Financial News

Civista Bancshares, Inc. Announces Fourth Quarter 2020 Financial Results

SANDUSKY, Ohio, Feb. 5, 2021 /PRNewswire/ -- Civista Bancshares, Inc. (NASDAQ:CIVB) ("Civista") announced its unaudited financial results for the three and twelve months ending December 31, 2020. 

Civista Bancshares, Inc.

Fourth quarter and year-to-date 2020 highlights

  • Earned net income of $10.2 million, or $0.64 per diluted share, for the fourth quarter of 2020, compared to $7.7 million, or $0.47 per diluted share, for the fourth quarter of 2019. 
  • Earned net income for the year of $32.2 million, or $2.00 per diluted share, compared to $33.2 million, or $2.01 per diluted share, in 2019.
  • Earned a record pre-tax, pre-provision net income of $47.2 million for the year, compared to $40.6 million in 2019.  See reconciliation of non-GAAP measures at the end of this press release.
  • COVID–19 loan deferrals in effect were 4.0% of total loans, net of Paycheck Protection Program ("PPP") loans, at period end, compared to 24.4% on June 30, 2020.  The bank has not experienced any specific loan losses attributed to COVID–19 closures in 2020.
  • We increased our dividend in January 2021 to $0.12 per quarter which is equivalent to a dividend yield of 2.65% based on the February 2, 2021 market close of $18.11.  The quarterly dividend represents an increase of 9.1%, and based on fourth quarter 2020 earnings per share, translates to a dividend payout ratio of 18.8%.

"While 2020 will most likely go down as the strangest year of my banking career, it is also one that has shown our mettle.  The strategies and concerns we had going into the year changed quickly as the pandemic took hold.  Our people rose to the occasion and made 2020 one of the more successful years on record for Civista.  While our net income is down slightly from 2019, we recognized record pre-tax-pre-provision net income.  We built our allowance for loan losses as the pandemic continued through the year.  We have consistently been a conservative bank when it comes to looking at our loan portfolio.  While we have downgraded ratings on many loans, we have yet to see any specific loan losses.  We have continued to manage capital through our stock repurchase program and an increase in our dividend that was announced in January 2021." said Dennis G. Shaffer, President and CEO of Civista.

Results of Operations:

For the three-month period ended December 31, 2020 and 2019

Net interest income increased $2.3 million, or 10.9%, for the fourth quarter of 2020 compared to the same period of 2019, due to an increase in interest income as well as a decrease in interest expense. Accretion of PPP fees was $2.3 million during the quarter.  

Net interest margin decreased 49 basis points to 3.69% for the fourth quarter of 2020, compared to 4.18% for the same period a year ago. 

Interest income increased $1.2 million, or 4.9%, for the fourth quarter of 2020.  Average yields decreased 79 basis points which resulted in a $3.6 million decrease in interest income.  Average earning assets increased $533.8 million, which resulted in a $4.8 million increase in interest income.  PPP loans accounted for $242.1 million of the increase in average earning assets at a yield of 3.88%.  Removing the impact of PPP loans, the yield on earning assets would have been 9 basis points higher.  Included in interest income is $2.3 million of accretion of Paycheck Protection Program ("PPP") fees as well as accretion income associated with purchased loan portfolios of $688 thousand.

Interest expense decreased $1.1 million, or 33.6%, for the fourth quarter of 2020, compared to the same period last year.  The average rate paid on interest-bearing liabilities decreased 43 basis points, while average interest-bearing liabilities increased $323.9 million

 

Average Balance Analysis

(Unaudited - Dollars in thousands)










Three Months Ended December 31,


2020


2019


Average


Yield/


Average


Yield/

Assets:

balance

Interest

rate *


balance

Interest

rate *

Interest-earning assets:








Loans **

$   2,072,477

$ 22,853

4.39%


$   1,676,769

$ 21,577

5.11%

Taxable securities

178,194

1,259

2.93%


190,898

1,429

3.05%

Non-taxable securities

207,985

1,534

4.06%


181,741

1,439

4.27%

Interest-bearing deposits in other banks

145,305

75

0.21%


20,767

76

1.45%

Total interest-earning assets

$   2,603,961

25,721

4.03%


$   2,070,175

24,521

4.82%

Noninterest-earning assets:








Cash and due from financial institutions

29,502




29,473



Premises and equipment, net

22,832




22,248



Accrued interest receivable

9,976




7,559



Intangible assets

84,919




85,388



Bank owned life insurance

45,816




44,841



Other assets

35,044




25,829



Less allowance for loan losses

(23,614)




(14,245)



      Total Assets

$   2,808,436




$   2,271,268











Liabilities and Shareholders' Equity:








Interest-bearing liabilities:








