CIVISTA BANCSHARES, INC. Three-Year Condensed
Consolidated Financial Summary
2023 | 2022 | 2021 | |||||||||||||||||||||||
Earnings | |||||||||||||||||||||||||
Net Income (000) | $42,964 | $39,427 | $40,546 | ||||||||||||||||||||||
Per Common Share Earnings | |||||||||||||||||||||||||
Available To Common Shareholders | |||||||||||||||||||||||||
Basic and Diluted | $2.73 | $2.60 | $2.63 | ||||||||||||||||||||||
Book Value | $23.70 | $21.92 | $23.75 | ||||||||||||||||||||||
Dividends Paid | $0.61 | $0.56 | $0.52 | ||||||||||||||||||||||
Balances | |||||||||||||||||||||||||
Assets (millions) | $3,861.4 | $3,639.4 | $3,102.3 | ||||||||||||||||||||||
Deposits (millions) | $2,985.0 | $2,620.0 | $2,416.7 | ||||||||||||||||||||||
Net Loans (millions) | $2,826.3 | $2,620.5 | $2,062.6 | ||||||||||||||||||||||
Shareholders' Equity (millions) | $372.0 | $334.8 | $355.2 | ||||||||||||||||||||||
Performance Ratios | |||||||||||||||||||||||||
Return On Average Assets | 1.16% | 1.18% | 1.29% | ||||||||||||||||||||||
Return On Average Equity | 12.50% | 12.47% | 11.61% | ||||||||||||||||||||||
Equity Capital Ratio | 9.63% | 9.20% | 11.45% | ||||||||||||||||||||||
Net Loans To Deposit Ratio | 94.68% | 100.02% | 85.35% | ||||||||||||||||||||||
Loss Allowance To Total Loans | 1.30% | 1.08% | 1.28% | ||||||||||||||||||||||
Year In Review
A Message from Dennis Shaffer, President and Chief Executive Officer
Dear Fellow Shareholders,
Every year brings different challenges and the year 2023 was no different for those in the banking industry. Bankers dealt with an uncertain economy, rising interest rates and larger regional bank failures. Throughout it all, Civista employees remained focused on our core mission of improving the financial lives of our customers and shareholders and in making a difference in the communities that we serve. It is this focus that once again led to another outstanding year.
FINANCIAL PERFORMANCE HIGHLIGHTS
For the year, we earned record net income of $43.0 million, or $2.73 per diluted share, compared to $39.4 million, or $2.60 per diluted share, in 2022. This represents a 9% increase over last year's performance. The bank is approximately $3.9 billion in asset size, which is an increase of 6.1% from year end 2022.
The year was highlighted by strong organic loan growth. Loans and Leases, net of adjusted participations, grew by $315 million, or 12.4% annually. Demand came from all areas of our footprint, as we continue to strengthen market share in most of our rural markets and add new customers in our urban markets.
Despite uncertainties associated with the economy and the higher interest rate environment, our credit quality continues to remain strong and delinquencies and charge-offs remain at relatively low levels. Our allowance for loan losses to loans ratio was 1.30% at year end, compared to 1.08% at December 31, 2022.
The bank's net interest margin peaked in December 2022. As a result, the bank's net interest margin did increase 5 basis points to 3.70% for the 12 months
The year was highlighted by strong organic loan growth. Loans and Leases, net of adjusted participations, grew by $315 million, or 12.4% annually.
of 2023, compared to 3.65% for the same period a year ago.
Total deposits increased $365 million, or 13.9%, for the year. However, the growth is primarily related to an increase of $455 million in brokered time deposits, which we used to fund our loan growth.
Deposit gathering and pricing have become extremely competitive. Civista's deposit costs for the fourth quarter 2023 were 179 basis points compared to 22 basis points for the fourth quarter 2022. This increase is primarily related to the 525 basis points in Federal Reserve rate increases over the last 18 months and the regional bank failures that happened in March 2023 as banks paid higher rates to retain current customers and attract new ones.
At Civista, we have established a strong risk management culture and framework which helps us grow in a responsible manner. We are proactive in our approach to identifying, assessing and mitigating risks, which provides a solid foundation for sound decision making.
As a result, even though we had net interest margin expansion year-over-year, we did start to see net interest margin contraction throughout much of the year due to higher interest expense. Much of the expense is the result of a greater reliance on wholesale funding to keep up with our strong loan demand and customers shifting out of non-interest bearing deposits to interest bearing deposits.
Growth remains a priority for us. As we grow, we want to do so in a profitable manner, ensuring that our investment is earned back in a reasonable period of time and accretive to our earnings. Continued profitable growth will make us more efficient by helping us leverage recent and future technology investments and offsetting rising compliance and regulatory costs.
At Civista, we have established a strong risk management culture and framework which helps us grow in a responsible manner. We are proactive in our
approach to identifying, assessing and mitigating risks, which provides a solid foundation for sound decision making. And we continuously monitor, evaluate and refine our risk management strategies, to ensure that we are adaptable to meet the emerging challenges facing our industry.
