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Acquisitions | 12 Months Ended
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Dec. 31, 2024
Business Combinations [Abstract] |
Acquisitions | NOTE 2 - ACQUISITIONS On July 1, 2022, CBI completed the acquisition by merger of Comunibanc Corp. in a stock and cash transaction for aggregate consideration of approximately $46,090. As a result of the acquisition, the Company issued 984,723 common shares and paid approximately $24,968 in cash to the former shareholders of Comunibanc Corp. The Company and Comunibanc Corp. had first announced that they had entered into an agreement to merge in January of 2022. Immediately following the merger, Comunibanc Corp.’s banking subsidiary, The Henry County Bank ("HCB"), was merged into CBI’s banking subsidiary, Civista Bank. The assets and liabilities of Comunibanc Corp. were recorded on the Company’s Consolidated Balance Sheet at their preliminary estimated fair values as of July 1, 2022, the acquisition date. The Company recorded $26,209 in goodwill and $4,426 in core deposit intangibles. None of the purchase price is deductible for tax purposes. At the time of the merger, Comunibanc Corp had total consolidated assets of $315,083, including $175,500 in loans, and $271,081 in deposits. The transaction was recorded as a purchase and, accordingly, the operating results of Comunibanc Corp. and HCB have been included in the Company’s Consolidated Financial Statements since the close of business on July 1, 2022. Identifiable intangibles are amortized to their estimated residual values over the expected useful lives. Such lives are also periodically reassessed to determine if any amortization period adjustments are required. The identifiable intangible assets consist of core deposit intangible which is being amortized over the estimated useful life. The gross carrying amount of the core deposit intangible at December 31, 2022 was $3,999 . In connection with the Comunibanc merger in 2022, the Company incurred additional third-party acquisition-related costs of $2,900. These expenses were comprised of employee benefits of $210.7, occupancy and equipment expenses of $110.7, software expense of $36.0, consulting and other professional fees of $905.2, data processing costs of $1,000 and other operating expenses of $647.5 in the Company’s Consolidated Statement of Operations for the twelve-month period ended December 31, 2022. As of December 31, 2022, the estimated future amortization expense for the core deposit intangible is as follows:
|  | Core deposit intangibles |
2023 |  | $ | 739 |
2024 |  |  | 684 |
2025 |  |  | 604 |
2026 |  |  | 523 |
2027 |  |  | 443 |
Thereafter |  |  | 1,006 |
|  | $ | 3,999 |
The following table presents financial information for the former Comunibanc Corp. included in the Consolidated Statements of Operations from the date of acquisition through December 31, 2022.
|  | Actual From Acquisition Date Through December 31, 2022 (in thousands) |
Net interest income after provision for loan losses |  | $ | 3,428 |
Noninterest income |  |  | 159 |
Net income |  |  | 1,719 |
The following table presents pro forma information for the twelve-month periods ended December 31, 2022, 2021 and 2020 as if the acquisition of Comunibanc Corp. had occurred on January 1, 2020. This table has been prepared for comparative purposes only and is not indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results. Furthermore, the unaudited pro forma information does not reflect management’s estimate of any revenue-enhancing opportunities nor anticipated cost savings as a result of the integration and consolidation of the acquisition.
|  | Pro Formas (unaudited) Twelve Months ended December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Net interest income after provision for loan losses |  | $ | 113,689 |  |  | $ | 103,583 |  |  | $ | 88,293 |
Noninterest income |  |  | 29,451 |  |  |  | 32,768 |  |  |  | 29,870 |
Net income |  |  | 39,095 |  |  |  | 42,482 |  |  |  | 34,374 |
Pro forma earnings per share: |  |  |  |  |  |  |  |  |
Basic |  | $ | 2.42 |  |  | $ | 2.59 |  |  | $ | 2.01 |
Diluted |  | $ | 2.42 |  |  | $ | 2.59 |  |  | $ | 2.01 |
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for Comunibanc Corp. Core deposit intangibles will be amortized over ten years using an accelerated method. Goodwill will not be amortized, but instead will be evaluated for impairment.
