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Item 2. Management’s Discussion and Analysis

2025-11-05 compared with 2025-08-06 · 180 added, 175 removed, 340 unchanged (51% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion focuses on the consolidated financial condition of the Company at June 30, 2025 compared to December 31, 2024, and the consolidated results of operations for the three and six month ended June 30, 2025, compared to the same period in 2024.

The following discussion focuses on the consolidated financial condition of the Company at September 30, 2025 compared to December 31, 2024, and the consolidated results of operations for the three and nine months ended September 30, 2025, compared to the same period in 2024.

This discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and Notes included in this Quarterly Report on Form 10-Q.

Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, relating to such matters as financial condition, anticipated operating results, cash flows, business line results, credit quality expectations, prospects for new lines of business, economic trends (including interest rates) and similar matters.

This Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, relating to such matters as financial condition, anticipated operating results, cash flows, business line results, credit quality expectations, prospects for new lines of business, economic trends (including interest rates) and similar matters.

Forward-looking statements reflect our expectations, estimates or projections concerning future results or events.

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Such forward-looking statements could include, but are not limited to:

• current and future economic and financial market conditions, including the effects of inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, an increasing federal government budget deficit, slowing gross domestic product, tariffs, trade wars, and other factors beyond our control, any of which may result in adverse impacts on our deposit levels and composition, the quality of investment securities available for purchase, demand for loans, the ability of our borrowers to repay their loans, and the value of the collateral securing loans made by Civista;

• current and future economic and financial market conditions, including the effects of inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, current or future government shutdown, an increasing federal government budget deficit, slowing gross domestic product, tariffs, trade wars, and other factors beyond our control, any of which may result in adverse impacts on our deposit levels and composition, the quality of investment securities available for purchase, demand for loans, the ability of our borrowers to repay their loans, and the value of the collateral securing loans made by Civista;

• significant changes to the size, structure, powers and operations of the federal government, changes to U.S.

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(Amounts in thousands, except share data)

• risks related to the pending FSB Merger, including, without limitation, that we may not consummate the FSB Merger on the terms currently contemplated or at all;

that the failure to complete the FSB Merger could negatively impact the price of our common shares and have a material adverse effect on our results of operations, cash flows and financial position;

that, following the FSB Merger, we may be unable to integrate the business of Civista and FSB successfully or realize the anticipated benefits of the FSB Merger;

that the synergies attributable to the FSB Merger may vary from expectations;

and that the market price for our common shares following the closing of the FSB Merger may be affected by factors different from those that have historically affected or currently affect our common shares;

• uncertainty regarding the nature, timing, cost and effect of legislative or regulatory changes in the banking industry or otherwise affecting the Company, including major reform of the regulatory oversight structure of the financial services industry;

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• the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board (FASB), the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, may adversely affect our reported financial condition or results of operations;

• a failure to appropriately maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, which could result in our inability to accurately report our financial results and adversely affect the market price of our common shares;

• litigation and regulatory compliance exposure, including the costs and effects of any adverse developments in legal proceedings or other claims and the costs and effects of unfavorable resolution of regulatory and other governmental examinations or inquiries;

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Risk Factors” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as supplement by "Item 1A.

Risk Factors” of Part II of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2025, and as further supplemented by “Item 1A.

Risk Factors” of Part II of this Quarterly Report on Form 10-Q.

Risk Factors” of Part II of the Company’s Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2025 and June 30, 2025.

The Company does not undertake, and specifically disclaims, any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except as required by law.

Recent Developments

Agreement and Plan of Merger with The Farmers Savings Bank

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Upon the terms and subject to the conditions of the Merger Agreement, at the effective time of the merger (the “Effective Time”), Farmers will merge with and into Civista, with Civista being the surviving bank in the merger (the “FSB Merger”).

The acquisition of Farmers will add two branches in Medina and Lorain Counties in Northeast Ohio, as well as approximately $183 million in low-cost core deposits.

As of March 31, 2025, Farmers reported total assets of $285 million and net loans of $104 million.

The acquisition of Farmers will add two branches in Medina and Lorain Counties in Northeast Ohio.

As of September 30, 2025, Farmers reported total assets of $293 million, net loans of $106 million, and total deposits of $236 million.

Under the terms and subject to the conditions of the Merger Agreement, which has been unanimously approved by the Boards of Directors of both companies, CBI agreed to pay $34.925 million in cash and issue 1,434,491 common shares, in aggregate, for all of the outstanding Farmers shares, subject to potential adjustment based on Farmers’ equity prior to closing being $56.0 million.

This implies an aggregate deal value of approximately $70.4 million based on the closing price of CBI’s common shares on July 9, 2025 of $24.72.

The FSB Merger is expected to close in the fourth quarter of 2025, subject to the required approval of the Farmers shareholders, receipt of all required regulatory approvals and fulfillment of other customary closing conditions.

Offering of Common Shares

On July 10, 2025, CBI announced an underwritten public offering of up to a maximum of 3,788,238 of its common shares.

CBI subsequently closed on the sale of 3,294,120 common shares on July 14, 2025, and the sale of an additional 494,118 common shares on July 16, 2025 pursuant to the underwriters’ exercise of their overallotment option, at the public offering price of $21.25 per share.

The aggregate net proceeds from the Offering to CBI were approximately, $76.0 million, after deducting expenses and the underwriting

This implies an aggregate deal value of approximately $66.7 million based on the closing price of CBI’s common shares on October 24, 2025 of $22.18.

Civista has received all required regulatory approvals for the FSB merger, which is expected to close in November 2025, pending approval by Farmer's shareholders and satisfaction of other customary closing conditions.

Civista Bancshares, Inc.

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(Amounts in thousands, except share data)

CBI plans to use the net proceeds from the offering for general corporate purposes, which may include supporting organic growth opportunities and future strategic transactions.

Offering of Common Shares

On July 10, 2025, CBI announced an underwritten public offering of up to a maximum of 3,788,238 of its common shares.

The aggregate net proceeds from the Offering to CBI were approximately $75.7 million, after deducting $608 of direct expenses and the underwriting discount of $4.2 million.

As of September 30, 2025, the net proceeds from the offering was used to pay-down short-term FHLB advances, but the long-term strategic plan is to use the net proceeds for general corporate purposes, which may include supporting organic growth opportunities and future strategic transactions.

Financial Condition

Total assets of the Company at June 30, 2025 were $4,185,869 compared to $4,098,469 at December 31, 2024, an increase of $87,400, or 2.1%.

The increase in total assets was mainly due to increases in net loans of $69,108, loans held for sale of $10,068, and cash and cash equivalents of $10,703.

These increases were partially offset by decreases in available-for-sale securities of $5,157, premises and equipment of $4,244, and swap assets of $2,178.