Demand and savings

$   1,169,152

$      380

0.13%


$      890,825

$      712

0.32%

Time

289,815

1,083

1.49%


269,674

1,382

2.03%

FHLB

125,000

452

1.44%


205,040

871

1.69%

Other borrowings

95,820

80

0.33%


543

1

0.73%

Subordinated debentures

29,427

188

2.54%


29,427

329

4.44%

Repurchase agreements

28,110

7

0.10%


17,898

4

0.09%

Total interest-bearing liabilities

$   1,737,324

2,190

0.50%


$   1,413,407

3,299

0.93%

Noninterest-bearing deposits

685,898




500,953



Other liabilities

41,879




27,274



Shareholders' equity

343,335




329,634



Total Liabilities and Shareholders' Equity

$   2,808,436




$   2,271,268











Net interest income and interest rate spread

$ 23,531

3.53%



$ 21,222

3.89%









Net interest margin



3.69%




4.18%









* - Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $411 thousand and $386 thousand for the periods ended December 31, 2020 and 2019, respectively. 









** - Average balance includes nonaccrual loans

For the twelve-month period ended December 31, 2020 and 2019

Net interest income increased $4.6 million, or 5.4%, compared to the same period in 2019.

Interest income increased $1.8 million, or 1.8%, for the twelve months of 2020.  The increase in interest income was primarily due to an increase in average earning assets of $471.9 million, partially offset by a decrease in yield of 84 basis points.  During the twelve-month period, the Bank had average PPP Loans totaling $172.6 million with an average yield of 3.73%, including amortization of fees.  Removing the impact of PPP loans, yields would have been 20 basis points higher.

Interest expense decreased $2.8 million, or 21.7%, for the twelve months of 2020 compared to the same period of 2019.  Average interest-bearing liabilities increased $279.3 million, resulting in a $455 thousand increase in interest expense.  Average rates decreased 34 basis points, resulting in a $3.3 million decrease in interest expense.

Net interest margin decreased 61 basis points to 3.70% for the twelve months of 2020, compared to 4.31% for the same period a year ago due to an increase in average earning assets as well as a decrease in the yield on earning assets. 

Average Balance Analysis

(Unaudited - Dollars in thousands)










Twelve Months Ended December 31,


2020


2019


Average


Yield/


Average


Yield/

Assets:

balance

Interest

rate *


balance

Interest

rate *

Interest-earning assets:








Loans **

$   1,953,472

$ 87,777

4.49%


$   1,612,975

$ 84,972

5.27%

Taxable securities

183,721

5,359

3.03%


200,074

6,584

3.35%

Non-taxable securities

202,982

6,123

4.15%


172,812

5,647

4.36%

Interest-bearing deposits in other banks

155,960

606

0.39%


38,359

851

2.22%

Total interest-earning assets

$   2,496,135

99,865

4.10%


$   2,024,220

98,054

4.95%

Noninterest-earning assets:








Cash and due from financial institutions

77,848




47,472



Premises and equipment, net

22,831




21,946



Accrued interest receivable

9,043




7,088



Intangible assets

84,953




85,744



Bank owned life insurance

45,454




44,352



Other assets

37,675




24,273



Less allowance for loan losses

(19,231)




(13,984)



      Total Assets

$   2,754,708




$   2,241,111











Liabilities and Shareholders' Equity:








Interest-bearing liabilities:








Demand and savings

$   1,050,544

$   1,813

0.17%


$      869,340

$   2,871

0.33%

Time

288,262

5,068

1.76%


269,823

5,186

1.92%

FHLB

133,151

1,932

1.45%


161,047

3,452

2.14%

Other borrowings

101,295

354

0.35%


-

-

0.00%

Federal funds purchased

288

1

0.35%


137

3

2.19%

Subordinated debentures

29,427

945

3.21%


29,427

1,423

4.84%

Repurchase agreements

24,390

25

0.10%


18,321

19

0.10%

Total interest-bearing liabilities

$   1,627,357

10,138

0.62%


$   1,348,095

12,954

0.96%

Noninterest-bearing deposits

739,648




550,638



Other liabilities

51,242




24,072



Shareholders' equity

336,461




318,306



Total Liabilities and Shareholders' Equity

$   2,754,708




$   2,241,111











Net interest income and interest rate spread

$ 89,727

3.48%



$ 85,100

3.99%









Net interest margin



3.70%




4.31%









* - Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $1.64 million and $1.52 million for the periods ended December 31, 2020 and 2019, respectively.









