# EDGAR Filing Document

**Accession Number:** 0000944745
**File Stem:** 0001193125-23-026287
**Filing Date:** 2023-2
**Character Count:** 59380
**Document Hash:** 6d24754a4edac77cef5c63dc3890a8f6
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-026287.hdr.sgml**: 20230207

**ACCESSION NUMBER**: 0001193125-23-026287

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230207

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230207

**DATE AS OF CHANGE**: 20230207

**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:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36192
- **FILM NUMBER:** 23592899

**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

?xml version="1.0" encoding="utf-8" ? 8-K

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### UNITED STATES

### SECURITIES AND EXCHANGE COMMISSION

#### Washington D.C. 20549

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### FORM 8-K

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#### CURRENT REPORT

#### Pursuant to section 13 or 15(d)

#### of The Securities Exchange Act of 1934

#### Date of Report (Date of earliest event reported) February 7, 2023

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## Civista Bancshares, Inc.

#### (Exact name of Registrant as specified in its charter)

------

---

| | | |
|:---|:---|:---|
| **Ohio** | **001-36192** | **34-1558688** |
| **(State or other jurisdiction of**<br> **incorporation or organization)** | **(Commission**<br> **File Number)** | **(IRS Employer**<br> **Identification No.)** |

---

#### 100 East Water Street, P.O. Box 5016, Sandusky, Ohio 44870

#### (Address of principle executive offices)

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

#### N/A

#### (Former name or former address, if changed since last report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Act of 1934 (§240.12b-2 of this chapter)

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

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br> **Symbol(s)** | **Name of each exchange**<br> **on which registered** |
| **Common** | **CIVB** | **NASDAQ Capital Market** |

---

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. ☐

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---

| | |
|:---|:---|
| **Item 2.02** | **Results of Operations and Financial Condition**  |

---

On February 7, 2023, Civista Bancshares, Inc. announced preliminary unaudited earnings for the three and twelve-month periods ended December 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated here by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

---

| | |
|:---|:---|
| **Item 9.01** | **Financial Statements and Exhibits**  |

---

(d)&nbsp;&nbsp;&nbsp;&nbsp;[Exhibit 99.1 Press release of Civista Bancshares, Inc. reporting financial results and earnings for the three and twelve-month periods ended December 31, 2022.](d358845dex991.htm)

Exhibit 104&nbsp;&nbsp;&nbsp;&nbsp;Cover Page Interactive File-the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | |
|:---|:---|
|  | Civista Bancshares, Inc. |
|  | (Registrant) |
| Date: February 7, 2023 | /s/ Todd A. Michel |
|  | Todd A. Michel, |
|  | Senior Vice President & Controller |

---

## Exhibit 99.1

**Exhibit 99.1**![LOGO](g358845g0206234946625.jpg)

**Civista Bancshares, Inc. Announces Fourth Quarter and Year-to-date 2022 Financial Results** 

***Sandusky, Ohio, February 7, 2023*** /PRNewswire/– Civista Bancshares, Inc. (NASDAQ:CIVB) ("Civista") announced its unaudited financial results for the three and twelve month periods ending December 31, 2022.

Fourth quarter and year-to-date 2022 highlights:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net income of $12.1 million, or $0.77 per diluted share, for the fourth quarter of 2022, compared to
$11.0 million, or $0.73 per diluted share, for the fourth quarter of 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net income of $39.4 million, or $2.60 per diluted share, compared to $40.5 million, or $2.63 per
diluted share, for the twelve months ended December 31, 2022 and 2021, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Low cost of deposits of 22 basis points and total funding costs of 102 basis points for the quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Based on the December 31, 2022 market close share price of $22.01, the $0.14 fourth quarter dividend is
equivalent to an annualized yield of 2.54% and a dividend payout ratio of 18.18%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On July 1, 2022, we consummated the merger of Comunibanc Corp. with and into Civista and Henry County Bank
("HCB"), a wholly owned subsidiary of Comunibanc, with and into Civista Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On October 3, 2022, we consummated the merger of Vision Financial Group ("VFG"), a leasing and
finance company based in Pittsburgh, PA, with and into Civista Bank.

"We are extremely pleased with our fourth quarter results. Due to our strong core funding, our disciplined approach to pricing deposits and the rising interest rate environment, we had another quarter of net interest margin expansion. Our net interest margin improved 11 basis points over the linked quarter to 4.14%. In addition, loan growth for the quarter was strong and loans, exclusive of our VFG acquisition, grew by $151 million or at an annualized rate of 26%", said Dennis G. Shaffer, CEO and President of Civista.

------

**Results of Operations**:

<u>For the three-month periods ended December 31, 2022 and 2021</u> 

Net interest income increased $9.2 million, or 39.6%, for the fourth quarter of 2022 compared to the same period of 2021. Interest income increased $13.3 million while interest expense increased $4.0 million. Both increases were primarily due to increases in rates. Accretion of PPP fees was $38 thousand during the fourth quarter 2022 compared to $1.6 million for the same period in 2021.

Net interest margin increased 72 basis points to 4.14% for the fourth quarter of 2022, compared to 3.42% for the same period a year ago. The increase in margin is primarily due to increases in the volume of earning assets and to the yield on earning assets.

The increase in interest income was primarily due to a $326.0 million increase in average earning assets, which led to a $7.1 million increase in interest income. Additionally, increased interest rates led to a 118 basis point increase in asset yield and a $6.2 million increase in interest income.

Interest expense increased $4.0 million, or 284.2%, for the fourth quarter of 2022, compared to the same period last year. The average rate paid on interest-bearing liabilities increased 70 basis points, while average interest-bearing liabilities increased $343.1 million. The increase in interest-bearing liabilities was primarily in short-term borrowings to fund growth. The increase in the funding rate is primarily due to the issuance of $75 million, 3.25% subordinated debt in November 2021. Interest-bearing deposit costs have increased 21 basis points compared to a year ago.