Total liabilities at June 30, 2025 were $3,781,732 compared to $3,709,967 at December 31, 2024, an increase of $71,765, or 1.9%.

The increase in total liabilities was primarily attributable to a increase in short-term FHLB advances of $94,500, partially offset by decreases in total deposits of $15,663 and swap liabilities of $4,608.

Loans outstanding as of June 30, 2025 and December 31, 2024 were as follows:

June 30, 2025

Total assets of the Company at September 30, 2025 were $4,113,334 compared to $4,098,469 at December 31, 2024, an increase of $14,865, or 0.4%.

The increase in total assets was mainly due to increases in net loans of $14,179, loans held for sale of $7,347, and securities available-for-sale of $6,549.

These increases were partially offset by decreases in premises and equipment of $6,256, other securities of $2,451, deferred taxes of $2,178, and swap assets of $1,624.

Total liabilities at September 30, 2025 were $3,614,306 compared to $3,709,967 at December 31, 2024, a decrease of $95,661, or 2.6%.

The decrease in total liabilities was primarily attributable to a decrease in short-term FHLB advances of $107,000, partially offset by an increase in total deposits of $18,593.

Loans outstanding as of September 30, 2025 and December 31, 2024 were as follows:

September 30, 2025

December 31, 2024

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The increase was due to increases in both the number of loans and average loan balances held for sale.

At June 30, 2025, 43 loans totaling $10,733 were held for sale as compared to 6 loans totaling $665 at December 31, 2024.

At September 30, 2025, 25 loans totaling $8,012 were held for sale as compared to 6 loans totaling $665 at December 31, 2024.

Net loans have increased $14,179, or 0.5%, since December 31, 2024.

The increase at June 30, 2025 was mainly attributed to increases in two categories, Commercial Real Estate – Non-Owner Occupied and Residential Real Estate, partially offset by a decrease in Real Estate Construction.

At June 30, 2025, the loan to deposit ratio was 98.6% compared to 95.9% at December 31, 2024.

During the first six months of 2025, provisions made to the allowances for credit losses and off-balance sheet credit exposures totaled $2,592, compared to a provision of $3,647 during the same period in 2024.

The decrease in the provision for the first six months of 2025 was primarily the result of a decrease in specific reserves related to one large credit that made a significant paydown during the six months ended June 30, 2025.

Commercial & Agriculture loan delinquencies decreased slightly during the first six months of 2025, primarily in the 30-59 days past due category, which decreased from $825 at December 31, 2024 to $114 at June 30, 2025.

Total Residential Real Estate loans past due decreased from $9,411 at December 31, 2024 to $3,290 as of June 30, 2025, mainly due to a decrease in delinquencies in 1-4 family first lien loans.

Reserves on the Lease Financing Receivables portfolio decreased at June 30, 2025, primarily due to less charge-offs and minimal balance growth, maintaining a consistent percentage of reserves to lease balance.

Total delinquencies on Lease Financing Receivables decreased from December 31, 2024 to June 30, 2025.

Lease Financing Receivables 30-59 days past due and 60-89 days past due decreased from $926 to $255, while the balance of 90 days or greater past due increased slightly from $909 to $924.

Nonaccrual Lease Financing Receivables decreased from $1,238 at December 31, 2024 to $799 at June 30, 2025.

Net charge-offs for the first six months ended June 30, 2025 totaled $1,633, compared to net charge-offs of $1,083 for the same period of 2024.

For the first six months ended June 30, 2025, the Company charged off a total of 31 loans and leases, consisting of 11 Commercial & Agriculture loans totaling $435, seven Lease Financing Receivables totaling $152, two Commercial Real Estate –

The increase at September 30, 2025 was mainly attributed to increases in one category, Residential Real Estate, partially offset by decreases in Real Estate Construction and Commercial & Agriculture.

At September 30, 2025, the loan to deposit ratio was 95.8% compared to 95.9% at December 31, 2024.

During the first nine months of 2025, provisions made to the allowances for credit losses and off-balance sheet credit exposures totaled $2,792, compared to provisions of $4,668 during the same period in 2024.

The decrease in the provision for the first nine months of 2025 was primarily the result of a decrease in specific reserves related to one large credit that made a significant paydown during the nine months ended September 30, 2025, in addition to lower net loan growth compared to 2024 and an improvement in delinquencies.

CRE non-owner occupied 60 to 89 days past due category decreased from $8,000 to $654 during the nine months ended September 30, 2025.

Commercial & Agriculture loan delinquencies decreased during the first nine months of 2025, primarily in the 30-59 days past due category, which decreased from $825 at December 31, 2024 to $112 at September 30, 2025.

Residential Real Estate loans past due decreased from $9,411 at December 31, 2024 to $3,929 at September 30, 2025, mainly due to a decrease in delinquencies in 1-4 family first lien loans.

Civista Bancshares, Inc.

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(Amounts in thousands, except share data)

Non-Owner Occupied loans totaling $1,350, eight Consumer and Other loans totaling $16 and three Residential Real Estate totaling $115.

The Commercial Real Estate - Non-Owner Occupied charge-off of $1,350 is related to two loans that were previously identified and actively monitored by management, classified as nonaccrual and individually evaluated as of both December 31, 2024 and June 30, 2025, In addition, during the six months ended June 30, 2025, the Company had recoveries on previously charged-off Commercial & Agriculture loans of $335, Commercial Real Estate – Non-Owner Occupied loans of $3, Residential Real Estate loans of $42, Leasing Financing Receivables of $42 and Consumer and Other loans of $13.

Reserves on the Lease Financing Receivables portfolio decreased at September 30, 2025, primarily related to lower balance growth in 2025 as the leasing division transitioned and focused on converting to a new core operating system.

Total delinquencies on Lease Financing Receivables decreased from December 31, 2024 to September 30, 2025.

Lease Financing Receivables 30-59 days past due and 60-89 days past due combined decreased from $926 to $327, and the balance of 90 days or greater past due also decreased from $909 to $449.

Nonaccrual Lease Financing Receivables decreased from $1,238 at December 31, 2024 to $807 at September 30, 2025.

Net charge-offs for the first nine months ended September 30, 2025 totaled $2,212, compared to net charge-offs of $1,080 for the same period of 2024.

For the first nine months ended September 30, 2025, the Company charged off a total of 45 loans and leases, consisting of 16 Commercial & Agriculture loans totaling $684, ten Lease Financing Receivables totaling $546, two Commercial Real Estate – Non-Owner Occupied loans totaling $1,350, 12 Consumer and Other loans totaling $20 and five Residential Real Estate totaling $130.

The Commercial Real Estate - Non-Owner Occupied charge-offs of $1,350 are related to two loans that were previously identified and actively monitored by management, classified as nonaccrual and individually evaluated as of both December 31, 2024 and September 30, 2025.

