PR Newswire | Jul 23, 2021 08:30AM EDT

07/23 07:30 CDT

Civista Bancshares, Inc. Announces Second Quarter 2021 Financial Results SANDUSKY, Ohio, July 23, 2021

SANDUSKY, Ohio, July 23, 2021 /PRNewswire/ -- Civista Bancshares, Inc. (NASDAQ:CIVB) ("Civista") announced its unaudited financial results for the three and six months ending June 30, 2021.

Second quarter and year-to-date 2021 highlights:

* Net income of $9.2 million, or $0.59 per diluted share, for the second quarter of 2021, compared to $6.5 million, or $0.41 per diluted share, for the second quarter of 2020. * Net income of $19.9 million, or $1.27 per diluted share, compared to $14.3 million, or $0.88 per diluted share, for the six months ended June 30, 2021 and 2020, respectively. * COVID-19 loan deferrals decreased to 2.5% of total loans at period end, compared to 3.6% at December 31, 2020 and 21.3% at June 30, 2020. * Second quarterly dividend of $0.12 is equivalent to an annualized yield of 2.17% based on the June 30, 2021 market close of $22.10 and a dividend payout ratio of 20.43%. * Executed a balance sheet restructuring to deploy excess liquidity which included the prepayment of a 2.05%, $50.0 million FHLB advance, with a $3.7 million prepayment penalty. In addition, we recognized a $1.8 million gain on the sale of our VISA B shares. We also invested $100.0 million dollars into a mix of investment securities yielding 1.50%.

"Our team executed another great quarter financially as well as several key initiatives operationally. On June 9th, we introduced the new Civista Digital Banking which provides for a better customer experience in both the mobile and online platform. We restructured our balance sheet to reduce cost in the future. Our mortgage team had another great quarter and our commercial lending team has seen increases in demand. In July, we also increased our third quarter dividend 17%." said Dennis G. Shaffer, CEO and President of Civista.

Results of Operations

For the three-month period ended June 30, 2021 and 2020

Net interest income increased $1.8 million, or 8.0%, for the second quarter of 2021 compared to the same period of 2020, due to a $914 thousand increase in interest income of as well as an $852 thousand decrease in interest expense. Interest income included $2.8 million of accretion of PPP loan fees during the quarter.

The increase in interest income was due to an increase in average earning assets of $248.1 million, partially offset by a 24 basis point decrease in average yields. Interest income included $2.8 million of PPP fees as well as accretion income of purchased loan portfolios of $565.3 thousand.

The decrease in interest expense is primarily due to a decrease in average rates of 24 basis points offset by an increase in average interest-bearing liabilities of $118.3 million.

Net interest margin decreased 8 basis points to 3.53% for the second quarter of 2021, compared to 3.61% for the same period a year ago.

PPP loans averaged $207.5 million during the quarter at an average yield of 6.39%, including the related fee accretion, which increased the margin by 23 basis points.

Average Balance Analysis

(Unaudited - Dollars in thousands)

Three Months Ended June 30,

2021 2020

Average Yield Average Yield / /

Assets: balance Interest rate balance Interest rate * *

Interest-earningassets:

Loans ** $ 2,054,784 $ 22,653 4.42% $ 1,972,969 $ 21,613 4.41%

Taxable securities 204,554 1,230 2.47% 185,956 1,359 3.05%

Non-taxable 208,940 1,525 4.04% 200,882 1,541 4.19%securities

Interest-bearingdeposits in other 307,853 90 0.12% 168,199 71 0.17%banks

Totalinterest-earning $ 2,776,131 25,498 3.77% $ 2,528,006 24,584 4.01%assets

Noninterest-earningassets:

Cash and due fromfinancial 45,626 84,961institutions

Premises and 22,375 22,535equipment, net

Accrued interest 8,463 9,312receivable

Intangible assets 84,638 84,906

Bank owned life 46,305 45,334insurance

Other assets 37,173 43,297

Less allowance for (26,580) (17,098)loan losses

Total Assets $ 2,994,131 $ 2,801,253

Liabilities andShareholders'Equity:

Interest-bearingliabilities:

Demand and savings $ 1,310,998 $ 334 0.10% $ 1,027,678 $ 439 0.17%

Time 269,624 802 1.19% 289,658 1,363 1.89%

FHLB 101,923 330 1.30% 125,034 447 1.44%

Other borrowings - - 0.00% 124,819 4 0.01%

Subordinated 29,427 185 2.52% 29,427 250 3.42%debentures

Repurchase 25,914 6 0.09% 22,987 6 0.15%agreements

Totalinterest-bearing $ 1,737,886 1,657 0.38% $ 1,619,603 2,509 0.62%liabilities

Noninterest-bearing 867,561 790,891deposits

Other liabilities 39,428 60,235

Shareholders' 349,256 330,524equity

Total Liabilitiesand Shareholders' $ 2,994,131 $ 2,801,253Equity

Net interest income and interest $ 23,841 3.39% $ 22,075 3.39%rate spread

Net interest margin 3.53% 3.61%

* - Average yields are presented on a tax equivalent basis. The tax equivalenteffect associated with loans and investments, included in the yields above, was$406 thousand and $413 thousand for the periods ended June 30, 2021 and 2020,respectively.

** - Average balance includes nonaccrual loans

For the six-month period ended June 30, 2021 and 2020

Net interest income increased $3.5 million, or 7.9%, compared to the same period in 2020.

Interest income increased $1.6 million, or 3.3%, for the first six months of 2021. Average earning assets increased $510.7 million, which resulted in a $5.3 million increase in interest income. Average yields decreased 64 basis points which resulted in a $3.7 million decrease in interest income. During the six-month period, the Bank had average PPP Loans totaling $228.1 million. These loans had an average yield of 6.22% including the amortization of PPP fees, which increased the margin by 24 basis points.

Interest expense decreased $1.8 million, or 34.1%, for the first six months of 2021 compared to the same period of 2020. Average rates decreased 31 basis points, resulting in a $1.8 million decrease in interest expense. Average interest-bearing liabilities increased $225.6 million, but led to a decrease in interest expense of $20 thousand, primarily due to a mix shift toward interest-bearing demand deposits.

Net interest margin decreased 43 basis points to 3.41% for the first six months of 2021, compared to 3.84% for the same period a year ago.

Average Balance Analysis

(Unaudited - Dollars in thousands)

Six Months Ended June 30,

2021 2020

Average Yield Average Yield / /

Assets: balance Interest rate balance Interest rate * *

Interest-earningassets:

Loans ** $ 2,062,061 $ 45,436 4.44% $ 1,849,327 $ 43,286 4.71%

Taxable securities 189,729 2,505 2.75% 186,780 2,775 3.10%

Non-taxable 208,260 3,044 4.08% 199,233 3,053 4.21%securities

Interest-bearingdeposits in other 430,705 239 0.11% 144,748 472 0.66%banks

Totalinterest-earning $ 2,890,755 51,224 3.66% $ 2,380,088 49,586 4.30%assets

Noninterest-earningassets:

Cash and due fromfinancial 39,777 126,655institutions

Premises and 22,442 22,636equipment, net

Accrued interest 8,515 8,031receivable

Intangible assets 84,749 84,994

Bank owned life 46,185 45,210insurance

Other assets 37,157 36,229

Less allowance for (26,087) (16,013)loan losses

Total Assets $ 3,103,493 $ 2,687,830

Liabilities andShareholders'Equity:

Interest-bearingliabilities:

Demand and savings $ 1,280,030 $ 677 0.11% $ 961,285 $ 1,044 0.22%

Time 276,793 1,719 1.25% 285,179 2,743 1.93%

FHLB 113,398 774 1.38% 141,391 1,028 1.46%

Other borrowings - - 0.00% 62,410 4 0.01%

Federal funds - - 0.00% 305 3 1.98%purchased

Subordinated 29,427 371 2.54% 29,427 563 3.85%debentures

Repurchase 28,531 14 0.10% 22,555 11 0.10%agreements

Totalinterest-bearing $ 1,728,179 3,555 0.41% $ 1,502,552 5,396 0.72%liabilities

Noninterest-bearing 986,185 795,215deposits

Other liabilities 39,690 58,500

Shareholders' 349,439 331,563equity

Total Liabilitiesand Shareholders' $ 3,103,493 $ 2,687,830Equity

Net interest income and interest $ 47,669 3.25% $ 44,190 3.58%rate spread

Net interest margin 3.41% 3.84%

* - Average yields are presented on a tax equivalent basis. The tax equivalenteffect associated with loans and investments, included in the yields above, was$814 thousand and $819 thousand for the periods ended June 30, 2021 and 2020,respectively.

