Financial News

Civista Bancshares, Inc. Announces Strong First Quarter 2016 Earnings

SANDUSKY, Ohio, April 22, 2016 /PRNewswire/ -- Civista Bancshares, Inc. (NASDAQ:CIVB) ("Civista") reported net income attributable to common shares of $4.3 million, or $0.43 per diluted share, for the first quarter of 2016, compared with $2.8 million, or $0.29 per diluted share, for the prior year period.   

"We increased our first quarter 2016 diluted earnings per share by 48% over the same quarter in 2015.  We have also seen the impact of organic and acquisitive growth now that a year has passed since the Dayton acquisition.  We have improved noninterest income, primarily due to the large portion of the tax refund processing fees in the first quarter. At the same time, noninterest expenses have increased modestly, largely attributable to growth and the merger." said James O. Miller, Chairman, President and CEO of Civista.

Results of Operations:

Net interest income for the first quarter of 2016 increased $1.3 million, or 12.1% compared to the same period of 2015.  The increase in net interest income for the quarter was due both to an increase in average loans outstanding as well as a decrease in cost of funds.  Tax equivalent net interest margin was 3.53% for the first quarter, compared to 3.65% for the same period a year ago.  Net interest margin was reduced in both periods due to the impact of additional interest-earning cash on deposit related to the tax refund processing program.  Average cash related to the tax refund processing program in the first quarter 2016 and 2015 was $216 million and $111 million, respectively.  The reduction to net interest margin was 54 basis points in 2016 and 34 basis points in 2015. 

Mr. Miller continued, "Our net interest margin is consistently lower in the first quarter due to the amount of cash the tax refund processing program generates.  In spite of the current rate environment, we have maintained a strong core net interest margin, kept our asset duration under two years and have not diluted our lending standards."

Summary Average Balance Sheet

(Tax-equivalent basis / dollars in thousands)














Three months ended March 31, 


2016


2015


Average
balance


Interest


Yield /
rate


Average
balance


Interest


Yield /
rate

Assets












Loans

$   1,000,720


$   11,317


4.55%


$      927,105


$   10,246


4.49%

Securities

211,995


1,456


3.54%


211,521


1,456


3.54%

Interest-bearing deposits

227,738


280


0.49%


116,298


60


0.21%

Total interest earning assets

$   1,440,453


$   13,053


3.76%


$   1,254,924


$   11,762


3.93%













Liabilities












Int-bearing demand and savings

$      556,240


$        113


0.08%


$      525,363


$          98


0.08%

Time deposits

209,550


377


0.72%


224,596


444


0.80%

FHLB advances and other borrowings

91,724


328


1.44%


84,079


305


1.47%

Total interest-bearing liabilities

$      857,514


$        818


0.38%


$      834,038


$        847


0.41%













Noninterest-bearing deposits

$      608,085






$      414,715

















Net interest income and interest rate spread


$   12,235


3.38%




$   10,915


3.52%

Net interest margin





3.53%






3.65%

The provision for loan losses was $400 thousand in the first quarter of 2015 while no provision was made during the first quarter of 2016.  The decrease in provision for loan losses for the three months of 2016 is due to improved asset quality, compared to the same period a year ago. Management believes the level of reserve for loan losses is adequate.  

During the quarter, noninterest income totaled $5.3 million, an increase of $858 thousand, or 19.5%, compared to the prior year's first quarter.   

Noninterest income




(dollars in thousands)

Three months ended
March 31,


2016


2015

Service charges

$    1,129


$    1,055

Net gain on sale of securities

(5)


-

Net gain on sale of loans

394


204

ATM fees

508


449

Trust fees

634


767

Tax refund processing fees

2,200


1,600

Other

400


327

Total noninterest income

$    5,260


$    4,402

 

Service charge income increased in the first quarter, primarily due to an increase in business service charges, as well as service charge fees instituted in our Dayton market since the acquisition of TCNB.  Gain on sale of mortgage loans increased $190 thousand due to additional volume of mortgage loans sold as well as an increase in the related premium.  Trust fees decreased $133 thousand due to a decrease in trust assets.  Tax refund processing fees increased $600 thousand, or 37.5% when compared to the three months of 2015, due to an increase in the volume of refunds processed. 