In addition, during the nine months ended September 30, 2025, the Company had recoveries on previously charged-off Commercial & Agriculture loans of $375, Commercial Real Estate – Non-Owner Occupied loans of $3, Residential Real Estate loans of $76, Leasing Financing Receivables of $43 and Consumer and Other loans of $21.

For each loan category, as well as in total, the percentage of net charge-offs to loans was less than one percent.

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Loans, or portions thereof, are charged-off when deemed uncollectible.

The allowance for credit losses as a percent of total loans was 1.28% at June 30, 2025 and 1.29% at December 31, 2024.

The available-for-sale securities portfolio decreased by $5,157, from $648,067 at December 31, 2024 to $642,910 at June 30, 2025.

The allowance for credit losses as a percent of total loans was 1.30% at September 30, 2025 and 1.29% at December 31, 2024.

The available-for-sale securities portfolio increased by $6,549, from $648,067 at December 31, 2024 to $654,616 at September 30, 2025.

Management continually evaluates our securities portfolio in response to established asset/liability management objectives, changing market conditions that could affect profitability, and the level of interest rate risk to which the Company is exposed.

These evaluations may cause the Company to change the level of funds it deploys into investment securities and change the composition of its investment securities portfolio.

As of June 30, 2025, the Company was in compliance with all pledging requirements.

Premises and equipment, net, decreased $4,244 from December 31, 2024 to June 30, 2025.

The decrease was the result of depreciation of $4,644 and disposals of $76, partially offset by purchases of $476.

The decrease in depreciation was mainly attributable to leasing operations as operating leases mature.

As of September 30, 2025, the Company was in compliance with all pledging requirements.

Premises and equipment, net, decreased $6,256 from December 31, 2024 to September 30, 2025.

The decrease was mainly the result of depreciation expenses of $5,201 coupled with maturing operating leases, partially offset by purchases.

The decrease in depreciation was mainly attributable to leasing operations as operating leases matured.

Since mid-2024, new lease originations have primarily consisted of finance leases which are recorded in Loans on the Consolidated Balance Sheets.

Swap assets decreased $2,178 from December 31, 2024 to June 30, 2025.

Swap assets decreased $1,624 from December 31, 2024 to September 30, 2025.

The decrease was primarily the result of a decline in market value.

Total deposits as of June 30, 2025 and December 31, 2024 were as follows:

June 30, 2025

Total deposits as of September 30, 2025 and December 31, 2024 were as follows:

Civista Bancshares, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Amounts in thousands, except share data)

September 30, 2025

December 31, 2024

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Total Deposits

The Company had approximately $457,130 and $431,713 of uninsured deposits as of June 30, 2025 and December 31, 2024, respectively.

The Company had approximately $512,458 and $431,713 of uninsured deposits as of September 30, 2025 and December 31, 2024, respectively.

Uninsured deposit amounts are estimated based on the portions of customer account balances that exceed the FDIC insurance limit of $250.

Civista Bancshares, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Amounts in thousands, except share data)

Total deposits at June 30, 2025 decreased $15,663 from December 31, 2024.

Noninterest-bearing deposits decreased $47,485 from December 31, 2024, while interest-bearing deposits, including savings and money markets, time deposits, and brokered deposits, increased $31,822 from December 31, 2024.

Total deposits at September 30, 2025 increased $18,593 from December 31, 2024.

Noninterest-bearing deposits, brokered deposits, and interest-bearing demand deposits decreased $43,160, $69,098, and $3,963, respectively, from December 31, 2024, while time deposits and savings and money markets increased $131,803 and $3,011, respectively, from December 31, 2024.

The decrease in noninterest-bearing deposits was primarily due to a $46,104 decrease in noninterest-bearing business accounts, partially offset by an increase of $5,883 in noninterest-bearing public funds accounts.

The increase in interest-bearing demand deposits was primarily due to an increase of $27,858 in interest-bearing public funds accounts, slightly offset by a decrease of $6,443 in Jumbo NOW accounts.

The $26,314 decrease in savings and money market accounts was primarily due to a $36,603 decrease in ICS demand and money market accounts, and a $8,325 decrease in retail money market savings, mostly offset by an increase of $20,115 in business money market savings.

The decrease in interest-bearing demand deposits was primarily due to a decrease of $16,586 in Jumbo NOW and interest-bearing checking accounts, mostly offset by an increase in interest-bearing public funds accounts of $14,067.

The $131,803 increase in time deposits was due to increases of $94,622 in jumbo time deposits and a $43,113 increase in retail time deposits, which were slightly offset by a decrease of $6,779 in reciprocal time deposits.

The year-to-date average balance of total deposits increased $216,105, compared to the average balance for the same period in 2024, mainly due to a increases of $203,964 in the average balance of demand and savings deposits and $58,565 in time deposits, partially offset by a $46,424 decrease in the average balance of noninterest-bearing deposits.

Short-term FHLB advances increased $94,500 from December 31, 2024 to June 30, 2025 for purposes of funding loan growth.

Swap liabilities decreased $4,608 from December 31, 2024 to June 30, 2025.

The $3,011 increase in savings and money market accounts was primarily due to a $51,994 increase in business money market accounts, mostly offset by decreases of $36,493 in ICS demand and money market, $724 in retail money market savings, $7,110 in retail statement savings, and $3,958 in business savings accounts.

The year-to-date average balance of total deposits increased $190,335, compared to the average balance for the same period in 2024, mainly due to increases of $162,887 in the average balance of demand and savings deposits and $67,482 in time deposits, partially offset by a $40,034 decrease in the average balance of noninterest-bearing deposits.

Short-term FHLB advances decreased $107,000 from December 31, 2024 to September 30, 2025, primarily as a result of the cash received from the capital raise that was completed in the third quarter of 2025.

Swap liabilities decreased $5,416 from December 31, 2024 to September 30, 2025.

The decrease was the result of a decrease in fair value of swap liabilities.

Shareholders’ equity at June 30, 2025 was $404,137, or 9.7% of total assets, compared to $388,502, or 9.5% of total assets, at December 31, 2024.

The increase was a result of net income of $21,183, partially offset by dividends paid on common shares of $5,270.

Total outstanding common shares at June 30, 2025 were 15,529,342, which increased from 15,487,667 common shares outstanding at December 31, 2024.

Common shares outstanding increased due to the grant of 49,857 restricted common shares to certain officers under the Company’s 2024 Incentive Plan, partially offset by 8,182 common shares surrendered by officers to the Company to pay taxes upon vesting of restricted shares.

Shareholders’ equity at September 30, 2025 was $499,028, or 12.1% of total assets, compared to $388,502, or 9.5% of total assets, at December 31, 2024.

The increase was a result of net income of $33,943 coupled with $75,666 resulting from the capital raise completed in the third quarter of 2025, partially offset by dividends paid on common shares of $8,553.