** - Average balance includes nonaccrual loans

No provision for loan losses was recorded during the second quarter and was $830 thousand for the first six months of 2021. Provision for loan losses was $3.5 million for the second quarter of 2020 and $5.6 million for the first six months of 2020. The reserve ratio increased to 1.30% at June 30, 2021 from 1.22% at December 31, 2020. The reserve ratio without $153.0 million of PPP loans would have been 10 basis points higher.

For the second quarter of 2021, noninterest income totaled $9.0 million, an increase of $2.2 million, or 31.7%, compared to the prior year's second quarter.

Noninterest income

(unaudited - dollars in Three months ended June 30,thousands)

2021 2020 $ change % change

Service charges $ 1,317 $ 930 $ 387 41.6%

Net loss on sale of securities 1,784 - 1,784 0.0%

Net gain/(loss) on equity 53 (5) 58 N/Msecurities

Net gain on sale of loans 2,218 2,261 (43) -1.9%

ATM/Interchange fees 1,373 1,149 224 19.5%

Wealth management fees 1,188 904 284 31.4%

Bank owned life insurance 248 240 8 3.3%

Tax refund processing fees 475 475 - 0.0%

Swap fees 17 764 (747) -97.8%

Other 352 136 216 158.8%

Total noninterest income $ 9,025 $ 6,854 $ 2,171 31.7%

N/M - not meaningful

Service charges increased as a result of higher overdraft fees and service charges. During 2020, customer behavior changed as a result of the COVID-19 pandemic, resulting in fewer overdrafts. Civista also waived service fees on deposit accounts of $93 thousand during 2020. Overdraft fees are rebounding to pre-pandemic levels.

Net gain on sale of securities increased as a result of the sale of Visa Class B shares.

ATM/Interchange fees increased as a result of increased volume of transactions and incentives from our network providers.

Wealth management fees increased due to an increase in average assets under management as well as an increase in the average rate earned on the assets in 2021.

Swap fees decreased due to the volume. For the quarter, we swapped $4.2 million compared to $44.8 million during the same period last year. We reduced the loans we entered into swaps on as a part of our asset liability management program.

For the six months ended June 30, 2021, noninterest income totaled $18.2 million, an increase of $4.5 million, or 32.7%, compared to the same period in the prior year.

Noninterest income

(unaudited - dollars in thousands) Six months ended June 30,

2021 2020 $ change % change

Service charges $ 2,573 $ 2,398 $ 175 7.3%

Net loss on sale of securities 1,783 - 1,783 0.0%

Net gain/(loss) on equity 141 (146) 287 196.6%securities

Net gain on sale of loans 4,963 3,088 1,875 60.7%

ATM/Interchange fees 2,620 2,043 577 28.2%

Wealth management fees 2,334 1,910 424 22.2%

Bank owned life insurance 491 490 1 0.2%

Tax refund processing fees 2,375 2,375 - 0.0%

Swap fees 94 1,102 (1,008) -91.5%

Other 841 470 371 78.9%

Total noninterest income $ 18,215 $ 13,730 $ 4,485 32.7%

Service charges increased as a result of higher overdraft fees and service charges. During 2020, customer behavior changed as a result of the COVID-19 pandemic, resulting in fewer overdrafts. Civista also waived service fees on deposit accounts of $93 thousand during 2020. Overdraft fees are rebounding to pre-pandemic levels.

Net gain on sale of securities increased as a result of the sale of Visa Class B shares.

Net gain (loss) on equity securities increased as a result of market value increases.

Net gain on sale of loans increased due to an increase in loans sold of $21.0 million and an increase in the premium on sold loans of 93 basis points.

ATM/Interchange fees increased as a result of increased volume of transactions and incentives from our network providers.

Wealth management fees increased due to an increase in average assets under management as well as an increase in the average rate earned on the assets in 2021.

Swap fees decreased as a result of a decline in the volume of loans. Year to date we swapped $5.7 million compared to $77.4 million during the same period last year. We reduced the loans we entered into swaps on as a part of our asset liability management program.

For the second quarter of 2021, noninterest expense totaled $22.5 million, an increase of $4.4 million, or 24.0%, compared to the prior year's second quarter.

