CIVB 10-K & 10-Q changes, risk factors and insider trading
Civista Bancshares, Inc. · Nasdaq · State Commercial Banks · CIK 944745 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
“During 2024 and 2025, we made the decision to make greater investments in our finance department, which included the hiring of a Chief Financial Officer. During that period, we experienced turnover in our accounting and financial reporting staff and function, which was addressed by making further investments in talent. We continued to integrate our more recent acquisition such as CLF, a division of Civista Bank, which we acquired in the fourth quarter of 2022. …”see in full comparison
“As of December 31, 2025, management concluded that the Company maintained effective internal controls over financial reporting and that no material weaknesses were identified.”see in full comparison
“LIBOR was used extensively in the United States and globally for many years as a benchmark for various commercial and financial contracts, including adjustable rate mortgages, corporate debt, interest rate swaps and other derivatives. LIBOR was set based on interest rate information reported by certain banks. In the U.S., as a result of efforts to identify a set of alternative U.S. dollar reference interest rates the Alternative Reference Rate Committee (“ARRC”) recommended the use of a Secured Overnight Funding Rate (“SOFR”) as the set of alternative U.S. dollar reference interest rates. …”see in full comparison
Our banking operations require liquidity to meet our deposit and debt obligations as they come due. There are many potential factors that could reduce our access to liquidity sources, including higher interest rate environments, tightening fiscal policy, a downturn in the U.S. economy, difficult credit markets or adverse regulatory actions. Our access to deposits may also be affected by the liquidity needs of our depositors. A substantial majority of our liabilities are demand, savings, interest checking and money market deposits, which are payable on demand or upon several days' notice, while by comparison, a substantial portion of our assets are loans, which cannot be called or sold in the same time frame. We may not be able to replace maturing deposits and advances as necessary in the future, especially if a large number of our depositors sought to withdraw their accounts, regardless of the reason. Our access to deposits may be negatively impacted by, among other factors, periods of low interest rates or higher interest rates which could promote increased competition for deposits, including from new financial technology competitors, or provide customers with alternative investment options. Additionally, negative news about us or the banking industry in general could negatively impact market and/or customer perceptions of our company, which could lead to a loss of depositor confidence and an increase in deposit withdrawals, particularly among those with uninsured deposits. Furthermore, as we and other regional banking organizations experienced in 2023, the failure of other financial institutions may cause deposit outflows as customers spread deposits among several different banks so as to maximize their amount of FDIC insurance, move deposits to banks deemed "too big to fail" or remove deposits from the banking system entirely.see in full comparisonAs of December 31, 2024, approximately 15% of our deposits were uninsured, and we rely on these deposits for liquidity.A failure to maintain adequate liquidity could have a material adverse effect on our business, financial condition and results of operations.
“In addition, we may fail to realize the anticipated benefits and synergies expected from the FSB acquisition and future acquisitions, which could adversely affect our business, financial condition and results of operations. The success of the FSB acquisition and any future acquisitions will depend, in significant part, on our ability to successfully integrate the acquired business, grow our revenue and realize the anticipated strategic benefits and synergies from the combination. However, achieving these goals requires, among other things, realization of targeted cost synergies. …”see in full comparison
“We are subject to reporting obligations under the U.S. securities laws. The SEC, as required under Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include a management report on such company’s internal control over financial reporting in its annual report, which contains management’s assessment of the effectiveness of the company’s internal control over financial reporting. …”see in full comparison
Full comparison: every changed paragraph (20)
Our success depends to a significant extent upon local and national economic and political conditions, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling and/or possible future U.S. government shutdowns over budget disagreements, slowing gross domestic product, threatened or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements,agreements and other changes in the relationship of the U.S. and U.S. global partners, trade wars, and other factors beyond our control may adversely affect Civista’s deposit levels and composition, the quality of investment securities available for purchase, demand for loans, the ability of Civista’s borrowers to repay their loans, and the value of the collateral securing loans made by Civista. Disruptions in U.S. and global financial markets, and changes in oil production in the Middle East also affect the economy and stock prices in the U.S., which can affect our earnings capital, as well as the ability of Civista’s customers to repay loans. Because we have a significant amount of real estate loans, decreases in real estate values could adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings and cash flows.
Our banking operations require liquidity to meet our deposit and debt obligations as they come due. There are many potential factors that could reduce our access to liquidity sources, including higher interest rate environments, tightening fiscal policy, a downturn in the U.S. economy, difficult credit markets or adverse regulatory actions. Our access to deposits may also be affected by the liquidity needs of our depositors. A substantial majority of our liabilities are demand, savings, interest checking and money market deposits, which are payable on demand or upon several days' notice, while by comparison, a substantial portion of our assets are loans, which cannot be called or sold in the same time frame. We may not be able to replace maturing deposits and advances as necessary in the future, especially if a large number of our depositors sought to withdraw their accounts, regardless of the reason. Our access to deposits may be negatively impacted by, among other factors, periods of low interest rates or higher interest rates which could promote increased competition for deposits, including from new financial technology competitors, or provide customers with alternative investment options. Additionally, negative news about us or the banking industry in general could negatively impact market and/or customer perceptions of our company, which could lead to a loss of depositor confidence and an increase in deposit withdrawals, particularly among those with uninsured deposits. Furthermore, as we and other regional banking organizations experienced in 2023, the failure of other financial institutions may cause deposit outflows as customers spread deposits among several different banks so as to maximize their amount of FDIC insurance, move deposits to banks deemed "too big to fail" or remove deposits from the banking system entirely. As of December 31, 2024, approximately 15% of our deposits were uninsured, and we rely on these deposits for liquidity. A failure to maintain adequate liquidity could have a material adverse effect on our business, financial condition and results of operations.
We believe that the impact on our cost of funds from a rise in interest rates will depend on a number of factors, including but not limited to, the competitive environment in the banking sector for deposit pricing, opportunities for clients to invest in other markets such as fixed income and equity markets, and the propensity of customers to invest in their businesses. The effect on our net interest income from an increase in interest rates will ultimately depend on the extent to which the aggregate impact of loan re-pricingsre-pricing exceeds the impact of increases in our cost of funds.
See the discussion under "ItemITEM 7A. QuantitativeQUANTITATIVE andAND QualitativeQUALITATIVE DisclosuresDISCLOSURES AboutABOUT MarketMARKET RiskRISK” in Part II of this Annual Report on Form 10-K for additional information related to the Company’s interest rate risk.
A transition away from LIBOR as a reference rate for financial contracts could negatively IMPACT our income and expenses and the value of various financial contracts.
LIBOR was used extensively in the United States and globally for many years as a benchmark for various commercial and financial contracts, including adjustable rate mortgages, corporate debt, interest rate swaps and other derivatives. LIBOR was set based on interest rate information reported by certain banks. In the U.S., as a result of efforts to identify a set of alternative U.S. dollar reference interest rates the Alternative Reference Rate Committee (“ARRC”) recommended the use of a Secured Overnight Funding Rate (“SOFR”) as the set of alternative U.S. dollar reference interest rates. SOFR is different from LIBOR in that it is a backward looking secured rate rather than a forward looking unsecured rate.
These differences could lead to a greater disconnect between our costs to raise funds for SOFR as compared to LIBOR. For cash products and loans, ARRC has also recommended Term SOFR, which is a forward looking SOFR based on SOFR futures and may in part reduce differences between SOFR and LIBOR. There are operational issues which may create a delay in the transition to SOFR or other substitute indices, leading to uncertainty across the industry. These consequences cannot be entirely predicted and could have an adverse impact on the market value for or value of LIBOR-linked securities, loans, and other financial obligations or extensions of credit.
The Company’s primary exposure to LIBOR was related to its promissory notes with borrowers, swap contracts with clients and offsetting swap contracts with third parties related to the swap contracts with clients. As of July 2023, all promissory notes and swap contracts were transitioned to SOFR.
In addition, increasingly there have been instances where financial institutions have been victims of fraudulent activity in which criminals pose as customers to initiate wire and automated clearinghouse transactions out of customer accounts. Although we have policies and procedures in place to verify the authenticity of our customers, we cannot assure that such policies and procedures will prevent all fraudulent transfers. Such activity can result in financial liability and harm to our reputation.
There can be no assurance that we will not suffer such cyber-attacks or other information security breaches or attempted breaches, or incur resulting losses in the future. Our risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats, and our plans to continue to implement internet and mobile banking capabilities to meet customer demand. As cyber and other data security threats continue to evolve, we may be required to expend significant additional resources to continue to modify and enhance its protective measures or to investigate and remediate any security vulnerabilities.
We maintain an allowance for credit losses that we believe is a reasonable estimate of knownexpected and inherent losses within the loan portfolio. We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of loans. Through a periodic review and consideration of the loan portfolio, management determines the amount of the allowance for credit losses by considering general market conditions, the credit quality of the loan portfolio, the collateral supporting the loans and the performance of customers relative to their financial obligations with us. However, every loan we make carries a risk of non-payment. This risk is affected by, among other things, cash flow of the borrower and/or the project being financed, changes and uncertainties as to the future value of the collateral securing such loan, the credit history of the particular borrower, changes in economic and industry conditions, and the duration of the loan.
On June 16, 2016, the FASB issued Accounting Standard Update ("ASU") 2016-13 "Financial Instruments - Credit Losses", which replaces the incurred loss model with an expected loss model, and is referred to as the current expected credit loss (or "CECL") model. Under the incurred loss model, loans were recognized as impaired when there was no longer an assumption that future cash flows would be collected in full under the originally contracted terms. Under the CECL model, financial institutions are required to use historical information, current conditions and reasonable forecasts to estimate the expected loss over the life of the loan. The transition to the CECL model requires significantly greater data requirements and changes to methodologies to accurately account for expected losses under the new parameters. If the methodologies and assumptions that we use in the CECL model are proven to be incorrect, or inadequate, the allowance for credit losses may not be sufficient, resulting in the need for additional allowance for credit losses to be established, which could have a material adverse impact on our financial condition and results of operations. The Company adopted ASU 2016-13 effective January 1, 2023 and, upon adoption, recognized a one-time cumulative effect adjustment (increase) to the retained earnings uponin adoptionthe amount of $6,069 in the first quarter of 2023 of $6,069.2023.
We have completed various acquisitions of other financial institutions and branches and assets of other financial institutions in the past, including our recent acquisition of FSB. In the future, we may acquire other financial institutions or branches or assets of other financial institutions. We may also open new branches, enter into new lines of business, or offer new products or services. Any future acquisition or expansion of our business, will involve a number of expenses and risks, which may include some or all of the following:
In addition, we may fail to realize the anticipated benefits and synergies expected from the FSB acquisition and future acquisitions, which could adversely affect our business, financial condition and results of operations. The success of the FSB acquisition and any future acquisitions will depend, in significant part, on our ability to successfully integrate the acquired business, grow our revenue and realize the anticipated strategic benefits and synergies from the combination. However, achieving these goals requires, among other things, realization of targeted cost synergies. This growth and the anticipated benefits of the transaction may not be realized fully, or at all, or may take longer to realize than expected. Actual operating, strategic and revenue opportunities, if achieved at all, may be less significant than expected or may take longer to achieve than anticipated. If we are not able to achieve these objectives and realize the anticipated benefits and synergies expected from the FSB acquisition and any future acquisitions within the anticipated timing or at all, our business, financial condition and results of operations may be adversely affected.