Each year, we continue to invest significant dollars in technology to help us improve efficiencies and customer satisfaction. In 2023, we migrated our AI- based chatbot to a new platform. This new platform lays the foundation for growing our digital presence at a significantly lower incremental cost with improved customer satisfaction. We also made significant strides in establishing Robotic Process Automation (RPA) in 2023. Several processes have been automated resulting in improved efficiency and quality.
As we look ahead to 2024, we are set to launch our new digital small business lending platform which streamlines our existing process providing quicker decisioning and greater satisfaction for both customers and employees. We also plan to introduce a new omnichannel origination solution enabling us to expand into new consumer markets while driving efficiency.
We remain committed to enhancing the customer experience at every interaction. Several enhancements this year included expanding electronic signature (e-sign) capability for such services as wire transfer; and the addition of mortgage text notifications, which quickly alert applicants to the status of their loan application and requests for additional information.
We also added the ability for large depositors to diversify their balances in money market funds and certificate of deposits through the IntraFi® Network of participating banks. This allows customers to maintain FDIC coverage for balances greater than the standard $250,000 FDIC maximum limit while working exclusively with Civista. Reciprocal deposits flow back to Civista, enabling Civista to continue to support more lending opportunities in the community.
WELCOME TO NEW DIRECTORS
Other highlights in 2023 included the election of two new directors at our April 18, 2023 Annual Meeting. Joining the Civista Bancshares, Inc. and Civista Bank Board of Directors are Darci L. Congrove and Mark J. Macioce. Ms. Congrove is Managing Director of GBQ Partners, LLC, a regional accounting firm in Columbus. Mr. Macioce is Vice President and Chief Information
Officer for MASCO Corporation, parent company of Kichler Lighting located in Solon, Ohio. They replaced William F. Ritzmann and Daniel J. White, who both retired from the corporate and bank boards in April. Also, ret iring from the bank board was Barry W. Boerger. I want to recognize and thank Mr. Ritzmann, Mr. White, and Mr. Boerger for their many years of service to our organization.
GROWTH BY DIVERSIFICATION
In October 2022, Civista acquired Vision Financial Group, Inc. (VFG), a small ticket, business equipment
leasing and finance company based in Pit sburgh,t PA. On September 1, 2023, with the goal of gaining both operational and business development synergies, we merged the VFG subsidiary into the bank and began operating under the name of Civista Leasing & Finance. We believe this integration will continue to enhance revenue opportunities and expand our client services across Civista business lines.
INVESTING IN OUR EMPLOYEES
We also continue to invest in our employees as they are our greatest resource and the reason for our success. Civista University, a new online learning management system, was launched in January 2023 which provides personalized training and career development for our employees. Several of our young leaders at tended and graduated from bank management schools hosted by bank trade associations. We've also created an Innovation Resource Group, where employees come together to exchange ideas and bring new ways to look at issues and drive innovation.
In October, we held our second annual all-employee Day of Learning at The Ohio State University in Columbus. We had over 500 employees in attendance and our
Civista Bank 2023 Day of Learning, The Ohio State University
Civista was well-represented at the Ohio Bankers League "Women in Banking Conference."
agenda included two keynote speakers: Harry Miller, who led a discussion on mental health under his "Don't Make it Weird" mantra, and motivational speaker, Roy Hall, Jr., who spoke about leadership. There was also a question-and-answer session with myself and several members of my executive team. This 'Civista Crew at the Shoe' themed day was capped of fwith an employee networking event at the OSU stadium, where employees participated in punt-pass-and kick games, facility tours and a team photo on the field. This day is truly a highlight of our continuous learning, development, and employee engagement initiatives.
INVESTING IN OUR COMMUNITIES
Civista and its employees continue to donate significant dollars in all the communities that we serve. In addition, our employees donate their time serving in leadership roles or as act vei volunteers at hundreds of organizations where we live and work. Specific employee driven charitable fund-raising events during the year included Casual for a Cause, where
Employees volunteered at Care and Share of Erie County.
Employees volunteered at The Foodbank, Inc., Dayton.
employees donate money monthly to a local charity of choice to dress casually; and Holiday Happenings, where employees donate items that are auctioned off during the holiday season with all proceeds donated to local charities. Civista employees are also significant contributors to the local United Way campaign in all our markets. In the case of United Way and our Holiday Happenings campaign, the company provided matching contributions to the designated charities. We, as an organization, take great pride in being a community leader and through volunteerism hope to make a dif ference in the communities that we serve.
AWARDS & RECOGNITION
I am pleased to report that we were again recognized in 2023, as one of the 2023 Best Banks to Work For and one of the 2023 Best Employers in Ohio. Both of these programs are coordinated with Best Companies Group in partnership with the American Banker publication and Crain's Cleveland Business Journal, respectively.
Dennis Shaffer, President & CEO, accepts the 2023 Shining Star Award presented by the Ohio Bankers League.
Civista was honored as 2023 Large Business of the Year by the Dearborn County (IN) Chamber of Commerce.
Civista was named Business of the Month by the Village of West Liberty and the West Liberty Business Association.