------

Average Balance Analysis

(Unaudited - Dollars in thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Three Months Ended December 31, | Three Months Ended December 31, | Three Months Ended December 31, | Three Months Ended December 31, | Three Months Ended December 31, | Three Months Ended December 31, |
|  | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 |
|  | Average<br>balance | Interest | Yield/<br>rate \* | Average<br>balance | Interest | Yield/<br>rate \* |
| <u>Assets:</u> |  |  |  |  |  |  |
|  Interest-earning assets: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans \*\* | $2458980 | $33086 | 5.34% | $1973989 | $21430 | 4.31% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taxable securities \*\*\* | 365258 | 2692 | 2.61% | 285734 | 1545 | 2.17% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-taxable securities \*\*\* | 264869 | 2190 | 3.65% | 236324 | 1651 | 3.76% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-bearing deposits in other banks | 10394 | 22 | 0.84% | 277451 | 108 | 0.15% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total interest-earning assets \*\*\* | $3099501 | 37990 | 4.81% | $2773498 | 24734 | 3.63% |
|  Noninterest-earning assets: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and due from financial institutions | 16435 |  |  | 28401 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Premises and equipment, net | 64952 |  |  | 22734 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued interest receivable | 10385 |  |  | 7609 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intangible assets | 132516 |  |  | 84541 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bank owned life insurance | 53378 |  |  | 46807 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets | 67557 |  |  | 33315 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less allowance for loan losses | (28025) |  |  | (26595) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Assets | $3416699 |  |  | $2970310 |  |  |
|  <u>Liabilities and Shareholders' Equity:</u> |  |  |  |  |  |  |
|  Interest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Demand and savings | $1449412 | $582 | 0.16% | $1368640 | $240 | 0.07% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Time | 260607 | 907 | 1.38% | 250920 | 569 | 0.90% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-term FHLB advances | 258254 | 2517 | 3.87% | 543 | 1 | 0.73% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-term FHLB advances | 5694 | (5) | -0.35% | 75000 | 195 | 1.03% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fed funds purchased | 543 | 6 | 4.38% |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other borrowings | 16006 | 334 | 8.28% |  |  | 0.00% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subordinated debentures | 103784 | 1081 | 4.13% | 54961 | 402 | 2.90% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repurchase agreements | 23429 | 3 | 0.05% | 24590 | 4 | 0.60% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total interest-bearing liabilities | $2117729 | 5425 | 1.02% | $1774654 | 1411 | 0.32% |
|  Noninterest-bearing deposits | 939736 |  |  | 811053 |  |  |
|  Other liabilities | 59725 |  |  | 35632 |  |  |
|  Shareholders' equity | 299509 |  |  | 348971 |  |  |
|  Total Liabilities and Shareholders' Equity | $3416699 |  |  | $2970310 |  |  |
|  Net interest income and interest rate spread |  | $32565 | 3.80% |  | $23323 | 3.31% |
|  Net interest margin \*\*\* |  |  | 4.14% |  |  | 3.42% |

---

\* Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $582 thousand and $440 thousand for the periods ended December 31, 2022 and 2021, respectively. 

\*\* Average balance includes nonaccrual loans

\*\*\* Average yield on investments were calculated by adjusting the average balances of taxable and nontaxable securities by unrealized losses of $80.8 million in 2022 and by unrealized gains of $18.6 million in 2021. These adjustments were also made when calculating the yield on earning assets and the margin. 

------

<u>For the twelve-month periods ended December 31, 2022 and 2021</u> 

Net interest income increased $14.8 million, or 15.5%, compared to the same period in 2021.

Interest income increased $19.5 million, or 19.2%, for the twelve months of 2022. Average earning assets increased $126.4 million, resulting in an increase in interest income of $13.2 million. Average yields increased 43 basis points, resulting in an increase in interest income of $6.3 million. During the twelve-month period, the Bank had average PPP Loans totaling $10.5 million compared to $155.3 million for the same period last year. For the twelve months ended December 31, 2022, these loans had an average yield of 17.86% including the amortization of PPP fees, which increased the margin by 5 basis points.

Interest expense increased $4.7 million, or 74.9%, for the twelve months of 2022 compared to the same period of 2021. Average rates increased 22 basis points compared to 2021 and average interest-bearing liabilities increased $182.2 million, resulting in a $4.6 million increase in interest expense.

Net interest margin increased 28 basis points to 3.75% for the twelve months of 2022, compared to 3.47% for the same period a year ago.