We may also incur substantial costs to expand, and we can give no assurance that such expansion will result in the levels of profits we expect. Neither can we assure that integration efforts for any future acquisitions will be successful. We may issue equity securities in connection with acquisitions, which could dilute the economic and voting interests of our existing shareholders.
If we do not appropriately maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, we may be unable to accurately report our financial results and the market price of our securities may be adversely affected.
We are subject to reporting obligations under the U.S. securities laws. The SEC, as required under Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include a management report on such company’s internal control over financial reporting in its annual report, which contains management’s assessment of the effectiveness of the company’s internal control over financial reporting. Such internal controls are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
During 2024 and 2025, we made the decision to make greater investments in our finance department, which included the hiring of a Chief Financial Officer. During that period, we experienced turnover in our accounting and financial reporting staff and function, which was addressed by making further investments in talent. We continued to integrate our more recent acquisition such as CLF, a division of Civista Bank, which we acquired in the fourth quarter of 2022. During 2025, we implemented a conversion of CLF’s legacy software system to a new core operating system, which resulted in the recognition of certain one-time nonrecurring items in our financial statements for the second quarter of 2025. As we continue to grow our business, implement our strategic plan and integrate any businesses we acquire, such as FSB, we may continue to seek to enhance our talent, policies and procedures across the Company, which may result in changes to and enhancements and remediation of certain of our internal controls, including our internal control over financial reporting. If we fail to maintain effective internal control over financial reporting in the future, our management and our independent registered public accounting firm may not be able to conclude that we have effective internal control over financial reporting at a reasonable assurance level. Similarly, if any material weaknesses in the Company’s internal controls are identified in the future and are not fully remediated, those material weaknesses could cause the Company to be unable to accurately report its financial results, reduce the market’s confidence in its financial statements, negatively impact the trading price of our securities and subject the Company to sanctions or investigations by the SEC or other regulatory authorities. In addition, the Company’s common shares may not be able to remain quoted on The Nasdaq Capital Market or any other securities quotation service or exchange.
As of December 31, 2025, management concluded that the Company maintained effective internal controls over financial reporting and that no material weaknesses were identified.
The DIF maintained by the FDIC to resolve bank failures is funded by fees assessed on insured depository institutions. The costs of resolving bank failures following the 2007-2009 financial crisis and the 2023 failures of Silicon Valley Bank and Signature Bank increased for a period of time and decreased the DIF. The FDIC collected a special assessment infollowing 2009those events to replenish the DIF and also required a prepayment of an estimated amount of future deposit insurance premiums. If the costs of future bank failures increase, the deposit insurance premiums required to be paid by Civista may also increase. The FDIC recently adopted rules revising its assessments in a manner benefiting banks with assets totaling less than $10 billion. There can be no assurance, however, that assessments will not be changed in the future.
Management's Discussion & Analysis (MD&A)
Largest changes
Uninsured deposits at December 31,see in full comparison20242025 and20232024 were$431,713$647,472 and$499,429,$431,713, respectively. The increase in uninsured deposits that was related to the FSB acquisition was $69,000. Uninsured deposits as of December 31,20242025 and20232024 are based on estimates and include portions of FDIC-insured deposit accounts that exceed the insurance limit of$250,000$250 per separately insured depositor. Management actively monitors uninsured deposit levels and customer concentrations and believes existing liquidity sources, including on-balance sheet liquidity and contingent funding arrangements, are sufficient to manage potential volatility.
Goodwillsee in full comparisonremainedincreasedunchanged$4,918 from December 31,20232024 to $130,438 at December 31,20242025.atThe$125,520.increase in Goodwill was related to the FSB acquisition. Other intangible assetsdecreasedincreased$1,625$5,217 from year-end2023.2024. Thedecreaseincreaseincludesin$1,484other intangibles was mainly the result of adding $6,975 in core deposit intangible from the FSB acquisition, partially offset by $1,564 of amortization on core deposit intangibles and a decrease of$141$194 of mortgage servicing rights. See Note 2 to the Consolidated Financial Statements for additional details related the FSB acquisition.
Year-end deposit balances totaledsee in full comparison$3,211,870$3,466,464 in20242025 compared to$2,985,028$3,211,870 in2023,2024, an increase of$226,842,$254,594, or7.6%.7.9%. This increase in deposits at December 31,20242025 compared to December 31,20232024includedincludes the November 2025 acquisition of FSB that added approximately $236,096 in total deposits. Year-over-year increasesininclude savings and money market accounts of$289,172,$107,619, or33.5%, and9.5%, certificate of deposit accounts of$44,085,$257,340, or5.1%,54.8%, and non-interest bearing demand accounts of $6,918, or 1.0%, partially offset by decreases innoninterest bearing demand deposits of $76,605, or 9.9% andinterest bearing demand accounts of$29,866$19,180, or6.6%.4.6%, and brokered deposits of $98,123, or 19.6%. Average deposit balances for20242025 were$3,086,961$3,265,754 compared to$2,852,037$3,086,961 for2023,2024, an increase of8.2%.5.8%.NoninterestSavingsbearinganddepositsdemand accounts averaged$701,397$1,021,670 for 2025 compared to $959,276 for 2024,comparedincreasingto $917,005 for 2023, decreasing $215,608,$144,143, or23.5%, which is10.1%, primarily due totheincreasesclosureinofretail,ourpublicformer tax refund processing program. Savings, NOW,funds, andMMDAbusinessaccountsmoneyaveragedmarket$1,000,865 for 2024 compared to $855,946 for 2023, increasing $144,919, or 16.9%, primarily due to deposits associated with the Ohio Home Buyers Program.deposits. Average certificates of deposit increased$381,033$62,394 to total an average balance of$959,276$1,021,670 for2024.2025 primarily resulting from competitive rate strategy retaining and growing the certificates of deposit portfolio.
Total interest expensesee in full comparisonincreaseddecreased$32,747,$7,583, or57.2%,8.4%, to$89,985$82,402 for the year ended December 31,2024,2025, compared to$57,238$89,985 for the same period in2023.2024. Theincreasedecrease in interest expensecanwasbemainlyattributedattributable toan101-basis point reduction in higher costing short-term FHLB borrowings coupled with a 55-basis point decrease in time deposits, that more than offset the increase intheaveragerate paid, accompanied by an increase in the average balance ofinterest-bearing liabilities. For the year ended December 31,2024,2025, the average balance of interest-bearing liabilities increased$435,723$157,968 to$2,841,378,$2,999,346, as compared to$2,405,655$2,841,378 for the year ended December 31,2023.2024. Interest incurred on depositsincreaseddecreased by$32,046$1,607 to$65,801$64,194 for the year ended December 31,2024,2025, compared to$33,755$65,801 for the same period in2023.2024. Theincreasedecrease in deposit expense was due to aincreasedecrease in the average rate paid, as the average rate paid on demand and savings accountsincreaseddecreased from0.57% in 2023 to1.53% in 2024 to 1.46% in 2025 and the average rate paid on time depositsincreaseddecreased from4.51% in 2023 to4.58% in2024,2024 to 4.03% in 2025, whichwasmorecoupledthanwithoffsetanthe increase in the average balance of interest-bearing deposits of$450,532$206,537 for the year ended December 31,20242025 as compared to the same period in2023.2024. Interest expense incurred on FHLB advancesanddecreasedsubordinated debentures increased 20.7%29.6% from2023.2024Theasincreaserateswashaveduefallentoinan2025increaseresulting in a 101-basis point reduction in the FHLB borrowing costs coupled with a $45,354 decrease in the average balance of short-term FHLBbalancesborrowingsandforsubordinatedthedebenturesyear ended December 31, 2025 as compared to$341,692theandsame$104,017, respectively, accompanied by an increaseperiod inrates.2024.
The increase insee in full comparisoncompensationotherexpenseoperatingwasexpensesdueisto increased payroll and payroll taxes, both related to merit increases, and an increase in employee insurance. The average full time equivalent ("FTE") employees was 531 at December 31, 2024, relatively flat from 2023. Software expense increased due to a general increase in legacy software maintenance contracts as well as new software contracts aimed at improving our ability to detect, deter, and mitigate fraud and fraud related losses. The increase in FDIC assessments wasmainly attributable tohighertheassessmentaforementionedmultipliersnon-recurringcharged to Civista.adjustments. The increase in professional services was mainly due to utilizing consultantsastowe transitionedassist inourtransitioning CLF to its newfinancecoreteamprocessing system that was completed in the second quarter of 2025. The decrease in compensation expense was due toseveralantenured employee departuresincrease in2024.the deferral of salaries and wages related to loan originations in 2025. The decrease in equipment expense was related to operating lease contracts, as our CLF division continues to originate fewer operating leases coupled with purchasing residual value insurance on those operating leases with a goal of eventually eliminating depreciation expense related to operatingleases.leases, as well as $737 in depreciation expense recorded to write down the net book value of certain assets identified as no longer in use.
Interest on taxable securities increasedsee in full comparison$921$2,327 to$12,639$14,966 for the year ended December 31,2024,2025, compared to$11,718$12,639 for the same period in2023.2024. The average balance of taxable securitiesdecreasedincreased$6,717$45,930 to $403,185 for the year ended December 31, 2025, as compared to $357,255 for the year ended December 31,2024,2024.asThe yield on taxable securities increased 24 basis points to 3.42% for 2025, compared to$363,9723.18% for 2024. Interest on tax-exempt securities decreased $140 to $9,333 for the year ended December 31,2023. The yield on taxable securities increased 30 basis points to 3.18% for 2024,2025, compared to2.88%$9,473 for2023.theInterestsameonperiod in 2024. The average balance of tax-exempt securitiesincreaseddecreased$191$10,855 to$9,473$280,978 for the year ended December 31,2024,2025 as comparedto $9,282 for the same period in 2023. The average balance of tax-exempt securities increased $9,155to $291,833 for the year ended December 31,2024 as compared to $282,678 for the year ended December 31, 2023.2024. The yield on tax-exempt securities increased62 basis points to3.85%3.87% for20242025 compared to3.79%3.85% for2023.2024.
Full comparison: every changed paragraph (40)
The Company operates as a single reportable segment. The Chief Financial Officer, who serves as the Company's chief operating decision maker ("CODM"), evaluates financial performance and allocates resources on a consolidated basis.
Acquisition of The Farmers Savings Bank ("FSB")
At the close of business on November 6, 2025, the Company closed the previously announced acquisition of FSB. The acquisition added approximately $268.1 million of total assets, $106.2 million of total loans and leases, $236.1 million of total deposits, and two branches. The 2025 results reflect inclusion of FSB since November 7, 2025.
