [Line Items]
Acquired trust preferred securities		$ 1,927,000

XML

Income Taxes - Schedule of Income Tax (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Expense Benefit Continuing Operations [Abstract]
Current	$ 5,414	$ 6,449	$ 5,191
Deferred	435	170	(410)
Change in corporate tax rate	511
Income tax expense	$ 6,360	$ 6,619	$ 4,781

XML

Income Taxes - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Taxes Disclosure [Line Items]
Statutory federal income tax rate		35.00%	35.00%	34.00%
Increase in income tax expense		$ 511,000
Valuation allowance		0	$ 0
Liability for uncertain tax positions, current		0
Unrecognized tax benefits		$ 0
Scenario Forecast [Member]
Income Taxes Disclosure [Line Items]
Statutory federal income tax rate	21.00%

XML

Income Taxes - Effective Tax Rates Differ from Statutory Federal Income Tax Rate (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Income taxes computed at the statutory federal tax rate	$ 7,781	$ 8,343	$ 5,959
Add (subtract) tax effect of:
Nontaxable interest income, net of nondeductible interest expense	(1,107)	(946)	(900)
Low income housing tax credit	(686)	(435)	(303)
Cash surrender value of BOLI	(201)	(197)	(159)
Change in corporate tax rate	511
Other	62	(146)	184
Income tax expense	$ 6,360	$ 6,619	$ 4,781

XML

Income Taxes - Summary of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets
Allowance for loan losses	$ 2,848	$ 4,640
Deferred compensation	1,213	1,762
Intangible assets	95	187
Pension costs		277
Other	141	102
Deferred tax asset	4,297	6,968
Deferred tax liabilities
Tax depreciation in excess of book depreciation	(275)	(97)
Discount accretion on securities	(43)	(58)
Purchase accounting adjustments	(536)	(1,091)
FHLB stock dividends	(1,053)	(1,705)
Unrealized gain on securities available for sale	(847)	(1,035)
Pension costs	(293)
Prepaids	(320)
Other	(166)	(256)
Deferred tax liability	(3,533)	(4,242)
Net deferred tax asset	$ 764	$ 2,726

XML

Retirement Plans - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2017 USD ($) Employee	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Matching contribution to 401(k) plan	$ 805,000	$ 734,000	$ 667,000
Employer matching contribution description	The Company’s matching contribution is 100% of an employee’s first three percent contributed and 50% of the next two percent contributed.
Pension plan eligibility age of employees	20 years 6 months
Pension plan eligibility service period of employees	6 months
Pension plan eligibility service hours of employees	1000 hours
Additional benefits under pension plan	$ 0
Interest expense	4,092,000	3,308,000	3,309,000
Unrecognized actuarial loss	4,070,000	4,345,000
Unrecognized actuarial net of tax	2,191,000	2,238,000
Accumulated benefit obligation for defined benefit pension plan	17,916,000	16,964,000
Net periodic benefit cost over the next fiscal year	380,000
Incurred settlement cost	$ 237,000	$ 259,000	$ 415,000
Rate of compensation increase used to determine the benefit obligation	0.00%	0.00%	0.00%
Long-term rate of return on plan assets	7.00%	7.00%
Expected future employer contributions	$ 0
Employer contribution	2,000,000	$ 500,000
Fund status	1,390,000	(814,000)
Shortfall Agreements [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension shortfall expense	18,000	201,000	$ 364,000
Interest expense	$ 18,000	11,000	10,000
Number of individuals under plan | Employee	10
Supplemental Retirement Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Maximum retirement year for participants	10 years
Liability recorded for supplemental retirement plan	$ 2,308,000	1,984,000
Expenses recorded for supplemental retirement plan	365,000	243,000	299,000
Total distribution to participant	$ 41,000	$ 34,000	$ 22,000

