Civista Bancshares, Inc. Announces Fourth Quarter and Year-to-date 2018 Earnings
PRNewswire 15-Feb-2019 8:55 AM
SANDUSKY, Ohio, Feb. 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 ("UCB") 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
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
|
Assets:
|
balance
|
Interest
|
rate *
|
|
balance
|
Interest
|
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
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
|
Assets:
|
balance
|
Interest
|
rate *
|
|
balance
|
Interest
|
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,
|
|
December 31,
|
|
|
|
|
|
2018
|
|
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,
|
|
December 31,
|
|
|
|
|
|
2018
|
|
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,
|
|
December 31,
|
|
2018
|
|
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,
|
|
December 31,
|
|
2018
|
|
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".
|
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%
|
|
|
|
|
View original content to download multimedia:http://www.prnewswire.com/news-releases/civista-bancshares-inc-announces-fourth-quarter-and-year-to-date-2018-earnings-300796547.html
SOURCE Civista Bancshares, Inc.
