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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-08 · 274 added, 138 removed, 243 unchanged (63% of the section changed)

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

The following discussion reviews the consolidated financial condition of the Company at March 31, 2026 compared to December 31, 2025, and the consolidated results of operations for the three months ended March 31, 2026, compared to the same period in 2025.

The following discussion reviews the consolidated financial condition of the Company at June 30, 2026 compared to December 31, 2025, and the consolidated results of operations for the three and six months ended June 30, 2026, compared to the same period in 2025.

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

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• adverse changes in the real estate market, which could cause increases in delinquencies and non-performing assets, including additional loan charge-offs, and could depress our income, earnings and capital;

• changes in interest rates resulting from national and local economic conditions and the policies of regulatory authorities, including monetary policies of the Board of Governors of the Federal Reserve System, which may adversely affect interest rates, interest margins, loan demand and interest rate sensitivity;

• changes in interest rates resulting from national and local economic conditions and the policies of regulatory authorities, including monetary policies of the Board of Governors of the Federal Reserve System, which may affect interest rates, interest margins, loan demand and interest rate sensitivity;

• operational risks, reputational risks, legal and compliance risks, and other risks related to potential fraud or theft by employees or outsiders, unauthorized transactions by employees or operational errors, or failures, disruptions or breaches in security of our systems, including those resulting from computer viruses or cyber-attacks;

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• competitive pressures and factors among financial services organizations could increase significantly, including product and pricing pressures, changes to third-party relationships and our ability to recruit and retain qualified management and banking personnel;

• unexpected losses of services of our key management personnel, or the inability to recruit and retain qualified personnel in the future;

• risks inherent in pursuing strategic growth initiatives, including integration and other risks involved in past and possible future acquisitions;

Civista Bancshares, Inc.

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(Amounts in thousands, except share data)

• risks related to the recent FSB Merger, including, without limitation, that we may be unable to integrate the business of Civista and FSB successfully or realize the anticipated benefits of the FSB Merger or that the synergies attributable to the FSB Merger may vary from expectations;

• unexpected losses of services of our key management personnel, or the inability to recruit and retain qualified personnel in the future;

• risks inherent in pursuing strategic growth initiatives, including integration and other risks involved in past and possible future acquisitions;

• 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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• other risks identified from time-to-time in the Company’s other public documents on file with the SEC, including those risks identified in “Item 1A.

Risk Factors” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Risk Factors” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as supplemented by the disclosure under "Item 1A.

Risk Factors" of Part II of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026.

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.

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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 were approximately $75.7 million, after deducting $608 of direct expenses and the underwriting discount of $4.2 million.

The net proceeds from the offering were initially used to pay-down short-term FHLB advances, but the

Civista Bancshares, Inc.

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(Amounts in thousands, except share data)

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.

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

The net proceeds from the offering were initially 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 March 31, 2026 were $4,298,322 compared to $4,336,453 at December 31, 2025, a decrease of $38,131, or 0.9%.

The decline was mainly due to a decrease in net loans of $38,895 and a decrease in securities available-for-sale of $2,171.

These decreases were slightly offset by increases in cash and due from financial institutions of $6,205 and investments in time deposits of $1,715.

Total liabilities at March 31, 2026 were $3,746,079 compared to $3,792,979 at December 31, 2025, a decrease of $46,900, or 1.2%.

The decrease in total liabilities was primarily attributable to a decrease in short-term FHLB advances of $75,000 coupled with a decrease in accrued incentives of $3,571, partially offset by an increase in total deposits of $35,426.

Loans outstanding as of March 31, 2026 and December 31, 2025 were as follows:

March 31, 2026

Total assets of the Company at June 30, 2026 were $4,294,298 compared to $4,336,453 at December 31, 2025, a decrease of $42,155, or 1.0%.

The decrease was mainly due to decreases in net loans of $14,835, securities available-for-sale of $14,594, and cash and due from financial institutions of $15,577.

These decreases were slightly offset by increases in investments in time deposits of $2,960 and other securities of $3,015.

Total liabilities at June 30, 2026 were $3,727,513 compared to $3,792,979 at December 31, 2025, a decrease of $65,466, or 1.7%.

The decrease in total liabilities was primarily attributable to decreases in short-term FHLB advances of $51,500 and total deposits of $8,221.