------

Average Balance Analysis

(Unaudited - Dollars in thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Twelve Months Ended December 31, | Twelve Months Ended December 31, | Twelve Months Ended December 31, | Twelve Months Ended December 31, | Twelve Months Ended December 31, | Twelve Months Ended December 31, |
|  | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 |
|  | Average<br>balance | Interest | Yield/<br>rate \* | Average<br>balance | Interest | Yield/<br>rate \* |
| <u>Assets:</u> |  |  |  |  |  |  |
|  Interest-earning assets: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans \*\* | $2199082 | $103151 | 4.69% | $2026907 | $89570 | 4.42% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taxable securities \*\*\* | 341600 | 9123 | 2.49% | 232813 | 5473 | 2.41% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-taxable securities \*\*\* | 263981 | 7859 | 3.56% | 217786 | 6250 | 3.96% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-bearing deposits in other banks | 146849 | 1120 | 0.76% | 347573 | 449 | 0.13% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total interest-earning assets \*\*\* | $2951512 | 121253 | 4.12% | $2825079 | 101742 | 3.69% |
|  Noninterest-earning assets: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and due from financial institutions | 84777 |  |  | 35404 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Premises and equipment, net | 34577 |  |  | 22617 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued interest receivable | 8650 |  |  | 8010 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intangible assets | 96492 |  |  | 84747 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bank owned life insurance | 50076 |  |  | 46435 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets | 50765 |  |  | 36456 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less allowance for loan losses | (27721) |  |  | (26366) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Assets | $3249128 |  |  | $3032382 |  |  |
|  <u>Liabilities and Shareholders' Equity:</u> |  |  |  |  |  |  |
|  Interest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Demand and savings | $1423134 | $1442 | 0.10% | $1315220 | $1219 | 0.09% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Time | 253399 | 2398 | 0.95% | 265294 | 2956 | 1.11% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-term FHLB advances | 66875 | 2566 | 3.84% | 137 | 1 | 0.73% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-term FHLB advances | 45325 | 510 | 1.13% | 94041 | 1163 | 1.24% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fed funds purchased | 137 | 6 | 4.38% |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other borrowings | 4002 | 335 | 3.64% |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subordinated debentures | 103741 | 3781 | 8.37% | 35863 | 955 | 3.28% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repurchase agreements | 22293 | 11 | 0.05% | 26165 | 23 | 0.09% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total interest-bearing liabilities | $1918906 | 11049 | 0.58% | $1736720 | 6317 | 0.36% |
|  Noninterest-bearing deposits | 937890 |  |  | 907591 |  |  |
|  Other liabilities | 76189 |  |  | 38868 |  |  |
|  Shareholders' equity | 316143 |  |  | 349203 |  |  |
|  Total Liabilities and Shareholders' Equity | $3249128 |  |  | $3032382 |  |  |
|  Net interest income and interest rate spread | Net interest income and interest rate spread | $110204 | 3.55% |  | $95425 | 3.33% |
|  Net interest margin \*\*\* |  |  | 3.75% |  |  | 3.47% |

---

\* Average yields are presented on a tax equivalent basis. The tax equivalent effect associated with loans and investments, included in the yields above, was $2.09 million and $1.67 million for the periods ended December 31, 2022 and 2021, respectively. 

\*\* Average balance includes nonaccrual loans

\*\*\* Average yield on investments were calculated by adjusting the average balances of taxable and nontaxable securities by unrealized losses of $39.8 million in 2022 and by unrealized gains of $23.9 million in 2021. These adjustments were also made when calculating the yield on earning assets and the margin. 

------

Provision for loan losses was $752 thousand for the fourth quarter of 2022 while there was no provision in the fourth quarter of 2021. Provision for loan losses was $1.8 million for the twelve months of 2022 compared to $830 thousand for the twelve months of 2021. The reserve ratio was 1.12% at December 31, 2022 and 1.33% at December 31, 2021. Loans outstanding at December 31, 2022 include balances acquired related to the acquisition of Comunibanc of approximately $174.3 million, and balances acquired related to the acquisition of VFG of approximately $67.2 million. These two acquired portfolios have a combined credit mark of $5.4 million.

Civista currently estimates that, upon adoption of Accounting Standards Update ("ASU") 2016-13, *Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments* ("ASU 2016-13"), that the allowance for credit losses will increase by approximately $3.3 million. In addition, the Bank expects to recognize a liability for unfunded loan commitments of approximately $3.4 million upon adoption. The impact of adoption will not be significant to the Banks regulatory capital. The Bank will not elect to phase in the over a three-year period, the standards impact on regulatory capital as permitted by the regulatory transition rules. The Bank will finalize the adoption during the first quarter of 2023.

------

For the fourth quarter of 2022, noninterest income totaled $10.1 million, an increase of $3.3 million, or 47.8%, compared to the prior year's fourth quarter.

**Noninterest income** 

(unaudited - dollars in thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three months ended December 31, | Three months ended December 31, | Three months ended December 31, | Three months ended December 31, |
|  | 2022 | 2021 | $ change | % change |
|  Service charges | $2070 | $1813 | $257 | 14.2% |
|  Net gain/(loss) on sale of securities |  | (1) | 1 | 100.0% |
|  Net gain/(loss) on equity securities | 162 | (5) | 167 | N/M |
|  Net gain on sale of loans | 1251 | 1467 | (216) | -14.7% |
|  ATM/Interchange fees | 1509 | 1493 | 16 | 1.1% |
|  Wealth management fees | 1189 | 1287 | (98) | -7.6% |
|  Lease revenue and residual income | 2310 |  | 2310 | 0.0% |
|  Bank owned life insurance | 252 | 448 | (196) | -43.8% |
|  Swap fees | 247 | 72 | 175 | 243.1% |
|  Other | 1074 | 237 | 837 | 353.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noninterest income | $10064 | $6811 | $3253 | 47.8% |

---

N/M - not meaningful

Service charges increased due to a $145 thousand increase service charges, primarily on personal deposit accounts, and a $83 thousand increase in overdraft fees.

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

Net gain on sale of loans decreased primarily because of a decrease in volume of loans sold, which was driven by increased interest rates. The volume of loans sold totaled $20.2 million and $55.1 million during the three months ended December 31, 2022 and 2021, respectively.

Lease revenue and residual income increased $2.3 million due to the acquisition of VFG.

Bank owned life insurance decreased due to a $187 thousand death benefit paid in 2021.

Swap fees increased due to the volume of swaps performed during the quarter ended December 31, 2022 as compared to the same period of 2021.

Other income increased $352 thousand due to rental income and $341 thousand due to brokerage fee income, both related to the acquisition of VFG. Additionally, mortgage servicing rights amortization increased $201 thousand.

------

For the twelve months ended December 31, 2022, noninterest income totaled $29.1 million, a decrease of $2.4 million, or 7.6%, compared to the same period in the prior year.

