Civista Bancshares Stock

Civista Bancshares, Inc. operates as the bank holding company for Civista Bank (Civista) that primarily engages in the community banking business.

Civista maintains its main office in Sandusky, Ohio and operates branch banking offices in various Ohio communities, such as Sandusky, Norwalk, Berlin Heights, Huron, Port Clinton, Castalia, New Washington, Shelby, Willard, Greenwich, Plymouth, Shiloh, Akron, Dublin, Plain City, Russells Point, Urbana, West Liberty, Quincy, Dayton, Beachwood, Gahanna, Napoleon, Malinta, Liberty Center, Holgate, Bowling Green, and in various Indiana communities, such as Lawrenceburg, Aurora, West Harrison, Milan, Osgood and Versailles.

FIRST CITIZENS INSURANCE AGENCY, INC. (FCIA) was formed as a wholly-owned subsidiary of the company to allow the it to participate in commission revenue generated through its third party insurance agreement.

WATER STREET PROPERTIES (WSP) was formed as a wholly-owned subsidiary of the company to hold properties repossessed by its subsidiaries.

FIRST CITIZENS INVESTMENTS, INC. (FCI) was formed as a wholly-owned subsidiary of Civista to hold and manage its securities portfolio. The operations of FCI are located in Wilmington, Delaware.

VISION FINANCIAL GROUP, INC. (VFG) was acquired in the fourth quarter of 2022 as a wholly-owned subsidiary of Civista and is a full-service general equipment leasing & financing company. The operations of VFG are located in Pittsburgh, Pennsylvania.

CIVB RISK MANAGEMENT, INC. (CRMI), a wholly-owned subsidiary of the company, is a Delaware-based captive insurance company which insures against certain risks unique to the operations of the company and for which insurance may not be available or economically feasible in insurance marketplace. CRMI pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. CRMI is subject to regulations of the state of Delaware and undergoes periodic examinations by the Delaware Division of Insurance.

The company conducts a general banking business that involves collecting customer deposits, making loans, purchasing securities, and offering Trust services. Civista also engages in a general equipment leasing and financing business through its wholly-owned subsidiary, VFG, which was acquired in October 2022.

Market Area

As of December 31, 2022, the company’s primary market area consisted of the counties in which it operates branches, and loan production offices, including Erie, Crawford, Champaign, Cuyahoga, Franklin, Huron, Logan, Madison, Montgomery, Ottawa, Richland, Henry, Wood and Summit counties in Ohio, Dearborn and Ripley counties in Indiana and Kenton County in Kentucky. The company’s lending is concentrated in these markets and its predominant sources of deposits are the communities in which its offices are located, as well as the neighboring communities.

Products and Services

The company offers a broad range of deposit and loan products and other banking services. These include personal and commercial checking accounts, retirement accounts, money market accounts, time and savings accounts, safe deposit boxes, wire transfers, access to automated teller services, internet banking, ACH origination, telephone banking, and mobile/digital banking. Civista also offers remote deposit capture banking for both retail and business customers, providing the ability to electronically scan and transmit checks for deposit.

Time deposits consist of certificates of deposit, including those held in IRA accounts. Reciprocal deposits are offered through Civista’s participation in the Certificate of Deposit Account Registry Service (CDARS) and Insured Cash Sweep (ICS) programs offered through Promontory Interfinancial Network, LLC. Customers who are Federal Deposit Insurance Corporation (FDIC) insurance sensitive are able to place large dollar deposits with Civista and Civista uses either outlet to place those funds into certificates of deposit or money markets issued by other banks in the Network. This occurs in increments of less than the FDIC insurance limits so that both the principal and interest are eligible for complete FDIC insurance coverage. The FDIC considers these funds as brokered deposits.

The company offers commercial and personal loans on a secured and unsecured basis, revolving lines of credit, commercial mortgage loans, and residential mortgages on both primary and secondary residences, home equity loans, bridge loans and other personal purpose loans. However, the company is not and has not historically been a participant in the sub-prime lending market.

Commercial loans are loans made for business purposes and are primarily secured by collateral, such as cash balances with Civista, business assets, including accounts receivable, inventory and equipment, and liens on commercial real estate.

Construction loans are loans to finance the construction of commercial or residential properties secured by first liens on such properties. Commercial real estate loans include loans secured by first liens on completed commercial properties, including multi-family properties, to purchase or refinance such properties. Residential mortgages include loans secured by first liens on residential real estate to purchase or refinance primary and secondary residences. Home equity loans and lines of credit include loans secured by first or second liens on residential real estate for primary or secondary residences.

