0001564590-19-042901.txt : 20191112 0001564590-19-042901.hdr.sgml : 20191112 20191112160710 ACCESSION NUMBER: 0001564590-19-042901 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 105 CONFORMED PERIOD OF REPORT: 20190930 FILED AS OF DATE: 20191112 DATE AS OF CHANGE: 20191112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIVISTA BANCSHARES, INC. CENTRAL INDEX KEY: 0000944745 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 341558688 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-36192 FILM NUMBER: 191209343 BUSINESS ADDRESS: STREET 1: 100 EAST WATER ST STREET 2: P O BOX 5016 CITY: SANDUSKY STATE: OH ZIP: 44870 BUSINESS PHONE: 4196254121 MAIL ADDRESS: STREET 1: 100 EAST WATER ST STREET 2: P O BOX 5016 CITY: SANDUSKY STATE: OH ZIP: 44870 FORMER COMPANY: FORMER CONFORMED NAME: FIRST CITIZENS BANC CORP /OH DATE OF NAME CHANGE: 19950502 10-Q 1 civb-10q_20190930.htm 10-Q civb-10q_20190930.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2019 

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-36192

 

Civista Bancshares, Inc.

(Exact name of registrant as specified in its charter)

 

 

Ohio

 

34-1558688

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

 

 

100 East Water Street, Sandusky, Ohio

 

44870

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (419) 625-4121

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common

 

CIVB

 

NASDAQ Capital Market

Preferred

 

CIVBP

 

NASDAQ Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒    No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒   No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

 

Accelerated filer

 

Non-accelerated filer

 

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes      No  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common Shares, no par value, outstanding at November 7, 2019—15,479,257 shares

 

 

 


 

CIVISTA BANCSHARES, INC.

Index

 

PART I.

 

Financial Information

  

 

 

 

Item 1.

 

Financial Statements:

  

 

 

 

 

 

Consolidated Balance Sheets (Unaudited) September 30, 2019 and December 31, 2018

  

 

2

 

 

 

Consolidated Statements of Operations (Unaudited) Three and nine months ended September 30, 2019 and 2018

  

 

3

 

 

 

Consolidated Statements of Comprehensive Income (Unaudited)
Three and nine months ended September 30, 2019 and 2018

  

 

4

 

 

 

Condensed Consolidated Statement of Changes in Shareholders’ Equity (Unaudited)
Three and nine months ended September 30, 2019 and 2018

  

 

5

 

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine months ended September 30, 2019 and 2018

  

 

7

 

 

 

Notes to Interim Consolidated Financial Statements (Unaudited)

  

 

8-36

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

  

 

37-48

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

  

 

49-50

 

Item 4.

 

Controls and Procedures

  

 

51

 

 

 

 

PART II.

 

Other Information

  

 

 

 

Item 1.

 

Legal Proceedings

  

 

52

 

Item 1A.

 

Risk Factors

  

 

52

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

  

 

52

 

Item 3.

 

Defaults upon Senior Securities

  

 

52

 

Item 4.

 

Mine Safety Disclosures

  

 

52

 

Item 5.

 

Other Information

  

 

52

 

Item 6.

 

Exhibits

  

 

53

 

Signatures

 

 

  

 

54

 

 

 

 


 

Part I – Financial Information

ITEM 1.

Financial Statements

CIVISTA BANCSHARES, INC.

Consolidated Balance Sheets (Unaudited)

(In thousands, except share data)

 

 

 

September 30, 2019

 

 

December 31, 2018

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from financial institutions

 

$

62,219

 

 

$

42,779

 

Securities available for sale

 

 

355,287

 

 

 

346,294

 

Equity securities

 

 

1,152

 

 

 

1,070

 

Loans held for sale

 

 

8,983

 

 

 

1,391

 

Loans, net of allowance of $14,144 and $13,679

 

 

1,634,496

 

 

 

1,548,262

 

Other securities

 

 

20,280

 

 

 

21,021

 

Premises and equipment, net

 

 

22,201

 

 

 

22,021

 

Accrued interest receivable

 

 

7,501

 

 

 

6,723

 

Goodwill

 

 

76,851

 

 

 

76,851

 

Other intangible assets

 

 

8,610

 

 

 

9,352

 

Bank owned life insurance

 

 

44,745

 

 

 

43,037

 

Other assets

 

 

26,740

 

 

 

20,153

 

Total assets

 

$

2,269,065

 

 

$

2,138,954

 