XML

Retirement Plans - Information about Pension Plan (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Change in benefit obligation:
Beginning benefit obligation	$ 16,964	$ 16,328
Service cost	0	0	$ 0
Interest cost	679	689	604
Curtailment gain	0	0
Settlement loss	46	51
Actuarial (gain)/loss	986	669
Benefits paid	(759)	(773)
Ending benefit obligation	17,916	16,964	16,328
Change in plan assets, at fair value:
Beginning plan assets	16,150	15,647
Actual return	1,947	802
Employer contribution	2,000	500
Benefits paid	(759)	(773)
Administrative expenses	(32)	(26)
Ending plan assets	19,306	16,150	$ 15,647
Funded status at end of year	$ 1,390	$ (814)

XML

Retirement Plans - Components of Net Periodic Pension Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Compensation And Retirement Disclosure [Abstract]
Service cost	$ 0	$ 0	$ 0
Interest cost	679	689	604
Expected return on plan assets	1,178	1,090	1,088
Net amortization and deferral	(380)	(326)	(270)
Net periodic pension cost (benefit)	(119)	(75)	(214)
Net loss (gain) recognized in other comprehensive loss	(322)	448	412
Total recognized in net periodic benefit cost and other comprehensive loss (before tax)	$ (441)	$ 373	$ 198

XML

Retirement Plans - Weighted Average Assumptions Used to Determine Benefit Obligations (Detail)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Rate of compensation increase	0.00%	0.00%	0.00%
Long-term rate of return on plan assets	7.00%	7.00%
Benefit Obligations [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate on benefit obligation	3.51%	4.00%	4.16%
Long-term rate of return on plan assets	7.00%	7.00%	7.00%
Rate of compensation increase	0.00%	0.00%	0.00%
Net Periodic Pension Cost [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate on benefit obligation	4.00%	4.16%	3.69%
Long-term rate of return on plan assets	7.00%	7.00%	7.00%
Rate of compensation increase	0.00%	0.00%	0.00%

XML

Retirement Plans - Schedule of Target Allocation and Expected Long-Term Rate of Return by Asset Category (Detail)	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Target Allocation	100.00%	100.00%
Equity Securities in Financial Institutions [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation	48.00%	47.50%
Equity Securities in Financial Institutions [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation	20.00%
Equity Securities in Financial Institutions [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation	50.00%
Total Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation	51.90%	52.10%
Total Debt Securities [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation	30.00%
Total Debt Securities [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation	60.00%
Money Market Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation	0.10%	0.40%
Money Market Funds [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation	20.00%
Money Market Funds [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation	30.00%

XML

Retirement Plans - Plan's Assets at Fair Value Hierarchy (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	$ 19,306	$ 16,150	$ 15,647
Bond Mutual Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	23
Common/Collective Trust, Equities [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	6,654
Equity Market Funds, International [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	750
Equity Market Funds, Large Cap [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	1,085
Equity Market Funds, Mid Cap [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	269
Equity Market Funds, Small Cap [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	432
Cash [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	113
Common/Collective Trust, Bonds [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	9,980
(Level 1) [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	19,306
(Level 1) [Member] | Bond Mutual Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	23
(Level 1) [Member] | Common/Collective Trust, Equities [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	6,654
(Level 1) [Member] | Equity Market Funds, International [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	750
(Level 1) [Member] | Equity Market Funds, Large Cap [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	1,085
(Level 1) [Member] | Equity Market Funds, Mid Cap [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	269
(Level 1) [Member] | Equity Market Funds, Small Cap [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	432
(Level 1) [Member] | Cash [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	113
(Level 1) [Member] | Common/Collective Trust, Bonds [Member]
Defined Benefit Plan Disclosure [Line Items]
Total assets at fair value	$ 9,980

XML

Retirement Plans - Summary of Expected Benefit Payments (Detail) $ in Thousands	Dec. 31, 2017 USD ($)
Defined Benefit Plan Estimated Future Benefit Payments [Abstract]
2018	$ 1,903
2019	1,127
2020	650
2021	913
2022	1,182
2023 through 2027	4,723
Total	$ 10,498