Total outstanding common shares at September 30, 2025 were 19,312,726, which increased from 15,487,667 common shares outstanding at December 31, 2024.

Common shares outstanding increased due to the issuance of 3,788,238 shares in the capital raise and the grant of 49,857 restricted common shares to certain officers under the Company’s 2024 Incentive Plan, partially offset by 8,716 common shares surrendered by officers to the Company to pay taxes upon vesting of restricted shares and 4,320 forfeited shares.

Results of Operations

Three Months Ended June 30, 2025 and 2024

The Company had net income of $11,015 for the three months ended June 30, 2025, an increase of $3,951 from net income of $7,064 for the same period of 2024.

Basic and diluted earnings per common share were $0.71 for the quarter ended June 30, 2025, compared to $0.45 for the same period of 2024.

In the second quarter of 2025, net income was increased by $757 from non-recurring adjustments resulting from the Civista Leasing and Finance ("CLF") division's core system conversion.

Three Months Ended September 30, 2025 and 2024

The Company had net income of $12,760 for the three months ended September 30, 2025, an increase of $4,394 from net income of $8,366 for the same period of 2024.

Basic and diluted earnings per common share were $0.68 for the quarter ended September 30, 2025, compared to $0.53 for the same period of 2024.

In the third quarter of 2025, net income was decreased by $554 from non-recurring adjustments resulting from acquisition-related expenses from the previously announced merger with FSB that is expected to close in November 2025.

The primary reasons for the changes in net income are explained below.

Net interest income for the three months ended June 30, 2025 was $34,814, an increase of $7,063 from $27,751 for the same period of 2024.

This increase was a result of an increase of $5,678 in total interest and dividend income, coupled with a $1,385 decrease in total interest expense.

Total interest-earning assets averaged $3,841,369 during the three months ended June 30, 2025, an increase of $221,560 from $3,619,809 for the same period of 2024.

The Company’s total average interest-bearing liabilities increased from $2,813,034 during the three months ended June 30, 2024 to $3,062,324 during the three months ended June 30, 2025.

The Company’s fully tax equivalent net interest margin for the three months ended June 30, 2025 and 2024 was 3.64% and 3.09%, respectively.

Net interest income was increased $1,621 in the second quarter of 2025, resulting from non-recurring adjustments from the CLF core system conversion.

Total interest and dividend income was $56,271 for the three months ended June 30, 2025, an increase of $5,678 from $50,593 for the same period of 2024.

The increase in interest and dividend income is attributable to a $5,026 increase in interest and fees on loans and a $681 increase in interest income on taxable securities.

The $5,026 increase in interest and fees on loans is attributable to increases in both average balances and loan yield.

The average balance of loans increased by $171,714, or 5.8%, to $3,136,091 for the three months ended June 30, 2025, as compared to $2,964,377 for the same period of 2024.

The loan yield increased to 6.39% for the three months ended June 30, 2025, from 6.10% for the same period of 2024.

Civista Bancshares, Inc.

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(Amounts in thousands, except share data)

Interest on taxable securities increased $681 to $3,751 for the three months ended June 30, 2025, compared to $3,070 for the same period of 2024.

The average balance of taxable securities increased $52,607 to $404,104 for the three months ended June 30, 2025, as compared to $351,497 for the same period of 2024.

The yield on taxable securities increased 31 basis points to 3.42% for the three months ended June 30, 2025, compared to 3.11% for the same period of 2024, resulting from the purchase of similar securities with higher rates due to the current rate environment in the second quarter of 2025 compared to the same period of 2024.

Interest on tax-exempt securities decreased $34 to $2,338 for the three months ended June 30, 2025, compared to $2,372 for the same period of 2024.

The average balance of tax-exempt securities decreased $10,197 to $277,931 for the three months ended June 30, 2025, as compared to $288,128 for the same period of 2024.

The yield on tax-exempt securities increased 1 basis points to 3.88% for the three months ended June 30, 2025, compared to 3.87% for the same period of 2024.

Total interest expense decreased $1,385, or 6.1%, to $21,457 for the three months ended June 30, 2025, compared to $22,842 for the same period of 2024.

For the three months ended June 30, 2025, the average balance of interest-bearing liabilities increased $249,290 to $3,062,324, as compared to $2,813,034 for the same period of 2024.

Interest incurred on deposits increased by $53 to $15,558 for the three months ended June 30, 2025, compared to $15,505 for the same period of 2024.

The average balance of interest-bearing deposits increased by $272,166 to $2,538,500 for the three months ended June 30, 2025, as compared to the same period in 2024, slightly offset by a decrease in the rate paid on time deposits from 5.40% in 2024 to 4.04% in 2025.

The decrease in rates on time deposits was primarily related to paying lower rates on retail and brokered CDs due to the lower rate environment in the second quarter of 2025 compared to the same period of 2024.

Interest expense incurred on short-term FHLB advances decreased because of the yield curve shifting downwards during the second quarter of 2025 compared to the same period of 2024.

The following table presents the condensed average balance sheets for the three months ended June 30, 2025 and 2024.

Net interest income for the three months ended September 30, 2025 was $34,545, an increase of $5,312 from $29,233 for the same period of 2024.

This increase was a result of an increase of $2,499 in total interest and dividend income, coupled with a $2,813 decrease in total interest expense.

Total interest-earning assets averaged $3,829,484 during the three months ended September 30, 2025, an increase of $123,618 from $3,705,866 for the same period of 2024.

The Company’s total average interest-bearing liabilities increased from $2,898,978 during the three months ended September 30, 2024 to $2,957,458 during the three months ended September 30, 2025.

The Company’s fully tax equivalent net interest margin for the three months ended September 30, 2025 and 2024 was 3.58% and 3.16%, respectively.

Total interest and dividend income was $55,240 for the three months ended September 30, 2025, an increase of $2,499 from $52,741 for the same period of 2024.

The increase in interest and dividend income is attributable to a $1,820 increase in interest and fees on loans and a $664 increase in interest income on taxable securities.

The $1,820 increase in interest and fees on loans is attributable to an increase in the average balance of loans.

The average balance of loans increased by $96,149, or 3.2%, to $3,128,033 for the three months ended September 30, 2025, as compared to $3,031,884 for the same period of 2024.

Interest on taxable securities increased $664 to $3,922 for the three months ended September 30, 2025, compared to $3,258 for the same period of 2024.

The average balance of taxable securities increased $38,632 to $402,216 for the three months ended September 30, 2025, as compared to $363,584 for the same period of 2024.

The yield on taxable securities increased 33 basis points to 3.57% for the three months ended September 30, 2025, compared to 3.24% for the same period of 2024, resulting from the purchase of similar securities to replace matured securities with the new securities having higher rates than when the matured securities were originally purchased.