Upon the closing of the acquisition, FSB was merged with and into Civista Bank. In addition, the management and organization structure was updated to reflect the combined organization. On-boarding of former FSB colleagues and their initial training remain ongoing. Certain of Civista's products and services are being introduced across the legacy FSB customer base, and customer-facing colleagues are focused on both growing and retaining customers. Technology conversions were completed in mid-February 2026, subsequent to year-end, and did not impact the Company's December 31, 2025 financial statements.
Offering of Common Shares
On July 10, 2025, CBI announced an underwritten public offering of up to a maximum of 3,788,238 of its common shares. CBI subsequently closed on the sale of 3,294,120 common shares on July 14, 2025, and the sale of an additional 494,118 common shares on July 16, 2025 pursuant to the underwriters' exercise of their overallotment option, at the public offering price of $21.25 per share. The aggregate net proceeds from the offering were approximately $75.7 million, after deducting $608 of direct expenses and the underwriting discount of $4.2 million. The net proceeds from the offering were initially used to pay-down short-term FHLB advances, but the long-term strategic plan is to use the net proceeds for general corporate purposes, which may include supporting organic growth opportunities and future strategic transactions.
At December 31, 2024,2025, the Company’s total assets were $4,098,469,$4,336,453, compared to $3,861,418$4,098,469 at December 31, 2023.2024. Net loans and leases (sometimes referred to herein as "net loans") and securities available for sale increased $216,993$186,465 and $29,795$33,841 from December 31, 2023,2024, to December 31, 2024,2025, respectively. Other factors contributing to the change in assets are discussed in the following sections.
Loans held for sale decreasedincreased $1,060,$6,515, from $1,725 at December 31, 2023 to $665 at December 31, 2024.2024 to $7,180 at December 31, 2025. The decreaseincrease is due to lowerhigher balancesloan oforigination held loans.activity. At December 31, 2024,2025, six27 loans totaling $665$7,180 were held for sale as compared to ninesix loans totaling $1,725$665 at December 31, 2023.2024.
At December 31, 2024,2025, the Company’s net loans totaled $3,041,561$3,228,026 and increased by 7.7%6.1% from $2,824,568$3,041,561 at December 31, 2023.2024. TheExcluding increase inthe net loans wasacquired spreadof across$104.2 mostmillion segments.from Commercialthe &FSB Agricultureacquisition, net loans increased $23,695,$82.3 million in 2025. Commercial Real Estate - Owner Occupied loans increased $11,180, Commercial Real Estate - Non-Owner Occupied loans increased $64,097,$24,975, Residential Real Estate loans increased $104,028,$168,510, andFarm Real Estate Constructionloans increased $14,740, and Consumer and Other loans increased $45,583.$21,859. The increases in the foregoing loan segments were partially offset by decreases of $17,901$52,448 in total for the remaining loan segments.
Securities available for sale increased by $29,795,$33,841, or 4.8%,5.2%, from $618,272 at December 31, 2023 to $648,067 at December 31, 2024.2024 to $681,908 at December 31, 2025. Mortgage-backed securities increased $70,532, or 31.3%, from $225,561 at December 31, 2024 to $296,093 at December 31, 2025. U.S. Treasury securities and obligations of U.S. government agencies increaseddecreased $29,729,$36,370, or 43.9%37.3% from $67,658 at December 31, 2023 to $97,387 at December 31, 2024.2024 Mortgage-backedto securities increased $13,546, or 6.4%, from $212,015$61,017 at December 31, 2023 to $225,561 at December 31, 2024.2025. Obligations of states and political subdivisions available for sale decreasedremained byrelative $13,480flat fromat 2023$324,798 toat 2024.December 31, 2025. The Company continues to utilize letters of credit from the Federal Home Loan Bank ("FHLB") to replace maturing securities that were pledged for public entities. As of December 31, 2024,2025, the Company was in compliance with all applicable pledging requirements.
Premises and equipment, net of accumulated depreciation, decreased $9,603$6,555 from December 31, 20232024 to December 31, 2024.2025. The decrease iswas the result of depreciation of $9,545$8,315 and net disposals exceeding new purchases by $58.$233, partially offset by the acquisition of $1,993 of premises and equipment in the FSB acquisition.
Goodwill remainedincreased unchanged$4,918 from December 31, 20232024 to $130,438 at December 31, 20242025. atThe $125,520.increase in Goodwill was related to the FSB acquisition. Other intangible assets decreasedincreased $1,625$5,217 from year-end 2023.2024. The decreaseincrease includesin $1,484other intangibles was mainly the result of adding $6,975 in core deposit intangible from the FSB acquisition, partially offset by $1,564 of amortization on core deposit intangibles and a decrease of $141$194 of mortgage servicing rights. See Note 2 to the Consolidated Financial Statements for additional details related the FSB acquisition.
Swap assets decreased $7,173$1,814 from December 31, 20232024 to December 31, 2024.2025. The decrease iswas primarily the result of $6,330$2,180 in cash collateral posted by counterparties at December 31, 20242025 that is netted against the fair value of the swap asset.
Bank owned life insurance ("BOLI") increased $1,448$370 from December 31, 20232024 to December 31, 2024.2025, Theas difference is thea result of increases in the cash surrender value of the underlying insurance policies partially offset byand death benefits on life insurance policies in 2024 held on two former employees.employees of $1,373 compared to death benefits of $1,193 in 2025 held on one former employee.
Year-end deposit balances totaled $3,211,870$3,466,464 in 20242025 compared to $2,985,028$3,211,870 in 2023,2024, an increase of $226,842,$254,594, or 7.6%.7.9%. This increase in deposits at December 31, 20242025 compared to December 31, 20232024 includedincludes the November 2025 acquisition of FSB that added approximately $236,096 in total deposits. Year-over-year increases ininclude savings and money market accounts of $289,172,$107,619, or 33.5%, and9.5%, certificate of deposit accounts of $44,085,$257,340, or 5.1%,54.8%, and non-interest bearing demand accounts of $6,918, or 1.0%, partially offset by decreases in noninterest bearing demand deposits of $76,605, or 9.9% and interest bearing demand accounts of $29,866$19,180, or 6.6%.4.6%, and brokered deposits of $98,123, or 19.6%. Average deposit balances for 20242025 were $3,086,961$3,265,754 compared to $2,852,037$3,086,961 for 2023,2024, an increase of 8.2%.5.8%. NoninterestSavings bearingand depositsdemand accounts averaged $701,397$1,021,670 for 2025 compared to $959,276 for 2024, comparedincreasing to $917,005 for 2023, decreasing $215,608,$144,143, or 23.5%, which is10.1%, primarily due to theincreases closurein ofretail, ourpublic former tax refund processing program. Savings, NOW,funds, and MMDAbusiness accountsmoney averagedmarket $1,000,865 for 2024 compared to $855,946 for 2023, increasing $144,919, or 16.9%, primarily due to deposits associated with the Ohio Home Buyers Program.deposits. Average certificates of deposit increased $381,033$62,394 to total an average balance of $959,276$1,021,670 for 2024.2025 primarily resulting from competitive rate strategy retaining and growing the certificates of deposit portfolio.
Uninsured deposits at December 31, 20242025 and 20232024 were $431,713$647,472 and $499,429,$431,713, respectively. The increase in uninsured deposits that was related to the FSB acquisition was $69,000. Uninsured deposits as of December 31, 20242025 and 20232024 are based on estimates and include portions of FDIC-insured deposit accounts that exceed the insurance limit of $250,000$250 per separately insured depositor. Management actively monitors uninsured deposit levels and customer concentrations and believes existing liquidity sources, including on-balance sheet liquidity and contingent funding arrangements, are sufficient to manage potential volatility.
Civista no longer offers repurchase agreements in the form of sweep accounts to commercial checking account customers, as of July 2023. These repurchase agreements totaled $0 at December 31, 2024 compared to $0 at December 31, 2023 and $25,143 at December 31, 2022. U.S. Treasury securities and obligations of U.S. government agencies maintained under Civista’s control were pledged as collateral for the repurchase agreements.
Swap liabilities decreased $843$5,890 from December 31, 20232024 to December 31, 2024.2025. The decrease iswas primarily the result of decreases in the fair value of swap liabilities as compared to December 31, 2023.2024.
Total shareholders’ equity increased $16,500,$154,972, or 4.4%,39.9%, during 20242025 to $388,502.$543,474. Shareholders' equity increased due to net income of $31,683,$46,212 coupled with $75,666 from the capital raise completed in the third quarter of 2025 and $31,214 from the issuance of common shares in the fourth quarter of 2025 in connection with the FSB acquisition, partially offset by $10,063$11,836 of dividends on common shares and $164$178 of repurchases of common shares as treasury shares. Additionally, $871$852 was recognized as stock-based compensation in 20242025 in connection with the grant of restricted common shares. Accumulated other comprehensive loss decreased $5,827by $13,042 due to aan decreaseincrease in the fair value of securities available for sale, net of tax. For further explanation of these items, see Note 1, Note 2, Note 15 and Note 16 to the Consolidated Financial Statements. The Company paid $0.68 per common share in dividends in 2025 compared to $0.64 per common share in dividends in 2024 compared to $0.61 per common share in dividends in 2023.2024.
Total outstanding common shares at December 31, 20242025 were 15,487,667,20,746,474, which increased from 15,695,42415,487,667 common shares outstanding at December 31, 2023.2024. Common shares outstanding mainly increased due to the issuance of 3,788,238 common shares in the capital raise and the issuance of 1,434,473 common shares in connection with the FSB acquisition. Common shares outstanding was also impacted by the Company’s repurchase of 8,9568,716 common shares during 20242025 at an average repurchase price of $18.31.$20.36. The Company repurchased 8,2628,182 common shares pursuant to its stock repurchase program announced on MayApril 8,15, 2023,2025, pursuant to which the Company is authorized to repurchase a maximum aggregate value of $13,500 of the Company’s common shares until MayApril 2,16, 2024.2026. An additional 694534 common shares were surrendered by officers to the Company to pay taxes upon vesting of restricted shares and 1,5185,045 restricted common shares previously issued to officers were forfeited and 250,148 restricted shares issued as contingent consideration in the VFG acquisition were forfeited, as the measurement period expired and required lease thresholds were not met.forfeited. The repurchase of common shares was offset by the grant of 42,23939,587 restricted common shares to certain officers in 20242025 under the Company’s 20142024 Incentive Plan. In addition, 10,62610,270 common shares were issued to Civista directors in 20242025 as a retainer payment for service on the Civista Board of Directors.
Net interest income for 20242025 was $116,710,$138,583, aan decreaseincrease of $8,786,$21,873, or 7.0%,18.7%, from 2023.2024. From 20232024 to 2024,2025, average interest-earning assets increased $263,582,$198,769, which increased interest income by $23,961,$14,290, while average interest-bearing liabilities increased $435,723,$157,968, whichbut increaseddecreased interest expense by $32,747.$7,583. The decrease in interest expense is mainly attributable to 101-basis point reduction in higher costing short-term FHLB borrowings coupled with a 55-basis point decrease in time deposits, that more than offset the increase in average interest-bearing liabilities. The Company continually examines its rate structure to ensure that its interest rates are competitive and reflective of the current rate environment in which it competes. Net interest income was also favorably impacted by $1.6 million of non-recurring adjustments in the second quarter of 2025 resulting from the CLF core system conversion.