Noninterest expense totaled $10.9 million, an increase of $304 thousand, or 2.9%, compared to the prior year's first quarter.   

Noninterest expense




(dollars in thousands)

Three months ended
March 31,


2016


2015

Salaries, Wages and benefits

$    6,324


$    5,899

Net occupancy and equipment 

927


987

Contracted data processing

355


448

Taxes and assessments

470


476

Professional services

501


456

Amortization of intangible assets

183


142

Marketing

287


236

Other

1,860


1,959

Total noninterest expense

$  10,907


$  10,603

 

Salaries, wages and benefits expense increased $425 thousand for the first quarter of 2016 compared to the same period of 2015.  The increase in salaries, wages and benefits expense was primarily due to the addition of TCNB employees, as well as normal merit increases.    

The efficiency ratio improved to 60.1% in the first quarter of 2016 compared to 66.9% for the first quarter of 2015.  The improvement in the efficiency ratio is due to the increase in net interest income, as well as the increase in noninterest income, partially offset by a modest increase in noninterest expense. 

Mr. Miller continued, "While we have had success increasing revenues, the success we have had in minimizing costs is also important in our increase in net income.  We added three offices in the acquisition of TCNB, added loans and increased mortgage production.  At the same time we were successful in limiting the increase of costs to less than 3%."

Balance Sheet

Total assets increased $191.9 million, or 14.6%, from December 31, 2015 to March 31, 2016.  This was due primarily to the additional cash balances related to the tax refund processing program.  Total tax refund processing related cash was $239.2 million, compared to $22.1 million at year-end. 

Total loans increased $4.3 million or 0.4% from December 31, 2015 to March 31, 2016.  The increase in total loans is due to increased Residential Real Estate and Real Estate Construction lending, offset by declines in our other lending segments. 

End of period loan balances




(dollars in thousands)





March 31,


December 31,


2016


2015

Commercial and Agriculture

$               122,207


$               124,402

Commercial Real Estate - Owner Occupied

166,859


167,897

Commercial Real Estate - Non-owner Occupied

344,717


348,439

Residential Real Estate

243,835


236,338

Real Estate Construction

64,176


58,898

Farm Real Estate

44,960


46,993

Consumer and Other

19,049


18,560

Total Loans

$            1,005,803


$            1,001,527

Jim Miller continued, "While we had a very modest increase in loans for the first quarter of 2016, we normally experience seasonal run-off of Agriculture loans during this period."

Total deposits increased $227.7 million, or 21.6%, from December 31, 2015 to March 31, 2016.  This was due primarily to the additional cash balances related to the tax refund processing program.    

End of period deposit balances




(dollars in thousands)





March 31,


December 31,


2016


2015

Noninterest-bearing demand

$               511,024


$               300,615

Interest-bearing demand

190,815


176,303

Savings and money market

373,389


364,067

Time deposits

204,552


211,048

Total Deposits

$            1,279,780


$            1,052,033





Total shareholder's equity increased $5.4 million, or 4.3%, from December 31, 2015 to March 31, 2016 primarily due to increased retained earnings of $3.9 million and a $1.3 million increase in other comprehensive income related to unrealized gains in the investment portfolio. 

Asset Quality

Nonperforming assets at March 31, 2016 were $15.5 million, a $2.2 million increase from December 31, 2015, primarily due to two loan relationships.  The Company recorded net recoveries of $72 thousand for the first quarter of 2016 compared to net charge-offs of $353 thousand for the same period of 2015.

