Civista Bancshares (CIVB) 8-KCivista Bancshares, Inc. Announces Third Quarter 2024 Financial Results of $0.53 per Common Share

EXHIBIT 99.1

Civista Bancshares, Inc. Announces Third Quarter 2024 Financial Results of $0.53 per Common Share

Sandusky, Ohio, October 29, 2024 /PRNewswire/– Civista Bancshares, Inc. (NASDAQ:CIVB) (“Civista”) announced its unaudited financial results for the three- and nine-month periods ending September 30, 2024.

Third quarter and year-to-date 2024 highlights:

CEO Commentary:

“We're pleased with our third-quarter earnings and performance. This quarter, we maintained a disciplined approach to loan and deposit pricing and effectively implemented our downward beta strategy. We also launched some of our deposit initiatives, that better aligned our lending and core funding. As a result, we increased deposits by $246 million and reduced wholesale borrowings by $213 million, contributing to an Earnings Per Share of $0.53, up from $0.45 last quarter.”, said Dennis G. Shaffer, CEO and President of Civista.

"Our credit quality remains strong, as we continue to support lending and deepen our customer relationships. We're committed to meeting the rising demand for housing and construction financing, ensuring we address the needs of our customers and communities. With a strong third quarter coupled with the inflection in our net interest margin, we're well positioned for a strong finish to 2024.", Shaffer commented.

Results of Operations:

For the three-month periods ended September 30 and June 30, 2024 and September 30, 2023

Net interest income increased $1.5 million, or 5.3%, for the third quarter of 2024 compared to the second quarter of 2024.

Interest income increased $2.1 million attributed to average interest-earning assets increasing $86 million coupled with a 6 basis point increase in asset yield.

The increase in interest income was partially offset by a $0.7 million increase in interest expenses. This was due to $246 million growth in deposits ($139 million in average balances) and a $214 million reduction in FHLB borrowings ($53 million in average balances), resulting in a net increase of $86 million in average interest-bearing liabilities when comparing Q3 2024 to Q2 2024.

When comparing the third quarter of 2024 to the same period of 2023. Net interest income declined $2.3 million. Interest income increased $6.1 million while interest expense increased $8.4 million.

Net interest margin decreased 53 basis points to 3.16% for the third quarter of 2024, compared to 3.69% for the same period a year ago.

The increase in interest income was primarily due to a 30-basis point increase in interest-earning asset yield, which led to $2.6 million of the increase in interest income. Additionally, a $325.7 million increase in average interest-earning assets led to $4.4 million of the increase in interest income.

Interest expense increased $8.4 million for the third quarter of 2024, compared to the same period last year. The average rate paid on interest-bearing liabilities increased 78 basis points, while average interest-bearing liabilities increased $583.9 million. The increase in interest-bearing liabilities was $320.3 million in time-deposits, $118.9 million in demand and savings, and $154.5 million in short-term borrowings to fund growth. This shift in the funding mix, as well as rising rates, is driving the increase in the funding rate. The 78-basis point increase in funding yield led to $4.5 million additional interest expense. Additionally, the $583.9 million of additional funds led to $4.7 million of additional interest expense. Interest-bearing deposit costs have increased 65.6% compared to a year ago.

For the nine-month periods ended September 30, 2024 and 2023

Net interest income decreased $10.1 million, or 10.6%, compared to the same period in 2023.

Interest income increased $22.8 million, or 17.5%, for the nine months of 2024 compared to the same period of 2023. Average interest-earning assets increased $342.2 million. Average yields increased 32 basis points. The increase in volume is due to organic loan growth.

Interest expense increased $32.9 million, or 93.4%, for the nine months of 2024 compared to the same period of 2023. Average rate paid on interest-bearing liabilities increased 117 basis points compared to 2023. Average interest-bearing liabilities increased $540.3 million for the nine months of 2024 compared to the same period of 2023. Demand, Savings and Time deposits increased $461.2 million, collectively, and FHLB borrowings increased $102.5 million for the the nine months of 2024 compared to the same period of 2023 to fund growth.

Net interest margin decreased of 72 basis points to 3.16% for the nine months of 2024, compared to 3.88% for the same period a year ago.

Provision for credit losses for the third quarter of 2024 was $1.3 million compared to $0.6 million for the third quarter of 2023. Provision for unfunded commitments for the third quarter of 2024 was (-$0.3) million compared to $0.1 million for the third quarter of 2023.

Year-to-date 2024 provision for credit losses (including provision for unfunded commitments) was $4.7 million compared to $2.7 million for the same period of 2023.

The Allowance to total loans ratio as of September 30, 2024 was 1.36%, up from 1.32% on June 30, 2024 and up from 1.30% at December 31, 2023. The increased reserve requirement is attributed to longer expected lives of certain loans due to slower expected prepayments of lower interest rate loans in this higher interest rate environment.