**Noninterest income** 

(unaudited - dollars in thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Twelve months ended December 31, | Twelve months ended December 31, | Twelve months ended December 31, | Twelve months ended December 31, |
|  | 2022 | 2021 | $ change | % change |
|  Service charges | $7074 | $5905 | $1169 | 19.8% |
|  Net gain on sale of securities | 10 | 1786 | (1776) | -99.4% |
|  Net gain/(loss) on equity securities | 118 | 186 | (68) | -36.6% |
|  Net gain on sale of loans | 3397 | 8042 | (4645) | -57.8% |
|  ATM/Interchange fees | 5499 | 5443 | 56 | 1.0% |
|  Wealth management fees | 4902 | 4857 | 45 | 0.9% |
|  Lease revenue and residual income | 2310 |  | 2310 | 0.0% |
|  Bank owned life insurance | 984 | 1200 | (216) | -18.0% |
|  Tax refund processing fees | 2375 | 2375 |  | 0.0% |
|  Swap fees | 247 | 207 | 40 | 19.3% |
|  Other | 2160 | 1451 | 709 | 48.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noninterest income | $29076 | $31452 | $(2376) | -7.6% |

---

Service charges increased due to a $680 thousand increase overdraft fees and a $462 thousand increase in service charges on deposit accounts.

Net gain on sale of securities decreased due to the $1.8 million nonrecurring gain on the sale of Visa Class B shares in 2021.

Net loss on equity securities increased due to market value decreases.

Net gain on sale of loans decreased primarily because of a decrease in volume of loans sold, which was driven by increased interest rates. The volume of loans sold totaled $127.8 million and $260.3 million during the twelve months ended December 31, 2022 and 2021, respectively.

Lease revenue and residual income increased due to the acquisition of Vision Financial Group.

Bank owned life insurance decreased due to a $187 thousand death benefit paid in 2021.

Other income increased due to increases in wire transfer fees, merchant credit card fees, loan servicing fees, amortization of mortgage servicing rights. Rental income increased $352 thousand and brokerage fee income increased $341 thousand, both related to the acquisition of VFG.

------

For the fourth quarter of 2022, noninterest expense totaled $27.3 million, an increase of $10.3 million, or 61.0%, compared to the prior year's fourth quarter. The increase in noninterest expense includes $2.2 million of one-time costs related to the Comunibanc and VFG acquisitions.

**Noninterest expense** 

(unaudited - dollars in thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three months ended December 31, | Three months ended December 31, | Three months ended December 31, | Three months ended December 31, |
|  | 2022 | 2021 | $ change | % change |
|  Compensation expense | $14407 | $10112 | $4295 | 42.5% |
|  Net occupancy and equipment | 4649 | 1495 | 3154 | 211.0% |
|  Contracted data processing | 889 | 363 | 526 | 144.9% |
|  Taxes and assessments | 356 | 804 | (448) | -55.7% |
|  Professional services | 1795 | 460 | 1335 | 290.2% |
|  Amortization of intangible assets | 406 | 222 | 184 | 82.9% |
|  ATM/Interchange expense | 589 | 471 | 118 | 25.1% |
|  Marketing | 444 | 103 | 341 | 331.1% |
|  Software maintenance expense | 993 | 883 | 110 | 12.5% |
|  Other | 2773 | 2049 | 724 | 35.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noninterest expense | $27301 | $16962 | $10339 | 61.0% |

---

Compensation expense increased primarily due to the acquisition of Comunibanc Corp and VFG. The quarter-to-date average full time equivalent (FTE) employees were 530.5 at December 31, 2022, an increase of 86.2 FTEs over the same period in 2021 due to the two acquisitions completed in 2022.

The increase in occupancy expense is due to increases in utilities and ground maintenance as a result of adding eight additional branches and general cost increases.

The increase in data processing expense was due to deconversion fees of $460 related to the acquisition of Comunibanc Corp.

The decrease in taxes and assessments was attributable to a $532 thousand refund of overpayment of quarterly estimated taxes paid.

Professional services increased primarily due to one-time merger related legal and audit fees of $637 thousand, accompanied by increases in accounting and tax professional fees, accompanied by increases in recruitment fees.

The increase in amortization of intangible assets is related to the merger with Comunibanc Corp.

Marketing expense increased due to a general increase in marketing and increased marketing efforts in newly acquired markets.

------

The increase in software maintenance expense is due to both increases in software maintenance contracts as well as the implementation of the new digital banking platform, introduced in June 2021.

Other operating expenses increased primarily due to other operating expenses of VFG of $516 thousand, accompanied by increases in travel and lodging of $93 thousand, and donations of $114 thousand.

The efficiency ratio was 63.3% for the quarter ended December 31, 2022 compared to 55.5% for the quarter ended December 31, 2021. The change in the efficiency ratio is primarily due to an increase in net interest expense. partially offset by an increase in net interest income.

Civista's effective income tax rate for the fourth quarter 2022 was 16.7% compared to 16.6% in 2021.

For the twelve months ended December 31, 2022, noninterest expense totaled $90.5 million, an increase of $12.8 million, or 16.5%, compared to the same period in the prior year. The increase in noninterest expense includes $3.8 million of one-time costs related to the Comunibanc and VFG acquisitions.

**Noninterest expense** 

(unaudited - dollars in thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Twelve months ended December 31, | Twelve months ended December 31, | Twelve months ended December 31, | Twelve months ended December 31, |
|  | 2022 | 2021 | $ change | % change |
|  Compensation expense | $51061 | $44690 | $6371 | 14.3% |
|  Net occupancy and equipment | 9771 | 6051 | 3720 | 61.5% |
|  Contracted data processing | 2788 | 1725 | 1063 | 61.6% |
|  Taxes and assessments | 2772 | 3240 | (468) | -14.4% |
|  Professional services | 5388 | 2715 | 2673 | 98.5% |
|  Amortization of intangible assets | 1296 | 890 | 406 | 45.6% |
|  ATM/Interchange expense | 2248 | 2314 | (66) | -2.9% |
|  Marketing | 1513 | 1103 | 410 | 37.2% |
|  Software maintenance expense | 3433 | 2755 | 678 | 24.6% |
|  Other | 10223 | 12183 | (1960) | -16.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noninterest expense | $90493 | $77666 | $12827 | 16.5% |

---

The increase in compensation expense was due to increased payroll, 401k expenses, payroll taxes and commission and incentive-based costs. Payroll and payroll related expenses increased due to annual pay increases. The additions of Comunibanc and VFG also contributed $3.4 million to the increase.