LIABILITIES

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

497,244

 

 

$

468,083

 

Interest-bearing

 

 

1,135,377

 

 

 

1,111,810

 

Total deposits

 

 

1,632,621

 

 

 

1,579,893

 

Short-term Federal Home Loan Bank advances

 

 

181,100

 

 

 

188,600

 

Securities sold under agreements to repurchase

 

 

15,088

 

 

 

22,199

 

Other borrowings

 

 

55,000

 

 

 

5,000

 

Subordinated debentures

 

 

29,427

 

 

 

29,427

 

Accrued expenses and other liabilities

 

 

26,566

 

 

 

14,937

 

Total liabilities

 

 

1,939,802

 

 

 

1,840,056

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Preferred shares, no par value, 200,000 shares authorized, Series B Preferred shares,

   $1,000 liquidation preference, 9,898 shares issued at September 30, 2019 and

   10,120 shares issued at December 31, 2018, net of issuance costs

 

 

9,158

 

 

 

9,364

 

Common shares, no par value, 20,000,000 shares authorized, 16,409,439 shares

   issued at September 30, 2019 and 16,351,463 shares issued at December 31, 2018

 

 

267,559

 

 

 

266,901

 

Retained earnings

 

 

62,023

 

 

 

41,320

 

Treasury shares, 936,164 common shares at September 30, 2019 and 747,964

   common shares at December 31, 2018, at cost

 

 

(21,144

)

 

 

(17,235

)

Accumulated other comprehensive income (loss)

 

 

11,667

 

 

 

(1,452

)

Total shareholders’ equity

 

 

329,263

 

 

 

298,898

 

Total liabilities and shareholders’ equity

 

$

2,269,065

 

 

$

2,138,954

 

 

See notes to interim unaudited consolidated financial statements

Page 2


 

CIVISTA BANCSHARES, INC.

Consolidated Statements of Operations (Unaudited)

(In thousands, except per share data)

 

 

 

Three months ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

20,776

 

 

$

15,833

 

 

$

63,395

 

 

$

43,615

 

Taxable securities

 

 

1,712

 

 

 

1,042

 

 

 

5,155

 

 

 

3,069

 

Tax-exempt securities

 

 

1,449

 

 

 

908

 

 

 

4,208

 

 

 

2,672

 

Federal funds sold and other

 

 

86

 

 

 

103

 

 

 

775

 

 

 

614

 

Total interest and dividend income

 

 

24,023

 

 

 

17,886

 

 

 

73,533

 

 

 

49,970

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

2,099

 

 

 

783

 

 

 

5,966

 

 

 

2,060

 

Federal Home Loan Bank advances

 

 

1,152

 

 

 

925

 

 

 

2,581

 

 

 

1,560

 

Subordinated debentures

 

 

350

 

 

 

349

 

 

 

1,094

 

 

 

975

 

Securities sold under agreements to repurchase and other

 

 

4

 

 

 

5

 

 

 

14

 

 

 

13

 

Total interest expense

 

 

3,605

 

 

 

2,062

 

 

 

9,655

 

 

 

4,608

 

Net interest income

 

 

20,418

 

 

 

15,824

 

 

 

63,878

 

 

 

45,362

 

Provision for loan losses

 

 

150

 

 

 

390

 

 

 

150

 

 

 

390

 

Net interest income after provision for loan losses

 

 

20,268

 

 

 

15,434

 

 

 

63,728

 

 

 

44,972

 

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges

 

 

1,726

 

 

 

1,219

 

 

 

4,733

 

 

 

3,712

 

Net gain (loss) on sale of securities

 

 

3

 

 

 

(392

)

 

 

17

 

 

 

(386

)

Net gain on equity securities

 

 

112

 

 

 

27

 

 

 

81

 

 

 

102

 

Net gain on sale of loans

 

 

815

 

 

 

428

 

 

 

1,701

 

 

 

1,235

 

ATM/Interchange fees

 

 

1,014

 

 

 

622

 

 

 

2,871

 

 

 

1,764

 

Wealth management fees

 

 

975

 

 

 

873

 

 

 

2,733

 

 

 

2,561

 

Bank owned life insurance

 

 

254

 

 

 

147

 

 

 

753

 

 

 

432

 

Tax refund processing fees

 

 

 

 

 

 

 

 

2,750

 

 

 

2,750

 

Other

 

 

530

 

 

 

364

 

 

 

1,177

 

 

 

1,123

 

Total noninterest income

 