Cash paid |  |  |  |  | $ | 24,968 |
Common shares issued (984,723 shares) |  |  |  |  |  | 21,122 |
Total |  |  |  |  | $ | 46,090 |
Net assets acquired: |  |  |  |  |  |
Cash and due from financial institutions |  | $ | 3,098 |  |  |  |
Securities available for sale |  |  | 120,399 |  |  |  |
Time deposits |  |  | 742 |  |  |  |
Loans, net |  |  | 169,202 |  |  |  |
Other securities |  |  | 1,553 |  |  |  |
Premises and equipment |  |  | 4,665 |  |  |  |
Accrued interest receivable |  |  | 670 |  |  |  |
Core deposit intangible |  |  | 4,426 |  |  |  |
Bank owned life insurance |  |  | 5,918 |  |  |  |
Other assets |  |  | 3,767 |  |  |  |
Noninterest-bearing deposits |  |  | (122,642 | ) |  |  |
Interest-bearing deposits |  |  | (148,552 | ) |  |  |
Other borrowings |  |  | (21,706 | ) |  |  |
Other liabilities |  |  | (1,659 | ) |  |  |
|  |  |  |  |  | 19,881 |
Goodwill resulting from Comunibanc Corp. acquisition |  |  |  |  | $ | 26,209 |
Loans purchased with evidence of credit deterioration since origination and for which it was probable that all contractually required payments would not be collected were considered to be credit impaired. Evidence of credit quality deterioration as of the purchase date included information such as past-due and nonaccrual status, borrower credit scores and recent loan to value percentages. Purchased credit-impaired loans were accounted for under the accounting guidance for loans and debt securities acquired with deteriorated credit quality (ASC 310-30) and initially measured at fair value, which included estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans was not carried over and recorded at the acquisition date. Management estimated the cash flows expected to be collected at acquisition using our internal risk models, which incorporated the estimate of the current assumptions, such as default rates, severity and prepayment speeds. The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30:
|  | At December 31, 2022 |
|  | Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30) |
|  | (In Thousands) |
Outstanding balance |  | $ | 4,768 |
Carrying amount |  |  | 4,121 |
The gross principal due under the contract for acquired receivables not subject to ASC 310-30 is $171.1 million. The fair value adjustment is $2.1 million and the contractual cash flows not expected to be collected is $5.7 million. The acquired assets and liabilities were measured at estimated fair values. Management made certain estimates and exercised judgment in accounting for the acquisition. The amount of goodwill recorded reflects a strategic opportunity to expand into new markets that, while similar to existing markets, are projected to be more vibrant in population growth and business opportunity growth. The goodwill represents the excess purchase price over the estimated fair value of the net assets acquired. Additionally, the acquisition will provide exposure to suburbs of larger urban areas without the commitment of operating inside large metropolitan areas dominated by regional and national financial organizations. The acquisition is also expected to create synergies on the operational side of the Company by allowing noninterest expenses to be spread over a larger operating base. On October 3, 2022, CBI and Civista completed the acquisition by Civista of all of the issued and outstanding shares of capital stock of VFG for aggregate cash and stock consideration of approximately $46,544. As a result of the acquisition, the Company issued 500,293 common shares and paid approximately $36,044 in cash. The assets and liabilities of VFG were recorded on the Company’s Consolidated Balance Sheet at their preliminary estimated fair values as of October 3, 2022, the acquisition date. The Company recorded $22,635 in goodwill. None of the purchase price is deductible for tax purposes. At the time of the acquisition, VFG had total consolidated assets of $93,870, including $62,712 in loans and leases. The transaction was recorded as a purchase and, accordingly, the operating results of VFG have been included in the Company’s Consolidated Financial Statements since the close of business on October 3, 2022. Effective as of August 31, 2023, VFG was merged with and into Civista, and CLF is now operated as a full-service general equipment leasing and financing division of Civista. In connection with the VFG acquisition in 2022, the Company incurred additional third-party acquisition-related costs of $814.3. These expenses were mainly comprised of consulting and other professional fees of $812.8 in the Company’s Consolidated Statement of Operations for the twelve-month period ended December 31, 2022. The following table presents financial information for VFG included in the Consolidated Statements of Operations from the date of acquisition through December 31, 2022.