The increase in occupancy and equipment expense was primarily due to a $2.4 million increase in equipment depreciation related to the acquisition of VFG. The expense also increased related to building maintenance and deprecation, purchases of security and other equipment purchases and grounds maintenance.

------

Contracted data processing fees increased due deconversion fees of $1.0 million related to the acquisition of Comunibanc Corp.

Professional services primarily increased due to a $1.7 million increase in merger related expenses, accompanied by increases in legal and audit fees and consulting fees.

The increase in amortization expense is due to $428 thousand related to the acquisition of Comunibanc Corp.

Marketing expense increased due to a $233 thousand increase, primarily related to marketing efforts in newly acquired markets.

The increase in software maintenance expense is due to both increases in software maintenance contracts as well as the implementation of the new digital banking platform, introduced in June 2021.

The decrease in other expense is due to the 2021 prepayment penalty of $3.7 million related to the early payoff of an FHLB long-term advance. This was partially offset by a credit to the valuation adjustment for mortgage servicing rights posted in 2021 and increases in travel, lodging and meals, donations, stationery and supplies and bad check expense.

The efficiency ratio was 64.3% for the twelve months ended December 31, 2022 compared to 60.6% for the twelve months ended December 31, 2021. The change in the efficiency ratio is primarily due to an increase in noninterest expense and a decrease in noninterest interest income.

Civista's effective income tax rate for the twelve months of 2022 was 16.2% compared to 16.2% in same period in 2021.

**Balance Sheet** 

Total assets increased $524.9 million, or 17.4%, from December 31, 2021 to December 31, 2022, due to both organic growth and to the acquisitions of Comunibanc Corp. on July 1, 2022 and VFG on October 3, 2022. The growth from acquisitions was $234.7 million.

------

**End of period loan balances** 

(unaudited - dollars in thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | September 30,<br>2022 | December 31,<br>2021 | $ Change | % Change |
|  Commercial and Agriculture | $278029 | $203293 | $74736 | 36.8% |
|  Paycheck protection program loans | 566 | 43209 | (42643) | -98.7% |
|  Commercial Real Estate: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Owner Occupied | 371147 | 295452 | 75695 | 25.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-owner Occupied | 1018736 | 829310 | 189426 | 22.8% |
|  Residential Real Estate | 552781 | 430060 | 122721 | 28.5% |
|  Real Estate Construction | 243127 | 157127 | 86000 | 54.7% |
|  Farm Real Estate | 24708 | 28419 | (3711) | -13.1% |
|  Lease financing receivable | 36797 |  | 36797 | 0.0% |
|  Consumer and Other | 20775 | 11009 | 9766 | 88.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Loans | $2546666 | $1997879 | $548787 | 27.5% |

---

Loan balances increased $548.8 million, or 27.5% since December 31, 2021, including the $167.5 million portfolio related to Comunibanc Corp and the $67.2 million portfolio related to VFG. The growth is partially offset by a $42.6 million decrease in PPP loans. Removing the balances in the portfolios related to Comunibanc, VFG and PPP loans, the loan portfolio increased $314.1 million or 15.7%. Commercial Real Estate grew across all categories except Farm Real Estate. Even with interest rates rising, there was consistent demand in both the Non-owner Occupied and Owner Occupied categories. The growth has come from all regions and continued to be exceptionally strong in our major metropolitan areas of Cleveland, Columbus, and Cincinnati. Residential Real Estate has increased due to more need this year for the on-balance sheet products of residential construction loans, Jumbo Loans, and our Community View CRA product. Commercial and Agriculture loans continue to grow as we successfully onboard new Commercial & Industrial clients. Real Estate Construction increased as the construction demand remained steady and many of the projects are nearing completion.

**Deposits** 

Total deposits increased $203.3 million, or 8.4%, from December 31, 2021 to December 31, 2022, due to the addition of the $203.3 million of deposits related to the Comunibanc deal.

------

**End of period deposit balances** 

(unaudited - dollars in thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | December 31,<br>2022 | December 31,<br>2021 | $ Change | % Change |
|  Noninterest-bearing demand | $896333 | $788906 | $107427 | 13.6% |
|  Interest-bearing demand | 527879 | 537510 | (9631) | -1.8% |
|  Savings and money market | 876427 | 843837 | 32590 | 3.9% |
|  Time deposits | 319345 | 246448 | 72897 | 29.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Deposits | $2619984 | $2416701 | $203283 | 8.4% |

---

The increase in noninterest-bearing demand of $107.4 million was primarily due to $71.2 million of deposits related to the merger with Comunibanc Corp and a $29.4 million increase in cash balances related to the Company's participation in a tax refund processing program. Interest-bearing demand deposits decreased $9.6 million, attributable to decreases in business and public-fund interest bearing demand accounts of $34.3 million and $12.3 million, respectively. These decreases were partially offset by the increase in interest bearing demand deposits related to the Comunibanc merger of $36.3 million. Savings and money market balances increased $32.6 million, resulting from Comunibanc Corp balances of $79.4 million and increases in personal savings but partially offset by decreases in money market deposits of $35.5 million and brokered money market deposits of $19.1 million. Decreases in time deposits including accounts over $100K and public time deposits were partially offset by the addition of time deposits related to Comunibanc of $31.1 million combined with an increase in brokered time deposits of $90.0 million resulting in the overall increase of $73 million, year over year.