We remain committed to enhancing the customer experience at every interaction.
We were also named and recognized by Bank Director Magazine for our 2023 financial performance, as one of The Best U.S. Banks. This recognition was for bank's ranging in asset size from $1 billion to $5 billion and included financial metrics measuring profitability, capital adequacy, asset quality and total shareholder return.
In closing, I am very pleased with our 2023 results and accomplishments. Our goal is to remain an independent community bank and our strong financial performance allows us to do so. As we move forward into a new year, I am confident that our disciplined approach to managing Civista and our long-term focus on driving shareholder value will continue to produce positive results.
As always, please read your proxy and vote your shares. The Annual Shareholder meeting is April 16, 2024, at 10 am and will be held at BGSU Firelands College
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Cedar Point Center, One University Drive, Huron, Ohio. I encourage shareholders to at endt . Thank you for your interest in our company. At Civista, we value
relationships and seek to make a dif erencef in our communities.
Warmest Regards,
Dennis G. Shaffer
President and Chief Executive Officer
Employee networking at our 2023 Day of Learning held at The Ohio State University.
Board of Directors
Civista Bancshares & Civista Bank
Front row: Congrove, Wise, Shaffer, Murray, Oliver, Mattlin, Miller.
Back row: Nickles, Bacon, Wurm, Perfect, Singer, Weaks, Macioce.
Dennis E. Murray Jr. | Julie A. Mattlin | Harry Singer |
Chairman of the Board, | Principal and Owner, | President and CEO, Sandusco, Inc. |
Civista Bancshares, Inc. and Civista Bank | DKMG Consulting, LLC. | and ICM Distributing Company, Inc. |
Partner, Murray & Murray Co., LPA | James O. Miller | Lorina W. Wise |
Dennis G. Shaffer | ||
Former Chairman of the Board, | Chief Human Resources Officer, | |
President and CEO, | Civista Bancshares, Inc. and Civista Bank | Nationwide Children's Hospital |
Vice-Chairman of the Board, | Allen R. Nickles | Gerald B. Wurm |
Civista Bancshares, Inc. and Civista Bank | ||
John O. Bacon | Of Counsel, Payne, Nickles & Company | President, Wurm's Woodworking Co. |
M. Patricia Oliver | and Creative Plastics International | |
President and CEO, | ||
The Mack Iron Works Company | Retired Partner, Tucker, Ellis, LLP | DIRECTORS EMERITUS |
Founder, The Oliver Consulting Group | ||
Darci L. Congrove | ||
Clyde A. "Chip" Perfect, Jr. | James D. Heckelman | |
CPA - Managing Director, | ||
Retired, Founder of Dan-Mar Co., Inc. | ||
GBQ Partners, LLC | President and CEO, Perfect North Slopes | |
Mark J. Macioce | Nathan E. Weaks | David A. Voight |
Former Chairman of the Board | ||
Vice President, Chief Information Officer, | President, Automatic Feed Company | |
and Former President and CEO, | ||
MASCO Corporation | ||
Civista Bancshares, Inc. and Civista Bank | ||
Sharing financial education in local schools.
Vision:
Working together to be the community's trusted financial provider.
Mission:
To improve the financial lives of our customers, employees, and shareholders, to make a difference in the communities that we serve.
Leadership
Civista Bancshares Executive Officers
Dennis G. Shaffer
President and
Chief Executive Officer
Robert L. Curry, Jr. | Richard J. Dutton | Russell L. Edwards | Donna M. Waltz-Jaskolski | Carl A. Kessler III | ||||
Chief Risk Officer | Chief Operating Officer | Senior Vice President | Customer Experience Officer | Chief Information Officer | ||||
Retail Banking | ||||||||
Todd A. Michel | Lance A. Morrison | Michael D. Mulford | Charles A. Parcher | Paul J. Stark | ||||
Controller | General Counsel & | Chief Credit Officer | Chief Lending Officer | Chief Credit Officer | ||||
Corporate Secretary | Retired December 2023 | |||||||
Civista Bank Senior Management Team
Richard | Veronica | Richard | Douglas | Jodi | Robert | Debora | Jason |
Bast | Doucette | Finneran | Greulich | Greulich | Katitus | Kline | Kuhnle |
Technology | Human Resources | Regional Market | Finance | Marketing and | Regional Market | Strategic | Wealth |
Executive, | Communications | Executive, | Initiatives | Management | |||
North Central Ohio | Northeast Ohio |
Brenda | Michael | Jeffrey | Mark | David | Aaron | Jessica | William | Jarvis |
Leal | Milchen | Rolfsen | Sams | Shaver | Stephens | Martin-Steuk | Summers | Woodson III |
Digital Banking | Underwriting | Loan | Regional Market | Deposit | Regional Market | Private | Civista Leasing | Mortgage |
Retired December 2023 | Operations | Executive, | Operations | Executive, | Banking | & Finance | Banking | |
SE IN/Cincinnati | Central Ohio | |||||||
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Civista Bancshares Inc. published this content on 13 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 April 2024 15:10:07 UTC.
