SANDUSKY, Ohio, Oct. 25, 2019 /PRNewswire/ -- Civista Bancshares, Inc. (NASDAQ:CIVB) ("Civista") reported net income available to common shareholders of $7.5 million, or $0.46 per diluted share, for the quarter ended September 30, 2019, compared to a net loss of $3.6 million, or ($0.31) per diluted share, for the quarter ended September 30, 2018.  Net income available to common shareholders for the nine-month period ended September 30, 2019, was $25.5 million or $1.54 per diluted share, compared to $5.8 million or $0.51 per diluted share, in the same period of 2018. 

Adjusted Earnings

Financial results for the third quarter and nine months ended September 30, 2018 included $8.8 million and $12.0 million respectively, in pre-tax acquisition and integration expenses, as well as a pre-tax loss on sale of securities of $392 thousand, which was part of a restructuring of securities after the United Community Bancorp ("UCB") acquisition.  Excluding these expenses, adjusted earnings were $4.8 million, or $0.37 diluted earnings per share, for the third quarter of 2018 and $16.8 million, or $1.37 diluted earnings per share, for the nine months ended September 30, 2018.

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.

"Once again, we have had a great quarter of earnings and growth.  Our loan growth for the third quarter was strong, at 12.4% annualized.  Our core diluted earnings per share for the quarter are up 24.3% compared to 2018.  It has now been a full year since we brought on UCB.  The results since the acquisition have exceeded our expectations.  We also announced earlier this week that we will be redeeming our convertible preferred shares on December 20th.  We believe that the redemption will assist us in aligning our capital structure more fully with our strategic plan," said Dennis G. Shaffer, President and CEO of Civista.

Results of Operations:

Net interest income increased $4.6 million, or 29.0% for the third quarter of 2019, and $18.5 million or 40.8% and for the nine months ended September 30, compared to the same periods of 2018.  Interest income increased $6.1 million, or 34.3% for the third quarter of 2019 and $23.6 million or 47.2% for the nine-month period ended September 30.  Average earning assets increased $487.7 million for the third quarter of 2019 and $519.5 million for the nine-month period ended September 30.  The increase in average earning assets resulted in $5.6 million and $18.6 million of the increase in interest income, for the three and nine-month periods, respectively.  Earning asset yields increased 14 basis points for the third quarter and 45 basis points for the nine-month period ended September 30, 2019, accounting for $550 thousand and $5.0 million increase in interest income.  Loan yields were impacted by the accretion of UCB related loan purchase accounting adjustments of ($209) thousand for the quarter and $1.8 million year-to-date.  During the third quarter, we automated our accretion model related to the purchase accounting adjustments of UCB loans and consequently reviewed our assumptions.  Through that process, we determined that we needed to adjust the speed of accretion.  Accordingly, we made an adjustment during the quarter of ($209) thousand, which decreased our margin to 4.12%.  We estimate that the accretion impact on future quarters will be approximately a positive 15 basis points.

Interest expense increased $1.5 million, or 74.8%, for the third quarter of 2019 and $5.0 million, or 109.5%, for the nine months ended September 30 compared to the same periods of 2018.  The cost of interest-bearing liabilities increased 25 basis points and 32 basis points, respectively. The increase in interest expense is due to both an increase in average balances and an increase in rates.  Average balances for the third quarter increased $340.9 million, resulting in $653 thousand of the increase, and $378.3 million for the nine-month period, resulting in $2.1 million of the increase.  The increase in rate accounted for $890 thousand and $2.9 million of the increase in interest expense. 

The tax equivalent net interest margin decreased 3 basis points to 4.12% for the third quarter of 2019, compared to 4.15% for the same period a year ago and increased 21 basis points to 4.35% for the nine months ended September 30, 2019, compared to 4.14% for the same period a year ago.  Accretion of the purchase accounting adjustments accounted for the 3 basis point reduction for the third quarter margin, due to the automation of our model, and a 14 basis point increase of the year-to-date margin.

Average Balance Analysis


(Unaudited - Dollars in thousands except share data)












Three Months Ended September 30,



2019


2018



Average


Yield/


Average


Yield/


Assets:

balance

Interest

rate *


balance

Interest

rate *


Interest-earning assets:









Loans **

$   1,626,010

$ 20,776

5.07%


$   1,256,680

$ 15,833

5.00%


Taxable securities

198,994

1,712

3.50%


145,621

1,042

2.81%


Non-taxable securities

180,531

1,449

4.33%


107,211

908

4.29%


Interest-bearing deposits in other banks

16,245

86

2.10%


24,527

103

1.67%


Total interest-earning assets

$   2,021,780

24,023

4.83%


$   1,534,039

17,886

4.69%


Noninterest-earning assets:









Cash and due from financial institutions

29,745




22,399




Premises and equipment, net

21,790




18,219




Accrued interest receivable

6,926




5,120




Intangible assets

85,617




38,920




Other assets

25,432




16,929




Bank owned life insurance

44,579




28,452




Less allowance for loan losses

(13,920)




(13,303)




      Total Assets

$   2,221,949




$   1,650,775













Liabilities and Shareholders Equity:









Interest-bearing liabilities:









Demand and savings

$      871,673

$      730

0.33%


$      653,537

$      317

0.19%


Time

267,959

1,369

2.03%


163,236

466

1.13%


FHLB

201,977

1,152

2.26%


180,073

925

2.04%


Subordinated debentures

29,427

350

4.72%


29,427

349

4.71%


Repurchase Agreements

14,831

4

0.11%


18,664

5

0.11%


Total interest-bearing liabilities

$   1,385,867

3,605

1.03%


$   1,044,937

2,062

0.78%


Noninterest-bearing deposits

482,895




385,646




Other liabilities

27,084




14,591




Shareholders' Equity

326,103




205,601




Total Liabilities and Shareholders' Equity

$   2,221,949




$   1,650,775













Net interest income and interest rate spread

$ 20,418

3.80%



$ 15,824

3.91%











Net interest margin



4.12%




4.15%











* - Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $389 thousand and $242 thousand for the periods ended September 30, 2019 and 2018, respectively.


** - Average balance includes nonaccrual loans































 

Average Balance Analysis


(Unaudited - Dollars in thousands except share data)












Nine Months Ended September 30,



2019


2018



Average


Yield/


Average


Yield/


Assets:

balance

Interest

rate *


balance

Interest

rate *


Interest-earning assets:









Loans  **

$   1,591,477

$ 63,395

5.33%


$   1,188,093

$ 43,615

4.91%


Taxable securities

203,165

5,155

3.44%


144,036

3,069

2.83%


Non-taxable securities

169,802

4,208

4.40%


103,540

2,672

4.42%


Interest-bearing deposits in other banks

44,287

775

2.34%


53,566

614

1.53%


Total interest-earning assets

$   2,008,731

73,533

5.00%


$   1,489,235

49,970

4.55%


Noninterest-earning assets:









Cash and due from financial institutions

53,517




49,330




Premises and equipment, net

21,844




17,836




Accrued interest receivable

6,929




4,947




Intangible assets

85,863




31,918




Other assets

22,607




14,539




Bank owned life insurance

44,186




26,327




Less allowance for loan losses

(13,896)




(13,127)




      Total Assets

$   2,229,781




$   1,621,005













Liabilities and Shareholders Equity:









Interest-bearing liabilities:









Demand and savings

$      862,098

$   2,159

0.33%


$      628,610

$      819

0.17%


Time

269,874

3,807

1.89%


163,660

1,241

1.01%


FHLB

146,222

2,581

2.36%


108,239

1,560

1.93%


Subordinated debentures

29,427

1,094

4.97%


29,427

975

4.43%


Repurchase Agreements

18,463

14

0.10%


17,871

13

0.10%


Total interest-bearing liabilities

$   1,326,084

9,655

0.97%


$      947,807

4,608

0.65%


Noninterest-bearing deposits

567,365




465,448




Other liabilities

21,843




14,889




Shareholders' Equity

314,489




192,861




Total Liabilities and Shareholders' Equity

$   2,229,781




$   1,621,005













Net interest income and interest rate spread

$ 63,878

4.03%



$ 45,362

3.90%











Net interest margin



4.35%




4.14%











* - Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $1.13 million and $712 thousand for the periods ended September 30, 2019 and 2018, respectively.


** - Average balance includes nonaccrual loans


Provision for loan losses was $150 thousand for the three and nine-month periods ended September 30, 2019 and $390 thousand for the three and nine-month periods ended September 30, 2018. 

For the third quarter of 2019, noninterest income totaled $5.4 million, an increase of $2.1 million, or 65.1%, compared to the prior year's third quarter.  Noninterest income for the first nine months of 2019 totaled $16.8 million, an increase of $3.5 million, or 26.5%, compared to the prior year's first nine months.     

Noninterest income








(unaudited - dollars in thousands)

Three months ended September 30,


2019


2018


$ change


% change

Service charges

$    1,726


$    1,219


$       507


41.6%

Net gain on sale of securities

115


(365)


480


131.5%

Net gain on sale of loans

815


428


387


90.4%

ATM/Interchange fees

1,014


622


392


63.0%

Wealth management fees

975


873


102


11.7%

Bank owned life insurance

254


147


107


72.8%

Other

530


364


166


45.6%

Total noninterest income

$    5,429


$    3,288


$    2,141


65.1%









 

Noninterest income








(unaudited - dollars in thousands)

Nine months ended September 30,


2019


2018


$ change


% change

Service charges

$    4,733


$    3,712


$    1,021


27.5%

Net gain (loss) on sale of securities

98


(284)


382


134.5%

Net gain on sale of loans

1,701


1,235


466


37.7%

ATM/Interchange fees

2,871


1,764


1,107


62.8%

Wealth management fees

2,733


2,561


172


6.7%

Bank owned life insurance

753


432


321


74.3%

Tax refund processing fees

2,750


2,750


-


0.0%

Other

1,177


1,123


54


4.8%

Total noninterest income

$  16,816


$  13,293


$    3,523


26.5%









The increases in service charge fee income, ATM/Interchange fees and bank owned life insurance income for both the quarter and nine-month periods are primarily attributable to the Company's acquisition of UCB during the third quarter of 2018.  The net gain on sale of securities was affected by a loss of $392 thousand in 2018, which was part of a restructuring of securities after the UCB acquisition.  The net gain on sale of loans increased due to an increase in mortgage lending in the third quarter of 2019.  During the quarter, mortgage loans sold on the secondary market totaled $36.0 million as a result of lower market rates.  The third quarter represented 44.8% of our 2019 volume. 

For the third quarter of 2019, noninterest expense totaled $16.7 million, a decrease of $5.4 million, or 24.5%, compared to the prior year's third quarter.  Noninterest expense for the first nine months of 2019 decreased $470 thousand, or 0.9%, when compared to the first nine months of 2018.  

Noninterest expense








(unaudited - dollars in thousands)

Three months ended September 30,


2019


2018


$ change


% change

Compensation expense

$    9,707


$  12,054


$  (2,347)


-19.5%

Net occupancy and equipment 

1,463


1,122


341


30.4%

Contracted data processing

435


3,150


(2,715)


-86.2%

Taxes and assessments

498


472


26


5.5%

Professional services

756


2,198


(1,442)


-65.6%

Amortization of intangible assets

235


26


209


803.8%

Marketing

404


350


54


15.4%

Other

3,233


2,784


449


16.1%

Total noninterest expense

$  16,731


$  22,156


$  (5,425)


-24.5%









 

Noninterest expense








(unaudited - dollars in thousands)

Nine months ended September 30,


2019


2018


$ change


% change

Compensation expense

$  29,059


$  26,812


$    2,247


8.4%

Net occupancy and equipment 

4,410


3,444


966


28.0%

Contracted data processing

1,301


6,237


(4,936)


-79.1%

Taxes and assessments

1,695


1,419


276


19.5%

Professional services

2,151


4,233


(2,082)


-49.2%

Amortization of intangible assets

710


85


625


735.3%

Marketing

1,111


988


123


12.4%

Other

9,381


7,070


2,311


32.7%

Total noninterest expense

$  49,818


$  50,288


$      (470)


-0.9%









Compensation expense for both periods of 2018 includes $4.2 million of acquisition related expenses.  The $2.3 million decrease in compensation expense for the three months was partially offset by increases in salaries, incentives and employee insurance. The $2.2 million increase for the nine months included increases to salaries, commissions and incentives, and employee insurance, which were partially offset by the acquisition expenses.  The increases for both periods are primarily due to the increased size of the company due to the UCB acquisition.  Year-to-date average FTE employees were 440.8 at September 30, 2019, an increase of 90.4 FTEs over 2018.  Net occupancy and equipment expense increased for the three and nine-month periods ended September 30, 2019, primarily due to the addition of 9 locations from the UCB acquisition.  The decrease in contracted data processing expenses for the three and nine-month periods ended September 30, 2019, was primarily due to expenses incurred in 2018 for the data processing conversion of UCB, which totaled approximately $2.8 million for the three-month and $5.3 million for the nine-month periods.  The decrease in professional services costs, for the third quarter and nine-month period ended September 30, 2019 is primarily due to legal and consulting expenses related to the UCB acquisition of approximately $1.6 million and $2.1 million, respectively which were included in the 2018 periods. 

The efficiency ratio was 60.9% for the nine months ended September 30, 2019, compared to 84.7% for the nine months ended September 30, 2018.  The improvement in the efficiency ratio is due primarily to $12.0 million of pre-tax expenses related to the merger with UCB, as well as an increase in net interest income.  Without the merger related expenses in 2018, the efficiency ratio would have improved from 64.2% to 60.9%.  See the Non-GAAP reconciliation at the end of this press release.

Civista's effective income tax rate for the nine months ended September 30, 2019 was 15.3% compared to 17.6% for the same period in 2018.  The effective income tax rate for third quarter 2019 was 14.0% compared to 0.0% in 2018.  The 2018 effective tax rate was affected by expenses incurred related to the UCB acquisition. 

Balance Sheet

Total assets increased $130.1 million, or 6.1%, from December 31, 2018 to September 30, 2019, primarily due to increases in cash and cash equivalents of $19.4 million, investment securities of $9.1 million, loans held for sale of $7.6 million, loans of $86.7 million and other assets of $7.4 million.    

End of period loan balances








(unaudited - dollars in thousands)









September 30,


December 31,






2019


2018


$ Change


% Change

Commercial and Agriculture

$           196,833


$           177,101


$    19,732


11.1%

Commercial Real Estate:








Owner Occupied

226,501


210,121


16,380


7.8%

Non-owner Occupied

558,804


523,598


35,206


6.7%

Residential Real Estate

465,455


457,850


7,605


1.7%

Real Estate Construction

149,018


135,195


13,823


10.2%

Farm Real Estate

36,286


38,513


(2,227)


-5.8%

Consumer and Other

15,743


19,563


(3,820)


-19.5%

Total Loans

$        1,648,640


$        1,561,941


$    86,699


5.6%









There continues to be strong growth across all commercial areas.  The new focus on treasury management has aided in the substantial increase in commercial and agriculture loans The commercial real estate and real estate construction loan growth has been led by the urban markets, including better than expected growth from the Cincinnati MSA.  

Total deposits increased $52.7 million, or 3.3%, from December 31, 2018 to September 30, 2019.  The increase was due primarily to increases in both noninterest-bearing and interest-bearing demand deposits.  A reduction of brokered deposits partially offset these increases. 

End of period deposit balances








(unaudited - dollars in thousands)









September 30,


December 31,






2019


2018


$ Change


% Change

Noninterest-bearing demand

$             497,244


$             468,083


$      29,161


6.2%

Interest-bearing demand

297,144


261,996


35,148


13.4%

Savings and money market

571,308


582,128


(10,820)


-1.9%

Time deposits

263,201


258,832


4,369


1.7%

Brokered deposits

3,725


8,854


(5,129)


-57.9%

Total Deposits

$         1,632,622


$         1,579,893


$      52,729


3.3%









The increase in noninterest-bearing demand is due to an increase in business and public fund demand deposits, primarily in Northern Ohio.  Interest-bearing demand deposits increased due to a $30.8 million increase in public funds accounts, primarily in Northern Ohio and Southeastern Indiana.  Brokered deposits decreased $5.1 million and Federal Home Loan Bank advances increased $42.5 million due to a shift in wholesale funding.

Stock Repurchase Program

During the third quarter, Civista repurchased 188,200 shares for $3.9 million, which equates to an average price of $20.77 per share.  The repurchases are a part of the share repurchase program that was approved in December 2018.  There are 281,800 shares that remain as part of the current approved repurchase program. 

Mr. Shaffer added, "Since the stock repurchase program was approved last December,   we have been up-front that we believe stock repurchases to be another tool in our tool-box to maximize shareholder value.  We will continue to be opportunistic while maintaining sufficient liquidity and capital to execute our other business strategies."

Asset Quality

The Company recorded net recoveries of $315 thousand for the first nine months of 2019 compared to net charge-offs $193 thousand for the same period of 2018.    

Allowance for Loan Losses




(dollars in thousands)





September 30,


September 30,


2019


2018

Beginning of period

$         13,679


$         13,134

Charge-offs

(431)


(784)

Recoveries

746


591

Provision

150


390

End of period

$         14,144


$         13,331





The allowance for loan losses to loans was 0.86% at September 30, 2019 and 0.88% at December 31, 2018.  The non-performing assets to assets ratio decreased to 0.42% from 0.46% in 2018.  The allowance for loan losses to non-performing loans increased to 149.9% from 137.9% in 2018.   

Non-performing assets at September 30, 2019 were $9.4 million, a 4.9% decrease from December 31, 2018. Nonaccrual loans include $533 thousand and $1.0 million of purchased credit-impaired ("PCI") loans at September 30, 2019 and December 31, 2018, respectively.

Non-performing Assets




(dollars in thousands)

September 30,


December 31,


2019


2018

Non-accrual loans

$          6,154


$          6,898

Restructured loans

3,281


3,024

Total non-performing loans

9,435


9,922

Other Real Estate Owned

-


-

Total non-performing assets

$          9,435


$          9,922





Mr. Shaffer concluded, "During the third quarter, we closed a limited service branch in Urbana, Ohio and are set to migrate our loan production office in Mayfield Heights, Ohio into a full service branch in Beachwood, Ohio.  That transition will occur in the last week of October.  We are very pleased to make the transition to a full-service branch in Cuyahoga County and are excited for its potential." 

Conference Call and Webcast
Civista Bancshares, Inc. will also host a conference call to discuss the Company's financial results for the third quarter of 2019 at 1:00 p.m. ET on Friday, October 25, 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. Third Quarter 2019 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, 2018.  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 $2.3 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".  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

(unaudited - dollars in thousands, except share amounts)



Consolidated Condensed Statement of Income










Three Months Ended


Nine Months Ended


September 30,


September 30,


2019


2018


2019


2018









Interest income

24,023


17,886


73,533


49,970

Interest expense

3,605


2,062


9,655


4,608

Net interest income

20,418


15,824


63,878


45,362

Provision for loan losses

150


390


150


390

Net interest income after provision

20,268


15,434


63,728


44,972

Noninterest income

5,429


3,288


16,816


13,293

Noninterest expense

16,731


22,156


49,818


50,288

Income (loss) before taxes

8,966


(3,434)


30,726


7,977

Income tax expense (benefit)

1,258


(1)


4,688


1,407

Net income (loss)

7,708


(3,433)


26,038


6,570

Preferred stock dividends 

162


192


490


794

Net income (loss) available 








to common shareholders

7,546


(3,625)


25,548


5,776









Dividends per common share

$             0.11


$             0.09


$             0.31


$             0.23









Earnings per common share,








basic

$             0.48


$            (0.31)


$             1.64


$             0.54

diluted

$             0.46


$            (0.31)


$             1.54


$             0.51









Average shares outstanding,








basic

15,577,371


11,627,093


15,604,410


10,775,577

diluted

16,849,887


13,271,073


16,891,286


12,830,402









Selected financial ratios:








Return on average assets

1.38%


-0.83%


1.56%


0.54%

Return on average equity

9.38%


-6.62%


11.07%


4.55%

Dividend payout ratio

22.23%


-30.48%


18.58%


37.72%

Net interest margin (tax equivalent)

4.12%


4.15%


4.35%


4.14%









 

 Selected Balance Sheet Items 

(unaudited - dollars in thousands, except share amounts)






 September 30, 


 December 31, 


2019


2018






 (unaudited) 


 (unaudited) 

 Cash and due from financial institutions 

$                  62,219


$                  42,779

 Investment securities 

356,439


347,364

 Loans held for sale 

8,983


1,391

 Loans 

1,648,640


1,561,941

 Less allowance for loan losses 

14,144


13,679

 Net loans 

1,634,496


1,548,262

 Other securities 

20,280


21,021

 Premises and equipment, net 

22,201


22,021

 Goodwill and other intangibles 

85,461


86,203

 Bank owned life insurance 

44,745


43,037

 Other assets 

34,241


26,876

 Total assets 

$            2,269,065


$            2,138,954





 Total deposits 

$            1,632,621


$            1,579,893

 Federal Home Loan Bank advances 

236,100


193,600

 Securities sold under agreements to repurchase 

15,088


22,199

 Subordinated debentures 

29,427


29,427

 Accrued expenses and other liabilities 

26,566


14,937

 Total shareholders' equity 

329,263


298,898

 Total liabilities and shareholders' equity 

$            2,269,065


$            2,138,954





 Shares outstanding at period end 

15,473,275


15,603,499





 Book value per share 

$                    20.69


$                    18.56

 Equity to asset ratio 

14.51%


13.97%





Selected asset quality ratios:




Allowance for loan losses to total loans

0.86%


0.88%

Non-performing assets to total assets

0.42%


0.46%

Allowance for loan losses to non-performing loans

149.91%


137.87%





Non-performing asset analysis:




Nonaccrual loans

$                    6,154


$                    6,898

Troubled debt restructurings

3,281


3,024

Other real estate owned

-


-

Total

$                    9,435


$                    9,922





 

Supplemental Financial Information

(Unaudited - Dollars in thousands except share data)












September 30,


June 30,


March 31,


December 31,


September 30,

End of Period Balances

2019


2019


2019


2018


2018











Assets










Cash and due from banks

$       62,219


$       49,839


$     164,094


$       42,779


$        64,754

Investment securities

356,439


360,512


351,006


347,364


318,112

Loans held for sale

8,983


2,563


1,444


1,391


4,025

Loans

1,648,640


1,598,770


1,573,193


1,561,941


1,515,644

Allowance for loan losses

(14,144)


(13,786)


(13,822)


(13,679)


(13,331)

Net Loans

1,634,496


1,584,984


1,559,371


1,548,262


1,502,313

Other securities

20,280


20,280


20,280


21,021


17,774

Premises and equipment, net

22,201


21,720


21,772


22,021


22,518

Goodwill and other intangibles

85,461


85,706


85,955


86,203


85,964

Bank owned life insurance

44,745


44,491


44,239


43,037


42,750

Other assets

34,241


32,900


29,541


26,876


27,325

Total Assets

$  2,269,065


$  2,202,995


$  2,277,702


$  2,138,954


$  2,085,535











Liabilities










Total deposits

$  1,632,621


$  1,632,720


$  1,765,801


$  1,579,893


$  1,577,755

Federal Home Loan Bank advances

236,100


176,300


127,100


193,600


145,100

Securities sold under agreement to repurchase

15,088


15,554


21,970


22,199


18,515

Subordinated debentures

29,427


29,427


29,427


29,427


29,427

Accrued expenses and other liabilities

26,566


24,782


21,347


14,937


25,350

Total liabilities

1,939,802


1,878,783


1,965,645


1,840,056


1,796,147











Shareholders' Equity










Preferred shares, Series B

9,158


9,364


9,364


9,364


10,878

Common shares

267,559


267,275


266,990


266,901


265,324

Accumulated earnings

62,023


56,199


49,421


41,320


35,302

Treasury shares

(21,144)


(17,235)


(17,235)


(17,235)


(17,235)

Accumulated other comprehensive income(loss)

11,667


8,609


3,517


(1,452)


(4,881)

Total shareholders' equity

329,263


324,212


312,057


298,898


289,388











Total Liabilities and Shareholders' Equity

$  2,269,065


$  2,202,995


$  2,277,702


$  2,138,954


$  2,085,535











Quarterly Average Balances










Assets:










Earning assets

$  2,021,780


$  1,986,841


$  2,017,523


$  1,907,966


$  1,534,039

Securities

379,525


373,999


365,219


352,412


252,832

Loans

1,626,010


1,583,533


1,564,208


1,532,012


1,256,680

Liabilities and Shareholders' Equity










Total deposits

$  1,622,527


$  1,670,247


$  1,807,102


$  1,591,521


$  1,202,419

Interest-bearing deposits

1,139,632


1,129,964


1,126,173


1,120,876


816,773

Other interest-bearing liabilities

246,235


186,140


148,891


204,002


228,164

Total shareholders' equity

326,103


315,438


301,656


290,096


205,601











 

Supplemental Financial Information

(Unaudited - Dollars in thousands except share data)












Three Months Ended


September 30,


June 30,


March 31,


December 31,


September 30,

Income statement

2019


2019


2019


2018


2018











Total interest and dividend income

$         24,023


$         24,926


$         24,584


$         23,707


$         17,886

Total interest expense

3,605


3,184


2,865


2,962


2,062

Net interest income

20,418


21,742


21,719


20,745


15,824

Provision for loan losses

150


-


-


390


390

Noninterest income

5,429


5,104


6,284


4,838


3,288

Noninterest expense

16,731


16,639


16,449


16,391


22,156

Income (loss) before taxes

8,966


10,207


11,554


8,802


(3,434)

Income tax expense (benefit)

1,258


1,546


1,885


1,233


(1)

Net income (loss)

7,708


8,661


9,669


7,569


(3,433)

Preferred stock dividends

162


164


164


165


192

Net income (loss) available to 










common shareholders

$            7,546


$            8,497


$            9,505


$            7,404


$          (3,625)











Common shares dividend paid

$            1,722


$            1,719


$            1,404


$            1,386


$               971











Per share data




















Basic earnings per common share

$              0.48


$              0.54


$              0.61


$              0.48


$            (0.31)

Diluted earnings per common share

0.46


0.51


0.57


0.45


(0.31)

Dividends per common share

0.11


0.11


0.09


0.09


0.09

Average common shares outstanding - basic

15,577,371


15,628,537


15,607,655


15,521,404


11,627,093

Average common shares outstanding - diluted

16,849,887


16,922,712


16,901,830


16,898,186


13,271,073











Asset quality










Allowance for loan losses, beginning of period

$         13,786


$         13,822


$         13,679


$         13,331


$         12,867

Charge-offs

(36)


(156)


(239)


(119)


(133)

Recoveries

244


120


382


77


207

Provision

150


-


-


390


390

Allowance for loan losses, end of period

$         14,144


$         13,786


$         13,822


$         13,679


$         13,331











Ratios










Allowance to total loans

0.86%


0.86%


0.88%


0.88%


0.88%

Allowance to nonperforming assets

149.91%


164.69%


150.60%


137.87%


132.86%

Allowance to nonperforming loans

149.91%


164.69%


150.60%


137.87%


132.86%











Nonperforming assets










Nonperforming loans

$            9,435


$            8,371


$            9,178


$            9,140


$         10,034

Other real estate owned

-


-


-


-


-

Total nonperforming assets

$            9,435


$            8,371


$            9,178


$            9,140


$         10,034











Capital and liquidity










Tier 1 leverage ratio

12.37%


12.44%


11.64%


12.22%


15.37%

Tier 1 risk-based capital ratio

15.50%


15.94%


15.64%


15.30%


15.43%

Total risk-based capital ratio

16.32%


16.78%


16.48%


16.15%


16.29%

Tangible common equity ratio (1)

10.81%


10.89%


9.96%


9.98%


9.71%











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

















 

Non-GAAP Reconciliation

Tangible Common Equity and Tangible Assets

(Unaudited - Dollars in thousands except share data)












Three Months Ended


September 30,


June 30,


March 31,


December 31,


September 30,

Tangible Common Equity

2019


2019


2019


2018


2018











Total Equity

$   329,263


$   324,212


$   312,057


$   298,898


$   289,388

Less: Preferred Equity

9,158


9,364


9,364


9,364


10,878

Less: Goodwill and intangible assets

83,829


84,065


84,299


84,540


84,286











Tangible common equity

$   236,276


$   230,783


$   218,394


$   204,994


$   194,224











Total Shares Outstanding

15,473,275


15,633,059


15,624,113


15,603,499


15,395,064











Tangible book value per share

$       15.27


$       14.76


$       13.98


$       13.14


$       12.62











Tangible Assets










Total Assets

$2,269,065


$2,202,995


$2,277,702


$2,138,954


$2,085,535

Less: Goodwill and intangible assets

83,829


84,065


84,299


84,540


84,286











Tangible assets

$2,185,236


$2,118,930


$2,193,403


$2,054,414


$2,001,249











Tangible common equity ratio

10.81%


10.89%


9.96%


9.98%


9.71%

 

Reconciliation of Non-GAAP Financial Measures

(Unaudited - Dollars in thousands except share data)










Three Months Ended


Three Months Ended


Nine Months Ended


Nine Months Ended


September 30,


September 30,


September 30,


September 30,

Adjusted earnings

2019


2018


2019


2018









Income before taxes (GAAP)

8,966


(3,434)


30,735


7,977

Loss on sale of investment securities

-


(392)


-


(392)

Acquisition and integration expenses

-


8,801


-


11,952

Adjusted earnings, pretax

8,966


5,759


30,735


20,321

Adjusted income tax expense

1,258


821


4,690


2,897

Adjusted net income (Non-GAAP)

7,708


4,938


26,045


17,424

Preferred stock dividends

162


192


490


794

Adjusted net income available to 








common shareholders

$               7,546


$               4,746


$            25,555


$            16,630









Adjusted earnings per common share - basic

$                 0.48


$                 0.41


$                 1.64


$                 1.54

Adjusted earnings per common share - diluted

0.46


0.37


1.54


1.36

Average common shares outstanding - basic

15,577,371


11,627,093


15,604,410


10,775,577

Average common shares outstanding - diluted

16,849,887


13,271,073


16,891,286


12,830,402









Adjusted Efficiency ratio

















Nine Months Ended


Nine Months Ended






September 30,


September 30,






2019


2018













Noninterest expense (GAAP)

49,818


50,288





Acquisition and integration expense

-


(11,952)





Adjusted noninterest expense

49,818


38,336













Net interest income (GAAP)

63,878


45,362





Effect of tax-exempt income

1,130


712





Adjusted net interest income

65,008


46,074













Noninterest Income - GAAP

16,816


13,293





Loss(gain) on sales of investment securities, net

-


392





Adjusted Non-interest Income

16,816


13,685













Adjusted total revenue

81,824


59,759













Adjusted Efficiency ratio

60.9%


64.2%





 

 

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SOURCE Civista Bancshares, Inc.


Source: Civista Bancshares, Inc.