XML

Equity Incentive Plan - Additional Information (Detail) - USD ($) $ in Thousands					12 Months Ended
	Sep. 11, 2017	May 16, 2017	May 17, 2016	Jan. 04, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted common shares granted					43,906
Share based compensation - Civista BOD					$ 426	$ 323	$ 106
Share based compensation expense					274
Expected future compensation expense					$ 317
Civista [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation - Civista BOD	$ 8	$ 144	$ 130	$ 32
Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted shares vesting service period				3 years
Restricted common shares granted	367	6,804	12,285	2,730	17,898	28,864
2014 Incentive Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum number of shares under stock option plan authorized for issuance								375,000
Number of shares available for grant under stock option plan					292,209
Options granted					0	0
Expected future compensation expense					$ 317
Weighted average remaining life of grants related to unvested awards not yet recognized					2 years 9 months 14 days
2014 Incentive Plan [Member] | Director
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation expense					$ 152

XML

Equity Incentive Plan - Summary of Company's Restricted Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands					12 Months Ended
	Sep. 11, 2017	May 16, 2017	May 17, 2016	Jan. 04, 2016	Dec. 31, 2017	Dec. 31, 2016
Schedule Of Nonvested Stock Option Activity [Line Items]
Number of Restricted Shares, Granted					43,906
Expected future remaining compensation expense					$ 317
Expected future compensation expense, restricted shares remaining vesting period					2 years 9 months 14 days
Restricted Shares Awarded on January 15, 2016 [Member]
Schedule Of Nonvested Stock Option Activity [Line Items]
Number of Restricted Shares, Granted					10,260
Date of Award					Jan. 15, 2016
Expected future remaining compensation expense					$ 66
Expected future compensation expense, restricted shares remaining vesting period					3 years
Restricted Shares Awarded on March 11, 2016 [Member]
Schedule Of Nonvested Stock Option Activity [Line Items]
Number of Restricted Shares, Granted					15,748
Date of Award					Mar. 11, 2016
Expected future remaining compensation expense					$ 33
Expected future compensation expense, restricted shares remaining vesting period					1 year
Restricted Shares Awarded on March 20, 2017 [Member]
Schedule Of Nonvested Stock Option Activity [Line Items]
Number of Restricted Shares, Granted					11,713
Date of Award					Mar. 20, 2017
Expected future remaining compensation expense					$ 110
Expected future compensation expense, restricted shares remaining vesting period					2 years
Restricted Shares Awarded on March 20, 2017 [Member]
Schedule Of Nonvested Stock Option Activity [Line Items]
Number of Restricted Shares, Granted					6,185
Date of Award					Mar. 20, 2017
Expected future remaining compensation expense					$ 108
Expected future compensation expense, restricted shares remaining vesting period					4 years
Restricted Stock [Member]
Schedule Of Nonvested Stock Option Activity [Line Items]
Number of Restricted Shares, Nonvested at beginning of period					37,050	16,983
Number of Restricted Shares, Granted	367	6,804	12,285	2,730	17,898	28,864
Number of Restricted Shares, Vested					(12,810)	(5,657)
Number of Restricted Shares, Forfeited					0	(3,140)
Number of Restricted Shares, Nonvested at end of period					42,138	37,050
Weighted Average Grant Date Fair Value, Nonvested at beginning of period					$ 10.77	$ 10.82
Weighted Average Grant Date Fair Value, Granted					22.15	10.75
Weighted Average Grant Date Fair Value, Vested					10.76	10.82
Weighted Average Grant Date Fair Value, Forfeited					0	10.87
Weighted Average Grant Date Fair Value, Nonvested at end of period					$ 15.60	$ 10.77

XML

Fair Value Measurement - Assets Measured at Fair Value (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 1,040	$ 952
Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	16	37
(Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value swap asset	1,560	1,839
(Level 2) [Member] | Assets Measured at Fair Value on a Recurring Basis [Member] | Swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value swap asset	1,560	1,839
Fair value swap liability	1,560	1,839
(Level 2) [Member] | Assets Measured at Fair Value on a Recurring Basis [Member] | U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	30,357	37,446
(Level 2) [Member] | Assets Measured at Fair Value on a Recurring Basis [Member] | Obligations of States and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	118,056	94,998
(Level 2) [Member] | Assets Measured at Fair Value on a Recurring Basis [Member] | Mortgage-backed Securities in Government Sponsored Entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	81,817	62,642
(Level 2) [Member] | Assets Measured at Fair Value on a Recurring Basis [Member] | Equity Securities in Financial Institutions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	832	778
(Level 3) [Member] | Assets Measured at Fair Value on a Nonrecurring Basis [Member] | Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	1,040	952
(Level 3) [Member] | Assets Measured at Fair Value on a Nonrecurring Basis [Member] | Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 16	$ 37