Noninterest expense

(unaudited - dollars in thousands) Three months ended June 30,

2021 2020 $ change % change

Compensation expense $ 11,406 $ 10,597 $ 809 7.6%

Net occupancy and equipment 1,489 1,571 (82) -5.2%

Contracted data processing 490 475 15 3.2%

Taxes and assessments 793 631 162 25.7%

Professional services 741 883 (142) -16.1%

Amortization of intangible assets 223 228 (5) -2.2%

ATM/Interchange expense 656 331 325 98.2%

Marketing 343 339 4 1.2%

Software maintenance expense 545 407 138 33.9%

Other 5,781 2,652 3,129 118.0%

Total noninterest expense $ 22,467 $ 18,114 $ 4,353 24.0%

The increase in other expense is due to the prepayment penalty of $3.7 million related to the early payoff of an FHLB long-term advance. This was partially offset by a $465 thousand credit valuation adjustment to mortgage servicing rights.

Compensation expense included increases in commissions of $465 thousand as well as salaries of $183 thousand. The increase in commissions is due to increased mortgage loan activity. The increase in salaries is due to annual pay increases, which occur every year in April.

Taxes and assessments increased due to an increase in the FDIC assessment base, as well as a $64 thousand credit for small banks that was applied to the June 2020 assessments.

The increase in ATM/Interchange expense is primarily due to additional volume and to a settlement received in the second quarter of 2020.

The increase in software maintenance expense is due to both increases in software maintenance contracts the implementation of our new digital banking.

The efficiency ratio was 67.5% for the quarter ended June 30, 2021 compared to 61.7% for the quarter ended June 30, 2020. Removing the effect of the FHLB prepayment and the gain on the sale of the VISA B shares, the efficiency ratio would have been 59.5%.

Civista's effective income tax rate for the second quarter 2021 was 11.9% compared to 11.3% in 2020.

For the six months ended June 30, 2021, noninterest expense totaled $41.9 million, an increase of $5.9 million, or 16.4%, compared to the same period in the prior year.

Noninterest expense

(unaudited - dollars in thousands) Six months ended June 30,

2021 2020 $ change % change

Compensation expense $ 23,188 $ 21,468 $ 1,720 8.0%

Net occupancy and equipment 3,127 3,053 74 2.4%

Contracted data processing 933 925 8 0.9%

Taxes and assessments 1,678 1,210 468 38.7%

Professional services 1,479 1,620 (141) -8.7%

Amortization of intangible assets 445 459 (14) -3.1%

ATM/Interchange expense 1,249 778 471 60.5%

Marketing 641 695 (54) -7.8%

Software maintenance expense 1,053 844 209 24.8%

Other 8,064 4,918 3,146 64.0%

Total noninterest expense $ 41,857 $ 35,970 $ 5,887 16.4%

The increase in other expense is due to the prepayment penalty of $3.7 million related to the early payoff of an FHLB long-term advance. This was partially offset by a $465 thousand credit valuation adjustment to mortgage servicing rights.

Compensation expense included increases in commissions of $1.1 million as well as salaries of $375 thousand. The increase in commission expense is a result of increased mortgage loan activity. The increase in salaries is due to annual pay increases which occur in April.

The increase in ATM/Interchange expense is primarily due to additional volume and to a settlement received in the second quarter of 2020.

The increase in software maintenance expense is due to both increases in software maintenance contracts as well as the implementation of the new digital banking platform.

The efficiency ratio was 62.8% for the six months ended June 30, 2021 compared to 61.2% for the six months ended June 30, 2020. Removing the effect of the FHLB prepayment and the gain on the sale of the VISA B shares, the efficiency ratio would have been 58.8%.

Civista's effective income tax rate for the first six months of 2021 was 14.1% compared to 12.2% in same period in 2020.

Balance Sheet

Total assets increased $155.8 million, or 5.6%, from December 31, 2020 to June 30, 2021, primarily due to an increase in cash of $105.8 million, or 75.8%. Securities available for sale increased $94.3 million, or 26.0%. The loan portfolio decreased $38.3 million, which includes a decrease in PPP loans of $64.3 million.