 

5,429

 

 

 

3,288

 

 

 

16,816

 

 

 

13,293

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

9,707

 

 

 

12,054

 

 

 

29,059

 

 

 

26,812

 

Net occupancy expense

 

 

902

 

 

 

751

 

 

 

2,906

 

 

 

2,375

 

Equipment expense

 

 

561

 

 

 

371

 

 

 

1,504

 

 

 

1,069

 

Contracted data processing

 

 

435

 

 

 

3,150

 

 

 

1,301

 

 

 

6,237

 

FDIC assessment

 

 

(1

)

 

 

121

 

 

 

297

 

 

 

388

 

State franchise tax

 

 

499

 

 

 

351

 

 

 

1,398

 

 

 

1,031

 

Professional services

 

 

756

 

 

 

2,198

 

 

 

2,151

 

 

 

4,233

 

Amortization of intangible assets

 

 

235

 

 

 

26

 

 

 

710

 

 

 

85

 

ATM/Interchange expense

 

 

514

 

 

 

286

 

 

 

1,437

 

 

 

712

 

Marketing

 

 

404

 

 

 

350

 

 

 

1,111

 

 

 

988

 

Other operating expenses

 

 

2,719

 

 

 

2,498

 

 

 

7,944

 

 

 

6,358

 

Total noninterest expense

 

 

16,731

 

 

 

22,156

 

 

 

49,818

 

 

 

50,288

 

Income (loss) before taxes

 

 

8,966

 

 

 

(3,434

)

 

 

30,726

 

 

 

7,977

 

Income tax expense (benefit)

 

 

1,258

 

 

 

(1

)

 

 

4,688

 

 

 

1,407

 

Net Income (loss)

 

 

7,708

 

 

 

(3,433

)

 

 

26,038

 

 

 

6,570

 

Preferred stock dividends

 

 

162

 

 

 

192

 

 

 

490

 

 

 

794

 

Net income (loss) available to common shareholders

 

$

7,546

 

 

$

(3,625

)

 

$

25,548

 

 

$

5,776

 

Earnings (loss) per common share, basic

 

$

0.48

 

 

$

(0.31

)

 

$

1.64

 

 

$

0.54

 

Earnings (loss) per common share, diluted

 

$

0.46

 

 

$

(0.31

)

 

$

1.54

 

 

$

0.51

 

 

See notes to interim unaudited consolidated financial statements

Page 3


 

CIVISTA BANCSHARES, INC.

Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net income (loss)

 

$

7,708

 

 

$

(3,433

)

 

$

26,038

 

 

$

6,570

 

Other comprehensive income (loss), net of reclassification adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized holding gains (losses) on available for sale securities

 

 

3,724

 

 

 

(935

)

 

 

16,164

 

 

 

(4,833

)

Tax effect

 

 

(782

)

 

 

197

 

 

 

(3,393

)

 

 

1,015

 

Pension liability adjustment

 

 

147

 

 

 

143

 

 

 

441

 

 

 

429

 

Tax effect

 

 

(31

)

 

 

(30

)

 

 

(93

)

 

 

(90

)

Total other comprehensive income (loss)

 

 

3,058

 

 

 

(625

)

 

 

13,119

 

 

 

(3,479

)

Comprehensive income (loss)

 

$

10,766

 

 

$

(4,058

)

 

$

39,157

 

 

$

3,091

 

 

See notes to interim unaudited consolidated financial statements

Page 4


 

CIVISTA BANCSHARES, INC.

Condensed Consolidated Statement of Changes in Shareholders’ Equity (Unaudited)

(In thousands, except share data)

 

 

 

Preferred Shares

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

Accumulated

Other

 

 

Total

 

 

 

Outstanding

Shares

 

 

Amount

 

 

Outstanding

Shares

 

 

Amount

 

 

Retained

Earnings

 

 

Treasury

Shares

 

 

Comprehensive

Income

 

 

Shareholders’

Equity

 

Balance, June 30, 2019

 

 

10,120

 

 

$

9,364

 

 

 

15,633,059

 

 

$

267,275

 

 

$

56,199

 

 

$

(17,235

)

 

$

8,609

 

 

$

324,212

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,708

 

 

 

 

 

 

 

 

 

7,708

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,058

 

 

 

3,058

 

Conversion of Series B preferred

   shares to common shares

 

 

(222

)

 

 

(206

)

 

 

28,416

 

 

 

206

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

78

 

 

 

 

 

 