XML

Fair Value Measurement - Quantitative Information about Level 3 Fair Value Measurements (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Estimate	$ 1,040	$ 952
Fair Value Measurements, Valuation Technique	Appraisal of collateral	Appraisal of collateral
Impaired Loans [Member] | Minimum [Member] | Appraisal of Collateral [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions, Appraisal adjustments	0.00%	10.00%
Fair Value Assumptions, Liquidation expense	0.00%	0.00%
Fair Value Assumptions, Holding period	0 months	0 months
Impaired Loans [Member] | Maximum [Member] | Appraisal of Collateral [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions, Appraisal adjustments	30.00%	67.00%
Fair Value Assumptions, Liquidation expense	10.00%	10.00%
Fair Value Assumptions, Holding period	30 months	30 months
Impaired Loans [Member] | Weighted Average [Member] | Appraisal of Collateral [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions, Appraisal adjustments	16.00%	64.00%
Fair Value Assumptions, Liquidation expense	8.00%	4.00%
Fair Value Assumptions, Holding period	20 months	19 months
Other Real Estate Owned [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Estimate	$ 16	$ 37
Fair Value Measurements, Valuation Technique	Appraisal of collateral	Appraisal of collateral
Other Real Estate Owned [Member] | Minimum [Member] | Appraisal of Collateral [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions, Appraisal adjustments	10.00%	10.00%
Fair Value Assumptions, Liquidation expense	0.00%	0.00%
Other Real Estate Owned [Member] | Maximum [Member] | Appraisal of Collateral [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions, Appraisal adjustments	30.00%	30.00%
Fair Value Assumptions, Liquidation expense	10.00%	10.00%
Other Real Estate Owned [Member] | Weighted Average [Member] | Appraisal of Collateral [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions, Appraisal adjustments	10.00%	10.00%
Fair Value Assumptions, Liquidation expense	10.00%	10.00%

XML

Fair Value Measurement - Carrying Amount and Fair Value of Financial Instruments (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Financial Assets:
Cash and due from financial institutions	$ 40,519	$ 36,695	$ 35,561	$ 29,858
Securities available for sale	231,062	195,864
Loans, net of allowance for loan losses	1,151,527	1,042,201
Other securities	14,247	14,055
Bank owned life insurance	25,125	24,552
Accrued interest receivable	4,488	3,854
Financial Liabilities:
Time deposits	223,902
Short-term FHLB advances	10,000
Long-term FHLB advances	15,000	17,500
Securities sold under agreement to repurchase	21,755	28,925	$ 25,040
Carrying Amount [Member]
Financial Assets:
Cash and due from financial institutions	40,519	36,695
Securities available for sale	231,062	195,864
Loans, held for sale	2,197	2,268
Loans, net of allowance for loan losses	1,151,527	1,042,201
Other securities	14,247	14,055
Bank owned life insurance	25,125	24,552
Accrued interest receivable	4,336	3,854
Fair value swap asset	1,560	1,839
Financial Liabilities:
Nonmaturing deposits	981,021	913,677
Time deposits	223,902	207,426
Short-term FHLB advances	56,900	31,000
Long-term FHLB advances	15,000	17,500
Securities sold under agreement to repurchase	21,755	28,925
Subordinated debentures	29,427	29,427
Accrued interest payable	410	181
Swap liability	1,560	1,839
Total Fair Value [Member]
Financial Assets:
Cash and due from financial institutions	40,519	36,695
Securities available for sale	231,062	195,864
Loans, held for sale	2,197	2,268
Loans, net of allowance for loan losses	1,146,969	1,047,329
Other securities	14,247	14,055
Bank owned life insurance	25,125	24,552
Accrued interest receivable	4,336	3,854
Fair value swap asset	1,560	1,839
Financial Liabilities:
Nonmaturing deposits	981,021	913,677
Time deposits	223,626	207,784
Short-term FHLB advances	56,900	31,000
Long-term FHLB advances	14,964	17,553
Securities sold under agreement to repurchase	21,755	28,925
Subordinated debentures	31,052	27,414
Accrued interest payable	410	181
Swap liability	1,560	1,839
(Level 1) [Member]
Financial Assets:
Cash and due from financial institutions	40,519	36,695
Loans, held for sale	2,197	2,268
Other securities	14,247	14,055
Bank owned life insurance	25,125	24,552
Accrued interest receivable	4,336	3,854
Financial Liabilities:
Nonmaturing deposits	981,021	913,677
Short-term FHLB advances	56,900	31,000
Securities sold under agreement to repurchase	21,755	28,925
Accrued interest payable	410	181
(Level 2) [Member]
Financial Assets:
Securities available for sale	231,062	195,864
Fair value swap asset	1,560	1,839
Financial Liabilities:
Swap liability	1,560	1,839
(Level 3) [Member]
Financial Assets:
Loans, net of allowance for loan losses	1,146,969	1,047,329
Financial Liabilities:
Time deposits	223,626	207,784
Long-term FHLB advances	14,964	17,553
Subordinated debentures	$ 31,052	$ 27,414