Total interest income increased $23,961$14,290 to $206,695$220,985 for the year ended December 31, 2024,2025, which was attributable to an increase of $22,823$11,891 in interest and fees on loans. This change was the result of an increase in the average balance of loans, accompanied by a higher yield on the loan portfolio. The average balance of loans increased by $262,115,$155,545, or 9.6%,5.2%, to $3,140,457 for the year ended December 31, 2025, as compared to $2,984,912 for the year ended December 31, 2024, as compared to $2,722,797 for the year ended December 31, 2023.2024. The loan yield increased to 6.15%6.22% for 2024,2025, from 5.90%6.15% in 2023.2024.
Interest on taxable securities increased $921$2,327 to $12,639$14,966 for the year ended December 31, 2024,2025, compared to $11,718$12,639 for the same period in 2023.2024. The average balance of taxable securities decreasedincreased $6,717$45,930 to $403,185 for the year ended December 31, 2025, as compared to $357,255 for the year ended December 31, 2024,2024. asThe yield on taxable securities increased 24 basis points to 3.42% for 2025, compared to $363,9723.18% for 2024. Interest on tax-exempt securities decreased $140 to $9,333 for the year ended December 31, 2023. The yield on taxable securities increased 30 basis points to 3.18% for 2024,2025, compared to 2.88%$9,473 for 2023.the Interestsame onperiod in 2024. The average balance of tax-exempt securities increaseddecreased $191$10,855 to $9,473$280,978 for the year ended December 31, 2024,2025 as compared to $9,282 for the same period in 2023. The average balance of tax-exempt securities increased $9,155 to $291,833 for the year ended December 31, 2024 as compared to $282,678 for the year ended December 31, 2023.2024. The yield on tax-exempt securities increased 62 basis points to 3.85%3.87% for 20242025 compared to 3.79%3.85% for 2023.2024.
Total interest expense increaseddecreased $32,747,$7,583, or 57.2%,8.4%, to $89,985$82,402 for the year ended December 31, 2024,2025, compared to $57,238$89,985 for the same period in 2023.2024. The increasedecrease in interest expense canwas bemainly attributedattributable to an101-basis point reduction in higher costing short-term FHLB borrowings coupled with a 55-basis point decrease in time deposits, that more than offset the increase in the average rate paid, accompanied by an increase in the average balance of interest-bearing liabilities. For the year ended December 31, 2024,2025, the average balance of interest-bearing liabilities increased $435,723$157,968 to $2,841,378,$2,999,346, as compared to $2,405,655$2,841,378 for the year ended December 31, 2023.2024. Interest incurred on deposits increaseddecreased by $32,046$1,607 to $65,801$64,194 for the year ended December 31, 2024,2025, compared to $33,755$65,801 for the same period in 2023.2024. The increasedecrease in deposit expense was due to a increasedecrease in the average rate paid, as the average rate paid on demand and savings accounts increaseddecreased from 0.57% in 2023 to 1.53% in 2024 to 1.46% in 2025 and the average rate paid on time deposits increaseddecreased from 4.51% in 2023 to 4.58% in 2024,2024 to 4.03% in 2025, which wasmore coupledthan withoffset anthe increase in the average balance of interest-bearing deposits of $450,532$206,537 for the year ended December 31, 20242025 as compared to the same period in 2023.2024. Interest expense incurred on FHLB advances anddecreased subordinated debentures increased 20.7%29.6% from 2023.2024 Theas increaserates washave duefallen toin an2025 increaseresulting in a 101-basis point reduction in the FHLB borrowing costs coupled with a $45,354 decrease in the average balance of short-term FHLB balancesborrowings andfor subordinatedthe debenturesyear ended December 31, 2025 as compared to $341,692the andsame $104,017, respectively, accompanied by an increaseperiod in rates.2024.
Provisions for credit losses totaled $3,377 in 2025, $5,364 in 2024 and $4,435 in 2023. The Company’s provision for credit losses decreased $1,987 during 2025, as compared to 2024. During 2025, the Company experienced lower net charge offs than in 2024, raised capital in the third quarter that allowed the Company to lower certain Q factor risks and saw improvement in prepayment and curtailment rates in some loan categories as well as improvement in the annual loss driver updates that are performed as part of its ongoing model governance process. The annual updated analysis resulted in changes to certain model assumptions and inputs, which reduced the allowance for credit losses, thus lowering the provision for credit losses. Management believes the revised methodology better reflects the current risk characteristics of the loan portfolio.
Provisions for credit losses totaled $5,364 in 2024, $4,435 in 2023 and $1,752 in 2022. The Company’s provision for credit losses increased $929 during 2024, as compared to 2023, primarily to support organic loan growth in the portfolio.
Efforts are continually made to analyze each segment of the loan portfolio and quantify risk to assure that reserves are appropriate for each segment and the overall portfolio. Management specifically evaluates loans that are indivduallyindividually evaluated, which includes restructured loans, to estimate potential loss. This analysis includes a review of the loss migration calculation for all loan categories as well as fluctuations and trends in various risk factors that have occurred within the portfolios’ economic life cycle. The analysis also includes assessment of qualitative factors such as credit trends, unemployment trends, vacancy trends and loan growth. The composition and overall level of the loan portfolio and charge-off activity are also factors used to determine the amount of the allowance for credit losses.
Noninterest income increaseddecreased $585,$3,781, or 1.6%,10.0%, to $37,748$33,967 for the year ended December 31, 2024,2025, from $37,163$37,748 for the comparable 20232024 period. The increasedecrease was primarily due to increasesdecreases in net gain on sale of loans and leases of $1,530, lease revenue and residual income of $1,316,$3,037, other income of $883, and bank owned life insurance of $1,093 and wealth management fees of $752,$370, which were partiallyslightly offset by decreasesan increase in service charges of $1,092$347. andFor the discontinuationtwelve months ended December 31, 2025, noninterest income was reduced $1,000 from non-recurring adjustments resulting from the CLF core system conversion that occurred in the second quarter of the tax refund processing center.2025.
Lease revenue and residual income decreased by $3,037 due to stronger lease originations in 2024 mainly due to leasing originations being strategically curtailed in 2025 resulting from the CLF core system conversion coupled with the one-time non-recurring adjustment aforementioned above. Other income decreased by $883 primarily related to lower fee revenue from CLF. Bank owned life insurance decreased by $370 mainly due to the receipt of death benefits on life insurance policies on two former employees in the amount of $699 in 2024. Service charges increased by $347 primarily attributable to an increase in retail overdraft fees.
Net gain on sale of loans and leases increased by $1,530 for 2024, primarily as a result of an increase in volume of loans sold. During the twelve-months ended December 31, 2024, 530 loans were sold, totaling $123,670. During the twelve-months ended December 31, 2023, 349 loans were sold, totaling $103,036. Lease revenue and residual income increased due to higher income from leasing operations at CLF. Bank owned life insurance increased by $1,093, primarily due to the receipt of death benefits on life insurance policies on two former employees in the amount of $699. Service charges decreased by $1,092 as the Company eliminated its representment fee and reduced overdraft charges.
Noninterest expense increased $4,909,$1,418, or 4.6%,1.3%, to $112,520$113,938 for the year ended December 31, 2024,2025, from $107,611$112,520 for the comparable 20232024 period. The increase was primarily due to increases in compensationother expenseoperating expenses of $3,530,$4,109 FDICand assessmentsprofessional fees of $994,$801, professional services of $827 and software expense of $777, partiallymostly offset by decreases in compensation expense of $3,080 and equipment expense of $1,532.$1,448. For the twelve months ended December 31, 2025, noninterest expense was increased by $3,782 of non-recurring adjustments related to acquisition expenses from the FSB acquisition and the CLF core system conversion.
The increase in compensationother expenseoperating wasexpenses dueis to increased payroll and payroll taxes, both related to merit increases, and an increase in employee insurance. The average full time equivalent ("FTE") employees was 531 at December 31, 2024, relatively flat from 2023. Software expense increased due to a general increase in legacy software maintenance contracts as well as new software contracts aimed at improving our ability to detect, deter, and mitigate fraud and fraud related losses. The increase in FDIC assessments wasmainly attributable to higherthe assessmentaforementioned multipliersnon-recurring charged to Civista.adjustments. The increase in professional services was mainly due to utilizing consultants asto we transitionedassist in ourtransitioning CLF to its new financecore teamprocessing system that was completed in the second quarter of 2025. The decrease in compensation expense was due to severalan tenured employee departuresincrease in 2024.the deferral of salaries and wages related to loan originations in 2025. The decrease in equipment expense was related to operating lease contracts, as our CLF division continues to originate fewer operating leases coupled with purchasing residual value insurance on those operating leases with a goal of eventually eliminating depreciation expense related to operating leases.leases, as well as $737 in depreciation expense recorded to write down the net book value of certain assets identified as no longer in use.
Income tax expense was $4,891$9,023 in 20242025 compared to $7,649$4,891 in 2023.2024. Income tax expense as a percentage of pre-tax income was 13.4%16.3% in 20242025 compared to 15.1%13.4% in 2023.2024. The increase in the effective tax rate for 2025 is mainly due to pretax income outpacing the change in permanent differences in 2025, thus creating more taxable income at the statutory tax rate of 21%, therefore, increasing the Company's effective tax rate. A lower federal effective tax rate than the statutory rate of 21% in 20242025 and 20232024 is primarily due to tax-exempt interest income from state and municipal investments, municipal loans, income from BOLI and low income housing tax credits.
Comparison of Results of Operations for the Years Ended December 31, 20232024 and December 31, 20222023 A discussion regarding our financial condition and results of operations for the year ended December 31, 20232024 and year-to-year comparisons between 20232024 and 2022,2023, which are not included in this Annual Report on Form 10-K, can be found under "Management'sITEM Discussion7. andMANAGEMENT'S AnalysisDISCUSSION ofAND FinancialANALYSIS ConditionOF andFINANCIAL ResultsCONDITION ofAND OperationsRESULTS OF OPERATIONS" in Part II, Item 7II of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 20232024 and are incorporated by reference herein.
Net cash provided by operating activities was $48,246,$43,273, $48,246 and $62,698 and $25,183 for 2024,2025, 20232024 and 2022,2023, respectively. The primary additions to cash from operating activities are from net income, adjusted for amortization of intangible assets, amortization of securities net of accretion, the provision for credit losses, depreciation and proceeds from sale of loans. The primary use of cash from operating activities is from loans originated for sale. Net cash provided by (used for) investing activities was $258,801,$55,591, $311,784$(258,801) and $410,364$(311,784) in 2024,2025, 20232024 and 2022,2023, respectively, principally reflecting our loan and investment security activities.activities Deposits,in all periods and net cash received from the FSB acquisition in 2025. Change in deposits and borrowings, andas well as cash dividends paid to shareholders' comprised most of our financing activities, which resulted in net cash (used) provided of $213,304,$(84,699), $213,304 and $266,131 and $164,303 in 2024,2025, 20232024 and 2022,2023, respectively.