End of period loan balances

(unaudited - dollars in thousands)

June 30, December 31,

2021 2020 $ Change % Change

Commercial and Agriculture ^1 $ 328,871 $ 409,876 $ (81,005) -19.8%

Commercial Real Estate:

Owner Occupied 271,667 278,413 (6,746) -2.4%

Non-owner Occupied 762,983 705,072 57,911 8.2%

Residential Real Estate 426,731 442,588 (15,857) -3.6%

Real Estate Construction 188,368 175,609 12,759 7.3%

Farm Real Estate 28,616 33,102 (4,486) -13.6%

Consumer and Other 11,960 12,842 (882) -6.9%

Total Loans $ 2,019,196 $ 2,057,502 $ (38,306) -1.9%

^1June 30, 2021 includes PPP loans totaling $153,007 and December 31, 2020includes PPP loans totaling $217,295.

Loan balances have declined during the first half of 2021, primarily due to a net decline in PPP loans. Removing the effects of PPP loans, the loan portfolio would have increased $26.0 million, or 1.4%. Commercial Real Estate continued to grow due to consistent demand in the Non-owner Occupied category. Real Estate Construction loans increased as the construction season got underway during the second quarter. Construction availability remains near all-time highs. Commercial and Agriculture loans have been negatively impacted by the amount of governmental stimulus money. The decrease in Residential Real Estate continues as a result of portfolio loans refinanced into saleable mortgage products.

Paycheck Protection Program

During 2021, we processed approximately 1,300 loans totaling $131.1 million of PPP loans as part of the second round of the PPP. This is in addition to the $268.3 million that we processed in round one during 2020. Of the total PPP loans we have originated, $246.4 million have been forgiven or have paid off. We recognized $2.8 million of PPP fees in income during the quarter, and $5.9 million for the six months ended June 30, 2021. At June 30, 2021, $5.9 million of prepaid SBA fees remain.

COVID-19 Loan Modifications

As of June 30, 2021, the remaining loans modified under the CARES Act total $50.4 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

Commercial and Agriculture 13 $ 4,222 0.21%

Commercial Real Estate:

Owner Occupied 5 8,185 0.41%

Non-owner Occupied 15 37,544 1.86%

Real Estate Construction 1 485 0.02%

34 $ 50,436 2.50%

Deposits

Total deposits increased $213.6 million, or 9.8%, from December 31, 2020 to June 30, 2021.

End of period deposit balances

(unaudited - dollars in thousands)

June 30, December 31,

2021 2020 $ Change % Change

Noninterest-bearing demand $ 853,724 $ 720,809 $ 132,915 18.4%

Interest-bearing demand 480,281 410,139 70,142 17.1%

Savings and money market 809,530 771,612 37,918 4.9%

Time deposits 259,457 286,838 (27,381) -9.5%

Total Deposits $ 2,402,992 $ 2,189,398 $ 213,594 9.8%

The increase in noninterest-bearing demand of $132.9 million was primarily due to a $61.1 million increase in business demand deposit accounts, primarily due to the deposit of PPP loan proceeds. Additionally, balances related to the tax refund processing program increased $50.8 million, which is temporary, and is expected to return to levels more consistent with December 31, 2020 over the next two quarters. Interest-bearing demand deposits increased due to a $47.6 million increase in public fund accounts and a $26.7 million increase in non-public fund accounts. The increase in savings and money market was primarily due to a $40.9 million increase in statement savings, a $26.7 million increase in personal money markets and a $14.8 million increase in public fund money markets. These increases were partially offset by a decrease of $40.1 million increase in brokered money market accounts.

FHLB advances totaled $75.0 million at June 30, 2021, down $50.0 million from December 31, 2020. The decrease was due to the prepayment of a $50 million, 2.05% long-term advance.

Stock Repurchase Program

During the first six months of 2021, Civista repurchased 505,239 shares for $11.3 million at a weighted average price of $22.30 per share. We have approximately $7.4 million remaining of the current $13.5 million repurchase authorization, which was approved in April 2021. In addition, Civista liquidated 5,065 shares held by employees, at $17.71 per share, to satisfy tax obligations stemming from vesting of restricted shares.

Shareholder Equity

Total shareholders' equity increased $2.3 million from December 31, 2020 to June 30, 2021. Retained earnings increased $16.1 million and was partially offset by an $11.4 million repurchase of treasury shares and a $3.1 million decrease in accumulated other comprehensive income.

Asset Quality

Civista recorded net recoveries of $339 thousand for the six months of 2021 compared to net recoveries of $41 thousand for the same period of 2020. The allowance for loan losses to loans was 1.30% at June 30, 2021 and 1.22% at December 31, 2020. Removing the PPP loans, the allowance ratio would have been 10 basis points higher.