XML

Commitments, Contingencies and Off-Balance-Sheet Risk - Contractual Amounts of Financial Instruments with Off-Balance-Sheet Risk (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fixed Rate	$ 5,613	$ 7,510
Variable Rate	322,915	232,347
Lines of Credit and Construction Loans [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fixed Rate	4,982	6,905
Variable Rate	286,925	202,923
Overdraft Protection [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fixed Rate	7	5
Variable Rate	33,353	29,075
Letters of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fixed Rate	624	600
Variable Rate	$ 2,637	$ 349

XML

Commitments, Contingencies and Off-Balance-Sheet Risk - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Maximum period of commitments to make loans	1 year
Maximum time period of maturities	30 years
Average reserve balance under Federal Reserve Board requirements	$ 4,112	$ 2,887
Minimum [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Range of fixed interest rate loan commitments	2.88%	3.25%
Maximum [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Range of fixed interest rate loan commitments	10.25%	8.50%

XML

Capital Requirements and Restriction on Retained Earnings - Actual Capital Levels and Minimum Required Capital Levels (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Consolidated [Member]
Compliance with Regulatory Capital Requirements for Mortgage Companies [Line Items]
Total Risk Based Capital, Actual, Amount	$ 200,772	$ 155,145
Tier I Risk Based Capital, Actual, Amount	187,638	141,840
CET1 Risk Based Capital, Actual, Amount	140,853	93,463
Leverage, Actual, Amount	$ 187,638	$ 141,840
Total Risk Based Capital, Actual, Ratio	16.60%	14.20%
Tier I Risk Based Capital, Actual, Ratio	15.50%	13.00%
CET1 Risk Based Capital, Actual, Ratio	11.60%	8.60%
Leverage, Actual, Ratio	12.70%	10.60%
Total Risk Based Capital , For Capital Adequacy Purposes, Amount	$ 97,025	$ 87,436
Tier I Risk Based Capital, For Capital Adequacy Purposes, Amount	72,769	65,577
CET1 Risk Based Capital, For Capital Adequacy Purposes, Amount	54,576	49,183
Leverage, For Capital Adequacy Purposes, Amount	$ 59,089	$ 53,774
Total Risk Based Capital , For Capital Adequacy Purposes, Ratio	8.00%	8.00%
Tier I Risk Based Capital, For Capital Adequacy Purposes, Ratio	6.00%	6.00%
CET1 Risk Based Capital, For Capital Adequacy Purposes, Ratio	4.50%	4.50%
Leverage, For Capital Adequacy Purposes, Ratio	4.00%	4.00%
Civista [Member]
Compliance with Regulatory Capital Requirements for Mortgage Companies [Line Items]
Total Risk Based Capital, Actual, Amount	$ 161,394	$ 145,270
Tier I Risk Based Capital, Actual, Amount	147,473	131,391
CET1 Risk Based Capital, Actual, Amount	136,760	120,465
Leverage, Actual, Amount	$ 147,473	$ 131,391
Total Risk Based Capital, Actual, Ratio	13.30%	13.30%
Tier I Risk Based Capital, Actual, Ratio	12.20%	12.00%
CET1 Risk Based Capital, Actual, Ratio	11.30%	11.00%
Leverage, Actual, Ratio	10.00%	9.80%