FHLB advances totaled $75.0 million at December 31, 2021. The entire outstanding balance was called in July. This was replaced by $3.6 million of term advances related to Comunibanc and to overnight advances of $393.7 million.

**Stock Repurchase Program** 

During the twelve months of 2022, Civista repurchased 742,015 shares for $16.8 million at a weighted average price of $22.58 per share, including 392,847 shares repurchased under the previous authorization for $9.3 million. We have approximately $6.1 million remaining of the current $13.5 million repurchase authorization, which was approved in April 2022. In addition, Civista liquidated 5,403 shares held by employees, at $24.66 per share, to satisfy tax obligations stemming from vesting of restricted shares.

**Shareholders' Equity** 

Total shareholders' equity decreased $20.4 million from December 31, 2021 to December 31, 2022, primarily due to a $66.9 million increase in accumulated other comprehensive loss caused by an increase in interest rates. The increase in other comprehensive loss does not impact our regulatory capital adequacy ratios. Shareholders' equity also decreased due to a $16.9 million repurchase of treasury shares. The decrease in equity was partially offset by a $30.9 million increase in retained earnings and a $32.4 million increase in common stock. The increase in common stock was primarily a result of shares issued related to the Comunibanc and VFG acquisitions.

------

**Asset Quality** 

Civista recorded net recoveries of $118 thousand for the twelve months of 2022 compared to net recoveries of $783 thousand for the same period of 2021. The allowance for loan losses to loans ratio was 1.12% at December 31, 2022 and 1.33% at December 31, 2021.

<u>Allowance for Loan Losses</u> 

(dollars in thousands)

---

| | | |
|:---|:---|:---|
|  | December 31,<br>2022 | December 31,<br>2021 |
|  Beginning of period | $26641 | $25028 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Charge-offs | (222) | (159) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Recoveries | 340 | 942 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision | 1752 | 830 |
|  End of period | $28511 | $26641 |

---

Non-performing assets at December 31, 2022 were $10.9 million, a 103.1% increase from December 31, 2021. The non-performing assets to assets ratio was 0.31% at December 31, 2022 and 0.18% at December 31, 2021. The allowance for loan losses to non-performing loans decreased from 496.10% at December 31, 2021 to 261.45% at December 31, 2022.

<u>Non-performing Assets</u> 

(dollars in thousands)

---

| | | |
|:---|:---|:---|
|  | December 31,<br>2022 | December 31,<br>2021 |
|  Non-accrual loans | $7890 | $3873 |
|  Restructured loans | 3015 | 1497 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total non-performing loans | 10905 | 5370 |
|  Other Real Estate Owned |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total non-performing assets | $10905 | $5370 |

---

**<u>Conference Call and Webcast</u>**

Civista Bancshares, Inc. will also host a conference call to discuss the Company's financial results for the fourth quarter of 2022 at 1:00 p.m. ET on Tuesday, February 7, 2023. Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company's website, www.civb.com. Participants can also listen to the conference call by dialing 855-238-2712 and ask to be joined into the Civista Bancshares, Inc. 2022 earnings call. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

------

An archive of the webcast will be available for one year on the Investor Relations section of the Company's website (<u>www.civb.com</u>).

**<u>Forward Looking Statements</u>**

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Civista. For these statements, Civista claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Civista, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Civista' reports filed with the Securities and Exchange Commission, including those described in "Item 1A Risk Factors" of Part I of Civista's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and any additional risks identified in the Company's subsequent Form 10-Q's. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Civista does not undertake, and specifically disclaims any obligation, to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Civista Bancshares, Inc., is a $3.5 billion financial holding company headquartered in Sandusky, Ohio. Its primary subsidiary, Civista Bank, was founded in 1884 and provides full-service banking, commercial lending, mortgage, and wealth management services. Today, Civista Bank operates 43 locations across Ohio, Southeastern Indiana and Northern Kentucky. Civista Bank also offers commercial equipment leasing services for businesses nationwide through its subsidiary, Vision Financial Group, Inc., centered in Pittsburgh, Pennsylvania. Civista Bancshares' common shares are traded on the NASDAQ Capital Market under the symbol "CIVB". Learn more at <u>www.civb.com</u>.

For additional information, contact:

Dennis G. Shaffer

CEO and President

Civista Bancshares, Inc.

888-645-4121

------

Civista Bancshares, Inc.

Financial Highlights

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

Consolidated Condensed Statement of Income

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended | Three Months Ended | Twelve Months Ended | Twelve Months Ended |
|  | December 31, | December 31, | December 31, | December 31, |
|  | 2022 | 2021 | 2022 | 2021 |
|  Interest income | $37990 | $24735 | $121253 | $101742 |
|  Interest expense | 5425 | 1412 | 11049 | 6317 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net interest income | 32565 | 23323 | 110204 | 95425 |
|  Provision for loan losses | 752 |  | 1752 | 830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net interest income after provision | 31813 | 23323 | 108452 | 94595 |
|  Noninterest income | 10064 | 6811 | 29076 | 31452 |
|  Noninterest expense | 27301 | 16962 | 90493 | 77666 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income before taxes | 14576 | 13172 | 47035 | 48381 |
|  Income tax expense | 2428 | 2190 | 7608 | 7835 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income | 12148 | 10982 | 39427 | 40546 |
|  Dividends paid per common share | $0.14 | $0.14 | $0.56 | $0.52 |
|  Earnings per common share |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income | $12148 | $10982 | $39427 | $40546 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less allocation of earnings and dividends to participating securities | 54 | 51 | 177 | 173 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income available to common shareholders - basic | $12094 | $10931 | $39250 | $40373 |
|  Weighted average common shares outstanding | 15717439 | 15009376 | 15162033 | 15408863 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less average participating securities | 70179 | 70349 | 68043 | 65648 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Weighted average number of shares outstanding used to calculate basic earnings per share | 15647260 | 14939027 | 15093990 | 15343215 |
|  Earnings per common share <sup>(1)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | $0.77 | $0.73 | $2.60 | $2.63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | 0.77 | 0.73 | 2.60 | 2.63 |
|  Selected financial ratios: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on average assets | 1.41% | 1.47% | 1.21% | 1.34% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on average equity | 16.09% | 12.49% | 12.47% | 11.61% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividend payout ratio | 18.11% | 19.13% | 21.54% | 19.76% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net interest margin (tax equivalent) | 4.14% | 3.42% | 3.75% | 3.47% |