Future loan demand of Civista can be funded by increases in deposit accounts, proceeds from payments on existing loans, the maturity of securities and the sale of securities classified as available for sale. Additional sources of funds may also come from borrowing in the Federal Funds market and/or borrowing from the FHLB. As of December 31, 2024,2025, Civista had total credit availabilitycapacity with the FHLB of $839,034,$1,004,533, of which $370,133$695,978 was available.
On a separate entity basis, CBI’s primary source of funds is dividends paid by its subsidiaries, primarily by Civista. Generally, subject to applicable minimum capital requirements, Civista may declare and pay a dividend without the approval of the Federal Reserve Bank of Cleveland (the “Federal Reserve Bank”) and the ODFI, provided the total dividends in a calendar year do not exceed the total of its profits for that year combined with its retained profits for the two preceding years. At December 31, 2024,2025, Civista washad able$31,647 of net profits available to pay approximately $51,007 of dividends to CBI without obtainingrequiring regulatory approval. During 2024, Civista paid dividends totaling $20,300 to CBI. This represented approximately 57 percent of Civista’s earnings for the year.
Shareholders’ equity totaled $543,474 at December 31, 2025 compared to $388,502 at December 31, 2024. The increase in shareholders' equity resulted from net income of $46,212 coupled with $75,666 from the capital raise completed in the third quarter of 2025 and $31,214 from the issuance of common shares in the fourth quarter of 2025 in connection with the FSB acquisition, partially offset by $11,836 of dividends on common shares and $178 of repurchases of common shares as treasury shares. Additionally, $852 was recognized as stock-based compensation in 2025 in connection with the grant of restricted common shares. Accumulated other comprehensive loss decreased by $13,042 due to an increase in the fair value of securities available for sale, net of tax.
Shareholders’ equity totaled $388,502 at December 31, 2024 compared to $372,002 at December 31, 2023. The increase in shareholders’ equity resulted primarily from net income of $31,683, which was partially offset by dividends on common shares of $10,063 and a decrease in the fair value of securities available for sale, net of tax, of $5,827.
The BASEL III regulatory capital rules and regulations also place restrictions on the payment of capital distributions, including dividends, and certain discretionary bonus payments to executive officers if the company does not hold a capital conservation buffer of at least 2.5 percent2.5% composed of CET1 capital above its minimum risk-based capital requirements, or if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5 percent2.5% at the beginning of the quarter.
What changed in the latest 10-Q
Risk Factors
There were no material changes during the current period to the risk factors previously disclosed under “Item 1A. Risk Factors” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as supplemented by the disclosures under "Item 1A. Risk Factors" of Part II of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026.
Largest changes
“Our success depends to a significant extent upon local and national economic and political conditions, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling and/or possible future U.S. government shutdowns over budget disagreements, slowing gross domestic product, threatened or imposed tariffs, a U.S. …”see in full comparison
see in full comparisonTheTheredisclosurewerebelownosupplementsmaterialandchangesupdatesduring the current period to the risk factors previously disclosed under “Item 1A. Risk Factors” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,2025.2025, as supplemented by the disclosures under "Item 1A. Risk Factors" of Part II of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026.
“CHANGES IN ECONOMIC AND POLITICAL CONDITIONS COULD ADVERSELY AFFECT OUR EARNINGS THROUGH DECLINES IN DEPOSITS, LOAN DEMAND, THE ABILITY OF OUR CUSTOMERS TO REPAY LOANS AND THE VALUE OF THE COLLATERAL SECURING OUR LOANS.”see in full comparison
Full comparison: every changed paragraph (3)
TheThere disclosurewere belowno supplementsmaterial andchanges updatesduring the current period to the risk factors previously disclosed under “Item 1A. Risk Factors” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.2025, as supplemented by the disclosures under "Item 1A. Risk Factors" of Part II of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026.
CHANGES IN ECONOMIC AND POLITICAL CONDITIONS COULD ADVERSELY AFFECT OUR EARNINGS THROUGH DECLINES IN DEPOSITS, LOAN DEMAND, THE ABILITY OF OUR CUSTOMERS TO REPAY LOANS AND THE VALUE OF THE COLLATERAL SECURING OUR LOANS.
Our success depends to a significant extent upon local and national economic and political conditions, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling and/or possible future U.S. government shutdowns over budget disagreements, slowing gross domestic product, threatened or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements and other changes in the relationship of the U.S. and U.S. global partners, trade wars, and other factors beyond our control may adversely affect Civista’s deposit levels and composition, the quality of investment securities available for purchase, demand for loans, the ability of Civista’s borrowers to repay their loans, and the value of the collateral securing loans made by Civista. As evidenced by the ongoing conflict between the U.S. and Iran, disruptions and changes in oil production and the supply of oil and related commodities and products in the Middle East, as well as other disruptions in U.S. and global markets, also effect the economy and stock prices in the U.S. Because we have a significant amount of real estate loans, decreases in real estate values could adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings and cash flows.
Management's Discussion & Analysis (MD&A)
New heading “Six Months Ended June 30, 2026 and 2025”
Largest changes
Short-term FHLB advances decreasedsee in full comparison$75,000$51,500 from December 31, 2025 toMarchJune31,30, 2026, due toanliquidityincreasegenerated from reductions inavailable liquidity, primarily as a result of deposit growth coupled with the net decrease in outstandingloans andleasesintheourfirstsecuritiesquarterportfolio,oftogether2026.with operating cash flows, which were used to repay short-term FHLB advances.
“Total noninterest expense for the six months ended June 30, 2026 was $58,526, an increase of $3,918, or 7.2%, from $54,608 compared to the same period of 2025. Noninterest expenses were reduced by $311 for the six months ended June 30, 2025 from non-recurring adjustments resulting from the CLF core system conversion. The increase in total noninterest expense was primarily due to increases in compensation, marketing, amortization of core deposit intangibles, software maintenance, and other expenses, partially offset by decreases in FDIC assessment and professional fees. …”see in full comparison
Total deposits atsee in full comparisonMarchJune31,30, 2026increaseddecreased$35,426$8,221 from December 31, 2025.Noninterest-bearingTimedeposits, interest-bearing demand deposits,deposits and savings and moneymarket accountsmarkets increased$1,746, $18,892,$33,823 and$56,660,$36,496, respectively, from December 31, 2025, whiletimebrokereddepositsdeposits, interest-bearing demand deposits, andbrokerednoninterest-bearing demand deposits decreased$16,871$51,999, $19,651, and$25,001,$6,890, respectively, from December 31, 2025. The increase ininterest-bearing demandtime deposits wasprimarilymainly due to an$18,568increasein interest-bearing public fund accounts and a $4,987 increase in business interest-bearing demand deposits, slightly offset by decreases of $4,589 and $2,795in jumbodemandtime deposits of $26.5 million and retailinterest-bearingcertificatesdemandofdeposits,deposit of $8.8 million, respectively. The increase in savings and money markets was due to increases of$27,030, $13,308, $8,814, $6,130,$34,150 and$4,222$10,555 in business money marketdeposits,deposits and public fund money market accounts, respectively, partially offset by a decrease in Insured Cash Sweep (ICS) money marketdeposits, retail money market accounts, and statement savings, respectively. The $16,871 decrease in timedepositswas due to a decreaseof$15,378 in jumbo time deposits.$5,132. Brokered deposits decreased$25,001$51,999 as the Company continues its strategy to reduce brokered deposits and replace them with core deposits. The decrease in interest-bearing demand deposits was primarily due to decreases of $12,448 and $10,441 in retail interest-bearing demand deposits and interest-bearing public fund accounts, respectively, partially offset by an increase of $4,566 in business interest-bearing demand deposits. The decrease in noninterest-bearing demand deposits was mainly due to a decrease in business commercial deposits. The year-to-date average balance of total deposits increased$251,868,$273,096, compared to the average balance for the same period in2025, mainly2025 due to increases of$150,746,$127,663,$76,467,$107,559, and$24,655$37,874 in the average balance of time deposits, demand and savings deposits, and noninterest-bearing deposits, respectively.
“Total interest expense decreased $6,477, or 15.3%, to $35,940 for the six months ended June 30, 2026, compared to $42,417 for the same period of 2025. For the six months ended June 30, 2026, the average balance of interest-bearing liabilities decreased $23,834 to $3,010,528, as compared to $3,034,362 for the same period of 2025. Interest incurred on deposits were basically flat at $31,347 for the six months ended June 30, 2026, compared to $31,274 for the same period of 2025. …”see in full comparison
“Interest on taxable securities increased $555 to $7,861 for the six months ended June 30, 2026, compared to $7,306 for the same period of 2025. The average balance of taxable securities increased $24,783 to $425,301 for the six months ended June 30, 2026, as compared to $400,518 for the same period of 2025. …”see in full comparison
Full comparison: every changed paragraph (63)
The following discussion reviews the consolidated financial condition of the Company at MarchJune 31,30, 2026 compared to December 31, 2025, and the consolidated results of operations for the three and six months ended MarchJune 31,30, 2026, compared to the same period in 2025. This discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and Notes included in this Quarterly Report on Form 10-Q.
changes in interest rates resulting from national and local economic conditions and the policies of regulatory authorities, including monetary policies of the Board of Governors of the Federal Reserve System, which may adversely affect interest rates, interest margins, loan demand and interest rate sensitivity;
risks related to the recent FSB Merger, including, without limitation, that we may be unable to integrate the business of Civista and FSB successfully or realize the anticipated benefits of the FSB Merger or that the synergies attributable to the FSB Merger may vary from expectations;
the impact on our businesses, and the risks described above, of various domestic or international widespread natural or other disasters including severe weather events, pandemics, cybersecurity attacks, system failures, civil unrest, military or terrorist activities or international conflicts, including Russia’s ongoing war on Ukraine and the conflicts in Iran (and the resulting disruptions in oil, energy and other commodity markets and supply chains,chains), which can affect our earnings and capital as well as the ability of our customers to repay loans;
our ability to anticipate and successfully keep pace with technological changes affecting the financial services industry; and other risks identified from time-to-time in the Company’s other public documents on file with the SEC, including those risks identified in “Item 1A. Risk Factors” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.2025, as supplemented by the disclosure under "Item 1A. Risk Factors" of Part II of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026.
Total assets of the Company at MarchJune 31,30, 2026 were $4,298,322$4,294,298 compared to $4,336,453 at December 31, 2025, a decrease of $38,131,$42,155, or 0.9%.1.0%. The declinedecrease was mainly due to a decreasedecreases in net loans of $38,895 and a decrease in$14,835, securities available-for-sale of $2,171.$14,594, and cash and due from financial institutions of $15,577. These decreases were slightly offset by increases in cash and due from financial institutions of $6,205 and investments in time deposits of $1,715.$2,960 and other securities of $3,015. Total liabilities at MarchJune 31,30, 2026 were $3,746,079$3,727,513 compared to $3,792,979 at December 31, 2025, a decrease of $46,900,$65,466, or 1.2%.1.7%. The decrease in total liabilities was primarily attributable to a decreasedecreases in short-term FHLB advances of $75,000$51,500 coupled with a decrease in accrued incentives of $3,571, partially offset by an increase inand total deposits of $35,426.$8,221.