Consumer loans are made to individuals who qualify for auto loans, cash reserve, and installment loans. The company’s consumer loan portfolio includes unsecured overdraft lines of credit and personal loans, as well as loans secured by savings accounts and certificates of deposit on deposit with Civista.

The company’s portfolio lending activities include the origination of one- to four-family first mortgage loans, primarily in its designated market area. The fixed-rate residential mortgage loans that it originates for portfolio generally meet the secondary mortgage market standards. As a complement to its residential one- to four-family portfolio lending activities, the company operates a mortgage banking platform which supports the origination of one- to four-family mortgage loans that generally meet the secondary mortgage market standards. Such loans are generally originated by and sourced from the same resources and markets as those loans originated and held in its portfolio.

Through the company’s equipment leasing and financing business operated by VFG, which was acquired as a whooly-owned subsidiary of Civista in October 2022, the company offers commercial equipment leasing services for businesses nationwide.

Through its Civista Wealth Management division, the company offers investment advisory services to individuals, families, businesses and non-profits with personalized investment management, 401(k) advisory services for employers, financial planning, and trust services.

Investment Portfolio

As of December 31, 2022, the company’s securities included U.S. treasury securities and obligations of U.S. government agencies; obligations of states and political subdivisions; and mortgage-backed securities in government sponsored entities.

Strategy

The company’s strategies are to expand relationships in its communities; continue to focus on growing its core, commercial operating and retail, non-maturity deposit base with an emphasis on relationship banking; and leverage its residential mortgage banking infrastructure.

Supervision and Regulation

As a financial holding company, the company is subject to regulation under the Bank Holding Company Act of 1956, as amended (the BHCA), and the examination and reporting requirements of the Board of Governors of the Federal Reserve System (the Federal Reserve Board). Under the BHCA, the company is subject to periodic examination by the Federal Reserve Board and is required to file periodic reports regarding its operations and any additional information that the Federal Reserve Board may require.

Transactions between Civista and its affiliates, including the company, are subject to Sections 23A and 23B of the Federal Reserve Act, and Federal Reserve Board Regulation W, which generally limit the extent to which Civista may engage in ‘covered transactions’ with affiliates and require that the terms of such transactions be the same, or at least as favorable, to Civista as the terms provided in a similar transaction between Civista and an unrelated party.

As insurer, the Federal Deposit Insurance Corporation (FDIC) is authorized to conduct examinations of and to require reporting by insured institutions, including Civista, to prohibit any insured institution from engaging in any activity the FDIC determines to pose a threat to the Deposit Insurance Fund (DIF), and to take enforcement actions against insured institutions.

Many of the Coronavirus Aid, Relief, and Economic Security Act of 2020’s programs are dependent upon the direct involvement of the U.S. financial institutions, such as the company and Civista, and have been implemented through rules and guidance adopted by federal departments and agencies, including the U.S. Department of Treasury, the Federal Reserve Board and other federal banking agencies, including those with direct supervisory jurisdiction over the company and Civista.

Civista has established policies and procedures that Civista believes comply with the requirements of the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

The company is also under the jurisdiction of the Securities and Exchange Commission (SEC)and certain state securities commissions for matters relating to the offering and sale of its securities. The company is subject to the registration, disclosure, reporting and regulatory requirements of the Securities Act of 1933, as amended (the Securities Act), the Securities Exchange Act of 1934, as amended (the Exchange Act), and the regulations promulgated under each of the Securities Act, the Exchange Act, as administered by the SEC. CBI’s common shares are listed with The Nasdaq Stock Market LLC (Nasdaq) under the symbol ‘CIVB’ and the company is subject to the rules for Nasdaq listed companies. In addition, in accordance with Section 302(a) of the Sarbanes-Oxley Act, written certifications by the company’s Chief Executive Officer and Chief Financial Officer are required.

As an Ohio chartered bank, Civista is subject to supervision and regulation by the state of Ohio Department of Commerce, Division of Financial Institutions (the ODFI). In addition, Civista is a member of the Federal Reserve System and, therefore, is subject to supervision and regulation by the Federal Reserve Board.

The company’s non-banking subsidiaries are also subject to regulation by the Federal Reserve Board and other applicable federal and state agencies. FCIA, as a licensed insurance agency, is subject to regulation by the Ohio Department of Insurance and the state insurance regulatory agencies of those states where it conducts business. CRMI, as a Delaware-chartered captive insurance company, is subject to the laws and regulations of the state of Delaware and undergoes periodic examinations by the Delaware Division of Insurance.

History

The company was founded in 1884. The company was formerly known as First Citizens Banc Corp. and changed its name to Civista Bancshares, Inc. in 2015.