Total Risk Based Capital , For Capital Adequacy Purposes, Amount	$ 96,880	$ 87,334
Tier I Risk Based Capital, For Capital Adequacy Purposes, Amount	72,660	65,501
CET1 Risk Based Capital, For Capital Adequacy Purposes, Amount	54,495	49,126
Leverage, For Capital Adequacy Purposes, Amount	$ 59,031	$ 53,717
Total Risk Based Capital , For Capital Adequacy Purposes, Ratio	8.00%	8.00%
Tier I Risk Based Capital, For Capital Adequacy Purposes, Ratio	6.00%	6.00%
CET1 Risk Based Capital, For Capital Adequacy Purposes, Ratio	4.50%	4.50%
Leverage, For Capital Adequacy Purposes, Ratio	4.00%	4.00%
Total Risk Based Capital , To Be Well Capitalized Under Prompt Corrective Action Purposes, Amount	$ 121,100	$ 109,168
Tier I Risk Based Capital, To Be Well Capitalized Under Prompt Corrective Action Purposes, Amount	96,880	87,334
CET1 Risk Based Capital, To Be Well Capitalized Under Prompt Corrective Action Purposes, Amount	78,715	70,959
Leverage, To Be Well Capitalized Under Prompt Corrective Action Purposes, Amount	$ 73,788	$ 67,146
Total Risk Based Capital , To Be Well Capitalized Under Prompt Corrective Action Purposes, Ratio	10.00%	10.00%
Tier I Risk Based Capital, To Be Well Capitalized Under Prompt Corrective Action Purposes, Ratio	8.00%	8.00%
CET1 Risk Based Capital, To Be Well Capitalized Under Prompt Corrective Action Purposes, Ratio	6.50%	6.50%
Leverage, To Be Well Capitalized Under Prompt Corrective Action Purposes, Ratio	5.00%	5.00%

XML

Capital Requirements and Restriction on Retained Earnings - Additional Information (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Net profits available to pay dividends to CBI	$ 36,440

XML

Parent Company Only Condensed Financial Information - Schedule of Condensed Balance Sheets (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
ASSETS
Securities available for sale	$ 231,062	$ 195,864
Other assets	10,707	10,975
Total assets	1,525,857	1,377,263
LIABILITIES
Subordinated debentures	29,427	29,427
Total liabilities	1,341,396	1,239,647
SHAREHOLDERS’ EQUITY
Preferred stock	17,358	18,950
Common stock	153,810	118,975
Accumulated earnings	31,652	19,263
Treasury Stock	17,235	17,235
Accumulated other comprehensive loss	(1,124)	(2,337)
Total shareholders’ equity	184,461	137,616	$ 125,173	$ 115,909
Total liabilities and shareholders’ equity	1,525,857	1,377,263
CBI[Member]
ASSETS
Cash	29,908	4,747	$ 7,493	$ 13,663
Securities available for sale	832	778
Investment in bank subsidiary	167,192	149,965
Investment in nonbank subsidiaries	12,928	12,635
Other assets	5,212	1,226
Total assets	216,072	169,351
LIABILITIES
Deferred income taxes and other liabilities	2,184	2,308
Subordinated debentures	29,427	29,427
Total liabilities	31,611	31,735
SHAREHOLDERS’ EQUITY
Preferred stock	17,358	18,950
Common stock	153,810	118,975
Accumulated earnings	31,652	19,263
Treasury Stock	17,235	17,235
Accumulated other comprehensive loss	(1,124)	(2,337)
Total shareholders’ equity	184,461	137,616
Total liabilities and shareholders’ equity	$ 216,072	$ 169,351