For the third quarter of 2024, noninterest income totaled $9.7 million, a decrease of $0.9 million or 8.1% from second quarter 2024 and an increase of $1.6 million, or 19.2%, compared to the prior year’s third quarter.

Service charges for the third quarter of 2024 decreased year over year as we have eliminated our representment fee as well as reduced our overdraft charges, the effect of which was partially offset by an increase in service fees in consumer and treasury management.

Net gain/(loss) on equity securities change was the result of a market valuation adjustment.

Net gain on sale of loans includes gain/loss on sale of mortgages, adjustments to mortgage service rights (MSR), and gain/loss on sales of loans and leases from the Civista Leasing and Finance division; which continues to provide a strong and consistent revenue source for Civista.

Wealth management fees increased from organic growth in the trust and investment services business.

Lease revenue and residual income increased as we shifted away from operating leases to more finance leases, resulting in residual and lease rental income.

Income from Bank Owned Life Insurance (BOLI) increased due to a death benefit on an insured individual in the third quarter of 2024.

Other income decreased in the third quarter which includes loan fees, loan servicing fees, and leasing rental income.

For the nine months ended September 30, 2024, noninterest income totaled $28.7 million, an increase of $391 thousand, or 1.4%, compared to the same period in the prior year. This reflects the replacement of the tax refund processing business exited in 2023.

Service charges for the first nine months of 2024 decreased resulting from the elimination of our representment fee and reducing our overdraft charges, the effect of which was partially offset by an increase in service fees in consumer and treasury management.

Net gain/loss on equity securities change was the result of a market valuation adjustment.

Net gain on sale of loans increased primarily due to an increase in the volume of mortgage and Civista Leasing and Finance leases as well as loans sold.

Wealth management fees increased from organic growth in the trust and investment services business.

Lease revenue and residual income increased from prior year as we shifted from operating leases to more finance leases, resulting in residual and lease rental income; as the Civista Leasing and Finance business continues to increase.

Income from Bank Owned Life Insurance (BOLI) increased due to death benefit on an insured individual in 2024.

Tax Refund Processing Fee income is now zero as we exited our relationship with a third-party processor that was in the tax refund processing business.

Other income – includes $1.1 million of loan and loan servicing fees and $1.3 million of leasing rental income. 2023 includes a $1.5 million fee collected with the renewal of the company's contract with MasterCard.

For the third quarter of 2024, noninterest expense totaled $28.0 million, a decrease of $0.6 million or 2.0% when compared to the second quarter of 2024. When compared to the prior years' third quarter, noninterest expense increased $1.4 million, or 5.1%.

Compensation expense increased primarily due to a merit increases, employee insurance, and other payroll-related expenses. The quarter-to-date average number of full time equivalent (FTE) employees was 526 at September 30, 2024, compared with an average number of 528 for the same period in 2023.

Equipment maintenance and depreciation expense decreased $342 thousand primarily due to depreciation associated with Civista Leasing and Finance as operating leases mature.

Software maintenance expense increased $136 thousand due to increases in both software maintenance contracts as well as the implementation of the new digital banking platform.

In the third quarter of 2024, other expenses include a $0.8 million reserve to address a reconciling item related to a system conversion, which is expected to be completed in the fourth quarter of 2024.

The efficiency ratio was 70.2% for the quarter ended September 30, 2024, compared to 65.6% for the quarter ended September 30, 2023. The change in the efficiency ratio is primarily due to a 5.3% increase in noninterest expenses and a 7.2% decrease in net interest income; partially offset by a 19.2% increase in noninterest income.

Civista’s effective income tax rate for the third quarter of 2024 was 15.6% compared to 15.2% in the third quarter of 2023.

For the nine months ended September 30, 2024, noninterest expense totaled $84.2 million, an increase of $2.5 million, or 3.1%, compared to the same period in the prior year.

Compensation expense increased primarily due to merit increases, employee insurance, and other payroll-related expenses. The year-to-date average number of full time equivalent (FTE) employees was 534 for the nine-months ended September 30, 2024, compared with an average number of 531 for the same period in 2023.

Equipment maintenance and depreciation expense decreased by $900 thousand, primarily from a decrease of $785 thousand in depreciation of equipment on operating leases as operating leases mature.

Software maintenance expense increased due to increases in both software maintenance contracts as well as the implementation of the new digital banking platform.

The efficiency ratio was 71.7% for the nine months ended September 30, 2024 compared to 64.5% for the nine months ended September 30, 2023. The change in the efficiency ratio is primarily due to an 3.2% increase in noninterest expense and a 10.6% decrease in net interest income, partially offset by an 1.4% increase in noninterest income.