Loans outstanding as of MarchJune 31,30, 2026 and December 31, 2025 were as follows:
Loans held for sale decreasedincreased $240$1,328 since December 31, 2025. The decreaseincrease was due to aan decreaseincrease in average loan balances held for sale.sale as well as the timing of selling the loans. At MarchJune 31,30, 2026, 3228 loans totaling $6,940$8,508 were held for sale as compared to 27 loans totaling $7,180 at December 31, 2025.
Net loans decreased $38,895,$14,835, or 1.2%,0.5%, since December 31, 2025. The decrease at MarchJune 31,30, 2026 was mainly attributed to decreases in Real Estate Construction, Commercial Real Estate - Non-Owner Occupied, and Farm Real Estate,Estate loans, partially offset by increases in Residential Real Estate, Commercial & Agriculture, and Commercial Real Estate - Owner Occupied and Commercial & Agriculture.loans. At MarchJune 31,30, 2026, the loan to deposit ratio was 92.2%94.1% compared to 94.3% at December 31, 2025.
During the first threesix months of 2026, provisions and recoveries made to the allowances for credit losses and off-balance sheet credit exposures resulted in a net creditexpense of $629$1,141 to the provision for credit losses, compared to an expense of $1,567$2,592 during the same period in 2025. The decrease in the provision expense for the first threesix months of 2026 was primarily the result of loan balances decreasing $40,379$15,142 in addition to favorable changes in economic factors for the threesix months ended MarchJune 31,30, 2026, coupled with an improvement in the historical loss rates in the majority of our loan segments.2026.
Reserves on the Lease Financing Receivables portfolio decreased at MarchJune 31,30, 2026, primarily related to lower balance growth in 2026 as theCLF firsthas quarters are historically aexperienced lower origination period for leases. Total delinquencies on Lease Financing Receivables decreased from December 31, 2025 to MarchJune 31,30, 2026. Lease Financing Receivables 30-59 days past due and 60-89 days past due combined decreased from $2,541 to $770,$675, and the balance of 90 days or greater past due also decreased from $454 to $105.$103. Nonaccrual Lease Financing Receivables decreased from $291 at December 31, 2025 to $105$28 at MarchJune 31,30, 2026.
Net charge-offs for the first threesix months ended MarchJune 31,30, 2026 totaled $716,$790, compared to net charge-offs of $633$1,633 for the same period of 2025. For the first threesix months ended MarchJune 31,30, 2026, the Company charged off a total of 1221 loans and leases, consisting of twothree Commercial & Agriculture loans totaling $96,$98, fourseven Lease Financing Receivables totaling $210,$348, one Commercial Real Estate - Non-Owner Occupied loan totaling $484, fourseven Consumer and Other loans totaling $13$20 and onethree Residential Real Estate loan totaling $3.$30. In addition, during the threesix months ended MarchJune 31,30, 2026, the Company had recoveries on previously charged-off Commercial & Agriculture loans of $62,$96, Commercial Real Estate - Owner Occupied loans of $2,$3, Commercial Real Estate - Non-Owner Occupied loans of $1,$2, Residential Real Estate loans of $13,$34, Lease Financing Receivables of $4$44 and Consumer and Other loans of $8.$11. For each loan category, as well as in total, the percentage of net charge-offs to loans was less than one percent. Each of these factors was considered by management as part of the examination of both the level and mix of the allowance by credit type as well as the overall level of the allowance.
Loans are generally moved to nonaccrual status when 90 days or more past due or at an earlier date when full collection of principal and interest is in doubt. Total loans 90 days or more past due increased from $4,109 at December 31, 2025 to $10,688$13,853 at MarchJune 31,30, 2026; however, this increase can be attributed to one Commercial Real Estate - Non-Owner Occupied loan with a balance of approximately $7,900 that was 30-59 days past due as of December 31, 2025 and became greater than 90 days past due by MarchJune 31,30, 2026, which is why total loans past due did not experience the same trend, decreasing slightly from December 31, 2025 to MarchJune 31,30, 2026. Further, this loan was already moved to nonaccrual as of December 31, 2025 and was individually evaluated for purpose of the December 31, 2025 allowance calculation, resulting in a specific reserve of $3,000. As of MarchJune 31,30, 2026, the loan remains on nonaccrual and continues to be individually evaluated with a $3,000$2,000 specific reserve. ThisFor isthis whyreason, nonaccrual loans did not move consistently with the increase in 90 days or more past due, decreasing slightly from $30,384$30,834 at December 31, 2025 to $29,400$29,865 at MarchJune 31,30, 2026.2026 This is also whyand the increase in 90 days or more past due did not result in an increase to our estimateestimated allowance, because the related risk was already accounted for with the $3,000 specific reserve included in both the December 31, 2025 and MarchJune 31,30, 2026 allowance for credit loss estimate. Loans, or portions thereof, are charged-off when deemed uncollectible. The allowance for credit losses as a percent of total loans was 1.26%1.28% at Marchboth 31,June 30, 2026 and 1.28% at December 31, 2025.
Cash and due from financial institutions increaseddecreased by $6,205,$15,577, from $77,320 at December 31, 2025 to $83,525$61,743 at MarchJune 31,30, 2026. The increasedecrease is mainly due to ana increasedecrease in overnight investments at the Federal Reserve.
The available-for-sale securities portfolio decreased by $2,171,$14,594, from $681,908 at December 31, 2025 to $679,737$667,314 at MarchJune 31,30, 2026. Management continually evaluates our securities portfolio in response to established asset/liability management objectives, changing market conditions that could affect profitability, and the level of interest rate risk to which the Company is exposed. These evaluations may cause the Company to change the level of funds it deploys into investment securities and change the composition of its investment securities portfolio. As of MarchJune 31,30, 2026, the Company was in compliance with all pledging requirements.
Premises and equipment, net, decreased $1,556 from December 31, 2025 to March 31, 2026. The decrease was mainly the result of depreciation expenses of $1,902 coupled with maturing operating leases, partially offset by purchases. The depreciation expense was mainly attributable to leasing operations as operating leases matured. Since mid-2024, new lease originations have primarily consisted of finance leases which are recorded in Loans on the Consolidated Balance Sheets.
Total deposits as of MarchJune 31,30, 2026 and December 31, 2025 were as follows:
The Company had approximately $636,183$638,065 and $647,472 of uninsured deposits as of MarchJune 31,30, 2026 and December 31, 2025, respectively. Uninsured deposit amounts are estimated based on the portions of customer account balances that exceed the FDIC insurance limit of $250.
Total deposits at MarchJune 31,30, 2026 increaseddecreased $35,426$8,221 from December 31, 2025. Noninterest-bearingTime deposits, interest-bearing demand deposits,deposits and savings and money market accountsmarkets increased $1,746, $18,892,$33,823 and $56,660,$36,496, respectively, from December 31, 2025, while timebrokered depositsdeposits, interest-bearing demand deposits, and brokerednoninterest-bearing demand deposits decreased $16,871$51,999, $19,651, and $25,001,$6,890, respectively, from December 31, 2025. The increase in interest-bearing demandtime deposits was primarilymainly due to an $18,568 increase in interest-bearing public fund accounts and a $4,987 increase in business interest-bearing demand deposits, slightly offset by decreases of $4,589 and $2,795 in jumbo demandtime deposits of $26.5 million and retail interest-bearingcertificates demandof deposits,deposit of $8.8 million, respectively. The increase in savings and money markets was due to increases of $27,030, $13,308, $8,814, $6,130,$34,150 and $4,222$10,555 in business money market deposits,deposits and public fund money market accounts, respectively, partially offset by a decrease in Insured Cash Sweep (ICS) money market deposits, retail money market accounts, and statement savings, respectively. The $16,871 decrease in time deposits was due to a decrease of $15,378 in jumbo time deposits.$5,132. Brokered deposits decreased $25,001$51,999 as the Company continues its strategy to reduce brokered deposits and replace them with core deposits. The decrease in interest-bearing demand deposits was primarily due to decreases of $12,448 and $10,441 in retail interest-bearing demand deposits and interest-bearing public fund accounts, respectively, partially offset by an increase of $4,566 in business interest-bearing demand deposits. The decrease in noninterest-bearing demand deposits was mainly due to a decrease in business commercial deposits. The year-to-date average balance of total deposits increased $251,868,$273,096, compared to the average balance for the same period in 2025, mainly2025 due to increases of $150,746,$127,663, $76,467,$107,559, and $24,655$37,874 in the average balance of time deposits, demand and savings deposits, and noninterest-bearing deposits, respectively.
Short-term FHLB advances decreased $75,000$51,500 from December 31, 2025 to MarchJune 31,30, 2026, due to anliquidity increasegenerated from reductions in available liquidity, primarily as a result of deposit growth coupled with the net decrease in outstanding loans and leases in theour firstsecurities quarterportfolio, oftogether 2026.with operating cash flows, which were used to repay short-term FHLB advances.
Shareholders’ equity at MarchJune 31,30, 2026 was $552,243,$566,785, or 12.8%13.2% of total assets, compared to $543,474, or 12.5% of total assets, at December 31, 2025. The increase was a result of net income of $14,989, partially offset by dividends paid on common shares of $3,732$29,304 and ana increasedecrease in accumulated other comprehensive loss of $2,889$645 resulting from the change in the unrealized loss on available-for-sale securities.securities and derivatives, in addition to an increase of $1,153 in stock compensation , partially offset by dividends paid on common shares of $7,473.
Total outstanding common shares at MarchJune 31,30, 2026 were 20,783,348,20,794,238, which increased slightly from 20,746,474 common shares outstanding at December 31, 2025. Common shares outstanding increased due to the grant of 10,890 common shares to Civista directors as payment for their service on the Civista Board of Directors and 51,378 restricted common shares to certain officers under the Company’s 2024 Incentive Plan, partially offset by 14,504 common shares surrendered by officers to the Company to pay taxes upon vesting of restricted shares.
Three Months Ended MarchJune 31,30, 2026 and 2025
The Company had net income of $14,989$14,315 for the three months ended MarchJune 31,30, 2026, an increase of $4,821$3,300 from net income of $10,168$11,015 for the same period of 2025. Basic and diluted earnings per common share were $0.72$0.69 for the quarter ended MarchJune 31,30, 2026, compared to $0.66$0.71 for the same period of 2025. In the firstsecond quarter of 2026,2025, net income was decreasedincreased by $358$757 from non-recurring adjustments resulting from acquisition-related expenses from the FSBCivista mergerLeasing relatingand toFinance the("CLF") division's core system conversion that was completed in February 2026.conversion. The primary reasons for the changes in net income are explained below.