Interest on tax-exempt securities decreased $45 to $2,324 for the three months ended September 30, 2025, compared to $2,369 for the same period of 2024.

The average balance of tax-exempt securities decreased $16,532 to $274,722 for the three months ended September 30, 2025, as compared to $291,254 for the same period of 2024.

The yield on tax-exempt securities increased 1 basis point to 3.84% for the three months ended September 30, 2025, compared to 3.83% for the same period of 2024.

Total interest expense decreased $2,813, or 12.0%, to $20,695 for the three months ended September 30, 2025, compared to $23,508 for the same period of 2024.

For the three months ended September 30, 2025, the average balance of interest-bearing liabilities increased $58,480 to $2,957,458, as compared to $2,898,978 for the same period of 2024.

Interest incurred on deposits decreased by $579 to $16,347 for the three months ended September 30, 2025, compared to $16,926 for the same period of 2024.

The average balance of interest-bearing deposits increased by $168,934 to $2,574,153 for the three months ended September 30, 2025, as compared to the same period in 2024, slightly offset by a decrease in the rate paid on time deposits from 5.37% in 2024 to 4.01% in 2025.

The decrease in rates on time deposits was primarily related to paying lower rates on retail and brokered CDs due to the lower rate environment in the third quarter of 2025 compared to the same period of 2024.

Interest expense incurred on short-term FHLB advances decreased mainly due to the cash received from the capital raise which subsequently paid down short-term FHLB advances in the third quarter of 2025 and a decrease in rate paid because of the yield curve shifting downwards in 2025 compared to the same period of 2024.

The following table presents the condensed average balance sheets for the three months ended September 30, 2025 and 2024.

The daily average loan amounts outstanding are net of unearned income and include loans held for sale and nonaccrual loans.

The average balance of securities is computed using the carrying value of securities.

Rates are annualized and taxable equivalent yields are computed using a

Rates are annualized and taxable equivalent yields are computed using

Civista Bancshares, Inc.

1 unchanged sentence

(Amounts in thousands, except share data)

21% tax rate for tax-exempt interest income.

a 21% tax rate for tax-exempt interest income.

The average yield has been computed using the historical amortized cost average balance for available-for-sale securities.

Three Months Ended June 30,

Three Months Ended September 30,

Interest-earning assets:

28 unchanged sentences

*Average yields are presented on a tax equivalent basis.

The tax equivalent effect associated with loans and investments, included in the yields above, was $622 and $631 for the periods ended June 30, 2025 and 2024, respectively.

The tax equivalent effect associated with loans and investments, included in the yields above, was $618 and $630 for the periods ended September 30, 2025 and 2024, respectively.

**Average balance includes nonaccrual loans.

Net interest income may also be analyzed by comparing the volume and rate components of interest income and interest expense.

The following table provides an analysis of the changes in interest income and expense between the three months ended June 30, 2025 and 2024.

The following table provides an analysis of the changes in interest income and expense between the three months ended September 30, 2025 and 2024.

Civista Bancshares, Inc.

19 unchanged sentences

The Company provides for credit losses through regular provisions to the allowance for credit losses.

During the three months ended June 30, 2025, the Company recorded a provision for credit losses of $1,025, a decrease of $630, from $1,655 during the three months ended June 30, 2024.

Noninterest income for the three month periods ended June 30, 2025 and 2024 was as follows:

Three Months Ended June 30,

During the three months ended September 30, 2025, the Company recorded a provision for credit losses for loans and off-balance sheet credit exposures of $200, a decrease of $821, from $1,021 during the three months ended September 30, 2024.

Noninterest income for the three month periods ended September 30, 2025 and 2024 was as follows:

Three Months Ended September 30,

Service charges

6 unchanged sentences

Total noninterest income

Total noninterest income for the three months ended June 30, 2025 was $6,589, a decrease of $3,788, or 36.5%, from $10,377 for the same period of 2024.

Lease revenue and residual income decreased $3,004 for the three months ended June 30, 2025, compared to the same period of 2024, mainly due to stronger lease originations in 2024 coupled with a one-time non-recurring adjustment in 2025 that

Total noninterest income for the three months ended September 30, 2025 was $9,633, a decrease of $466, or 4.6%, from $10,099 for the same period of 2024.

Lease revenue and residual income decreased $494 for the three months ended September 30, 2025, compared

Civista Bancshares, Inc.

1 unchanged sentence

(Amounts in thousands, except share data)

decreased leasing revenue by $1,044 associated with CLF's core system conversion.

Other income decreased $639 for the three months ended June 30, 2025, compared to the same period of 2024, mostly related to lower fee revenue from CLF.

Noninterest expense for the three month periods ended June 30, 2025 and 2024 was as follows:

Three Months Ended June 30,

to the same period of 2024, mainly due to leasing originations being strategically curtailed in 2025 resulting from the CLF core system conversion.

The core system conversion was completed late in the second quarter of 2025.

Noninterest expense for the three month periods ended September 30, 2025 and 2024 was as follows:

Three Months Ended September 30,

Compensation expense

9 unchanged sentences

Total noninterest expense

Total noninterest expense for the three months ended June 30, 2025 was $27,482, a decrease of $907, or 3.2%, from $28,389 reported for the same period of 2024.

The decrease in total noninterest expense was primarily due to decreases in compensation expense and equipment expense, mostly offset by increases in professional services.

The decrease in compensation expense was primarily due to an increase in the deferral of salaries and wages related to the loan growth in the second quarter of 2025 coupled with a decrease in the average number of full-time equivalent employees to 526 at June 30, 2025, compared to 537 for the same period of 2024, resulting in lower compensation and benefits costs.

The decrease in equipment expense was mainly due to normal depreciation as well as decreases in expenses related to operating lease contracts.

The increase in professional fees was attributable to utilizing consultants to assist in the transitioning of the new core operating system at CLF.

Income tax expense for the three months ended June 30, 2025 totaled $1,881, up $861 compared to the same period of 2024.

The effective tax rates for the three month periods ended June 30, 2025 and 2024 were 14.8% and 12.6%, respectively.

Total noninterest expense for the three months ended September 30, 2025 was $28,327, a decrease of $68, or 0.2%, from $28,395 reported for the same period of 2024.

The decrease in total noninterest expense was primarily due to decreases in compensation and marketing expenses, mostly offset by increases in software maintenance and other expenses.

The decrease in compensation expense was primarily due to an increase in the deferral of salaries and wages related to the loan originations in the third quarter of 2025.

The decrease in marketing expense was mainly due to lower marketing and promotional expenses related to advertising and product marketing.

The increase in software maintenance expenses was primarily a function of the renewal of current contracts at higher levels as we continue to enhance our systems and products to meet customer demand as well as create efficiencies for our employees.

The increase in other expenses are mainly related to the non-recurring acquisition-related expense for the FSB Merger.

