Form 8-K Civista Bancshares, Inc.

Current report, items 2.02 and 9.01

Published: 2019-02-15 09:11:03
Submitted: 2019-02-15
Period Ending In: 2019-02-15
d709686d8k.htm 8-K


> ENT> 8-K 1 d709686d8k.htm 8-K

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

 


FORM 8-K

 

 


CURRENT REPORT

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

Date of Report (Date of earliest event reported)

February 15, 2019

 

 


Civista Bancshares, Inc.

(Exact name of Registrant as specified in its charter)

 

 


 

Ohio   001-36192   34-1558688

(State or other jurisdiction of

incorporation or organization)

  (Commission File Number)  

(IRS Employer

Identification No.)

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

(Address of principle executive offices)

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

N/A

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

 

 


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

 

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

 

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

 

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

 

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

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

Emerging growth company  ☐

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

 

 

 



Item 2.02

Results of Operations and Financial Condition

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

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

 

Item 9.01

Financial Statements and Exhibits

 

(d)    

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


SIGNATURE

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

 

   

Civista Bancshares, Inc.

(Registrant)

Date: February 15, 2019       /s/ Todd A. Michel
      Todd A. Michel,
      Senior Vice President & Controller

d709686dex991.htm EX-99.1


ENT> EX-99.1 2 d709686dex991.htm EX-99.1

EX-99.1

Exhibit 99.1

 

LOGO

Civista Bancshares, Inc. Announces Fourth Quarter and

Year-to-date
2018 Earnings

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

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

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

Factors Affecting Comparability

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

Adjusted Earnings

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

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


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

Results of Operations:

Net interest income increased $6.2 million, or 42.5%, for the fourth quarter of 2018, and $11.6 million, or 21.3%, for the twelve months ended December 31, compared to the same periods of 2017. Interest income increased $7.9 million, or 49.7%, for the fourth quarter of 2018 and $15.1 million or 25.7% for the twelve-month period ended December 31. Accretion income associated with purchased loan portfolios totaled $973 thousand for the fourth quarter of 2018. Interest income further increased for both periods, due to an increase in average earning assets, as well as an increase in yields, compared to 2017. The only category of interest earning assets that experienced a decrease in yield was

non-taxable
securities. The decrease in yield for
non-taxable
securities is due to the decrease in the federal income tax rate and subsequently, the tax equivalent yield. Interest expense increased $1.7 million, or 132.1 %, for the fourth quarter of 2018 and $3.5 million, or 85.0%, for the twelve months ended December 31 compared to the same periods of 2017. The increase in interest expense is due to both an increase in average balances and an increase in the cost of interest-bearing liabilities. The tax equivalent net interest margin increased 14 basis points to 4.38% for the fourth quarter of 2018, compared to 4.24% for the same period a year ago and increased 20 basis points to 4.21% for the twelve months ended December 31, 2018, compared to 4.01% for the same period a year ago. Civista’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 22 basis points and 6 basis points for the fourth quarter and year to date, respectively.

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


Average Balance Analysis

(Unaudited – Dollars in thousands except share data)

 

     Three Months Ended December 31,  
     2018     2017  

Assets:

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

Interest-earning assets:

              

Loans

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

Taxable securities

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

Non-taxable
securities

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

Interest-bearing deposits in other banks

     23,542       121        2.04     12,261       25        0.81
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-earning assets

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

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Noninterest-earning assets:

              

Cash and due from financial institutions

     27,187            22,984       

Premises and equipment, net

     22,635            17,864       

Accrued interest receivable

     7,189            5,440       

Intangible assets

     85,895            28,416       

Other assets

     22,903            7,450       

Bank owned life insurance

     42,818            25,031       

Less allowance for loan losses

     (13,459          (12,985     
  

 

 

        

 

 

      

Total Assets

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

 

 

        

 

 

      

Liabilities and Shareholders Equity:

              

Interest-bearing liabilities:

              

Demand and savings

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

Time

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

FHLB advances

     153,920       911        2.35     44,921       161        1.42

Federal funds purchased

     462       3        2.58     11       —          0.00

Subordinated debentures

     29,427       345        4.65     29,427       269        3.63

Repurchase Agreements

     20,193       5        0.10     17,156       4        0.09
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing liabilities

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

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Noninterest-bearing deposits

     470,645            369,079       

Other liabilities

     17,515            10,167       

Shareholders’ Equity

     290,096            182,495       
  

 

 

        

 

 

      

Total Liabilities and Shareholders’ Equity

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

 

 

        

 

 

      