Non-performing Assets




(dollars in thousands)

March 31,


December 31,


2016


2015

Non-accrual loans

$        11,252


$          9,890

Restructured loans

4,191


3,294

Total non-performing loans

15,443


13,184

Other Real Estate Owned

56


116

Total non-performing assets

$        15,499


$        13,300

Civista Bancshares, Inc. is a $1.5 billion financial holding company headquartered in Sandusky, Ohio.  The Company's banking subsidiary, Civista Bank, operates 28 locations in North Central, West Central and Southwestern Ohio.

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".  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".

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, 2015.  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 publicly release the result of any revisions that may be made 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. 
Financial Highlights 
(dollars in thousands, except share amounts)

 

Consolidated Condensed Statement of Income






Three Months Ended


March 31,


(unaudited)


2016


2015





Interest income

13,053


11,762

Interest expense

818


847

Net interest income

12,235


10,915

Provision for loan losses

-


400

Net interest income after provision

12,235


10,515

Noninterest income

5,260


4,402

Noninterest expense

10,907


10,603

Income before taxes

6,588


4,314

Income tax expense

1,863


1,143

Net income

4,725


3,171

Preferred stock dividends 

391


404

Net income available 




to common shareholders

4,334


2,767





Dividends per common share

$             0.05


$             0.05





Earnings per common share,




basic

$             0.55


$             0.36

diluted

$             0.43


$             0.29





Average shares outstanding,




basic

7,860,716


7,758,998

diluted

10,938,961


10,907,674





Selected financial ratios:




Return on average assets

1.17%


0.93%

Return on average equity

14.97%


10.99%

Dividend payout ratio

8.32%


12.23%

Net interest margin (tax equivalent)

3.53%


3.65%

 

 

 Selected Balance Sheet Items 






 March 31, 


 December 31, 


2016


2015






 (unaudited) 


 (unaudited) 

 Cash and due from financial institutions 

$               214,407


$                  35,561

 Investment securities 

201,786


196,249

 Loans held for sale 

2,193


2,698

 Loans 

1,005,803


1,001,527

 Less allowance for loan losses 

14,433


14,361

 Net loans 

991,370


987,166

 Other securities 

13,550


13,452

 Fixed assets 

16,773


16,944

 Goodwill and other intangibles 

29,337


29,504

 Bank owned life insurance 

23,218


20,104

 Other assets 

14,262


13,363

 Total assets 

$            1,506,896


$            1,315,041





 Total deposits 

$            1,279,780


$            1,052,033

 Federal Home Loan Bank advances 

17,500


71,200

 Securities sold under agreements to repurchase 

24,272


25,040

 Subordinated debentures 

29,427


29,427

 Accrued expenses and other liabilities 

25,377


12,168

 Total shareholders' equity 

130,540


125,173

 Total liabilities and shareholders' equity 

$            1,506,896


$            1,315,041





 Shares outstanding at period end 

7,875,172


7,843,578





 Book value per share 

$                    13.75


$                    13.12

 Tangible book value per share 

10.02


9.36

 Equity to asset ratio 

8.66%


9.52%





Selected asset quality ratios:




Allowance for loan losses to total loans

1.43%


1.43%

Non-performing assets to total assets

1.03%


1.01%

Allowance for loan losses to non-performing loans

93.46%


108.93%





Non-performing asset analysis




Nonaccrual loans

$                  11,252


$                    9,890

Troubled debt restructurings

4,191


3,294

Other real estate owned

56


116

Total

$                  15,499


$                  13,300

 

 

 

Average Balance Analysis

(Unaudited - Dollars in thousands except share data)










Three Months Ended March 31,


2016


2015


Average


Yield/


Average


Yield/

Assets:

balance

Interest

rate *


balance

Interest

rate *

Interest-earning assets:








Loans

$   1,000,720

$ 11,317

4.55%


$      927,105

$ 10,246

4.49%

Taxable securities

137,795

801

2.38%


141,902

832

2.42%

Non-taxable securities

74,200

655

5.69%


69,619

624

5.82%

Interest-bearing deposits in other banks

227,738

280

0.49%


116,298

60

0.21%

Total interest-earning assets

$   1,440,453

13,053

3.76%


$   1,254,924

11,762

3.93%

Noninterest-earning assets:








Cash and due from financial institutions

114,551




66,687



Premises and equipment, net

16,871




15,407



Accrued interest receivable

4,019




3,885



Intangible assets

29,447




24,760



Other assets

9,906




9,512



Bank owned life insurance

21,562




19,678



Less allowance for loan losses

(14,504)




(14,446)



      Total Assets

$   1,622,305




$   1,380,407











Liabilities and Shareholders Equity:








Interest-bearing liabilities:








Demand and savings

$      556,240

$      113

0.08%


$      525,363

$        98

0.08%

Time

209,550

377

0.72%


224,596

444

0.80%

FHLB

38,436

110

1.15%


34,447

121

1.42%

Subordinated debentures

29,427

212

2.90%


29,427

179

2.47%

Repurchase Agreements

23,861

6

0.10%


20,205

5

0.10%

Total interest-bearing liabilities

$      857,514

818

0.38%


$      834,038

847

0.41%

Noninterest-bearing deposits

608,085




414,715



Other liabilities

29,730




14,633



Shareholders' Equity

126,976




117,021



Total Liabilities and Shareholders' Equity

$   1,622,305




$   1,380,407











Net interest income and interest rate spread

$ 12,235

3.38%



$ 10,915

3.52%









Net interest margin



3.53%




3.65%









* - All yields and costs are presented on an annualized basis






 

 

Supplemental Financial Information

(Unaudited - Dollars in thousands except share data)












March 31,


December 31,


September 30,


June 30,


March 31,

End of Period Balances

2016


2015


2015


2015


2015











Assets










Cash and due from banks

$     214,407


$       35,561


$       33,619


$       35,092


$      142,339

Securities available for sale

201,786


196,249


198,655


197,429


199,693

Loans held for sale

2,193


2,698


1,223


4,034


2,919

Loans

1,005,803


1,001,527


1,000,275


1,002,917


984,105

Allowance for loan losses

(14,433)


(14,361)


(14,760)


(14,707)


(14,315)

Net Loans

991,370


987,166


985,515


988,210


969,790

Other securities

13,550


13,452


13,324


13,261


13,400

Fixed assets

16,773


16,944


16,200


16,308


16,163

Goodwill and other intangibles

29,337


29,504


29,683


29,608


29,790

Bank owned life insurance

23,218


20,104


19,987


19,870


19,754

Other assets

14,262


13,363


15,125


13,460


13,391

Total Assets

$  1,506,896


$  1,315,041


$  1,313,331


$  1,317,272


$  1,407,239











Liabilities










Total Deposits

$  1,279,780


$  1,052,033


$  1,055,959


$  1,075,806


$  1,197,316

Federal Home Loan Bank advances

17,500


71,200


72,200


55,300


17,500

Securities sold under agreement to repurchase

24,272


25,040


20,887


17,460


21,488

Subordinated debentures

29,427


29,427


29,427


29,427


29,427

Accrued expenses and other liabilities

25,377


12,168


11,521


19,257


22,581

Total liabilities

1,376,356


1,189,868


1,189,994


1,197,250


1,288,312











Shareholders' equity










Preferred shares, Series B

22,273


22,273


22,273


22,273


22,309

Common Stock

115,442


115,330


115,267


115,248


115,193

Accumulated earnings (deficit)

9,242


5,300


2,884


414


(1,924)

Treasury stock

(17,235)


(17,235)


(17,235)


(17,235)


(17,235)

Accumulated other comprehensive income (loss)

818


(495)


148


(678)