Loans outstanding as of June 30, 2026 and December 31, 2025 were as follows:

June 30, 2026

December 31, 2025

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Allowance for credit losses

Loans held for sale decreased $240 since December 31, 2025.

The decrease was due to a decrease in average loan balances held for sale.

At March 31, 2026, 32 loans totaling $6,940 were held for sale as compared to 27 loans totaling $7,180 at December 31, 2025.

Loans held for sale increased $1,328 since December 31, 2025.

The increase was due to an increase in average loan balances held for sale as well as the timing of selling the loans.

At June 30, 2026, 28 loans totaling $8,508 were held for sale as compared to 27 loans totaling $7,180 at December 31, 2025.

Net loans decreased $14,835, or 0.5%, since December 31, 2025.

The decrease at March 31, 2026 was mainly attributed to decreases in Real Estate Construction, Commercial Real Estate - Non-Owner Occupied, and Farm Real Estate, partially offset by increases in Commercial Real Estate - Owner Occupied and Commercial & Agriculture.

At March 31, 2026, the loan to deposit ratio was 92.2% compared to 94.3% at December 31, 2025.

During the first three months of 2026, provisions and recoveries made to the allowances for credit losses and off-balance sheet credit exposures resulted in a net credit of $629 to the provision for credit losses, compared to an expense of $1,567 during the same period in 2025.

The decrease in the provision for the first three months of 2026 was primarily the result of loan balances decreasing $40,379 for the three months ended March 31, 2026, coupled with an improvement in the historical loss rates in the majority of our loan segments.

Reserves on the Lease Financing Receivables portfolio decreased at March 31, 2026, primarily related to lower balance growth in 2026 as the first quarters are historically a lower origination period for leases.

Total delinquencies on Lease Financing Receivables decreased from December 31, 2025 to March 31, 2026.

The decrease at June 30, 2026 was mainly attributed to decreases in Real Estate Construction, Commercial Real Estate - Non-Owner Occupied, and Farm Real Estate loans, partially offset by increases in Residential Real Estate, Commercial & Agriculture, and Commercial Real Estate - Owner Occupied loans.

At June 30, 2026, the loan to deposit ratio was 94.1% compared to 94.3% at December 31, 2025.

During the first six months of 2026, provisions and recoveries made to the allowances for credit losses and off-balance sheet credit exposures resulted in a net expense of $1,141 to the provision for credit losses, compared to an expense of $2,592 during the same period in 2025.

The decrease in the provision expense for the first six months of 2026 was the result of loan balances decreasing $15,142 in addition to favorable changes in economic factors for the six months ended June 30, 2026.

Reserves on the Lease Financing Receivables portfolio decreased at June 30, 2026, primarily related to lower balance growth in 2026 as CLF has experienced lower origination for leases.

Total delinquencies on Lease Financing Receivables decreased from December 31, 2025 to June 30, 2026.

Lease Financing Receivables 30-59 days past due and 60-89 days past due combined decreased from $2,541 to $675, and the balance of 90 days or greater past due also decreased from $454 to $103.

Nonaccrual Lease Financing Receivables decreased from $291 at December 31, 2025 to $105 at March 31, 2026.

Net charge-offs for the first three months ended March 31, 2026 totaled $716, compared to net charge-offs of $633 for the same period of 2025.

For the first three months ended March 31, 2026, the Company charged off a total of 12 loans and leases, consisting of two Commercial & Agriculture loans totaling $96, four Lease Financing Receivables totaling $210, one Commercial Real Estate - Non-Owner Occupied loan totaling $484, four Consumer and Other loans totaling $13 and one Residential Real Estate loan totaling $3.

In addition, during the three months ended March 31, 2026, the Company had recoveries on previously charged-off Commercial & Agriculture loans of $62, Commercial Real Estate - Owner Occupied loans of $2, Commercial Real Estate - Non-Owner Occupied loans

Nonaccrual Lease Financing Receivables decreased from $291 at December 31, 2025 to $28 at June 30, 2026.

Net charge-offs for the first six months ended June 30, 2026 totaled $790, compared to net charge-offs of $1,633 for the same period of 2025.

For the six months ended June 30, 2026, the Company charged off a total of 21 loans and leases, consisting of three Commercial & Agriculture loans totaling $98, seven Lease Financing Receivables totaling $348, one Commercial Real Estate - Non-Owner Occupied

Civista Bancshares, Inc.