** - Average balance includes nonaccrual loans

Provision for loan losses was $2.3 million for the fourth quarter of 2020 and $10.1 million for the year ended December 31, 2020.  Provision for loan losses was $885 thousand for the fourth-quarter and $1.0 million for the year ended December 31, 2019.  The increase in provision is due to an increase in the bank's qualitative factors related to the economic shutdown that is driven by COVID-19 and the ongoing payment deferrals on loans modified under the CARES Act.  Economic impacts include the loss of revenue experienced by our business clients, disruption of supply chains, additional employee costs for businesses due to the pandemic, higher unemployment rates throughout our footprint and a large number of customers requesting payment relief. 

For the fourth quarter of 2020, noninterest income totaled $7.7 million, an increase of $2.0 million, or 36.2%, compared to the prior year's fourth quarter. 

Noninterest income








(unaudited - dollars in thousands)

Three months ended December 31,


2020


2019


$ change


% change

Service charges

$    1,476


$    1,662


$      (186)


-11.2%

Net gain on sale of securities

2


15


(13)


-86.7%

Net gain on equity securities

69


40


29


72.5%

Net gain on sale of loans

3,062


1,006


2,056


204.4%

ATM/Interchange fees

1,246


1,185


61


5.1%

Wealth management fees

1,065


937


128


13.7%

Bank owned life insurance

244


254


(10)


-3.9%

Swap fees

199


230


(31)


-13.5%

Other

303


298


5


1.7%

Total noninterest income

$    7,666


$    5,627


$    2,039


36.2%









N/M - not meaningful








Service charge income decreased primarily due to a $273.4 thousand decrease in overdraft fees.  Customer behavior changed during the COVID-19 pandemic, resulting in fewer overdrafts.    

Net gain on sale of loans increased due to an increase in the volume of loans sold of $46.7 million as well as an increase in the premium on sold loans of 112 basis points. 

Wealth management fees increased as a result of increased assets under management, primarily driven by market gains, as well as an increase in the conversion ratio.    

For the twelve months ended December 31, 2020, noninterest income increased $5.7 million, or 25.6%, compared to the same period in the prior year. 

Noninterest income








(unaudited - dollars in thousands)

Twelve months ended December 31,


2020


2019


$ change


% change

Service charges

$    5,288


$    6,395


$  (1,107)


-17.3%

Net gain on sale of securities

94


32


62


193.8%

Net gain/(loss) on equity securities

(57)


121


(178)


-147.1%

Net gain on sale of loans

8,563


2,707


5,856


216.3%

ATM/Interchange fees

4,472


4,056


416


10.3%

Wealth management fees

3,981


3,670


311


8.5%

Bank owned life insurance

977


1,007


(30)


-3.0%

Tax refund processing fees

2,375


2,750


(375)


-13.6%

Swap fees

1,459


516


943


182.8%

Other

1,030


1,189


(159)


-13.4%

Total noninterest income

$  28,182


$  22,443


$    5,739


25.6%









N/M - not meaningful








Service charge income decreased primarily due a $1.1 million decrease in overdraft fees.   Customer behavior changed during the COVID-19 pandemic, resulting in fewer overdrafts.   

During the twelve months ended December 31, 2020, Civista sold $304.0 million of mortgage loans, an increase of $178.2 million from the same period in 2019.  The premium on sold loans also increased by 67 basis points during the twelve months this year compared to last year.  These two factors contributed to the increase in net gain on sale of loans. 

ATM/Interchange fees increased as a result of increased transaction volume. 

Swap fees increased as a result of the declining interest rate environment and more customers looking to lock in lower fixed rate loans.  During 2020, Civista entered into swap agreements with a notional value of $104.4 million in loans to provide low fixed rate loans for customers and variable rate loans for Civista. 

Tax refund processing fees decreased due to a decline in volume processed. 

Wealth management fees increased as a result of increased assets under management, primarily driven by market gains, as well as an increase in the conversion ratio.      

For the fourth quarter of 2020, noninterest expense totaled $17.0 million, a decrease of $160 thousand, or 0.9%, compared to the prior year's fourth quarter.

Noninterest expense








(unaudited - dollars in thousands)

Three months ended December 31,


2020


2019


$ change


% change

Compensation expense

$  10,417


$  10,097


$       320


3.2%

Net occupancy and equipment 

1,528


1,671


(143)


-8.6%

Contracted data processing

540


530


10


1.9%

Taxes and assessments

716


286


430


150.3%

Professional services

506


693


(187)


-27.0%

Amortization of intangible assets

227


235


(8)


-3.4%

ATM/Interchange expense

552


450


102


22.7%

Marketing

18


300


(282)


-94.0%

Software maintenance expense

483


422


61


14.5%

Other

1,981


2,444


(463)


-18.9%

Total noninterest expense

$  16,968


$  17,128


$      (160)


-0.9%









Compensation expense increased primarily due to annual pay increases and commission and incentive expense.  Annual pay increases in 2020 were an average of 3.3%.  Employee insurance decreased $270.1 thousand, or 26.7%, for the fourth quarter 2020, compared to the same period in 2019.  Commission and incentive expense increased $400.1 thousand, or 24.5% as a result of increased loan activity.