Income tax expense for the three months ended September 30, 2025 totaled $2,891, up $1,340 compared to the same period of 2024.

The effective tax rates for the three month periods ended September 30, 2025 and 2024 were 18.5% and 15.6%, respectively.

The increase in the effective tax rate for the three month period ended September 30, 2025, was primarily due to an increase in the forecasted pre-tax income outpacing the permanent differences for 2025, thus, creating more taxable income at the statutory tax rate of 21% and increasing the Company's effective tax rate.

The difference between the statutory federal income tax rate and the Company’s effective tax rate is the permanent tax differences, primarily consisting of tax-exempt interest income from municipal investments and loans, low-income housing tax credits, tax-deductible captive insurance premiums and bank owned life insurance income.

Six Months Ended June 30, 2025 and 2024

The Company had net income of $21,183 for the six months ended June 30, 2025, an increase of $7,759 from net income of $13,424 for the same six months of 2024.

Basic and diluted earnings per common share were $1.37 for the six months ended June 30, 2025, compared to $0.85 for the same period in 2024.

For the six months ended June 30, 2025, net income was increased by $757 from non-recurring adjustments resulting from the CLF core system conversion.

Nine Months Ended September 30, 2025 and 2024

The Company had net income of $33,943 for the nine months ended September 30, 2025, an increase of $12,153 from net income of $21,790 for the same nine months of 2024.

Basic and diluted earnings per common share were $2.04 for the nine months ended September 30, 2025, compared to $1.39 for the same period in 2024.

The primary reasons for the changes in net income are explained below.

Net interest income for the six months ended June 30, 2025 was $67,587, an increase of $11,464, from $56,123 for the same six months of 2024.

Net interest income for the nine months ended September 30, 2025 was $102,132, an increase of $16,776, from $85,356 for the same nine months of 2024.

This increase was a result of an increase of $11,782 in total interest and dividend income, coupled with a $4,994 decrease in total interest expense.

Total interest-earning assets averaged $3,821,649 during the six months ended June 30, 2025, an increase of $235,469 from $3,586,180 for the same period of 2024.

The Company’s total average interest-bearing liabilities increased from $2,766,811 during the six months ended June 30, 2024 to $3,034,362 during the six months ended June 30, 2025.

The Company’s fully tax equivalent net interest margin for the six months ended June 30, 2025 and 2024 was 3.57% and 3.16%, respectively.

Net interest income was increased $1,621 in the six months ended June 30, 2025, resulting from non-recurring adjustments from the CLF core system conversion.

Total interest-earning assets averaged $3,824,289 during the nine months ended September 30, 2025, an increase of $197,921 from $3,626,368 for the same period of 2024.

The Company’s total average interest-bearing liabilities increased from $2,811,188 during the nine months ended September 30, 2024 to $3,007,668 during the nine months ended September 30, 2025.

The Company’s fully tax equivalent net interest margin for the nine months ended September 30, 2025 and 2024 was 3.58% and 3.16%, respectively.

Net interest income was increased $1,621 in the nine months ended September 30, 2025, as a result of the non-recurring adjustments from the CLF core system conversion.

Civista Bancshares, Inc.

1 unchanged sentence

(Amounts in thousands, except share data)

Total interest and dividend income increased $9,283 to $110,004 for the six months ended June 30, 2025.

Total interest and dividend income increased $11,782 to $165,244 for the nine months ended September 30, 2025.

This change was the result of an increase in the average balance of loans, accompanied by a higher yield on the portfolio.

The average balance of loans increased by $195,663, or 6.7%, to $3,117,867 for the six months ended June 30, 2025, as compared to $2,922,204 for the six months ended June 30, 2024.

The average balance of loans increased by $162,261, or 5.5%, to $3,121,292 for the nine months ended September 30, 2025, as compared to $2,959,031 for the nine months ended September 30, 2024.

The loan yield increased to 6.27% for 2025, from 6.15% in 2024.

Interest on taxable securities increased $1,302 to $7,306 for the six months ended June 30, 2025, compared to $6,004 for the same period in 2024.

The average balance of taxable securities increased $49,362 to $400,518 for the six months ended June 30, 2025, as compared to $351,156 for the six months ended June 30, 2024.

Interest on taxable securities increased $1,966 to $11,228 for the nine months ended September 30, 2025, compared to $9,262 for the same period in 2024.

The average balance of taxable securities increased $45,762 to $401,091 for the nine months ended September 30, 2025, as compared to $355,329 for the nine months ended September 30, 2024.

The yield on taxable securities increased 31 basis points to 3.43% for 2025, compared to 3.12% for 2024.

Interest on tax-exempt securities decreased $69 to $4,678 for the six months ended June 30, 2025, compared to $4,747 for the same period in 2024.

The average balance of tax-exempt securities decreased $9,575 to $282,183 for the six months ended June 30, 2025, as compared to $291,758 for the six months ended June 30, 2024.

Interest on tax-exempt securities decreased $114 to $7,002 for the nine months ended September 30, 2025, compared to $7,116 for the same period in 2024.

The average balance of tax-exempt securities decreased $11,921 to $279,668 for the nine months ended September 30, 2025, as compared to $291,589 for the nine months ended September 30, 2024.

The yield on tax-exempt securities increased 3 basis points to 3.88% for 2025, compared to 3.85% for 2024.

Total interest expense decreased $2,181, or 4.9%, to $42,417 for the six months ended June 30, 2025, compared to $44,598 for the same period in 2024.

Total interest expense decreased $4,994, or 7.3%, to $63,112 for the nine months ended September 30, 2025, compared to $68,106 for the same period in 2024.

The change in interest expense can be attributed to a decrease in rate, mostly offset by an increase in the average balance of interest-bearing liabilities.

For the six months ended June 30, 2025, the average balance of interest-bearing liabilities increased $267,551 to $3,034,362, compared to $2,766,811 for the six months ended June 30, 2024.

Interest incurred on deposits decreased $218 to $31,274 for the six months ended June 30, 2025, compared to $31,492 for the same period in 2024.

The average balance of interest-bearing deposits increased by $262,529 for the six months ended June 30, 2025, as compared to the same period in 2024, and the rate paid on demand and savings accounts increased from 1.04% in 2024 to 1.46% in 2025.

The rate paid on time deposits decreased from 5.38% in 2024 to 4.13% in 2025.

In addition, for the six months ended June 30, 2025, the average balance of short-term FHLB balances decreased $455 to $384,224 from $384,679 compared to the same period in 2024.

The rate paid on subordinated debentures decreased 31 basis points for the six months ended June 30, 2025, as compared to the same period in 2024.

The following table presents the condensed average balance sheets for the six months ended June 30, 2025 and 2024.