Net interest income for the three months ended MarchJune 31,30, 2026 was $37,823,$38,593, an increase of $5,050$3,779 from $32,773$34,814 for the same period of 2025. ThisIn the second quarter of 2025, net interest income was increased by $1,621 resulting from the non-recurring adjustments from the CLF core system conversion. The quarterly increase was a result of an increase of $2,076$276 in total interest and dividend income, coupled with a $2,974$3,503 decrease in total interest expense. Total interest-earning assets averaged $4,003,144$3,992,950 during the three months ended MarchJune 31,30, 2026, an increase of $201,435$151,581 from $3,801,709$3,841,369 for the same period of 2025. The Company’s total average interest-bearing liabilities increaseddecreased from $3,006,090$3,062,324 during the three months ended MarchJune 31,30, 2025 to $3,023,372$2,997,826 during the three months ended MarchJune 31,30, 2026. The Company’s fully tax equivalent net interest margin for the three months ended MarchJune 31,30, 2026 and 2025 was 3.85%3.89% and 3.51%,3.64%, respectively.
Total interest and dividend income was $55,809$56,547 for the three months ended MarchJune 31,30, 2026, an increase of $2,076$276 from $53,733$56,271 for the same period of 2025. The increase in interest and dividend income is mainly attributable to increases of $156 and $264 in taxable securities and deposits in other banks, respectively, partially offset by a $1,584 increasedecrease in interest and fees on loans andof a$84 $399which increasewas inimpacted interestby incomethe onnon-recurring taxableadjustment securities.mentioned The $1,584 increase in interest and fees on loans is attributable to an increaseabove in the averagesecond balancequarter of loans.2025. The average balance of loans increased by $152,902,$107,864, or 4.9%,3.4%, to $3,252,342$3,243,955 for the three months ended MarchJune 31,30, 2026, as compared to $3,099,440$3,136,091 for the same period of 2025.
Interest on taxable securities increased $399$156 to $3,954$3,907 for the three months ended MarchJune 31,30, 2026, compared to $3,555$3,751 for the same period of 2025. The average balance of taxable securities increased $35,867$13,820 to $432,760$417,924 for the three months ended MarchJune 31,30, 2026, as compared to $396,893$404,104 for the same period of 2025. The yield on taxable securities increased 189 basis points to 3.49%3.51% for the three months ended MarchJune 31,30, 2026, compared to 3.31%3.42% for the same period of 2025, resulting from the purchase of similar securities to replace matured securities with the new securities having higher rates than when the matured securities were originally purchased. Interest on tax-exempt securities decreased $37$60 to $2,303$2,278 for the three months ended MarchJune 31,30, 2026, compared to $2,340 for the same period of 2025. The average balance of tax-exempt securities decreased $1,204 to $285,277 for the three months ended March 31, 2026, as compared to $286,481 for the same period of 2025. The yield on tax-exempt securities increased 3 basis points to 3.94% for the three months ended March 31, 2026, compared to 3.91%$2,338 for the same period of 2025. Interest on deposits in other banks increased $130$264 to $322$474 for the three months ended MarchJune 31,30, 2026, compared to $192$210 for the same period of 2025. The average balance of interest-bearing deposits in other banks increased $13,870$29,676 to $32,765$52,919 for the three month period ended MarchJune 31,30, 2026, compared to $18,895$23,243 for the same period of 2025. The yield on interest-bearing deposits in other banks decreased 222 basis points to 3.91%3.59% for the three months ended MarchJune 31,30, 2026, compared to 4.13%3.61% for the same period of 2025.
Total interest expense decreased $2,974,$3,503, or 14.2%,16.3%, to $17,986$17,954 for the three months ended MarchJune 31,30, 2026, compared to $20,960$21,457 for the same period of 2025. For the three months ended MarchJune 31,30, 2026, the average balance of interest-bearing liabilities increaseddecreased $17,282$64,498 to $3,023,372,$2,997,826, as compared to $3,006,090$3,062,324 for the same period of 2025. Interest incurred on deposits decreasedincreased by $263$336 to $15,453$15,894 for the three months ended MarchJune 31,30, 2026, compared to $15,716$15,558 for the same period of 2025. The average balance of interest-bearing deposits increased by $227,213$243,145 to $2,765,773$2,781,645 for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, which was morealmost thanfully offset by athe decrease in the rate paid on interest-bearing deposits from 2.51%2.46% for the firstsecond threequarter months ended March 31,of 2025 to 2.27%2.29% in the firstsecond three monthsquarter of 2026. The decrease in rates was mainly driven by time deposits related to paying lower rates on retail and brokered CDs due to the lower rate environment in the firstsecond quarter of 2026 compared to the same period of 2025. Interest expense incurred on short-term FHLB advances decreased mainly due to the average balance of short-term FHLB advances decreasing by $206,933$304,722 to $148,656$107,823 for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
The following table presents the condensed average balance sheets for the three months ended MarchJune 31,30, 2026 and 2025. The daily average loan amounts outstanding are net of unearned income and include loans held for sale and nonaccrual loans. The average balance of securities is computed using the carrying value of securities. Rates are annualized and taxable equivalent yields are computed using a 21% tax rate for tax-exempt interest income. The average yield has been computed using the historical amortized cost average balance for available-for-sale securities.
*Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $612$606 and $622 for the periodsthree months ended MarchJune 31,30, 2026 and 2025, respectively.
Net interest income may also be analyzed by comparing the volume and rate components of interest income and interest expense. The following table provides an analysis of the changes in interest income and expense between the three months ended MarchJune 31,30, 2026 and 2025.
(1) The change in interest income and interest expense due to changes in both volume and rate, which cannot be segregated, has been allocated proportionately to the change due to volume and the change due to rate.
The Company provides for credit losses through regular provisions to the allowance for credit losses. During the three months ended MarchJune 31,30, 2026, the Company recorded a credit to the provision for credit losses for loans and off-balance sheet credit exposures of $629,$1,770, aan decreaseincrease of $2,196,$745, from an expense of $1,567$1,025 during the three months ended MarchJune 31,30, 2026.2025.
Noninterest income for the three month periods ended MarchJune 31,30, 2026 and 2025 was as follows:
Total noninterest income for the three months ended June 30, 2026 was $9,007, an increase of $2,418, or 36.7%, from $6,589 for the same period of 2025. Noninterest income was reduced by $1,044 in the second quarter of 2025 from non-recurring adjustments resulting from the CLF core system conversion. Service charges increased $325 for the three months ended June 30, 2026, compared to the same period of 2025, primarily from higher business service charges and retail overdrafts. Net gain on sale of loans and leases increased $660 for the three months ended June 30, 2026, compared to the same period of 2025, resulting from favorable secondary market conditions resulting in higher sales volumes for both loans and leases. Lease revenue and residual income increased $879 for the three months ended June 30, 2026, compared to the same period of 2025, mainly due to the non-recurring adjustment noted above.
Total noninterest income for the three months ended March 31, 2026 was $9,431, an increase of $1,571, or 20.0%, from $7,860 for the same period of 2025. Net gain on sale of loans and leases increased $1,001 for the three months ended March 31, 2026, compared to the same period of 2025, resulting from changes in the rate environment at the time of sale that resulted in higher sales volume. Lease revenue and residual income decreased $266 for the three months ended March 31, 2026, compared to the same period of 2025, mainly due to a decrease in operating lease originations as the Company continues to shift towards finance leases. Other income increased $444 for the three months ended March 31, 2026, compared to the same period of 2025, due to income from the Company's captive insurance subsidiary, CIVB Risk Management, recording $487 of income related to the resolution of three prior period claims that were closed without payment, resulting in a reduction of ceded reserves in the first quarter of 2026.
Noninterest expense for the three month periods ended MarchJune 31,30, 2026 and 2025 was as follows:
Total noninterest expense for the three months ended MarchJune 31,30, 2026 was $29,873,$28,653, an increase of $2,747$1,171 or 10.1%,4.3%, from $27,126$27,482 compared to the same period of 2025. Noninterest expenses were reduced by $311 in the second quarter of 2025 from non-recurring adjustments resulting from the CLF core system conversion. The increase in total noninterest expense was primarily due to increases in compensationcompensation, amortization of core deposit intangibles, and other expenses, partially offset by decreases in FDIC assessment and professional fees. The increase in compensation expense was primarily due to increases in salaries, commissions, and medical expenses associated fromwith operating with higher average full-time equivalent (FTE) employees year-over-year. The average number of FTEs atfor Marchthe 31,three months ended June 30, 2026 was 535,549, compared to 520526 for the same period of 2025. The increase in amortization of core deposit intangibles is related to the FSB merger. The increase in other expense is mainly related to acquisition-relatedthe expensesnon-recurring adjustment mentioned above in the firstsecond quarter of 2026 of $427 for the FSB merger.2025. The decrease in FDIC assessment is relatedmainly due to betteran creditimprovement ratingsin loweringCivista's the Company's overall quarterlyrisk-based assessment rate, reflecting favorable trends in regulatory ratios and supervisory metrics used in the firstFDIC's quarterpricing of 2026 compared to the same period of 2025.methodology. The decrease in professional fees is primarily due to lowerhigher consulting expenses in 2025 related to CLF's core system conversion.
Income tax expense for the three months ended MarchJune 31,30, 2026 totaled $3,021,$2,862, up $1,249$981 compared to the same period of 2025. The effective tax rates for the three month periods ended MarchJune 31,30, 2026 and 2025 were 16.8%16.7% and 14.8%,14.6%, respectively. The increase in the effective tax rate for the three month period ended MarchJune 31,30, 2026, was primarily due to an increase in the forecasted pre-tax income outpacing the permanent differences for 2026, thus, creating more taxable income at the statutory tax rate of 21% and increasing the Company's effective tax rate. The difference between the statutory federal income tax rate and the Company’s effective tax rate is the permanent tax differences, primarily consisting of tax-exempt interest income from municipal investments and loans, low-income housing tax credits, tax-deductible captive insurance premiums and bank owned life insurance income.
Six Months Ended June 30, 2026 and 2025
The Company had net income of $29,304 for the six months ended June 30, 2026, an increase of $8,121 from $21,183 for the same period of 2025. Basic and diluted earnings per common share were $1.41 for the six months ended June 30, 2026, compared to $1.37 for the same period of 2025. For the six months ended June 30, 2026, net income was reduced by $374 from non-recurring adjustments related to acquisition-related expenses associated with the FSB merger. For the six months ended June 30, 2025, net income was increased by $757 from non-recurring adjustments resulting from the CLF core system conversion. The primary reasons for the changes in net income are explained below.
Net interest income for the six months ended June 30, 2026 was $76,416, an increase of $8,829 from $67,587 for the same period of 2025. For the six months ended June 30, 2025, net interest income was increased by $1,621 resulting from the non-recurring adjustments from the CLF core system conversion. The year-to-date increase was a result of an increase of $2,352 in total interest and dividend income, coupled with a $6,477 decrease in total interest expense. Total interest-earning assets averaged $3,998,020 during the six months ended June 30, 2026, an increase of $176,371 from $3,821,649 for the same period of 2025. The Company’s total average interest-bearing liabilities decreased from $3,010,528 during the six months ended June 30, 2025 to $3,034,362 during the six months ended June 30, 2026. The Company’s fully tax equivalent net interest margin for the six months ended June 30, 2026 and 2025 was 3.87% and 3.57%, respectively.