584

Total shareholders' equity

130,540


125,173


123,337


120,022


118,927











Total liabilities and shareholders' equity

$  1,506,896


$  1,315,041


$  1,313,331


$  1,317,272


$  1,407,239











Quarterly Average Balances










Assets:










Earning assets

$  1,440,453


$  1,218,797


$  1,230,249


$  1,246,731


$  1,254,924

Securities

211,995


212,463


210,209


211,553


211,521

Loans

1,000,720


996,861


1,009,372


991,487


927,105

Liabilities and shareholders' equity










Total deposits

$  1,373,875


$  1,059,271


$  1,073,930


$  1,133,432


$  1,164,674

Interest-bearing deposits

765,790


756,422


773,625


788,191


749,959

Interest-bearing liabilities

91,724


111,481


111,797


72,687


84,079

Total shareholders' equity

126,976


124,025


121,057


119,212


117,021

 

 

Supplemental Financial Information

(Unaudited - Dollars in thousands except share data)












Three Months Ended


March 31,


December 31,


September 30,


June 30,


March 31,

Income statement

2016


2015


2015


2015


2015











Total interest income

$         13,053


$         12,976


$         13,223


$         12,740


$         11,762

Total interest expense

818


815


821


824


847

Net interest income

12,235


12,161


12,402


11,916


10,915

Provision for loan losses

-


-


400


400


400

Noninterest income

5,260


3,146


3,076


3,652


4,402

Noninterest expense

10,907


10,741


10,666


10,933


10,603

Income before taxes

6,588


4,566


4,412


4,235


4,314

Income tax expense

1,863


1,367


1,159


1,113


1,143

Net income

4,725


3,199


3,253


3,122


3,171

Preferred stock dividends

391


391


391


391


404

Net income available to common shareholders

$            4,334


$            2,808


$            2,862


$            2,731


$            2,767











Common stock dividend paid

$               393


$               392


$               392


$               392


$               385











Per share data




















Basic net income per common share

$              0.55


$              0.36


$              0.36


$              0.35


$              0.36

Diluted net income per common share

0.43


0.29


0.30


0.29


0.29

Dividends per common share

0.05


0.05


0.05


0.05


0.05

Average common shares outstanding - basic

7,860,716


7,843,578


7,843,578


7,842,159


7,758,998

Average common shares outstanding - diluted

10,938,961


10,921,823


10,921,823


10,921,824


10,907,674











Asset quality










Allowance for loan losses, beginning of period

$         14,361


$         14,760


$         14,707


$         14,315


$         14,268

Charge-offs

(126)


(525)


(634)


(305)


(585)

Recoveries

198


126


287


297


232

Provision

-


-


400


400


400

Allowance for loan losses, end of period

$         14,433


$         14,361


$         14,760


$         14,707


$         14,315











Ratios










Allowance to total loans

1.43%


1.43%


1.48%


1.47%


1.45%

Allowance to nonperforming assets

93.12%


107.98%


102.90%


86.33%


74.69%

Allowance to nonperforming loans

93.46%


108.93%


106.57%


88.80%


76.81%











Nonperforming assets










Nonperforming loans

$         15,443


$         13,184


$         13,851


$         16,562


$         18,638

Other real estate owned

56


116


494


474


528

Total nonperforming assets

$         15,499


$         13,300


$         14,345


$         17,036


$         19,166











Capital and liquidity










Tier 1 leverage ratio

8.24%


9.96%


9.68%


9.38%


8.91%

Tier 1 risk-based capital ratio

12.52%


12.70%


12.47%


12.20%


12.10%

Total risk-based capital ratio

13.77%


13.96%


13.72%


13.45%


13.35%

Tangible common equity ratio

5.34%


5.71%


5.56%


5.29%


4.79%

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/civista-bancshares-inc-announces-strong-first-quarter-2016-earnings-300255981.html

SOURCE Civista Bancshares, Inc.

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