Civista Bancshares Inc. reported last week a net profit of $2.8 million, or $0.29 per diluted share, for the fourth quarter of 2015, compared with $1.9 million, or $0.21 per diluted share, for the prior year period.
The parent company of Civista Bank, the eighth largest bank in Crawford County, reported a net income of $11.2 million or $1.17 per diluted share, in 2015 compared with $7.7 million, or $0.85 per diluted share, in 2014.
“We have increased our 2015 diluted earnings per share by 38 percent. We completed the acquisition of TCNB Financial Corp. in the first quarter of the year. We have decreased our nonperforming assets 30 percent, increased our net interest income, slightly improved noninterest income, and reduced noninterest expenses as a percent of average assets,” said James O. Miller, Chairman, president and chief executive officer of Civista.
There were no changes for the provision for loan losses in the fourth quarter of 2015 and 2014, while losses declined to $1.2 million in 2015 from $1.5 million in 2014 because of improved asset quality.
During the quarter, noninterest income totaled $3.1 million, an increase of $288,000, or 10.1 percent, compared with the prior year’s fourth quarter. Year-to-date noninterest income increased $404,000, or 2.9 percent, when compared with year-to-date 2014.
Service charge income increased in both the fourth quarter and full year because of an increase in business service charges, as well as service charge fees instituted in the bank’s Dayton market since the acquisition of TCNB. Gain on sale of loans increased $29,000 and $447,000 in the fourth quarter and full year, respectively, because of an additional volume of loans sold as well as an increase in the premium on loans sold. Trust fees decreased $70,000 in the fourth quarter of 2015 and $307,000 for last year because of a decrease in trust assets. Tax refund processing fees were down $324,000, or 13.9 percent when compared with 2014 because of a change in the fee structure for 2015.
Noninterest expense totaled $10.7 million and $10.5 million for the fourth quarter of 2015 and 2014, respectively. Year-to-date noninterest expense increased $1.4 million, or 3.4 percent, when compared with 2014.
Salaries, wages and benefits expense increased $266,000 for the fourth quarter in 2015 and $1.3 million for whole year. The increase in salaries, wages and benefits expense was due to normal merit increases, the addition of TCNB employees, as well as a change to the bank’s 401k match expense.
The 401k plan was modified to a safe harbor plan On Jan. 1, which led to an increase in the company match. Contracted data processing and professional fees increased for 2015 because of expenses related to the acquisition of TCNB. Overall acquisition related expenses included in 2015 were about $374,000.
“We have discussed for some time that we have built a chassis that will accommodate growth,” Miller said. “In 2015, a year in which we added three offices from an acquisition and a loan production office, our efficiency ratio decreased to 67 percent compared with 71.7 percent for 2014. Removing the acquisition related expenses for the year, our noninterest expenses only increased 2.5 percent.”
Total assets increased $101.4 million, or 8.4 percent, from 2014 to 2015 primarily because of the acquisition of TCNB, which closed on March 6. Total assets of TCNB prior to the merger were $97.4 million, including $76.8 million in loans. Total Loans increased $86.6 million or 9.6 percent from 2014 to last year after introducing $76.8 million in loans from the acquisition. Total deposits increased $83.1 million, or 8.6 percent, from 2014 to 2015.
Total shareholder’s equity increased $10.1 million, or 8.8 percent, last year because of an increase to $9.6 million in retained earnings.
Nonperforming assets at the end of 2015 were $13.3 million, a $5.7 million decrease from the prior year. Net charge-offs were $1.1 million for 2015 compared with $3.4 million for 2014.
“Our Special Assets group continues to work toward reducing our non-performing assets. Non-performing assets have decreased 30 percent since December 2014 and 49 percent since December 2013,” Miller said.
Reach Klein at 419-468-1117, ext. 2048 or on Twitter at @brandoneklein.