Total interest and dividend income was $112,356 for the six months ended June 30, 2026, an increase of $2,352 from $110,004 for the same period of 2025. The increase in interest and dividend income is mainly attributable to increases of $1,500, $555 and $394 in interest and fees on loans, taxable securities and deposits in other banks, respectively, partially offset by a decrease in tax-exempt securities of $97. The average balance of loans increased by $130,259, or 4.2%, to $3,248,126 for the six months ended June 30, 2026, as compared to $3,117,867 for the same period of 2025.
Interest on taxable securities increased $555 to $7,861 for the six months ended June 30, 2026, compared to $7,306 for the same period of 2025. The average balance of taxable securities increased $24,783 to $425,301 for the six months ended June 30, 2026, as compared to $400,518 for the same period of 2025. The yield on taxable securities increased 13 basis points to 3.50% for the six months ended June 30, 2026, compared to 3.37% for the same period of 2025, resulting from the purchase of similar securities to replace matured securities with the new securities having higher rates than when the matured securities were originally purchased. Interest on deposits in other banks increased $394 to $796 for the six months ended June 30, 2026, compared to $402 for the same period of 2025. The average balance of interest-bearing deposits in other banks increased $21,817 to $42,898 for the six months ended June 30, 2026, compared to $21,081 for the same period of 2025. The yield on interest-bearing deposits in other banks decreased 13 basis points to 3.71% for the six months ended June 30, 2026, compared to 3.84% for the same period of 2025.
Total interest expense decreased $6,477, or 15.3%, to $35,940 for the six months ended June 30, 2026, compared to $42,417 for the same period of 2025. For the six months ended June 30, 2026, the average balance of interest-bearing liabilities decreased $23,834 to $3,010,528, as compared to $3,034,362 for the same period of 2025. Interest incurred on deposits were basically flat at $31,347 for the six months ended June 30, 2026, compared to $31,274 for the same period of 2025. The average balance of interest-bearing deposits increased by $235,222 to $2,773,752 for the six months ended June 30, 2026, as compared to the same period in 2025, which was fully offset by the decrease in the rate paid on interest-bearing deposits from 2.48% for the six months ended June 30, 2025 to 2.28% for the six months ended June 30, 2026. The decrease in rates was mainly driven by paying lower rates on retail and brokered CDs due to the lower rate environment in the first six month of 2026 compared to the same period of 2025. Interest expense incurred on short-term FHLB advances decreased mainly due to the average balance of short-term FHLB advances decreasing by $256,097 to $128,127 for the six months ended June 30, 2026, as compared to the same period in 2025.
The following table presents the condensed average balance sheets for the six months ended June 30, 2026 and 2025. The daily average loan amounts outstanding are net of unearned income and include loans held for sale and nonaccrual loans. The average balance of securities is computed using the carrying value of securities. Rates are annualized and taxable equivalent yields are computed using a 21% tax rate for tax-exempt interest income. The average yield has been computed using the historical amortized cost average balance for available-for-sale securities.
(1) Net interest spread represents the difference between the yield on average interest-earning assets and the cost of interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average interest-earning assets.
*Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $1.2 million and $1.2 million for the six month periods ended June 30, 2026 and 2025, respectively.
**Average balance includes nonaccrual loans.
Net interest income may also be analyzed by comparing the volume and rate components of interest income and interest expense. The following table provides an analysis of the changes in interest income and expense between the six months ended June 30, 2026 and 2025. The table is presented on a fully tax-equivalent basis.
(1) The change in interest income and interest expense due to changes in both volume and rate, which cannot be segregated, has been allocated proportionately to the change due to volume and the change due to rate.
The Company provides for credit losses through regular provisions to the allowance for credit losses. During the six months ended June 30, 2026, the Company recorded a provision for credit losses of $1,141, a decrease of $1,451, from $2,592 during the six months ended June 30, 2025.
Noninterest income for the six months ended June 30, 2026 and 2025 was as follows:
Total noninterest income for the six months ended June 30, 2026 was $18,438, an increase of $3,989, or 27.6%, from $14,449 for the same period of 2025. Noninterest income was reduced by $1,044 for the six months ended June 30, 2025, from non-recurring adjustments resulting from the CLF core system conversion. Service charges increased $515 for the six months ended June 30, 2026, compared to the same period of 2025, primarily from higher business service charges and retail overdrafts. Net gain on sale of loans and leases increased $1,661 for the six months ended June 30, 2026, compared to the same period of 2025, resulting from favorable secondary market conditions resulting in higher sales volumes for both loans and leases, coupled with disciplined pricing strategies on both the loan and lease gain on sale margins. Lease revenue and residual income increased $613 for the six months ended June 30, 2026, compared to the same period of 2025, mainly due to the non-recurring adjustment noted above.
The components of noninterest expense for the six month periods ended June 30, 2026 and 2025 are as follows:
Total noninterest expense for the six months ended June 30, 2026 was $58,526, an increase of $3,918, or 7.2%, from $54,608 compared to the same period of 2025. Noninterest expenses were reduced by $311 for the six months ended June 30, 2025 from non-recurring adjustments resulting from the CLF core system conversion. The increase in total noninterest expense was primarily due to increases in compensation, marketing, amortization of core deposit intangibles, software maintenance, and other expenses, partially offset by decreases in FDIC assessment and professional fees. The increase in compensation expense was primarily due to increases in salaries, commissions, and medical expenses resulting from operating with higher average full-time equivalent (FTE) employees year-over-year. The average number of FTEs for the six months ended June 30, 2026 was 548, compared to 523 for the same period of 2025. The increase in marketing expenses is related to an increase in digital marketing campaigns. The increase in amortization of core deposit intangibles is related to the FSB merger. The increase in software maintenance expense is primarily related to year-over-year maintenance increases as well as having more users increasing licensing costs. The increase in other expense is mainly related to the non-recurring adjustments related to the FSB merger for the six months ended June 30, 2026 and the non-recurring adjustment mentioned above related to the CLF core system conversion for the six months ended June 30, 2025. The decrease in FDIC assessment is mainly due to an improvement in Civista's risk-based assessment rate, reflecting favorable trends in regulatory ratios and supervisory metrics used in the FDIC's pricing methodology. The decrease in professional fees is primarily due to lower consulting expenses related to CLF's core system conversion.
Income tax expense for the six months ended June 30, 2026 totaled $5,883, up $2,230 compared to the same period of 2025. The effective tax rates for the six month periods ended June 30, 2026 and 2025 were 16.7% and 14.7%, respectively. The increase in the effective tax rate for the six month period ended June 30, 2026, was primarily due to an increase in the forecasted pre-tax income outpacing the permanent differences for 2026, thus, creating more taxable income at the statutory tax rate of 21% and increasing the Company's effective tax rate. The difference between the statutory federal income tax rate and the Company’s effective tax rate is the permanent tax differences, primarily consisting of tax-exempt interest income from municipal investments and loans, low-income housing tax credits, tax-deductible captive insurance premiums and bank owned life insurance income.
Shareholders’ equity at MarchJune 31,30, 2026 was $552,243,$566,785, or 12.8%13.2% of total assets, compared to $543,474, or 12.5% of total assets, at December 31, 2025. The increase was a result of net income of $14,989, partially offset by dividends paid on common shares of $3,732$29,304 and ana increasedecrease in accumulated other comprehensive loss of $2,889$645 resulting from the change in the unrealized loss on available-for-sale securities.securities and derivatives, in addition to an increase of $1,153 in stock compensation, partially offset by dividends paid on common shares of $7,473.
All of the Company’s capital ratios exceeded the regulatory minimum guidelines as of MarchJune 31,30, 2026 and December 31, 2025 as identified in the following table:
CIVB insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 1 trade date, 400 shares, about $10.7K) and open-market sales in 0 filings. Net open-market shares: 400 (purchases minus sales); net value about $10.7K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-23 | Parcher Charles A. |
Open-market purchase | 315 | $26.75 | $8.4K |
| 2026-09-23 | Parcher Charles A. |
Open-market purchase | 85 | $26.75 | $2.3K |
| 2026-08-07 | Doucette Veronica G |
Disposition to issuer | 528 | $28.47 | $15.0K |
| 2026-07-29 | Macioce Mark J. |
Disposition to issuer | 58 | $29.49 | $1.7K |
| 2026-06-08 | Oliver Mary Patricia |
Grant/award | 1,210 | — | — |
| 2026-06-08 | Perfect Clyde A Jr |
Grant/award | 1,210 | — | — |
| 2026-06-08 | Wise Lorina W |
Grant/award | 1,210 | — | — |
| 2026-06-08 | Mattlin Julie A |
Grant/award | 1,210 | — | — |
| 2026-06-08 | Wurm Gerald B |
Grant/award | 1,210 | — | — |
| 2026-06-08 | Weaks Nathan E |
Grant/award | 1,210 | — | — |
| 2026-06-08 | Congrove Darci L |
Grant/award | 1,210 | — | — |
| 2026-06-08 | Macioce Mark J. |
Grant/award | 1,210 | — | — |
| 2026-06-08 | Singer Harry |
Grant/award | 1,210 | — | — |
| 2026-05-19 | Oliver Mary Patricia |
Other | 55 | — | — |
| 2026-05-19 | Wurm Gerald B |
Other | 729 | — | — |
| 2026-05-19 | Wurm Gerald B |
Other | 299 | — | — |
| 2026-05-19 | Macioce Mark J. |
Other | 22 | — | — |
| 2026-05-19 | Singer Harry |
Other | 67 | — | — |
| 2026-04-29 | Singer Harry |
Disposition to issuer | 7,900 | $24.77 | $195.7K |
| 2026-04-28 | Macioce Mark J. |
Disposition to issuer | 250 | $25.23 | $6.3K |
| 2026-02-24 | Oliver Mary Patricia |
Other | 57 | — | — |
| 2026-02-24 | Wurm Gerald B |
Other | 317 | — | — |
| 2026-02-24 | Wurm Gerald B |
Other | 772 | — | — |
| 2026-02-24 | Macioce Mark J. |
Other | 22 | — | — |
| 2026-02-24 | Singer Harry |
Other | 70 | — | — |
Well-known investors holding CIVB (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 168,561 | $4.8M | 0.0% | Added 8% |
| Two Sigma Investments | 2026-06-30 | 100,432 | $2.8M | 0.0% | Added 13% |
| Renaissance Technologies | 2026-06-30 | 36,964 | $1.0M | 0.0% | Reduced 29% |
| D. E. Shaw & Co. | 2026-06-30 | 23,045 | $650.3K | 0.0% | New position |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 22,762 | $642.3K | 0.0% | Added 51% |