The quarter-over-quarter increase in taxes and assessments was attributable to an increase in the FDIC assessment base and a $159.0 thousand credit for small banks, applied to the December 2019 assessments.  State franchise tax increased $73.6 thousand related to a State of Ohio audit of the tax years 2018 and 2019. 

The decrease in marketing expense is due to decreases in both advertising and business promotion expenses, primarily related to the COVID-19 pandemic.  Event cancellations and postponed outreach efforts contributed to the decrease as our focus was on communicating changes in operations, safety protocols, alternative delivery channels, and economic relief programs with the safety and financial wellness of our employees and customers in mind.  

The decrease in other operating expense is primarily due to a decreases in travel and lodging expense of $264.4 thousand, education and training of $164.9 thousand and donations of $149.4 thousand.  These decreases were partially offset by increases in loan origination expenses of $126.5 thousand.

The efficiency ratio was 53.7% for the quarter ended December 31, 2020 compared to 62.9% for the quarter ended December 31, 2019.  The change in the efficiency ratio is due to increases in both noninterest income and the increase in net interest income.

Civista's effective income tax rate for the fourth quarter 2020 was 15.1% compared to 11.3% in 2019.

For the twelve months ended December 31, 2020, noninterest expense totaled $70.7 million, an increase of $3.7 million, or 5.6%, compared to the same period in the prior year.

Noninterest expense








(unaudited - dollars in thousands)

Twelve months ended December 31,


2020


2019


$ change


% change

Compensation expense

$  42,480


$  39,156


$    3,324


8.5%

Net occupancy and equipment 

6,085


6,081


4


0.1%

Contracted data processing

1,880


1,831


49


2.7%

Taxes and assessments

2,641


1,981


660


33.3%

Professional services

2,795


2,844


(49)


-1.7%

Amortization of intangible assets

913


945


(32)


-3.4%

ATM/Interchange expense

1,868


1,887


(19)


-1.0%

Marketing

1,074


1,411


(337)


-23.9%

Software maintenance expense

1,833


1,523


310


20.4%

Other

9,096


9,288


(192)


-2.1%

Total noninterest expense

$  70,665


$  66,947


$    3,718


5.6%









The increase in compensation expense was due to increased payroll and commission and incentive based costs, offset by a decrease in employee insurance costs.  Annual pay increases in 2020 were an average of 3.3%.  Commission and incentive expense increased $1.9 million, or 39.1% as a result of increased loan activity.  Employee insurance decreased $505.4 thousand, or 10.0%, for 2020.

The increase in taxes and assessments was primarily attributable to a $456.0 thousand FDIC assessment credits for small banks that was applied to the 2019 assessment charges.  The FDIC assessment base also increased, leading to an additional $134.0 thousand increase.   State franchise tax increased $71.3 thousand related to a State of Ohio audit of the tax years 2018 and 2019. 

The decrease in marketing expense is due to decreases in both advertising and business promotion expenses, primarily related to the COVID-19 pandemic.  Event cancellations and postponed outreach efforts contributed to the decrease as our focus was on communicating changes in operations, safety protocols, alternative delivery channels, and economic relief programs with the safety and financial wellness of our employees and customers in mind.

The increase in software maintenance expense is due to contracts related to new services.

The decrease in other operating expense is primarily due to a decreases in travel and lodging expense of $742.7 thousand, education and training of $169.2 thousand and donations of $147.8 thousand.  These decreases were partially offset by increases in loan origination expenses of $463.4 thousand.

The efficiency ratio was 59.1% for the twelve months ended December 31, 2020 compared to 61.4% for the twelve months ended December 31, 2019.  The improvement in the efficiency ratio is due primarily to the increase in noninterest income and the accretion of PPP fees.

Civista's effective income tax rate for the year ended December 31, 2020 was 13.3% compared to 14.4% in 2019.     

Balance Sheet

Total assets increased $453.4 million, or 19.6%, from December 31, 2019 to December 31, 2020, due to a $348.5 million, or 20.4%, increase in the loan portfolio, $4.7 million, or 206.4%increase in loans held for sale, and a $91.0 million increase in cash.  The asset increases were primarily funded by an increase in deposits, which includes the remaining proceeds from PPP loans still held on deposit.      