XML

Parent Company Only Condensed Financial Information - Schedule of Condensed Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Condensed Financial Statements Captions [Line Items]
Interest expense									$ (4,092)	$ (3,308)	$ (3,309)
Income tax benefit									(6,360)	(6,619)	(4,781)
Net income	$ 3,981	$ 3,660	$ 3,596	$ 4,635	$ 3,631	$ 3,680	$ 5,181	$ 4,725	15,872	17,217	12,745
Comprehensive income									17,284	15,375	12,297
CBI[Member]
Condensed Financial Statements Captions [Line Items]
Dividends from bank subsidiaries											14,226
Interest expense									(1,035)	(884)	(760)
Pension expense									(925)	(184)	(388)
Other expense, net									(1,071)	(920)	(1,755)
Income (loss) before equity in undistributed net earnings of subsidiaries									(3,031)	(1,988)	11,323
Income tax benefit									1,407	676	959
Equity in undistributed net earnings of subsidiaries									17,496	18,529	463
Net income									15,872	17,217	12,745
Comprehensive income									$ 17,284	$ 15,375	$ 12,297

XML

Parent Company Only Condensed Financial Information - Schedule of Condensed Statements of Cash Flows (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating activities:
Net income	$ 3,981	$ 3,660	$ 3,596	$ 4,635	$ 3,631	$ 3,680	$ 5,181	$ 4,725	$ 15,872	$ 17,217	$ 12,745
Adjustment to reconcile net income to net cash from (used for) operating activities:
Gain on sale of fixed assets									(67)	(1)
Cash flows used for investing activities:
Proceeds from sale of premises and equipment									139	3
Net cash used for investing activities									(146,180)	(63,575)	(11,904)
Cash flows from financing activities:
Net proceeds from common stock issuance									32,821
Net cash from financing activities									129,185	47,000	2,534
Increase in cash and due from financial institutions									3,824	1,134	5,703
CBI[Member]
Operating activities:
Net income									15,872	17,217	12,745
Adjustment to reconcile net income to net cash from (used for) operating activities:
Change in other assets and other liabilities									(2,147)	1,821	1,324
Gain on sale of fixed assets									(66)
Equity in undistributed net earnings of subsidiaries									(17,496)	(18,529)	(463)
Net cash (used for) from operating activities									(3,837)	509	13,606
Cash flows used for investing activities:
Proceeds from sale of premises and equipment									138
Acquisition and additional capitalization of subsidiary, net of cash acquired									(275)		(16,637)
Net cash used for investing activities									(137)		(16,637)
Cash flows from financing activities:
Cash paid on fractional shares on preferred stock conversion to common stock										(1)
Net proceeds from common stock issuance									32,821
Payment to repurchase common stock									(4)
Cash dividends paid									(3,682)	(3,254)	(3,139)
Net cash from financing activities									29,135	(3,255)	(3,139)
Increase in cash and due from financial institutions									25,161	(2,746)	(6,170)
Cash and cash equivalents at beginning of year				$ 4,747				$ 7,493	4,747	7,493	13,663
Cash and cash equivalents at end of year	$ 29,908				$ 4,747				$ 29,908	$ 4,747	$ 7,493

XML

Preferred Shares - Additional information (Detail) - USD ($) $ / shares in Units, $ in Thousands	Feb. 15, 2014	Dec. 19, 2013	Dec. 31, 2017	Dec. 31, 2016
Preferred Stock [Line Items]
Preferred shares, liquidation preference			$ 1,000	$ 1,000
Depositary Shares [Member]
Preferred Stock [Line Items]
Newly issued shares		1,000,000
Percentage of ownership Interest		2.50%
Share issued price per share		$ 25.00
Gross proceeds from public offering		$ 25,000
Shares outstanding			750,382
Series B Preferred Stock [Member]
Preferred Stock [Line Items]
Preferred shares, liquidation preference		$ 1,000
Dividend on preferred stock		6.50%
Series A Preferred Stock [Member]
Preferred Stock [Line Items]
Aggregate purchase price of Preferred stock	$ 22,857
Preferred stock redemption date	Feb. 15, 2014