Allowance for Loan Losses

(unaudited - dollars in thousands)

Six months ended June 30,

2021 2020

Beginning of period $ 25,028 $ 14,767

Charge-offs (71) (140)

Recoveries 410 181

Provision 830 5,612

End of period $ 26,197 $ 20,420

Non-performing assets at June 30, 2021 were $5.9 million, a 19.4% decrease from December 31, 2020. The non-performing assets to assets ratio decreased to 0.20 % from 0.27% at December 31, 2020. The allowance for loan losses to non-performing loans increased to 443.50% from 343.05% at December 31, 2020.

Non-performing Assets

(dollars in thousands) June 30, December 31,

2021 2020

Non-accrual loans $ 4,288 $ 5,399

Restructured loans 1,619 1,897

Total non-performing loans 5,907 7,296

Other Real Estate Owned - 31

Total non-performing assets $ 5,907 $ 7,327

Conference Call and WebcastCivista Bancshares, Inc. will also host a conference call to discuss the Company's financial results for the second quarter of 2021 at 1:00 p.m. ET on Friday, July 23, 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. second quarter 2021 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, 2020, 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 $2.9 billion financial holding company headquartered in Sandusky, Ohio. The Company's banking subsidiary, Civista Bank, operates 35 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 Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Interest $ 25,498 $ 24,584 $ 51,224 $ 49,586income

Interest 1,657 2,509 3,555 5,396expense

Net interest 23,841 22,075 47,669 44,190income

Provisionfor loan - 3,486 830 5,612losses

Net interestincome after 23,841 18,589 46,839 38,578provision

Noninterest 9,025 6,854 18,215 13,730income

Noninterest 22,467 18,114 41,857 35,970expense

Income 10,399 7,329 23,197 16,338before taxes

Income tax 1,235 825 3,275 2,001expense

Net income 9,164 6,504 19,922 14,337

Dividendspaid per $ 0.12 $ 0.11 $ 0.24 $ 0.22common share

Earnings percommonshare,

basic $ 0.59 $ 0.41 $ 1.27 $ 0.88

diluted $ 0.59 $ 0.41 $ 1.27 $ 0.88

Averagesharesoutstanding,^(1)

basic 15,529,766 15,989,851 15,674,231 16,237,242

diluted 15,529,766 15,989,851 15,674,231 16,237,242

Selectedfinancialratios:

Return onaverage 1.23% 0.93% 1.29% 1.07%assets

Return onaverage 10.52% 7.91% 11.50% 8.70%equity

Dividend 20.34% 27.04% 18.88% 24.92%payout ratio

Net interestmargin (tax 3.53% 3.61% 3.41% 3.84%equivalent)

(1) The Company is now presenting earnings per share using the two-classmethod. As such, the presentation for the prior periods have been revised. Earnings per share for the prior periods did not change as a result of usingthe two-class method.

Selected Balance Sheet Items

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

June 30, December 31,

2021 2020

(unaudited) (unaudited)

Cash and due from $ 245,306 $ 139,522financial institutions

Investment securities 458,831 364,350

Loans held for sale 6,618 7,001

Loans 2,019,196 2,057,502

Less: allowance for (26,197) (25,028)loan losses

Net loans 1,992,999 2,032,474

Other securities 20,537 20,537

Premises and equipment, 22,817 22,580net

Goodwill and other 84,980 84,926intangibles

Bank owned life 46,467 45,976insurance

Other assets 46,088 51,496

Total assets $ 2,924,643 $ 2,768,862

Total deposits $ 2,402,992 $ 2,189,398

Federal Home Loan Bank 75,000 125,000advances

Securities sold underagreements to 24,916 28,914repurchase

Subordinated 29,427 29,427debentures

Accrued expenses and 39,895 46,015other liabilities

Total shareholders' 352,413 350,108equity

Total liabilities and $ 2,924,643 $ 2,768,862shareholders' equity

Shares outstanding at 15,434,592 15,898,032period end

Book value per share $ 22.83 $ 22.02

Equity to asset ratio 12.05% 12.64%

Selected asset qualityratios:

Allowance for loan 1.30% 1.22%losses to total loans

Non-performing assets to 0.20% 0.26%total assets

Allowance for loanlosses to non-performing 443.50% 343.05%loans

Non-performing assetanalysis

Nonaccrual loans $ 4,288 $ 5,399

Troubled debt 1,619 1,897restructurings

Other real estate owned - 31

Total $ 5,907 $ 7,327

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)