Net interest income and interest rate spread

     $ 20,745        4.11     $ 14,563        4.07

Net interest margin

          4.38          4.24

* – Interest yields are calculated using a 21%

tax-equivalent
adjustment for 2018 and a 35%
tax-equivalent
adjustment for 2017


Average Balance Analysis

(Unaudited – Dollars in thousands except share data)

 

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

Interest-earning assets:

              

Loans

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

Taxable securities

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

Non-taxable
securities

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

Interest-bearing deposits in other banks

     45,766       735        1.61     61,859       498        0.81
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-earning assets

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

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Noninterest-earning assets:

              

Cash and due from financial institutions

     43,247            45,801       

Premises and equipment, net

     19,045            18,027       

Accrued interest receivable

     5,514            4,697       

Intangible assets

     45,524            28,605       

Other assets

     17,678            12,374       

Bank owned life insurance

     30,483            24,819       

Less allowance for loan losses

     (13,211          (13,113     
  

 

 

        

 

 

      

Total Assets

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

 

 

        

 

 

      
Liabilities and Shareholders Equity:               

Interest-bearing liabilities:

              

Demand and savings

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

Time

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

FHLB

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

Federal funds purchased

     116       3        2.59     119       2        1.68

Subordinated debentures

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

Repurchase Agreements

     18,456       18        0.10     18,234       18        0.10
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing liabilities

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

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Noninterest-bearing deposits

     466,763            450,648       

Other liabilities

     15,840            15,081       

Shareholders’ Equity

     217,371            172,763       
  

 

 

        

 

 

      

Total Liabilities and Shareholders’ Equity

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

 

 

        

 

 

      

Net interest income and interest rate spread

 

  $ 66,107        3.96     $ 54,502        3.84

Net interest margin

          4.21          4.01

* – Interest yields are calculated using a 21%

tax-equivalent
adjustment for 2018 and a 35%
tax-equivalent
adjustment for 2017

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


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

Noninterest income

 

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

Service charges

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

Net gain (loss) on sale of securities

     (27      21        (413      12  

Net gain (loss) on equity securities

     (76      —          26        —    

Net gain on sale of loans

     386        538        1,621        1,745  

ATM/Interchange fees

     1,030        661        2,794        2,304  

Wealth management fees

     1,108        835        3,669        3,068  

Bank owned life insurance

     286        144        718        573  

Tax refund processing fees

     —          —          2,750        2,750  

Other

     635        263        1,758        1,105  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total noninterest income

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

 

 

    

 

 

    

 

 

    

 

 

 

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


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

Noninterest expense

 

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

Compensation expense

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

Net occupancy and equipment

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

Contracted data processing

     904        664        7,140        1,838  

Taxes and assessments

     487        345        1,906        1,526  

Professional services

     816        582        4,229        2,300  

Amortization of intangible assets

     281        104        366        586  

Marketing

     194        49        1,182        817  

Other

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

 

 

    

 

 

    

 

 

    

 

 

 

Total noninterest expense

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

 

 

    

 

 

    

 

 

    

 

 

 

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

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

non-GAAP
reconciliation at the end of this document.


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

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

Balance Sheet

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

End of period loan balances

(dollars in thousands)

 

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

Commercial and Agriculture

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

Commercial Real Estate:

           

Owner Occupied

     210,121        164,099        46,022        28.0

Non-owner
Occupied

     523,598        425,623        97,975        23.0

Residential Real Estate

     457,850        268,735        189,115        70.4

Real Estate Construction

     135,195        97,531        37,664        38.6

Farm Real Estate

     38,513        39,461        (948      -2.4

Consumer and Other

     19,563        16,739        2,824        16.9
  

 

 

    

 

 

    

 

 

    

Total Loans

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

 

 

    

 

 

    

 

 

    

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

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

End of period deposit balances

(dollars in thousands)

 

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

Noninterest-bearing demand

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

Interest-bearing demand

     261,996        183,680        78,316       42.6

Savings and money market

     562,882        404,690        158,192       39.1

Time deposits

     262,686        133,853        128,833       96.2

Brokered deposits

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

 

 

    

 

 

    

 

 

   

Total Deposits

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

 

 

    

 

 

    

 

 

   


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

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

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

Asset Quality

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

 

 

 

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

Beginning of period

   $ 13,134      $ 13,305  

Charge-offs

     (903      (942

Recoveries

     668        771  

Provision

     780        —    
  

 

 

    

 

 

 

End of period

   $ 13,679      $ 13,134  
  

 

 

    

 

 

 

The allowance for loan losses to loans was 0.88% for 2018 and 1.13% for 2017. The

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


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

 

 

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

Non-accrual
loans

   $ 6,116      $ 6,648  

Restructured loans

     3,024        2,888  
  

 

 

    

 

 

 

Total

non-performing
loans

     9,140        9,536  

Other Real Estate Owned

     —          16  
  

 

 

    

 

 

 

Total

non-performing
assets

   $ 9,140      $ 9,552  
  

 

 

    

 

 

 

Conference Call and Webcast

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

855-238-2712
and ask to be joined into the Civista Bancshares, Inc. Fourth Quarter 2018 Earnings call. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

An archive of the webcast will be available for one year on the Investor Relations section of the Company’s website (www.civb.com).