For the nine months ended September 30, 2025, the average balance of interest-bearing liabilities increased $196,480 to $3,007,668, compared to $2,811,188 for the nine months ended September 30, 2024.

Interest incurred on deposits decreased $797 to $47,621 for the nine months ended September 30, 2025, compared to $48,418 for the same period in 2024.

The average balance of interest-bearing deposits increased by $230,369 for the nine months ended September 30, 2025, as compared to the same period in 2024.

The rate paid on demand and savings accounts increased from 1.07% in 2024 to 1.48% in 2025, while the rate paid on time deposits decreased from 5.37% in 2024 to 4.09% in 2025.

In addition, for the nine months ended September 30, 2025, the average balance of short-term FHLB balances decreased $39,064 to $346,737 from $385,801 compared to the same period in 2024, resulting from the aforementioned cash generated from the capital raise.

The rate paid on subordinated debentures decreased 30 basis points for the nine months ended September 30, 2025, as compared to the same period in 2024.

The following table presents the condensed average balance sheets for the nine months ended September 30, 2025 and 2024.

The daily average loan amounts outstanding are net of unearned income and include loans held for sale and nonaccrual loans.

5 unchanged sentences

(Amounts in thousands, except share data)

Six Months Ended June 30,

Nine Months Ended September 30,

Interest-earning assets:

25 unchanged sentences

Net interest margin (2)

(1) Net interest spread represents the difference between the yield on average interest-earning assets and the cost of interest-bearing liabilities.

(2) Net interest margin represents net interest income divided by average interest-earning assets.

*Average yields are presented on a tax equivalent basis.

The tax equivalent effect associated with loans and investments, included in the yields above, was $1.2 million and $1.3 million for the periods ended June 30, 2025 and 2024, respectively.

The tax equivalent effect associated with loans and investments, included in the yields above, was $1.9 million and $1.9 million for the periods ended September 30, 2025 and 2024, respectively.

**Average balance includes nonaccrual loans.

Net interest income may also be analyzed by comparing the volume and rate components of interest income and interest expense.

The following table provides an analysis of the changes in interest income and expense between the six months ended June 30, 2025 and 2024.

The following table provides an analysis of the changes in interest income and expense between the nine months ended September 30, 2025 and 2024.

The table is presented on a fully tax-equivalent basis.

21 unchanged sentences

The Company provides for credit losses through regular provisions to the allowance for credit losses.

During the six months ended June 30, 2025, the Company recorded a provision for credit losses of $2,592, a decrease of $1,055, from $3,647 during the six months ended June 30, 2024.

Noninterest income for the six months ended June 30, 2025 and 2024 was as follows:

Six Months Ended June 30,

During the nine months ended September 30, 2025, the Company recorded a provision for credit losses and off-balance sheet credit exposures of $2,792, a decrease of $1,876, from $4,668 during the nine months ended September 30, 2024.

Noninterest income for the nine months ended September 30, 2025 and 2024 was as follows:

Nine Months Ended September 30,

Service charges

6 unchanged sentences

Total noninterest income

Total noninterest income for the six months ended June 30, 2025 was $14,449, a decrease of $4,185, or 22.5%, from $18,634 for the same period of 2024.

Lease revenue and residual income decreased $2,782 for the six months ended June 30, 2025, compared to the same period of 2024, mainly due to stronger lease originations in 2024 coupled with a one-time non-recurring adjustment decreasing leasing revenue by $1,044 associated with CLF's core system conversion.

Other income decreased $1,277 for the six months ended June 30, 2025, compared to the same period of 2024, mostly related to lower fee revenue from CLF.

Total noninterest income for the nine months ended September 30, 2025 was $24,082, a decrease of $4,651, or 16.2%, from $28,733 for the same period of 2024.

Lease revenue and residual income decreased $3,274 for the nine months ended September 30, 2025, compared to the same period of 2024, mainly due to curtailing lease originations in 2025 while CLF implemented a new core operating system coupled with stronger lease originations in 2024, and a one-time non-recurring adjustment decreasing leasing revenue by $1,044 associated with CLF's core system conversion.

Other income decreased $1,276 for the nine months ended September 30, 2025, compared to the same period of 2024, mostly related to lower fee revenue from CLF.

Civista Bancshares, Inc.

1 unchanged sentence

(Amounts in thousands, except share data)

The components of noninterest expense for the six month periods ended June 30, 2025 and 2024 are as follows:

Six Months Ended June 30,

The components of noninterest expense for the nine month periods ended September 30, 2025 and 2024 are as follows:

Nine Months Ended September 30,

Compensation expense

9 unchanged sentences

Total noninterest expense

Total noninterest expense for the six months ended June 30, 2025 was $54,608, a decrease of $1,223, or 2.2%, from $55,831 reported for the same period of 2024.

The decrease in total noninterest expense was primarily due to decreases in compensation expense and equipment expense, mostly offset by increases in professional services.

The decrease in compensation expense was primarily due to an increase in the deferral of salaries and wages related to the loan growth in the first six months of 2025 coupled with a decrease in the average number of full-time equivalent employees to 523 at June 30, 2025, compared to 538 for the same period of 2024, resulting in lower compensation and benefits costs.

The decrease in equipment expense was mainly due to normal depreciation as well as decreases in expenses related to operating lease contracts.

Total noninterest expense for the nine months ended September 30, 2025 was $82,935, a decrease of $1,290, or 1.5%, from $84,225 reported for the same period of 2024.

The decrease in total noninterest expense was primarily due to decreases in compensation expense and equipment expense, somewhat offset by increases in professional services.

The decrease in compensation expense was primarily due to an increase in the deferral of salaries and wages related to loan originations in the first nine months of 2025 coupled with a decrease in the average number of full-time equivalent employees to 523 at September 30, 2025, compared to 531 for the same period of 2024, resulting in lower compensation and benefits costs.

The decrease in equipment expense was primarily due to the $1,616 decrease in expenses related to operating lease contracts, which was partially offset by $737 in depreciation expense recorded to write down the net book value of certain assets identified as no longer in use.

The increase in professional fees was attributable to utilizing consultants to assist in the transitioning of the new core operating system at CLF.

Income tax expense for the six months ended June 30, 2025 totaled $3,653, up $1,798 compared to the same period of 2024.

The effective tax rates for the six months ended June 30, 2025 and 2024 were 14.7% and 12.1%, respectively.

Income tax expense for the nine months ended September 30, 2025 totaled $6,544, up $3,138 compared to the same period of 2024.

The effective tax rates for the nine months ended September 30, 2025 and 2024 were 16.2% and 13.5%, respectively.

The increase in the effective tax rate for the nine month period ended September 30, 2025, was primarily due to an increase in the forecasted pre-tax income outpacing the permanent differences for 2025, thus, creating more taxable income at the statutory tax rate of 21% and increasing the Company's effective tax rate.