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

End of Period 2021 2021 2020 2020 2020Balances

Assets

Cash and due $ 245,306 $ 437,238 $ 139,522 $ 194,773 $ 196,520from banks

Investment 458,831 357,798 364,350 366,691 369,181securities

Loans held for 6,618 10,769 7,001 13,256 18,523sale

Loans 2,019,196 2,060,239 2,057,502 2,040,940 2,022,965

Allowance for (26,197) (26,133) (25,028) (22,637) (20,420)loan losses

Net Loans 1,992,999 2,034,106 2,032,474 2,018,303 2,002,545

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

Premises and 22,817 22,265 22,580 22,958 23,137equipment, net

Goodwill andother 84,980 84,682 84,926 84,896 84,852intangibles

Bank owned life 46,467 46,219 45,976 45,732 45,489insurance

Other assets 46,088 43,754 51,496 50,847 51,369

Total Assets $ 2,924,643 $ 3,057,368 $ 2,768,862 $ 2,817,993 $ 2,812,153

Liabilities

Total deposits $ 2,402,992 $ 2,475,907 $ 2,189,398 $ 2,068,769 $ 2,069,261

Federal HomeLoan Bank 75,000 125,000 125,000 125,000 125,000advances

Securities soldunder agreement 24,916 29,513 28,914 25,813 23,608to repurchase

Other borrowings - - - 183,695 183,695

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

Accrued expensesand other 39,895 47,463 46015 43,234 44,549liabilities

Total liabilities 2,572,230 2,707,310 2,475,938 2,475,540 2,418,754

Shareholders'Equity

Common shares 277,495 277,164 277,039 276,940 276,841

Retained 109,178 101,899 93,048 84,628 78,712earnings

Treasury shares (45,953) (38,574) (34,598) (33,900) (32,594)

Accumulatedother 11,693 9,569 14,619 14,387 13,654comprehensiveincome

Totalshareholders' 352,413 350,058 350,108 342,055 336,613equity

TotalLiabilities and $ 2,924,643 $ 3,057,368 $ 2,768,862 $ 2,817,993 $ 2,812,153Shareholders'Equity

QuarterlyAverage Balances

Assets:

Earning assets $ 2,776,131 $ 3,006,653 $ 2,603,961 $ 2,617,884 $ 2,528,006

Securities 413,494 382,313 386,179 388,594 386,838

Loans 2,054,784 2,069,419 2,072,477 2,040,492 1,972,969

Liabilities andShareholders'Equity

Total deposits $ 2,448,183 $ 2,632,782 $ 2,144,865 $ 2,084,791 $ 2,108,227

Interest-bearing 1,580,622 1,532,759 1,458,967 1,401,318 1,317,336deposits

Otherinterest-bearing 157,264 185,605 278,357 362,965 302,267liabilities

Totalshareholders' 349,256 349,625 343,335 339,278 330,524equity

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)

Three Months Ended

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

Income 2021 2021 2020 2020 2020statement

Totalinterest and $ 25,498 $ 25,725 $ 25,721 $ 24,558 $ 24,584dividendincome

Totalinterest 1,657 1,897 2,190 2,552 2,509expense

Net interest 23,841 23,828 23,531 22,006 22,075income

Provision for - 830 2,250 2,250 3,486loan losses

Noninterest 9,025 9,190 7,666 6,786 6,854income

Noninterest 22,467 19,390 16,968 17,727 18,114expense

Income before 10,399 12,798 11,979 8,815 7,329taxes

Income tax 1,235 2,040 1,806 1,133 825expense

Net income $ 9,164 $ 10,758 $ 10,173 $ 7,682 $ 6,504

Common shares $ 1,885 $ 1,907 $ 1,753 $ 1,766 $ 1,764dividend paid

Per sharedata

Earnings percommon share

Basic $ 0.59 $ 0.68 $ 0.64 $ 0.48 $ 0.41

Diluted 0.59 0.68 0.64 0.48 0.41

Dividendspaid per 0.12 0.12 0.11 0.11 0.11common share

Averagecommon sharesoutstanding,^ (1)