Non-GAAP
Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP. These

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


Forward Looking Statements

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Civista. For these statements, Civista claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Civista, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Civista’ reports filed with the Securities and Exchange Commission, including those described in “Item 1A Risk Factors” of Part I of Civista’s Annual Report on Form

10-K
for the fiscal year ended December 31, 2017. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Civista does not undertake, and specifically disclaims any obligation, to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

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

For additional information, contact:

Dennis G. Shaffer

President and CEO

Civista Bancshares, Inc.

888-645-4121


Civista Bancshares, Inc.

Financial Highlights

(dollars in thousands, except share amounts)

Consolidated Condensed Statement of Operations

 

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

Interest and dividend income

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

Interest expense

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

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

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

Provision for loan losses

     390       —         780       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision

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

Noninterest income

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

Noninterest expense

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

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes

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

Income tax expense

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

 

 

   

 

 

   

 

 

   

 

 

 

Net income

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

Preferred stock dividends

     165       308       959       1,244  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income available to common shareholders

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

 

 

   

 

 

   

 

 

   

 

 

 

Dividends per common share

   $ 0.09     $ 0.06     $ 0.32     $ 0.24  

Earnings per common share,

        

basic

   $ 0.48     $ 0.36     $ 1.10     $ 1.48  

diluted

   $ 0.45     $ 0.32     $ 1.02     $ 1.28  

Average shares outstanding,

        

basic

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

diluted

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

Selected financial ratios:

        

Return on average assets

     1.43     1.05     0.81     1.04

Return on average equity

     10.35     8.65     6.50     9.19

Dividend payout ratio

     18.46     15.35     27.10     14.98

Net interest margin (tax equivalent)

     4.38     4.24     4.21     4.01


Selected Balance Sheet Items

 

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

Cash and due from financial institutions

   $ 42,779     $ 40,519  

Investment securities

     347,364       231,062  

Loans held for sale

     1,391       2,197  

Loans

     1,561,941       1,164,661  

Less allowance for loan losses

     13,679       13,134  
  

 

 

   

 

 

 

Net loans

     1,548,262       1,151,527  

Other securities

     21,021       14,247  

Premises and equipment, net

     22,021       17,611  

Goodwill and other intangibles

     86,203       28,374  

Bank owned life insurance

     43,037       25,125  

Other assets

     26,876       15,195  
  

 

 

   

 

 

 

Total assets

   $ 2,138,954     $ 1,525,857  
  

 

 

   

 

 

 

Total deposits

   $ 1,579,893     $ 1,204,923  

Federal Home Loan Bank advances

     193,600       71,900  

Securities sold under agreements to repurchase

     22,199       21,755  

Subordinated debentures

     29,427       29,427  

Accrued expenses and other liabilities

     14,937       13,391  

Total shareholders’ equity

     298,898       184,461  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 2,138,954     $ 1,525,857  
  

 

 

   

 

 

 

Shares outstanding at period end

     15,603,499       10,198,475  

Book value per share

   $ 18.56     $ 16.39  

Equity to asset ratio

     13.97     12.09

Selected asset quality ratios:

    

Allowance for loan losses to total loans

     0.88     1.13

Non-performing
assets to total assets

     0.43     0.63

Allowance for loan losses to

non-performing
loans

     149.66     137.73

Non-performing
asset analysis

    

Nonaccrual loans

   $ 6,116     $ 6,648  

Troubled debt restructurings

     3,024       2,888  

Other real estate owned

     —         16  
  

 

 

   

 

 

 

Total

   $ 9,140     $ 9,552  
  

 

 

   

 

 

 


Supplemental Financial Information

(Unaudited—Dollars in thousands except share data)

 

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

End of Period Balances

   2018     2018     2018     2018     2017  

Assets

          

Cash and due from banks

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

Investment securities

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

Loans held for sale

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

Loans

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

Allowance for loan losses

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Loans

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

Other securities

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

Premises and equipment, net

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

Goodwill and other intangibles

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

Bank owned life insurance

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

Other assets

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities

          