End of period loan balances








(unaudited - dollars in thousands)









December 31,


December 31,






2020


2019


$ Change


% Change

Commercial and Agriculture 1

$           409,876


$           203,110


$  206,766


101.8%

Commercial Real Estate:








Owner Occupied

278,413


245,606


32,807


13.4%

Non-owner Occupied

705,072


592,222


112,850


19.1%

Residential Real Estate

442,588


463,032


(20,444)


-4.4%

Real Estate Construction

175,609


155,825


19,784


12.7%

Farm Real Estate

33,102


34,114


(1,012)


-3.0%

Consumer and Other

12,842


15,061


(2,219)


-14.7%

Total Loans

$        2,057,502


$        1,708,970


$  348,532


20.4%









1 2020 includes PPP loans totaling $217,295







Loan growth during 2020 totaled $348.5 million, including $217.3 million of PPP loans.  Removing the effect of PPP loans, the loan portfolio grew $131.2 million or 7.7%.  Loan growth was led by increases of $145.7 million in Commercial Real Estate and $19.8 million in Real Estate Construction.  The Commercial Real Estate growth continues to be aided by some successful real estate projects we kept on balance sheet by using longer term swaps that might otherwise have been refinanced on the commercial mortgage-backed securities market.  Our construction portfolio continues to be vibrant, especially in the metro markets.  The decrease in Residential Real Estate is a result of loans refinanced into saleable mortgage products.  All regions have contributed to the growth, aided by many new clients and prospects from our success in PPP originations.

Paycheck Protection Program

During 2020, we processed over 2,300 loans totaling $259.1 million, of which $41.8 million have been forgiven or have paid off.   SBA fees total approximately $9.9 million, which are being recognized in interest income over the life of the PPP loans.  During the year, $4.7 million of PPP fees were accreted to income.  We borrowed $183.7 million from the Paycheck Protection Program Lending Facility ("PPPLF"), anticipating an additional funding source for PPP landing.  We have since determined this source was no longer needed and have paid off the PPPLF in full.

"We believe that the PPP program has been instrumental in assisting small businesses and their employees.  We expect to continue to support our customers in the next round of PPP approved prior to year-end.  We have seen a number of customers begin the forgiveness process, however, that has been delayed somewhat due to the ever changing rules for the program. The new simplified rules should be helpful to streamline the process for our customers and the bank." said Dennis G. Shaffer, President and CEO of Civista.

COVID-19 Loan Modifications

During 2020, Civista modified a total of 813 loans totaling $431.3 million, primarily consisting of the deferral of principal and/or interest payments.  All of the loans modified were performing at December 31, 2019 and comply with the provisions of the CARES Act to not be considered a troubled debt restructuring.  As of December 31, 2020, the remaining loans modified under the CARES Act total $73.8 million.   

Details with respect to the loan modifications that remain on deferred status are as follows:

Loans currently modified under COVID-19 programs



(unaudited - dollars in thousands)





Type of Loan


Number of
Loans


Balance


Percent of
loans
outstanding 1








Commercial and Agriculture


21


$        4,069


0.22%

Commercial Real Estate:







Owner Occupied


12


13,072


0.71%

Non-owner Occupied


19


51,027


2.77%

Real Estate Construction


2


5,438


0.30%

Residential Real Estate


1


180


0.01%



55


$      73,786


4.01%








1excluding PPP loans







Deposits

Total deposits increased $510.6 million, or 30.4%, from December 31, 2019 to December 31, 2020. 

End of period deposit balances








(unaudited - dollars in thousands)









December 31,


December 31,






2020


2019


$ Change


% Change

Noninterest-bearing demand

$             720,809


$             512,553


$    208,256


40.6%

Interest-bearing demand

410,139


301,674


108,465


36.0%

Savings and money market

771,612


588,697


182,915


31.1%

Time deposits

286,838


275,840


10,998


4.0%

Total Deposits

$         2,189,398


$         1,678,764


$    510,634


30.4%









The increase in noninterest-bearing demand of $208.3 million was primarily due to a $164.4 million increase in business demand deposit accounts and a $16.5 million increase in tax refund processing deposit accounts.  Interest-bearing demand deposits increased, split nearly evenly between increases in public fund accounts non-public fund accounts.  The increase in savings and money market was primarily due to a $46.6 million increase in statement savings, a $45.6 million increase in personal money markets, a $47.3 million increase in business money markets and a $29.8 million increase in brokered money market accounts.

FHLB advances totaled $125.0 million at December 31, 2020, a decrease of $101.5 million, or 44.8%, from December 31, 2019.  The increase in deposits reduced the need for wholesale funding.

Stock Repurchase Program

An important part of capital management are share repurchases.  During the second half of 2020, Civista repurchased 154,947 shares for $2.0 million at a weighted average price of $12.94 per share.  These repurchases were part of the $13.5 million repurchase authorization which was approved in April 2020.  Prior to this plan, Civista repurchased 672,000 shares for $11.4 million, at a weighted average price of $16.90 per share.  Year to date, Civista has repurchased a total of 826,947 shares for $13.4 million, at a weighted average price of $16.16 per share.  In addition, Civista liquidated 3,808 shares held by employees, at $24.07 per share, to satisfy tax obligations stemming from vesting of restricted shares.