---

------

Selected Balance Sheet Items

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

---

| | | |
|:---|:---|:---|
|  | December 31,<br>2022 | December 31,<br>2021 |
|  | (unaudited) | (unaudited) |
|  Cash and due from financial institutions | $43361 | $264239 |
|  Investment in time deposits | 1477 | 1730 |
|  Investment securities | 617592 | 560946 |
|  Loans held for sale | 683 | 1972 |
|  Loans | 2546666 | 1997879 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: allowance for loan losses | (28511) | (26641) |
|  Net loans | 2518155 | 1971238 |
|  Other securities | 33585 | 17011 |
|  Premises and equipment, net | 64018 | 22445 |
|  Goodwill and other intangibles | 133528 | 84432 |
|  Bank owned life insurance | 53543 | 46641 |
|  Other assets | 71888 | 42251 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $3537830 | $3012905 |
|  Total deposits | $2619984 | $2416701 |
|  Federal Home Loan Bank advances - short term | 393700 |  |
|  Federal Home Loan Bank advances - long term | 3578 | 75000 |
|  Securities sold under agreements to repurchase | 25143 | 25495 |
|  Subordinated debentures | 103799 | 103735 |
|  Other borrowings | 15516 |  |
|  Securities purchased payable | 1338 | 3524 |
|  Tax refunds in process | 278 | 549 |
|  Accrued expenses and other liabilities | 39658 | 32689 |
|  Total shareholders' equity | 334836 | 355212 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and shareholders' equity | $3537830 | $3012905 |
|  Shares outstanding at period end | 15728234 | 14954200 |
|  Book value per share | $21.29 | $23.75 |
|  Equity to asset ratio | 9.46% | 11.79% |
|  Selected asset quality ratios: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Allowance for loan losses to total loans | 1.12% | 1.33% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-performing assets to total assets | 0.31% | 0.18% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Allowance for loan losses to non-performing loans | 261.45% | 496.10% |
|  Non-performing asset analysis |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Nonaccrual loans | $7890 | $3873 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Troubled debt restructurings | 3015 | 1497 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other real estate owned |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $10905 | $5370 |

---

------

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **End of Period Balances** | December 31,<br>2022 | September 30,<br>2022 | June 30, 2022 | March 31,<br>2022 | December 31,<br>2021 |
|  **<u>Assets</u>** |  |  |  |  |  |
|  Cash and due from banks | $43361 | $40914 | $233281 | $412698 | $264239 |
|  Investment in time deposits | 1477 | 1479 | 1236 | 1728 | 1730 |
|  Investment securities | 617592 | 604074 | 531978 | 553499 | 560946 |
|  Loans held for sale | 683 | 3491 | 4167 | 4794 | 1972 |
|  Loans | 2546666 | 2328614 | 2064221 | 2018188 | 1997879 |
|  Allowance for loan losses | (28511) | (27773) | (27435) | (27033) | (26641) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Loans | 2518155 | 2300841 | 2036786 | 1991155 | 1971238 |
|  Other securities | 33585 | 18578 | 18511 | 18511 | 17011 |
|  Premises and equipment, net | 64018 | 30168 | 24151 | 22110 | 22445 |
|  Goodwill and other intangibles | 133528 | 113206 | 84021 | 84251 | 84432 |
|  Bank owned life insurance | 53543 | 53291 | 47118 | 46885 | 46641 |
|  Other assets | 71888 | 75677 | 57850 | 48726 | 42251 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Assets** | $3537830 | $3241719 | $3039099 | $3184357 | $3012905 |
|  **<u>Liabilities</u>** |  |  |  |  |  |
|  Total deposits | $2619984 | $2708253 | $2455502 | $2615137 | $2416701 |
|  Federal Home Loan Bank advances - short term | 393700 | 55000 |  |  |  |
|  Federal Home Loan Bank advances - long term | 3578 | 6723 | 75000 | 75000 | 75000 |
|  Securities sold under agreement to repurchase | 25143 | 20155 | 17479 | 23931 | 25495 |
|  Subordinated debentures | 103799 | 103778 | 103737 | 103704 | 103735 |
|  Other borrowings | 15516 |  |  |  |  |
|  Securities purchased payable | 1338 | 2611 | 15025 | 1876 | 3524 |
|  Tax refunds in process | 278 | 2709 | 39448 | 10232 | 549 |
|  Accrued expenses and other liabilities | 39658 | 39888 | 30846 | 26785 | 32689 |
|  Total liabilities | 3202994 | 2939117 | 2737037 | 2856665 | 2657693 |
|  **<u>Shareholders' Equity</u>** |  |  |  |  |  |
|  Common shares | 310182 | 299515 | 278240 | 277919 | 277741 |
|  Retained earnings | 156493 | 146546 | 137592 | 131934 | 125558 |
|  Treasury shares | (73794) | (73641) | (67528) | (61472) | (56907) |
|  Accumulated other comprehensive income(loss) | (58045) | (69818) | (46242) | (20689) | 8820 |
|  Total shareholders' equity | 334836 | 302602 | 302062 | 327692 | 355212 |
|  Total Liabilities and Shareholders' Equity | $3537830 | $3241719 | $3039099 | $3184357 | $3012905 |
| **Quarterly Average Balances** | **Quarterly Average Balances** | **Quarterly Average Balances** | **Quarterly Average Balances** | **Quarterly Average Balances** | **Quarterly Average Balances** |
|  Assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earning assets | $3099501 | $3002256 | $2866362 | $2814589 | $2773498 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities | 630127 | 622924 | 556352 | 575359 | 522058 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans | 2458980 | 2289588 | 2033378 | 2006984 | 1973989 |
|  Liabilities and Shareholders' Equity |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deposits | $2649755 | $2719014 | $2524971 | $2557638 | $2430613 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-bearing deposits | 1710019 | 1738015 | 1630084 | 1623984 | 1619560 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other interest-bearing liabilities | 407710 | 155077 | 200005 | 204299 | 155094 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total shareholders' equity | 299509 | 305134 | 313272 | 347302 | 348971 |