Basic 15,529,766 15,820,301 15,861,095 15,991,270 15,989,851

Diluted 15,529,766 15,820,301 15,861,095 15,991,270 15,989,851

Asset quality

Allowance forloan losses, $ 26,133 $ 25,028 $ 22,637 $ 20,420 $ 16,948beginning ofperiod

Charge-offs (25) (46) (139) (185) (116)

Recoveries 89 321 280 152 102

Provision - 830 2,250 2,250 3,486

Allowance forloan losses, $ 26,197 $ 26,133 $ 25,028 $ 22,637 $ 20,420end of period

Ratios

Allowance to 1.30% 1.27% 1.22% 1.11% 1.01%total loans

Allowance tononperforming 443.50% 423.09% 341.59% 292.88% 262.14%assets

Allowance tononperforming 443.50% 423.09% 343.05% 292.88% 262.14%loans

Nonperformingassets

Nonperforming $ 5,907 $ 6,177 $ 7,296 $ 7,729 $ 7,790loans

Other real - - 31 - -estate owned

Totalnonperforming $ 5,907 $ 6,177 $ 7,327 $ 7,729 $ 7,790assets

Capital andliquidity

Tier 1leverage 9.92% 9.23% 10.77% 10.73% 10.43%ratio

Tier 1risk-based 14.65% 15.20% 14.74% 14.73% 12.99%capital ratio

Totalrisk-based 15.90% 16.45% 15.99% 15.94% 13.97%capital ratio

Tangiblecommon equity 9.51% 9.00% 9.98% 9.47% 9.29%ratio ^(2)

(1) The Company is now presenting earnings per share using the two-classmethod. As such, the presentation for the prior periods have been revised. Earnings per share for the prior periods did not change as a result of usingthe two-class method.

(2) See reconciliation of non-GAAP measures at the endof this press release.

Reconciliation of Non-GAAP Financial Measures

(Unaudited - dollars in thousands except share data)

Three Months Ended

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

2021 2021 2020 2020 2020

TangibleCommon Equity

TotalShareholder's $ 352,413 $ 350,058 $ 350,108 $ 342,055 $ 336,613Equity - GAAP

Less:Goodwill and 82,235 82,458 82,681 82,907 83,135intangibleassets

Tangiblecommon equity $ 270,178 $ 267,600 $ 267,427 $ 259,148 $ 253,478(Non-GAAP)

Total Shares 15,434,592 15,750,479 15,898,032 15,945,479 16,052,979Outstanding

Tangible bookvalue per $ 17.50 $ 16.99 $ 16.82 $ 16.25 $ 15.79share

TangibleAssets

Total Assets $ 2,924,643 $ 3,057,368 $ 2,762,918 $ 2,817,993 $ 2,812,153- GAAP

Less:Goodwill and 82,235 82,458 82,681 82,907 83,135intangibleassets

Tangibleassets $ 2,842,408 $ 2,974,910 $ 2,680,237 $ 2,735,086 $ 2,729,018(Non-GAAP)

Tangiblecommon equity 9.51% 9.00% 9.98% 9.47% 9.29%to tangibleassets

Reconciliation of Non-GAAP Efficiency Ratio

(Unaudited - dollars in thousands except share data)

For the three June 30, 2021 June 30, 2020months ended :

GAAP Non-GAAP Non- GAAP Non-GAAP Non- adjustment GAAP adjustment GAAP

Noninterest 22,467 (3,717) ^ 18,750 18,114 - 18,114expense (1)

Net interest 24,247 - 24,247 22,488 - 22,488income (FTE)

Noninterest income 9,025 (1,785) ^ 7,240 6,854 - 6,854 (2)

Efficiency ratio 67.5% 59.5% 61.7% 61.7%

For the six months June 30, 2021 June 30, 2020ended:

GAAP Non-GAAP Non-GAAP GAAP Non-GAAP Non- adjustment adjustment GAAP

Noninterest 41,857 (3,717) ^ 38,140 35,970 - 35,970expense (1)

Net interest 48,483 - 48,483 45,009 - 45,009income (FTE)

Noninterest income 18,215 (1,785) ^ 16,430 13,730 - 13,730 (2)

Efficiency ratio 62.8% 58.8% 61.2% 61.2%

(1) FHLBprepayment penalty

(2) Gain on saleof VISA B shares

View original content to download multimedia: https://www.prnewswire.com/news-releases/civista-bancshares-inc-announces-second-quarter-2021-financial-results-301339822.html

SOURCE Civista Bancshares, Inc.