 

 

 

 

 

 

78

 

Common stock dividends

   ($0.11 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,722

)

 

 

 

 

 

 

 

 

(1,722

)

Preferred stock dividends

   ($16.25 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(162

)

 

 

 

 

 

 

 

 

(162

)

Purchase of treasury stock

 

 

 

 

 

 

 

 

(188,200

)

 

 

 

 

 

 

 

 

(3,909

)

 

 

 

 

 

(3,909

)

Balance, September 30, 2019

 

 

9,898

 

 

$

9,158

 

 

 

15,473,275

 

 

$

267,559

 

 

$

62,023

 

 

$

(21,144

)

 

$

11,667

 

 

$

329,263

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Shares

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

Accumulated

Other

 

 

Total

 

 

 

Outstanding

Shares

 

 

Amount

 

 

Outstanding

Shares

 

 

Amount

 

 

Retained

Earnings

 

 

Treasury

Shares

 

 

Comprehensive

Loss

 

 

Shareholders’

Equity

 

Balance, June 30, 2018

 

 

14,320

 

 

$

13,250

 

 

 

10,788,892

 

 

$

158,191

 

 

$

39,898

 

 

$

(17,235

)

 

$

(4,256

)

 

$

189,848

 

Net Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,433

)

 

 

 

 

 

 

 

 

(3,433

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(625

)

 

 

(625

)

Conversion of Series B preferred

   shares to common shares

 

 

(2,564

)

 

 

(2,372

)

 

 

327,875

 

 

 

2,372

 

 

 

 

 

 

 

 

 

 

 

 

 

UCB acquisition

 

 

 

 

 

 

 

 

4,277,430

 

 

 

104,669

 

 

 

 

 

 

 

 

 

 

 

 

104,669

 

Stock-based compensation

 

 

 

 

 

 

 

 

867

 

 

 

92

 

 

 

 

 

 

 

 

 

 

 

 

92

 

Common stock dividends

   ($0.09 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(971

)

 

 

 

 

 

 

 

 

(971

)

Preferred stock dividends

   ($16.25 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(192

)

 

 

 

 

 

 

 

 

(192

)

Balance, September 30, 2018

 

 

11,756

 

 

$

10,878

 

 

 

15,395,064

 

 

$

265,324

 

 

$

35,302

 

 

$

(17,235

)

 

$

(4,881

)

 

$

289,388

 

 

See notes to interim unaudited consolidated financial statements

Page 5


 

CIVISTA BANCSHARES, INC.

Condensed Consolidated Statement of Changes in Shareholders’ Equity (Unaudited)

(In thousands, except share data)

 

 

 

Preferred Shares

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

Accumulated

Other

 

 

Total

 

 

 

Outstanding

Shares

 

 

Amount

 

 

Outstanding

Shares

 

 

Amount

 

 

Retained

Earnings

 

 

Treasury

Shares

 

 

Comprehensive

Income (loss)

 

 

Shareholders’

Equity

 

Balance, December 31, 2018

 

 

10,120

 

 

$

9,364

 

 

 

15,603,499

 

 

$

266,901

 

 

$

41,320

 

 

$

(17,235

)

 

$

(1,452

)

 

$

298,898

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,038

 

 

 

 

 

 

 

 

 

26,038

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,119

 

 

 

13,119

 

Conversion of Series B preferred

   shares to common shares

 

 

(222

)

 

 

(206

)

 

 

28,416

 

 

 

206

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

29,560

 

 

 

452

 

 

 

 

 

 

 

 

 

 

 

 

452

 

Common stock dividends

   ($0.31 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,845

)

 

 

 

 

 

 

 

 

(4,845

)

Preferred stock dividends

   ($48.75 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(490

)

 

 

 

 

 

 

 

 

(490

)

Purchase of treasury stock

 

 

 

 

 

 

 

 

(188,200

)

 

 

 

 

 

 

 

 

(3,909

)

 

 

 

 

 

(3,909

)

Balance, September 30, 2019

 

 

9,898

 

 

$

9,158

 

 

 

15,473,275

 

 

$

267,559

 

 

$

62,023

 

 

$

(21,144

)

 

$

11,667

 

 

$

329,263

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Shares

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

Accumulated

Other

 

 

Total

 

 

 

Outstanding

Shares

 

 

Amount

 

 

Outstanding

Shares

 

 

Amount

 

 

Retained

Earnings

 

 

Treasury

Shares

 

 

Comprehensive

Loss