---

------

Supplemental Financial Information

(Unaudited - dollars in thousands except share data)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended |
| **Income statement** | December 31,<br>2022 | September 30,<br>2022 | June 30,<br>2022 | March 31,<br>2022 | December 31,<br>2021 |
|  Total interest and dividend income | $37990 | $32533 | $26064 | $24666 | $24735 |
|  Total interest expense | 5425 | 2094 | 1796 | 1734 | 1412 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net interest income | 32565 | 30439 | 24268 | 22932 | 23323 |
|  Provision for loan losses | 752 | 300 | 400 | 300 |  |
|  Noninterest income | 10064 | 5734 | 5635 | 7643 | 6811 |
|  Noninterest expense | 27301 | 22555 | 20379 | 20258 | 16963 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income before taxes | 14576 | 13318 | 9124 | 10017 | 13171 |
|  Income tax expense | 2428 | 2206 | 1423 | 1551 | 2189 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income | $12148 | $11112 | $7701 | $8466 | $10982 |
| **Per share data** | **Per share data** | **Per share data** | **Per share data** | **Per share data** | **Per share data** |
|  Earnings per common share |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income | $12148 | $11112 | $7701 | $8466 | $10982 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less allocation of earnings and dividends to participating securities | 54 | 52 | 39 | 32 | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income available to common shareholders - basic | $12094 | $11060 | $7662 | $8434 | $10931 |
|  Weighted average common shares outstanding | 15717979 | 15394898 | 14615154 | 14909192 | 15009376 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less average participating securities | 70719 | 71604 | 74286 | 55905 | 70349 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Weighted average number of shares outstanding used to calculate basic earnings per share | 15647260 | 15323294 | 14540868 | 14853287 | 14939027 |
|  Earnings per common share |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | $0.77 | $0.72 | $0.53 | $0.57 | $0.73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | 0.77 | 0.72 | 0.53 | 0.57 | 0.73 |
|  Common shares dividend paid | $2202 | $2042 | $2091 | $2104 | $2140 |
|  Dividends paid per common share | 0.14 | 0.14 | 0.14 | 0.14 | 0.14 |

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Supplemental Financial Information

(Unaudited - dollars in thousands except share data)

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended |
| **Asset quality** | December<br>2022 | September<br>2022 | June<br>2022 | March<br>2022 | December 31,<br>2021 |
|  Allowance for loan losses, beginning of period | $27773 | $27435 | $27033 | $26641 | $26568 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Charge-offs | (58) | (74) | (60) | (30) | (11) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Recoveries | 44 | 112 | 62 | 122 | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision | 752 | 300 | 400 | 300 |  |
|  Allowance for loan losses, end of period | $28511 | $27773 | $27435 | $27033 | $26641 |
|  **Ratios** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Allowance to total loans | 1.12% | 1.19% | 1.33% | 1.34% | 1.33% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Allowance to nonperforming assets | 261.45% | 476.24% | 572.78% | 501.50% | 496.10% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Allowance to nonperforming loans | 261.45% | 476.24% | 572.78% | 501.50% | 496.10% |
|  **Nonperforming assets** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Nonperforming loans | $10905 | $5832 | $4790 | $5390 | $5370 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other real estate owned |  |  |  |  |  |
|  Total nonperforming assets | $10905 | $5832 | $4790 | $5390 | $5370 |
|  **Capital and liquidity** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tier 1 leverage ratio | 8.92% | 9.32% | 9.87% | 9.50% | 10.21% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tier 1 risk-based capital ratio | 10.78% | 11.62% | 13.63% | 14.02% | 14.35% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total risk-based capital ratio | 14.52% | 15.62% | 18.24% | 18.74% | 19.17% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tangible common equity ratio <sup>(1)</sup> | 5.91% | 6.05% | 7.38% | 7.85% | 9.25% |

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(1) See reconciliation of non-GAAP measures at the end of this press
release.

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Reconciliation of Non-GAAP Financial Measures

(Unaudited - dollars in thousands except share data)

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended |
|  | December 31,<br>2022 | September 30,<br>2022 | June 30,<br>2022 | March 31,<br>2022 | December 31,<br>2021 |
|  **Tangible Common Equity** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Shareholder's Equity - GAAP | $334836 | $302602 | $302062 | $327692 | $355212 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: Goodwill and intangible assets | 133528 | 113206 | 84021 | 84251 | 84432 |
|  Tangible common equity (Non-GAAP) | $201308 | $189396 | $218041 | $243441 | $270780 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Shares Outstanding | 15728234 | 15235545 | 14537433 | 14797232 | 14954200 |
|  Tangible book value per share | $12.80 | $12.43 | $15.00 | $16.45 | $18.11 |
|  **Tangible Assets** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Assets - GAAP | $3537830 | $3241719 | $3039099 | $3184357 | $3011983 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: Goodwill and intangible assets | 133528 | 113206 | 84021 | 84251 | 84432 |
|  Tangible assets (Non-GAAP) | $3404302 | $3128513 | $2955078 | $3100106 | $2927551 |
|  Tangible common equity to tangible assets | 5.91% | 6.05% | 7.38% | 7.85% | 9.25% |

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