Shareholder Equity

Total shareholders' equity increased $20.0 million, or 6.1%, from December 31, 2019 to December 31, 2020, as a result of a $25.1 million increase in retained earnings and an increase in other comprehensive income of $7.7 million.  These increases were partially offset by a $13.5 million repurchase of treasury shares.         

Asset Quality

Civista recorded net recoveries of $149 thousand for the twelve months of 2020 compared to net recoveries of $53 thousand for the same period of 2019.  The allowance for loan losses to loans was 1.22% at December 31, 2020 and 0.86% at December 31, 2019.  Without the PPP loans, the allowance ratio would have been 14 basis points higher.     

Allowance for Loan Losses




(dollars in thousands)





December 31,


December 31,


2020


2019

Beginning of period

$         14,767


$         13,679

Charge-offs

(465)


(776)

Recoveries

614


829

Provision

10,112


1,035

End of period

$         25,028


$         14,767

Non-performing assets at December 31, 2020 were $7.3 million, a 19.7% decrease from December 31, 2019.  The non-performing assets to assets ratio decreased to 0.27% from 0.39% at December 31, 2019.  The allowance for loan losses to non-performing loans increased to 343.05% from 161.95% at December 31, 2019.  

Non-performing Assets




(dollars in thousands)

December 31,


December 31,


2020


2019

Non-accrual loans

$          5,399


$          6,115

Restructured loans

1,897


3,004

Total non-performing loans

7,296


9,119

Other Real Estate Owned

31


-

Total non-performing assets

$          7,327


$          9,119





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 2020 at 1:00 p.m. ET on Friday, February 5, 2021.  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 2020 earnings call.  Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

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

Forward Looking Statements
This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Civista.  For these statements, Civista claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.   Statements in this press release should be considered in conjunction with the other information available about Civista, including the information in the filings we make with the Securities and Exchange Commission.  Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance.  The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties.  We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.  Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Civista' reports filed with the Securities and Exchange Commission, including those described in "Item 1A Risk Factors" of Part I of Civista's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and any additional risks identified in the Company's subsequent Form 10-Q's.  Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof.  Civista does not undertake, and specifically disclaims any obligation, to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Civista Bancshares, Inc. is a $2.8 billion financial holding company headquartered in Sandusky, Ohio.  The Company's banking subsidiary, Civista Bank, operates 37 locations in Northern, Central and Southwestern Ohio, Southeastern Indiana and Northern Kentucky.  Civista Bancshares, Inc. may be accessed at www.civb.com.  The Company's common shares are traded on the NASDAQ Capital Market under the symbol "CIVB". 

 

Civista Bancshares, Inc.

Financial Highlights

(Unaudited, dollars in thousands, except share and per share amounts)


Consolidated Condensed Statement of Income










Three Months Ended


Twelve Months Ended


December 31,


December 31,


2020


2019


2020


2019









Interest income

$        25,721


$        24,521


$        99,865


$        98,054

Interest expense

2,190


3,299


10,138


12,954

Net interest income

23,531


21,222


89,727


85,100

Provision for loan losses

2,250


885


10,112


1,035

Net interest income after provision

21,281


20,337


79,615


84,065

Noninterest income

7,666


5,627


28,182


22,443

Noninterest expense

16,968


17,128


70,665


66,947

Income before taxes

11,979


8,836


37,132


39,561

Income tax expense

1,806


995


4,940


5,683

Net income

10,173


7,841


32,192


33,878

Preferred stock dividends 

-


157


-


647

Net income available 








to common shareholders

$        10,173


$           7,684


$        32,192


$        33,231









Dividends paid per common share

$             0.11


$             0.11


$             0.44


$             0.42









Earnings per common share,








basic

$             0.64


$             0.49


$             2.00


$             2.12

diluted

$             0.64


$             0.47


$             2.00


$             2.01









Average shares outstanding,








basic

15,915,369


15,796,713


16,129,875


15,652,881

diluted

15,915,369


16,734,391


16,129,875


16,851,740









Selected financial ratios:








Return on average assets (annualized)

1.44%


1.37%


1.17%


1.51%

Return on average equity (annualized)

11.79%


9.44%


9.57%


10.64%

Dividend payout ratio

17.21%


22.16%


22.05%


19.41%

Net interest margin (tax equivalent)

3.69%


4.18%


3.70%


4.31%

 

 

 Selected Balance Sheet Items 

(Dollars in thousands, except share and per share amounts)






 December 31, 


 December 31, 


2020


2019


(unaudited)