Capital Resources

Shareholders’ equity totaled $404,137 at June 30, 2025, compared to $388,502 at December 31, 2024.

Shareholders’ equity increased during the first six months of 2025 as a result of net income of $21,183, partially offset by dividends on common shares of $5,270.

All of the Company’s capital ratios exceeded the regulatory minimum guidelines as of June 30, 2025 and December 31, 2024 as identified in the following table:

Company Ratios—June 30, 2025

Shareholders’ equity totaled $499,028 at September 30, 2025, compared to $388,502 at December 31, 2024.

Shareholders’ equity increased during the first nine months of 2025 as a result of net income of $33,943 coupled with $75,666 resulting from the capital raise completed in the third quarter of 2025, partially offset by dividends on common shares of $8,553.

Civista Bancshares, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Amounts in thousands, except share data)

All of the Company’s capital ratios exceeded the regulatory minimum guidelines as of September 30, 2025 and December 31, 2024 as identified in the following table:

Company Ratios—September 30, 2025

Company Ratios—December 31, 2024

4 unchanged sentences

All securities, with the exception of equity securities, are classified as available-for-sale.

Securities, with maturities of one year or less, totaled $8,840, or 1.25% of the total securities portfolio, at June 30, 2025.

Securities, with maturities of one year or less, totaled $29,753, or 4.55% of the total securities portfolio, at September 30, 2025.

The available-for-sale securities portfolio helps to provide the Company with the ability to meet its funding needs.

The Condensed

Civista Bancshares, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Amounts in thousands, except share data)

Consolidated Statements of Cash Flows (Unaudited) contained in the Consolidated Financial Statements detail the Company’s cash flows from operating activities resulting from net earnings.

The Condensed Consolidated Statements of Cash Flows (Unaudited) contained in the Consolidated Financial Statements detail the Company’s cash flows from operating activities resulting from net earnings.

As reported in the Condensed Consolidated Statements of Cash Flows (Unaudited), our cash flows are classified for financial reporting purposes as operating, investing or financing cash flows.

Net cash provided by operating activities was $14,693 and $12,945 for the six months ended June 30, 2025 and 2024, respectively.

Net cash provided by operating activities was $33,661 and $25,850 for the nine months ended September 30, 2025 and 2024, respectively.

The primary additions to cash from operating activities are from proceeds from the sale of loans.

The primary use of cash from operating activities is from loans originated for sale.

Net cash used for investing activities was $76,078 and $164,247 for the six months ended June 30, 2025 and 2024, respectively, principally reflecting our loan and investment security activities.

Cash provided by financing activities was $72,088 and $146,656 for the six months ended June 30, 2025 and 2024, respectively.

The primary additions in financing activities is the increase in short-term FHLB advances, partially offset by the payment of common dividends.

Net cash used for investing activities was $10,457 and $187,303 for the nine months ended September 30, 2025 and 2024, respectively, principally reflecting our loan and investment security activities.

Cash (used)/provided by financing activities was ($23,593) and $175,709 for the nine months ended September 30, 2025 and 2024, respectively.

The primary changes in financing activities is the decrease in short-term FHLB advances and the payment of common dividends, mostly offset by cash provided by proceeds from the capital raise as well as an increase in deposits.

Future loan demand of Civista may be funded by increases in deposit accounts, proceeds from payments on existing loans, the maturity of securities, and the sale of securities classified as available-for-sale.

1 unchanged sentence

Through its correspondent banks, Civista maintains federal funds borrowing lines totaling $50,000.

As of June 30, 2025, Civista had total credit availability with the FHLB of $889,402 with standby letters of credit totaling $123,000 and a remaining borrowing capacity of approximately $331,799.

As of September 30, 2025, Civista had total credit availability with the FHLB of $966,116 with standby letters of credit totaling $115,000 and a remaining borrowing capacity of approximately $618,147.

In addition, CBI maintains a credit line with a third party lender totaling $10,000.

No borrowings were outstanding by CBI under this credit line as of June 30, 2025.

No borrowings were outstanding by CBI under this credit line as of September 30, 2025.

Civista Bancshares, Inc.

40 unchanged sentences

Because these instruments are sensitive to interest rate changes, they require management expertise to be effective.

The Company has not purchased derivative financial instruments to hedge interest rate risk in the past and does not currently intend to purchase such instruments in the near future.

Financial institutions are also subject to prepayment risk in falling rate environments.

5 unchanged sentences

FHLB advances and wholesale borrowings may also be used as important sources of liquidity for the Company.

The following table provides information about the Company’s financial instruments that were sensitive to changes in interest rates as of December 31, 2024 and June 30, 2025, based on certain prepayment and account decay assumptions that management believes are reasonable.

The table shows the changes in the Company’s net portfolio value (in amount and percent) that would result from hypothetical interest rate increases of up to 400 basis points from 100 basis points and interest rate decreases of 100 basis points and up to 400 basis points at June 30, 2025 and December 31, 2024.

The following table provides information about the Company’s financial instruments that were sensitive to changes in interest rates as of December 31, 2024 and September 30, 2025, based on certain prepayment and account decay assumptions that management believes are reasonable.

Net Portfolio Value

June 30, 2025

September 30, 2025

December 31, 2024

Change in Rates

The change in net portfolio value from December 31, 2024 to June 30, 2025, can be attributed to a couple of factors.

The yield curve has widened since last year with the short-end shifting down and the long-end shifting upward.

Additionally, the volume of assets and funding sources has changed, but the asset mix remains centered on loan and deposits.

The volume of loans and deposits has increased, while the volume of short-term FHLB advances and other borrowings has decreased.

The change in net portfolio value from December 31, 2024 to September 30, 2025, can be attributed to a couple of factors.

The volume of assets and funding sources has changed, but the asset mix remains centered on loan and deposits.

The volume of loans and deposits has increased, while the volume of short-term FHLB advances has decreased.

The volume shifts from the end of the year contributed to an increase in the base net portfolio value.

Additionally, the Company completed its underwritten public offering of common shares in the third quarter of 2025 resulting in aggregate net proceeds of approximately $75.7 million.

Beyond the change in the base level of net portfolio value, projected movements in rates, up or down, would also lead to changes in market values.

1 unchanged sentence

Accordingly, the Company sees an increase in the net portfolio value.

The change in the rates down scenarios for the 100, 200, and 300 basis point movements would lead to a larger decrease in the market value of liabilities than in assets, leading to a decrease in the net portfolio value with the exception of the down 400 basis point which has a higher market value of assets then liabilities.

The change in the rates down scenarios for the 100 and 200 basis point movements would lead to a larger decrease in the market value of liabilities than in assets, leading to a decrease in the net portfolio value with the exception of the down 300 and 400 basis point which has a higher market value of assets then liabilities.

Civista Bancshares, Inc.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis