PR Newswire | Feb 5, 2021 08:30AM EST

02/05 07:30 CST

Civista Bancshares, Inc. Announces Fourth Quarter 2020 Financial Results SANDUSKY, Ohio, Feb. 5, 2021

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

Fourth quarter and year-to-date 2020 highlights

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

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

Results of Operations

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

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

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

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

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

Average Balance Analysis

(Unaudited - Dollars in thousands)

Three Months Ended December 31,

2020 2019

Average Yield Average Yield / /

Assets: balance Interest rate balance Interest rate * *

Interest-earningassets:

Loans ** $ 2,072,477 $ 22,853 4.39% $ 1,676,769 $ 21,577 5.11%

Taxable securities 178,194 1,259 2.93% 190,898 1,429 3.05%

Non-taxable 207,985 1,534 4.06% 181,741 1,439 4.27%securities

Interest-bearingdeposits in other 145,305 75 0.21% 20,767 76 1.45%banks

Totalinterest-earning $ 2,603,961 25,721 4.03% $ 2,070,175 24,521 4.82%assets

Noninterest-earningassets:

Cash and due fromfinancial 29,502 29,473institutions

Premises and 22,832 22,248equipment, net

Accrued interest 9,976 7,559receivable

Intangible assets 84,919 85,388

Bank owned life 45,816 44,841insurance

Other assets 35,044 25,829

Less allowance for (23,614) (14,245)loan losses

Total Assets $ 2,808,436 $ 2,271,268

Liabilities andShareholders'Equity:

Interest-bearingliabilities:

Demand and savings $ 1,169,152 $ 0.13% $ $ 0.32% 380 890,825 712

Time 289,815 1,083 1.49% 269,674 1,382 2.03%

FHLB 125,000 452 1.44% 205,040 871 1.69%

Other borrowings 95,820 80 0.33% 543 1 0.73%

Subordinated 29,427 188 2.54% 29,427 329 4.44%debentures

Repurchase 28,110 7 0.10% 17,898 4 0.09%agreements

Totalinterest-bearing $ 1,737,324 2,190 0.50% $ 1,413,407 3,299 0.93%liabilities

Noninterest-bearing 685,898 500,953deposits

Other liabilities 41,879 27,274

Shareholders' equity 343,335 329,634

Total Liabilitiesand Shareholders' $ 2,808,436 $ 2,271,268Equity

Net interest income and interest $ 23,531 3.53% $ 21,222 3.89%rate spread

Net interest margin 3.69% 4.18%

* - Average yields are presented on a tax equivalent basis. The tax equivalenteffect associated with loans and investments, included in the yields above, was$411 thousand and $386 thousand for the periods ended December 31, 2020 and2019, respectively.

** - Average balance includes nonaccrual loans

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

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

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

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

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

Average Balance Analysis

(Unaudited - Dollars in thousands)

Twelve Months Ended December 31,

2020 2019

Average Yield Average Yield / /

Assets: balance Interest rate balance Interest rate * *

Interest-earningassets:

Loans ** $ 1,953,472 $ 87,777 4.49% $ 1,612,975 $ 84,972 5.27%

Taxable securities 183,721 5,359 3.03% 200,074 6,584 3.35%

Non-taxable 202,982 6,123 4.15% 172,812 5,647 4.36%securities

Interest-bearingdeposits in other 155,960 606 0.39% 38,359 851 2.22%banks

Totalinterest-earning $ 2,496,135 99,865 4.10% $ 2,024,220 98,054 4.95%assets

Noninterest-earningassets:

Cash and due fromfinancial 77,848 47,472institutions

Premises and 22,831 21,946equipment, net

Accrued interest 9,043 7,088receivable

Intangible assets 84,953 85,744

Bank owned life 45,454 44,352insurance

Other assets 37,675 24,273

Less allowance for (19,231) (13,984)loan losses

Total Assets $ 2,754,708 $ 2,241,111

Liabilities andShareholders'Equity:

Interest-bearingliabilities:

Demand and savings $ 1,050,544 $ 0.17% $ $ 0.33% 1,813 869,340 2,871

Time 288,262 5,068 1.76% 269,823 5,186 1.92%

FHLB 133,151 1,932 1.45% 161,047 3,452 2.14%

Other borrowings 101,295 354 0.35% - - 0.00%

Federal funds 288 1 0.35% 137 3 2.19%purchased

Subordinated 29,427 945 3.21% 29,427 1,423 4.84%debentures

Repurchase 24,390 25 0.10% 18,321 19 0.10%agreements

Totalinterest-bearing $ 1,627,357 10,138 0.62% $ 1,348,095 12,954 0.96%liabilities

Noninterest-bearing 739,648 550,638deposits

Other liabilities 51,242 24,072

Shareholders' equity 336,461 318,306

Total Liabilitiesand Shareholders' $ 2,754,708 $ 2,241,111Equity

Net interest income and interest $ 89,727 3.48% $ 85,100 3.99%rate spread

Net interest margin 3.70% 4.31%

* - Average yields are presented on a tax equivalent basis. The tax equivalenteffect associated with loans and investments, included in the yields above, was$1.64 million and $1.52 million for the periods ended December 31, 2020 and2019, respectively.

** - Average balance includes nonaccrual loans

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

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

Noninterest income

(unaudited - dollars in Three months ended December 31,thousands)

2020 2019 $ change % change

Service charges $ 1,476 $ 1,662 $ -11.2% (186)

Net gain on sale of securities 2 15 (13) -86.7%

Net gain on equity securities 69 40 29 72.5%

Net gain on sale of loans 3,062 1,006 2,056 204.4%

ATM/Interchange fees 1,246 1,185 61 5.1%

Wealth management fees 1,065 937 128 13.7%

Bank owned life insurance 244 254 (10) -3.9%

Swap fees 199 230 (31) -13.5%

Other 303 298 5 1.7%

Total noninterest income $ 7,666 $ 5,627 $ 2,039 36.2%

N/M - not meaningful

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

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

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

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

Noninterest income

(unaudited - dollars in thousands) Twelve months ended December 31,

2020 2019 $ change % change

Service charges $ 5,288 $ 6,395 $ (1,107) -17.3%

Net gain on sale of securities 94 32 62 193.8%

Net gain/(loss) on equity (57) 121 (178) -147.1%securities

Net gain on sale of loans 8,563 2,707 5,856 216.3%

ATM/Interchange fees 4,472 4,056 416 10.3%

Wealth management fees 3,981 3,670 311 8.5%

Bank owned life insurance 977 1,007 (30) -3.0%

Tax refund processing fees 2,375 2,750 (375) -13.6%

Swap fees 1,459 516 943 182.8%

Other 1,030 1,189 (159) -13.4%

Total noninterest income $ 28,182 $ 22,443 $ 5,739 25.6%

N/M - not meaningful

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

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

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

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

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

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

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

Noninterest expense

(unaudited - dollars in thousands) Three months ended December 31,

2020 2019 $ change % change

Compensation expense $ 10,417 $ 10,097 $ 320 3.2%

Net occupancy and equipment 1,528 1,671 (143) -8.6%

Contracted data processing 540 530 10 1.9%

Taxes and assessments 716 286 430 150.3%

Professional services 506 693 (187) -27.0%

Amortization of intangible assets 227 235 (8) -3.4%

ATM/Interchange expense 552 450 102 22.7%

Marketing 18 300 (282) -94.0%

Software maintenance expense 483 422 61 14.5%

Other 1,981 2,444 (463) -18.9%

Total noninterest expense $ 16,968 $ 17,128 $ (160) -0.9%

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

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

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

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

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

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

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

Noninterest expense

(unaudited - dollars in thousands) Twelve months ended December 31,

2020 2019 $ change % change

Compensation expense $ 42,480 $ 39,156 $ 3,324 8.5%

Net occupancy and equipment 6,085 6,081 4 0.1%

Contracted data processing 1,880 1,831 49 2.7%

Taxes and assessments 2,641 1,981 660 33.3%

Professional services 2,795 2,844 (49) -1.7%

Amortization of intangible assets 913 945 (32) -3.4%

ATM/Interchange expense 1,868 1,887 (19) -1.0%

Marketing 1,074 1,411 (337) -23.9%

Software maintenance expense 1,833 1,523 310 20.4%

Other 9,096 9,288 (192) -2.1%

Total noninterest expense $ 70,665 $ 66,947 $ 3,718 5.6%

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

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

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

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

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

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

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

Balance Sheet

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

End of period loanbalances

(unaudited -dollars inthousands)

December 31, December 31,

2020 2019 $ Change % Change

Commercial and $ 409,876 $ $ 206,766 101.8%Agriculture ^1 203,110

Commercial RealEstate:

Owner Occupied 278,413 245,606 32,807 13.4%

Non-owner Occupied 705,072 592,222 112,850 19.1%

Residential Real 442,588 463,032 (20,444) -4.4%Estate

Real Estate 175,609 155,825 19,784 12.7%Construction

Farm Real Estate 33,102 34,114 (1,012) -3.0%

Consumer and Other 12,842 15,061 (2,219) -14.7%

Total Loans $ 2,057,502 $ 1,708,970 $ 348,532 20.4%

^1 2020 includes PPP loans totaling$217,295

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

Paycheck Protection Program

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

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

COVID-19 Loan Modifications

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

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

Loans currently modified under COVID-19 programs

(unaudited - dollars in thousands)

Number of Percent ofType of Loan Loans Balance loans outstanding ^1

Commercial and Agriculture 21 $ 4,069 0.22%

Commercial Real Estate:

Owner Occupied 12 13,072 0.71%

Non-owner Occupied 19 51,027 2.77%

Real Estate Construction 2 5,438 0.30%

Residential Real Estate 1 180 0.01%

55 $ 73,786 4.01%

^1excluding PPP loans

Deposits

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

End of perioddeposit balances

(unaudited -dollars inthousands)

December 31, December 31,

2020 2019 $ Change % Change

Noninterest-bearing $ 720,809 $ 512,553 $ 208,256 40.6%demand

Interest-bearing 410,139 301,674 108,465 36.0%demand

Savings and money 771,612 588,697 182,915 31.1%market

Time deposits 286,838 275,840 10,998 4.0%

Total Deposits $ 2,189,398 $ 1,678,764 $ 510,634 30.4%

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

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

Stock Repurchase Program

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

Shareholder Equity

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

Asset Quality

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

Allowance for Loan Losses

(dollars in thousands)

December 31, December 31,

2020 2019

Beginning of period $ 14,767 $ 13,679

Charge-offs (465) (776)

Recoveries 614 829

Provision 10,112 1,035

End of period $ 25,028 $ 14,767

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

Non-performing Assets

(dollars in thousands) December 31, December 31,

2020 2019

Non-accrual loans $ 5,399 $ 6,115

Restructured loans 1,897 3,004

Total non-performing loans 7,296 9,119

Other Real Estate Owned 31 -

Total non-performing assets $ 7,327 $ 9,119

Conference Call and WebcastCivista Bancshares, Inc. will also host a conference call to discuss the Company's financial results for the fourth quarter of 2020 at 1:00 p.m. ET on Friday, February 5, 2021. Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company's website, www.civb.com. Participants can also listen to the conference call by dialing 855-238-2712 and ask to be joined into the Civista Bancshares, Inc. fourth quarter 2020 earnings call. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

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

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

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

Civista Bancshares, Inc.

Financial Highlights

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

Consolidated Condensed Statement of Income

Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 2020 2019

Interest $ 25,721 $ 24,521 $ 99,865 $ 98,054income

Interest 2,190 3,299 10,138 12,954expense

Net interest 23,531 21,222 89,727 85,100income

Provisionfor loan 2,250 885 10,112 1,035losses

Net interestincome after 21,281 20,337 79,615 84,065provision

Noninterest 7,666 5,627 28,182 22,443income

Noninterest 16,968 17,128 70,665 66,947expense

Income 11,979 8,836 37,132 39,561before taxes

Income tax 1,806 995 4,940 5,683expense

Net income 10,173 7,841 32,192 33,878

Preferredstock - 157 - 647dividends

Net incomeavailable

to common $ 10,173 $ 7,684 $ 32,192 $ 33,231shareholders

Dividendspaid per $ 0.11 $ 0.11 $ 0.44 $ 0.42common share

Earnings percommonshare,

basic $ 0.64 $ 0.49 $ 2.00 $ 2.12

diluted $ 0.64 $ 0.47 $ 2.00 $ 2.01

Averagesharesoutstanding,

basic 15,915,369 15,796,713 16,129,875 15,652,881

diluted 15,915,369 16,734,391 16,129,875 16,851,740

Selectedfinancialratios:

Return onaverage 1.44% 1.37% 1.17% 1.51%assets(annualized)

Return onaverage 11.79% 9.44% 9.57% 10.64%equity(annualized)

Dividend 17.21% 22.16% 22.05% 19.41%payout ratio

Net interestmargin (tax 3.69% 4.18% 3.70% 4.31%equivalent)

Selected Balance Sheet Items

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

December 31, December 31,

2020 2019

(unaudited)

Cash and due from financial $ 139,522 $ institutions 48,535

Investment securities 364,350 359,690

Loans held for sale 7,001 2,285

Loans 2,057,502 1,708,970

Less: allowance for loan (25,028) (14,767)losses

Net loans 2,032,474 1,694,203

Other securities 20,537 20,280

Premises and equipment, net 22,580 22,871

Goodwill and other 84,926 85,156intangibles

Bank owned life insurance 45,976 44,999

Other assets 45,552 31,538

Total assets $ 2,762,918 $ 2,309,557

Total deposits $ 2,189,398 $ 1,678,764

Federal Home Loan Bank 125,000 226,500advances

Securities sold under 28,914 18,674agreements to repurchase

Subordinated debentures 29,427 29,427

Accrued expenses and other 40,071 26,066liabilities

Total shareholders' equity 350,108 330,126

Total liabilities and $ 2,762,918 $ 2,309,557shareholders' equity

Shares outstanding at period 15,898,032 16,687,542end

Book value per share $ $ 22.02 19.78

Equity to asset ratio 12.67% 14.29%

Selected asset quality ratios:

Allowance for loan losses to 1.22% 0.86%total loans

Non-performing assets to total 0.27% 0.39%assets

Allowance for loan losses to 343.05% 161.95%non-performing loans

Non-performing asset analysis

Nonaccrual loans $ $ 5,399 6,115

Troubled debt restructurings 1,897 3,004

Other real estate owned 31 -

Total $ $ 7,327 9,119

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)

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

End of Period 2020 2020 2020 2020 2019Balances

Assets

Cash and due $ 139,522 $ 194,773 $ 196,520 $ $ from banks 256,023 48,535

Investment 364,350 366,691 369,181 366,689 359,690securities

Loans held for 7,001 13,256 18,523 7,632 2,285sale

Loans 2,057,502 2,040,940 2,022,965 1,743,125 1,708,970

Allowance for (25,028) (22,637) (20,420) (16,948) (14,767)loan losses

Net Loans 2,032,474 2,018,303 2,002,545 1,726,177 1,694,203

Other securities 20,537 20,537 20,537 20,280 20,280

Premises and 22,580 22,958 23,137 22,443 22,871equipment, net

Goodwill andother 84,926 84,896 84,852 84,919 85,156intangibles

Bank owned life 45,976 45,732 45,489 45,249 44,999insurance

Other assets 45,552 50,847 51,369 46,444 31,538

Total Assets $ 2,762,918 $ 2,817,993 $ 2,812,153 $ 2,575,856 $ 2,309,557

Liabilities

Total deposits $ 2,189,398 $ 2,068,769 $ 2,069,261 $ 1,991,939 $ 1,678,764

Federal HomeLoan Bank 125,000 125,000 125,000 142,000 226,500advances

Securities soldunder agreement 28,914 25,813 23,608 22,699 18,674to repurchase

Other borrowings - 183,695 183,695 - -

Subordinated 29,427 29,427 29,427 29,427 29,427debentures

Accrued expensesand other 40,071 43,234 44,549 61,624 26,066liabilities

Total 2,412,810 2,475,938 2,475,540 2,247,689 1,979,431liabilities

Shareholders'Equity

Common shares 277,039 276,940 276,841 276,546 276,422

Retained 93,048 84,628 78,712 73,972 67,974earnings

Treasury shares (34,598) (33,900) (32,594) (32,239) (21,144)

Accumulatedother 14,619 14,387 13,654 9,888 6,874comprehensiveincome

Totalshareholders' 350,108 342,055 336,613 328,167 330,126equity

TotalLiabilities and $ 2,762,918 $ 2,817,993 $ 2,812,153 $ 2,575,856 $ 2,309,557Shareholders'Equity

QuarterlyAverage Balances

Assets:

Earning assets $ 2,603,961 $ 2,617,884 $ 2,528,006 $ 2,232,168 $ 2,070,175

Securities 386,179 388,594 386,838 385,187 372,639

Loans 2,072,477 2,040,492 1,972,969 1,725,685 1,676,769

Liabilities andShareholders'Equity

Total deposits $ 2,144,865 $ 2,084,791 $ 2,108,227 $ 1,975,133 $ 1,661,452

Interest-bearing 1,458,967 1,401,318 1,317,336 1,175,593 1,160,499deposits

Otherinterest-bearing 278,357 362,965 302,267 209,909 252,908liabilities

Totalshareholders' 343,335 339,278 330,524 332,602 329,634equity

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)

Three Months Ended

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

Income 2020 2020 2020 2020 2019statement

Totalinterest and $ 25,721 $ 24,558 $ 24,584 $ 25,002 $ 24,521dividendincome

Totalinterest 2,190 2,552 2,509 2,887 3,299expense

Net interest 23,531 22,006 22,075 22,115 21,222income

Provision for 2,250 2,250 3,486 2,126 885loan losses

Noninterest 7,666 6,786 6,854 6,876 5,627income

Noninterest 16,968 17,727 18,114 17,856 17,128expense

Income before 11,979 8,815 7,329 9,009 8,836taxes

Income tax 1,806 1,133 825 1,176 995expense

Net income 10,173 7,682 6,504 7,833 7,841

Preferredstock - - - - 157dividends

Net incomeavailable to

common $ 10,173 $ 7,682 $ 6,504 $ 7,833 $ 7,684shareholders

Common shares $ 1,753 $ 1,766 $ 1,764 $ 1,835 $ 1,702dividend paid

Per sharedata

Basic $ $ $ $ $ earnings per 0.64 0.48 0.41 0.47 0.49common share

Dilutedearnings per 0.64 0.48 0.41 0.47 0.47common share

Dividendspaid per 0.11 0.11 0.11 0.11 0.11common share

Averagecommon shares 15,915,369 16,045,544 16,044,125 16,517,745 15,796,713outstanding -basic

Averagecommon shares 15,915,369 16,045,544 16,044,125 16,517,745 16,734,391outstanding -diluted

Asset quality

Allowance forloan losses, $ 22,637 $ 20,420 $ 16,948 $ 14,767 $ 14,144beginning ofperiod

Charge-offs (139) (185) (116) (24) (345)

Recoveries 280 152 102 79 83

Provision 2,250 2,250 3,486 2,126 885

Allowance forloan losses, $ 25,028 $ 22,637 $ 20,420 $ 16,948 $ 14,767end of period

Ratios

Allowance to 1.22% 1.11% 1.01% 0.97% 0.86%total loans

Allowance tononperforming 341.59% 292.88% 262.14% 197.97% 161.95%assets

Allowance tononperforming 343.05% 292.88% 262.14% 197.97% 161.95%loans

Nonperformingassets

Nonperforming $ 7,296 $ 7,729 $ 7,790 $ 8,561 $ 9,119loans

Other real 31 - - - -estate owned

Totalnonperforming $ 7,327 $ 7,729 $ 7,790 $ 8,561 $ 9,119assets

Capital andliquidity

Tier 1leverage 10.77% 10.73% 10.43% 10.66% 12.35%ratio

Tier 1risk-based 14.74% 14.73% 12.99% 14.33% 15.26%capital ratio

Totalrisk-based 15.99% 15.94% 13.97% 15.25% 16.10%capital ratio

Tangiblecommon equity 9.98% 9.47% 9.29% 9.82% 11.08%ratio ^(1)

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

Reconciliation of Non-GAAP Financial Measures

(Unaudited - dollars in thousands except share data)

Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 2020 2019

Net income (GAAP) $ $ $ $ 10,173 7,841 32,192 33,878

Add back: income tax 1,806 995 4,940 5,683expense

Add back: provision for 2,250 885 10,112 1,035loan losses

Pre-tax, pre-provision

net income (Non-GAAP) $ $ $ $ 14,229 9,721 47,244 40,596

Reconciliation of Non-GAAP Financial Measures

(Unaudited - dollars in thousands except share data)

Three Months Ended

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

2020 2020 2020 2020 2019

TangibleCommon Equity

TotalShareholder's $ 350,108 $ 342,055 $ 336,613 $ 328,167 $ 330,126Equity - GAAP

Less:Preferred - - - - -Equity

Less:Goodwill and 82,681 82,907 83,135 83,363 83,595intangibleassets

Tangiblecommon equity $ 267,427 $ 259,148 $ 253,478 $ 244,804 $ 246,531(Non-GAAP)

Total Shares 15,898,032 15,945,479 16,052,979 16,064,010 16,687,542Outstanding

Tangible bookvalue per $ 16.82 $ 16.25 $ 15.79 $ 15.24 $ 14.77share

TangibleAssets

Total Assets $ 2,762,918 $ 2,817,993 $ 2,812,153 $ 2,575,856 $ 2,309,557- GAAP

Less:Goodwill and 82,681 82,907 83,135 83,363 83,595intangibleassets

Tangibleassets $ 2,680,237 $ 2,735,086 $ 2,729,018 $ 2,492,493 $ 2,225,962(Non-GAAP)

Tangiblecommon equity 9.98% 9.47% 9.29% 9.82% 11.08%to tangibleassets

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

SOURCE Civista Bancshares, Inc.