 Cash and due from financial institutions 

$               139,522


$                  48,535

 Investment securities 

364,350


359,690

 Loans held for sale 

7,001


2,285

 Loans 

2,057,502


1,708,970

 Less: allowance for loan losses 

(25,028)


(14,767)

 Net loans 

2,032,474


1,694,203

 Other securities 

20,537


20,280

 Premises and equipment, net 

22,580


22,871

 Goodwill and other intangibles 

84,926


85,156

 Bank owned life insurance 

45,976


44,999

 Other assets 

45,552


31,538

 Total assets 

$            2,762,918


$            2,309,557





 Total deposits 

$            2,189,398


$            1,678,764

 Federal Home Loan Bank advances 

125,000


226,500

 Securities sold under agreements to repurchase 

28,914


18,674

 Subordinated debentures 

29,427


29,427

 Accrued expenses and other liabilities 

40,071


26,066

 Total shareholders' equity 

350,108


330,126

 Total liabilities and shareholders' equity 

$            2,762,918


$            2,309,557





 Shares outstanding at period end 

15,898,032


16,687,542





 Book value per share 

$                    22.02


$                    19.78

 Equity to asset ratio 

12.67%


14.29%





Selected asset quality ratios:




Allowance for loan losses to total loans

1.22%


0.86%

Non-performing assets to total assets

0.27%


0.39%

Allowance for loan losses to non-performing loans

343.05%


161.95%





Non-performing asset analysis




Nonaccrual loans

$                    5,399


$                    6,115

Troubled debt restructurings

1,897


3,004

Other real estate owned

31


-

Total

$                    7,327


$                    9,119

 

 

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)












December 31,


September 30,


June 30,


March 31,


December 31,

End of Period Balances

2020


2020


2020


2020


2019











Assets










Cash and due from banks

$     139,522


$     194,773


$     196,520


$     256,023


$        48,535

Investment securities

364,350


366,691


369,181


366,689


359,690

Loans held for sale

7,001


13,256


18,523


7,632


2,285

Loans

2,057,502


2,040,940


2,022,965


1,743,125


1,708,970

Allowance for loan losses

(25,028)


(22,637)


(20,420)


(16,948)


(14,767)

Net Loans

2,032,474


2,018,303


2,002,545


1,726,177


1,694,203

Other securities

20,537


20,537


20,537


20,280


20,280

Premises and equipment, net

22,580


22,958


23,137


22,443


22,871

Goodwill and other intangibles

84,926


84,896


84,852


84,919


85,156

Bank owned life insurance

45,976


45,732


45,489


45,249


44,999

Other assets

45,552


50,847


51,369


46,444


31,538

Total Assets

$  2,762,918


$  2,817,993


$  2,812,153


$  2,575,856


$  2,309,557











Liabilities










Total deposits

$  2,189,398


$  2,068,769


$  2,069,261


$  1,991,939


$  1,678,764

Federal Home Loan Bank advances

125,000


125,000


125,000


142,000


226,500

Securities sold under agreement to repurchase

28,914


25,813


23,608


22,699


18,674

Other borrowings

-


183,695


183,695


-


-

Subordinated debentures

29,427


29,427


29,427


29,427


29,427

Accrued expenses and other liabilities

40,071


43,234


44,549


61,624


26,066

Total liabilities

2,412,810


2,475,938


2,475,540


2,247,689


1,979,431











Shareholders' Equity










Common shares

277,039


276,940


276,841


276,546


276,422

Retained earnings

93,048


84,628


78,712


73,972


67,974

Treasury shares

(34,598)


(33,900)


(32,594)


(32,239)


(21,144)

Accumulated other comprehensive income

14,619


14,387


13,654


9,888


6,874

Total shareholders' equity

350,108


342,055


336,613


328,167


330,126











Total Liabilities and Shareholders' Equity

$  2,762,918


$  2,817,993


$  2,812,153


$  2,575,856


$  2,309,557











Quarterly Average Balances










Assets:










Earning assets

$  2,603,961


$  2,617,884


$  2,528,006


$  2,232,168


$  2,070,175

Securities

386,179


388,594


386,838


385,187


372,639

Loans

2,072,477


2,040,492


1,972,969


1,725,685


1,676,769

Liabilities and Shareholders' Equity










Total deposits

$  2,144,865


$  2,084,791


$  2,108,227


$  1,975,133


$  1,661,452

Interest-bearing deposits

1,458,967


1,401,318


1,317,336


1,175,593


1,160,499

Other interest-bearing liabilities

278,357


362,965


302,267


209,909


252,908

Total shareholders' equity

343,335


339,278


330,524


332,602


329,634

 

 

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

2020


2020


2020


2020


2019











Total interest and dividend income

$         25,721


$         24,558


$         24,584


$         25,002


$         24,521

Total interest expense

2,190


2,552


2,509


2,887


3,299

Net interest income

23,531


22,006


22,075


22,115


21,222

Provision for loan losses

2,250


2,250


3,486


2,126


885

Noninterest income

7,666


6,786


6,854


6,876


5,627

Noninterest expense

16,968


17,727


18,114


17,856


17,128

Income before taxes

11,979


8,815


7,329


9,009


8,836

Income tax expense

1,806


1,133


825


1,176


995

Net income

10,173


7,682


6,504


7,833


7,841

Preferred stock dividends

-


-


-


-


157

Net income available to 










common shareholders

$         10,173


$            7,682


$            6,504


$            7,833


$            7,684











Common shares dividend paid

$            1,753


$            1,766


$            1,764


$            1,835


$            1,702











Per share data




















Basic earnings per common share

$              0.64


$              0.48


$              0.41


$              0.47


$              0.49

Diluted earnings per common share

0.64


0.48


0.41


0.47


0.47

Dividends paid per common share

0.11


0.11


0.11


0.11


0.11

Average common shares outstanding - basic

15,915,369


16,045,544


16,044,125


16,517,745


15,796,713

Average common shares outstanding - diluted

15,915,369


16,045,544


16,044,125


16,517,745


16,734,391











Asset quality










Allowance for loan losses, beginning of period

$         22,637


$         20,420


$         16,948


$         14,767


$         14,144

Charge-offs

(139)


(185)


(116)


(24)


(345)

Recoveries

280


152


102


79


83

Provision

2,250


2,250


3,486


2,126


885

Allowance for loan losses, end of period

$         25,028


$         22,637


$         20,420


$         16,948


$         14,767











Ratios










Allowance to total loans

1.22%


1.11%


1.01%


0.97%


0.86%

Allowance to nonperforming assets

341.59%


292.88%


262.14%


197.97%


161.95%

Allowance to nonperforming loans

343.05%


292.88%


262.14%


197.97%


161.95%











Nonperforming assets










Nonperforming loans

$            7,296


$            7,729


$            7,790


$            8,561


$            9,119

Other real estate owned

31


-


-


-


-

Total nonperforming assets

$            7,327


$            7,729


$            7,790


$            8,561


$            9,119











Capital and liquidity










Tier 1 leverage ratio

10.77%


10.73%


10.43%


10.66%


12.35%

Tier 1 risk-based capital ratio

14.74%


14.73%


12.99%


14.33%


15.26%

Total risk-based capital ratio

15.99%


15.94%


13.97%


15.25%


16.10%

Tangible common equity ratio (1)

9.98%


9.47%


9.29%


9.82%


11.08%











(1) See reconciliation of non-GAAP measures at the end of this press release.







 

 

Reconciliation of Non-GAAP Financial Measures

(Unaudited - dollars in thousands except share data)










Three Months Ended


Twelve Months Ended


December 31,


December 31,


2020


2019


2020


2019









Net income (GAAP)

$        10,173


$           7,841


$        32,192


$        33,878

Add back: income tax expense

1,806


995


4,940


5,683

Add back: provision for loan losses

2,250


885


10,112


1,035

Pre-tax, pre-provision 








net income (Non-GAAP)

$        14,229


$           9,721


$        47,244


$        40,596

 

 

Reconciliation of Non-GAAP Financial Measures

(Unaudited - dollars in thousands except share data)












Three Months Ended


December 31,


September 30,


June 30,


March 31,


December 31,


2020


2020


2020


2020


2019











Tangible Common Equity










Total Shareholder's Equity - GAAP

$       350,108


$       342,055


$       336,613


$       328,167


$       330,126

Less: Preferred Equity

-


-


-


-


-

Less: Goodwill and intangible assets

82,681


82,907


83,135


83,363


83,595

Tangible common equity (Non-GAAP)

$       267,427


$       259,148


$       253,478


$       244,804


$       246,531











Total Shares Outstanding

15,898,032


15,945,479


16,052,979


16,064,010


16,687,542











Tangible book value per share

$            16.82


$            16.25


$            15.79


$            15.24


$            14.77











Tangible Assets










Total Assets - GAAP

$    2,762,918


$    2,817,993


$    2,812,153


$    2,575,856


$    2,309,557

Less: Goodwill and intangible assets

82,681


82,907


83,135


83,363


83,595

Tangible assets (Non-GAAP)

$    2,680,237


$    2,735,086


$    2,729,018


$    2,492,493


$    2,225,962











Tangible common equity to tangible assets

9.98%


9.47%


9.29%


9.82%


11.08%

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/civista-bancshares-inc-announces-fourth-quarter-2020-financial-results-301222807.html

SOURCE Civista Bancshares, Inc.

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