Civista’s effective income tax rate for the nine months ended September 30, 2024 was 13.5% compared to 15.4% for the nine months ended September 30, 2023.

Balance Sheet

Total assets at September 30, 2024, were $4.1 billion, an increase of $200.0 million, or 5.2%, from December 31, 2023.

Loan and lease balances increased $182.2 million, or 6.4% since December 31, 2023.

Growth was tempered in the first quarter with a diligent focus on rate and margin, and also tempered in the third quarter to focus on deposits and reduce dependency on wholesale funding.

Commercial Real Estate continued to grow due to consistent demand in the non-owner occupied category, especially in the multi-family area in the major Ohio metropolitan areas. Real Estate Construction has increased with consistent demand for more projects across the state of Ohio.

Residential Real Estate has grown primarily due to more home construction loans as we meet the demand for housing and construction financing by our customers and communities.

Deposits

Total deposits at September 30, 2024 were $3.2 billion, an increase of $238.7 million, or 8.0%, from December 31, 2023.

The $85.4 million decrease in noninterest-bearing demand deposits was primarily due to a $48.0 million decrease in noninterest-bearing business accounts and $36.8 million noninterest-bearing accounts related to the former tax refund processing program as customers migrate deposits to interest bearing accounts.

The $29.1 million decrease in interest-bearing demand deposits was primarily due to a $14.6 million decrease in interest-bearing personal accounts, a $7.5 million decrease in Jumbo NOW accounts, and a $3.7 million decrease in interest-bearing business accounts.

The $256.9 million increase in savings and money market deposits was primarily due to a $65.9 million increase in personal money market accounts, a $148.5 million increase in business money market accounts, $115.1 million increase in public funds money markets, partially offset by a $18.4 million decrease in statement savings coupled with a $7.2 million decrease in business savings accounts. Included in the growth are the $87 million of trust cash deposits brought onto the balance sheet in the third quarter, and $110 million of deposits associated with the Ohio Home Buyers Program.

The $65.2 million increase in time deposits was primarily due to a $22.7 million increase in Jumbo time certificates, a $23.5 million increase in retail time certificates, and a $23.5 million increase in time certificates over $250 thousand.

FHLB overnight advances totaled $287.0 million on September 30, 2024, down $213.5 million from $500.5 million on June 30, 2024 and down from $338.0 million on December 31, 2023. FHLB term advances totaled $1.6 million on September 30, 2024, down from $2.4 million on December 31, 2023.

Stock Repurchase Program

So far in 2024, Civista has not repurchased any shares, leaving the entire $13.5 million of the current repurchase authorization remaining. The current repurchase plan will expire in May 2025. In January, Civista liquidated 8,262 shares held by employees, at $18.38 per share, to satisfy tax obligations stemming from vesting of restricted shares.

Shareholders’ Equity

Total shareholders’ equity at September 30, 2024, totaled $394.4 million, an increase of $22.4 million from December 31, 2023. This resulted from an increase of $14.1 million in retained earnings and a reduction in accumulated other comprehensive loss of $7.6 million.

Asset Quality

Civista recorded net losses of $1.1 million for the first nine months of 2024 compared to net losses of $0.5 million for the same period of 2023. The allowance for credit losses to loans ratio was 1.36% at September 30, 2024, compared to 1.32% at June 30, 2024 and 1.30% at December 31, 2023.

Non-performing assets at September 30, 2024 were $18.2 million, an increase of $3.1 million or 20.4%, from December 31, 2023. The non-performing assets to assets ratio was 0.46% at September 30, 2024 and 0.39% at December 31, 2023. The allowance for credit losses to non-performing loans decreased from 245.67% at December 31, 2023 to 227.36% at September 30, 2024.

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 2024 at 1:00 p.m. ET on Tuesday, October 29, 2024. 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 800-836-8184 and ask to be joined into the Civista Bancshares, Inc. third quarter 2024 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, 2023, 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 $4.1 billion financial holding company headquartered in Sandusky, Ohio. Its primary subsidiary, Civista Bank, was founded in 1884 and provides full-service banking, commercial lending, mortgage, and wealth management services. Today, Civista Bank operates 43 locations across Ohio, Southeastern Indiana and Northern Kentucky. Civista Bank also offers commercial equipment leasing services for businesses nationwide through its Civista Leasing and Finance Division (formerly Vision Financial Group, Inc.), headquartered in Pittsburgh, Pennsylvania. Civista Bancshares’ common shares are traded on the NASDAQ Capital Market under the symbol “CIVB”. Learn more at www.civb.com.

For additional information, contact:

Dennis G. Shaffer

CEO and President

Civista Bancshares, Inc.

888-645-4121

Civista Bancshares, Inc.

Financial Highlights

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