Total deposits

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

Federal Home Loan Bank advances

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

Securities sold under agreement to repurchase

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

Subordinated debentures

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

Accrued expenses and other liabilities

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

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

Shareholders’ Equity

          

Preferred shares, Series B

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

Common stock

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

Accumulated earnings

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

Treasury stock

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

Accumulated other comprehensive loss

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

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

Total Liabilities and Shareholders’ Equity

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Quarterly Average Balances

          

Assets:

          

Earning assets

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

Securities

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

Loans

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

Liabilities and Shareholders’ Equity

          

Total deposits

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

Interest-bearing deposits

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

Interest-bearing liabilities

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

Total shareholders’ equity

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


Supplemental Financial Information

(Unaudited—Dollars in thousands except share data)

 

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

Income statement

   2018     2018     2018     2018     2017  

Total interest and dividend income

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

Total interest expense

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

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

Provision for loan losses

     390       390       —         —         —    

Noninterest income

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

Noninterest expense

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before taxes

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

Income tax expense (benefit)

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

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

Preferred stock dividends

     165       192       299       303       308  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) available to common shareholders

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Common shares dividend paid

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

Per share data

          

Basic earnings per common share

   $ 0.48     $ (0.31   $ 0.26     $ 0.65     $ 0.36  

Diluted earnings per common share

     0.45       (0.31     0.24       0.55       0.32  

Dividends per common share

     0.09       0.09       0.07       0.07       0.06  

Average common shares outstanding—basic

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

Average common shares outstanding—diluted

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

Asset quality

          

Allowance for loan losses, beginning of period

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

Charge-offs

     (119     (133     (226     (425     (145

Recoveries

     77       207       279       105       333  

Provision

     390       390       —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for loan losses, end of period

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios

          

Allowance to total loans

     0.88     0.88     1.09     1.11     1.13

Allowance to nonperforming assets

     149.67     132.86     168.36     154.21     137.50

Allowance to nonperforming loans

     149.67     132.86     168.36     154.41     137.73

Nonperforming assets

          

Nonperforming loans

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

Other real estate owned

     —  `       —         —         11       16  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming assets

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

Capital and liquidity

          

Tier 1 leverage ratio

     12.22     15.37     12.96     11.82     12.69

Tier 1 risk-based capital ratio

     15.30     15.43     15.71     15.87     15.45

Total risk-based capital ratio

     16.15     16.29     16.74     16.92     16.53

Tangible common equity ratio

     9.98     9.70     9.80     9.12     9.33


Reconciliation of

Non-GAAP
Financial Measures

(Unaudited—Dollars in thousands except share data)

 

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

Adjusted earnings

   2018     2017     2018     2017  

Income before taxes (GAAP)

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

Loss on sale of investment securities

     (27     —         (413     —    

Acquisition and integration expenses

     782       —         12,735       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted earnings, pretax

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

Income tax expense

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

Income tax expense adjustment

     150       (511     1,678       (511
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income

(Non-GAAP)

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

Preferred stock dividends

     165       308       959       1,244  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income available to common shareholders

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

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted earnings per common share—basic

   $ 0.52     $ 0.41     $ 2.06     $ 1.53  

Adjusted earnings per common share—diluted

     0.49       0.36       1.85       1.33  

Average common shares outstanding—basic

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

Average common shares outstanding—diluted

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

Adjusted return on average assets

     1.55     1.19     1.47     1.07

Adjusted return on average equity

     11.25     9.76     11.78     9.48

Adjusted Efficiency ratio

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

Noninterest expense (GAAP)

     66,679       48,604      

Acquisition and integration expense

     (12,735          
  

 

 

   

 

 

     

Adjusted noninterest expense

     53,944       48,604      

Net interest income (GAAP)

     66,107       54,502      

Effect of

tax-exempt
income

     1,062       1,711      
  

 

 

   

 

 

     

Adjusted net interest income

     67,169       56,213      

Noninterest Income—GAAP

     18,131       16,334      

Loss on sales of investment securities, net

     413            
  

 

 

   

 

 

     

Adjusted Non-interest Income

     18,544       16,334      

Adjusted total revenue

     85,713       72,547      

Adjusted Efficiency ratio

     62.9     67.0    
Additional Files
FileSequenceDescriptionTypeSize
0001193125-19-041746.txt   Complete submission text file   403151
$CIVB $CIVBP

© 2019 SEC.report
SEC CFR Title 17 of the Code of Federal Regulations.