|  | Actual From Acquisition Date Through December 31, 2022 (in thousands) |
Net interest income after provision for loan losses |  | $ | 403 |
Noninterest income |  |  | 3,926 |
Net loss |  |  | (992 | )
Pro forma information for the twelve-month periods ended December 31, 2022, 2021 and 2020 is not presented as the acquisition of VFG was determined to not be a significant transaction. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for VFG. Goodwill will not be amortized, but instead will be evaluated for impairment.
Cash paid |  |  |  |  | $ | 36,044 |
Common shares issued (250,145 shares) |  |  |  |  |  | 5,250 |
Common shares issued (contingent consideration) (250,148 shares) |  |  |  |  |  | 5,250 |
Total |  |  |  |  | $ | 46,544 |
Net assets acquired: |  |  |  |  |  |
Cash and due from financial institutions |  | $ | 6,271 |  |  |  |
Time Deposits |  |  | 80 |  |  |  |
Loans, net |  |  | 61,418 |  |  |  |
Premises and equipment |  |  | 35,039 |  |  |  |
Other assets |  |  | 1,409 |  |  |  |
Other borrowings |  |  | (58,142 | ) |  |  |
Other liabilities |  |  | (22,166 | ) |  |  |
|  |  |  |  |  | 23,909 |
Goodwill resulting from VFG acquisition |  |  |  |  | $ | 22,635 |
Loans purchased with evidence of credit deterioration since origination and for which it was probable that all contractually required payments would not be collected were considered to be credit impaired. Evidence of credit quality deterioration as of the purchase date included information such as past-due and nonaccrual status, borrower credit scores and recent loan to value percentages. Purchased credit-impaired loans were accounted for under the accounting guidance for loans and debt securities acquired with deteriorated credit quality (ASC 310-30) and initially measured at fair value, which included estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans was not carried over and recorded at the acquisition date. Management estimated the cash flows expected to be collected at acquisition using our internal risk models, which incorporated the estimate of the current assumptions, such as default rates, severity and prepayment speeds. The contingent consideration arrangement required the Company to pay the former owners of VFG, over two years, and subject to meeting certain lease origination thresholds for each year, or meeting a combined threshold for the two years, up to a maximum amount of $5,250, undiscounted. The potential undiscounted amount of all future payments the Company could be required to make under the contingent consideration arrangement was between $0 and $5,250. The fair value of the contingent consideration arrangement of $5,250 was estimated based on significant inputs that are not observable in the market, which are considered Level 3 inputs in accordance with ASC Topic 820. Key assumptions included the CIVB share price at close, management’s assumptions and the probability that the vesting thresholds would be met. The common shares subject to the contingent consideration arrangement were issued upon the closing of the transaction and were considered restricted with participating rights with voting, dividends and distribution rights prior to vesting or forfeiture. As a result of the failure of the lease thresholds to be met for the two-year periods ended December 31, 2024, the shares were forfeited and transferred from outstanding common shares to treasury stock. The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30:
|  | At December 31, 2022 |
|  | Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30) |
|  | (In Thousands) |
Outstanding balance |  | $ | 635 |
Carrying amount |  |  | — |
The gross principal due under the contract for acquired receivables not subject to ASC 310-30 is $62.1 million. The fair value adjustment is $2.3 million and the contractual cash flows not expected to be collected is $658.8. The acquired assets and liabilities were measured at estimated fair values. Management made certain estimates and exercised judgment in accounting for the acquisition. The amount of goodwill recorded reflects the excess purchase price over the estimated fair value of the net assets acquired.

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