XML

Earnings per Common Share - Computation of Basic and Diluted Earnings per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Basic
Net income	$ 3,981	$ 3,660	$ 3,596	$ 4,635	$ 3,631	$ 3,680	$ 5,181	$ 4,725	$ 15,872	$ 17,217	$ 12,745
Preferred stock dividends									1,244	1,501	1,577
Net income available to common shareholders									$ 14,628	$ 15,716	$ 11,168
Weighted average common shares outstanding for earnings per common share basic									9,906,856	8,010,399	7,822,369
Basic earnings per share	$ 0.36	$ 0.33	$ 0.32	$ 0.47	$ 0.39	$ 0.41	$ 0.61	$ 0.55	$ 1.48	$ 1.96	$ 1.43
Diluted
Net income available to common shareholders—basic									$ 14,628	$ 15,716	$ 11,168
Preferred stock dividends on convertible preferred stock									1,244	1,501	1,577
Net income available to common shareholders—diluted									$ 15,872	$ 17,217	$ 12,745
Weighted average common shares outstanding for earnings per common share basic									9,906,856	8,010,399	7,822,369
Add: dilutive effects of convertible preferred shares									2,445,760	2,940,562	3,095,966
Average shares and dilutive potential common shares outstanding—diluted									12,352,616	10,950,961	10,918,335
Diluted earnings per share	$ 0.30	$ 0.29	$ 0.29	$ 0.40	$ 0.33	$ 0.34	$ 0.47	$ 0.43	$ 1.28	$ 1.57	$ 1.17

XML

Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
Interest Income	$ 15,838	$ 14,836	$ 14,228	$ 13,692	$ 13,405	$ 13,370	$ 13,739	$ 13,053	$ 58,594	$ 53,567	$ 50,701
Net Interest Income	14,563	13,680	13,367	12,892	12,558	12,526	12,940	12,235	54,502	50,259	47,392
Net income	$ 3,981	$ 3,660	$ 3,596	$ 4,635	$ 3,631	$ 3,680	$ 5,181	$ 4,725	$ 15,872	$ 17,217	$ 12,745
Basic Earnings per Common Share	$ 0.36	$ 0.33	$ 0.32	$ 0.47	$ 0.39	$ 0.41	$ 0.61	$ 0.55	$ 1.48	$ 1.96	$ 1.43
Diluted Earnings per Common Share	$ 0.30	$ 0.29	$ 0.29	$ 0.40	$ 0.33	$ 0.34	$ 0.47	$ 0.43	$ 1.28	$ 1.57	$ 1.17

XML

Derivative Hedging Instruments - Summary of Interest Rate Swap Transactions (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net Exposure, Notional Amount	$ 0	$ 0
Derivative Financial Instruments, Assets [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net Exposure, Notional Amount	$ 66,227,000	$ 52,975,000
Weighted Average Rate Received/(Paid)	5.08%	5.07%
Net Exposure, Impact of a 1 basis point change in interest rates	$ 36,000	$ 30,000
Repricing Frequency	Monthly
Derivative Financial Instruments, Liabilities [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net Exposure, Notional Amount	$ (66,227,000)	$ (52,975,000)
Weighted Average Rate Received/(Paid)	5.08%	5.07%
Net Exposure, Impact of a 1 basis point change in interest rates	$ (36,000)	$ (30,000)
Repricing Frequency	Monthly

XML

Qualified Affordable Housing Project Investments - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Investments In Affordable Housing Projects [Abstract]
Investments in qualified affordable housing projects included in other assets	$ 3,204,000	$ 2,754,000
Unfunded commitments related to the investments in qualified affordable housing projects	4,510,000	2,313,000
Recognized amortization expense included in pre-tax income	354,000	304,000
Recognized tax credits and other benefits from its investments in affordable housing tax credits	686,000	538,000
Impairment losses related to its investment in qualified affordable housing projects	$ 0	$ 0