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(Amounts in thousands, except share data)

of $1, Residential Real Estate loans of $13, Lease Financing Receivables of $4 and Consumer and Other loans of $8.

loan totaling $484, seven Consumer and Other loans totaling $20 and three Residential Real Estate loan totaling $30.

In addition, during the six months ended June 30, 2026, the Company had recoveries on previously charged-off Commercial & Agriculture loans of $96, Commercial Real Estate - Owner Occupied loans of $3, Commercial Real Estate - Non-Owner Occupied loans of $2, Residential Real Estate loans of $34, Lease Financing Receivables of $44 and Consumer and Other loans of $11.

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 are generally moved to nonaccrual status when 90 days or more past due or at an earlier date when full collection of principal and interest is in doubt.

Total loans 90 days or more past due increased from $4,109 at December 31, 2025 to $10,688 at March 31, 2026;

however, this increase can be attributed to one Commercial Real Estate - Non-Owner Occupied loan with a balance of approximately $7,900 that was 30-59 days past due as of December 31, 2025 and became greater than 90 days past due by March 31, 2026, which is why total loans past due did not experience the same trend, decreasing slightly from December 31, 2025 to March 31, 2026.

Total loans 90 days or more past due increased from $4,109 at December 31, 2025 to $13,853 at June 30, 2026;

however, this increase can be attributed to one Commercial Real Estate - Non-Owner Occupied loan with a balance of approximately $7,900 that was 30-59 days past due as of December 31, 2025 and became greater than 90 days past due by June 30, 2026, which is why total loans past due did not experience the same trend, decreasing slightly from December 31, 2025 to June 30, 2026.

Further, this loan was already moved to nonaccrual as of December 31, 2025 and was individually evaluated for purpose of the December 31, 2025 allowance calculation, resulting in a specific reserve of $3,000.

As of March 31, 2026, the loan remains on nonaccrual and continues to be individually evaluated with a $3,000 specific reserve.

This is why nonaccrual loans did not move consistently with the increase in 90 days or more past due, decreasing slightly from $30,384 at December 31, 2025 to $29,400 at March 31, 2026.

This is also why the increase in 90 days or more past due did not result in an increase to our estimate allowance, because the related risk was already accounted for with the $3,000 specific reserve included in both the December 31, 2025 and March 31, 2026 allowance for credit loss estimate.

As of June 30, 2026, the loan remains on nonaccrual and continues to be individually evaluated with a $2,000 specific reserve.

For this reason, nonaccrual loans did not move consistently with the increase in 90 days or more past due, decreasing slightly from $30,834 at December 31, 2025 to $29,865 at June 30, 2026 and the increase in 90 days or more past due did not result in an increase to our estimated allowance, because the related risk was already accounted for in both the December 31, 2025 and June 30, 2026 allowance for credit loss estimate.

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

The allowance for credit losses as a percent of total loans was 1.26% at March 31, 2026 and 1.28% at December 31, 2025.

Cash and due from financial institutions increased by $6,205, from $77,320 at December 31, 2025 to $83,525 at March 31, 2026.

The increase is mainly due to an increase in overnight investments at the Federal Reserve.

The available-for-sale securities portfolio decreased by $2,171, from $681,908 at December 31, 2025 to $679,737 at March 31, 2026.

The allowance for credit losses as a percent of total loans was 1.28% at both June 30, 2026 and December 31, 2025.

Cash and due from financial institutions decreased by $15,577, from $77,320 at December 31, 2025 to $61,743 at June 30, 2026.

The decrease is mainly due to a decrease in overnight investments at the Federal Reserve.

The available-for-sale securities portfolio decreased by $14,594, from $681,908 at December 31, 2025 to $667,314 at June 30, 2026.

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 March 31, 2026, the Company was in compliance with all pledging requirements.

Premises and equipment, net, decreased $1,556 from December 31, 2025 to March 31, 2026.

The decrease was mainly the result of depreciation expenses of $1,902 coupled with maturing operating leases, partially offset by purchases.

The depreciation expense 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.

Civista Bancshares, Inc.

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

(Amounts in thousands, except share data)

Total deposits as of March 31, 2026 and December 31, 2025 were as follows:

March 31, 2026

As of June 30, 2026, the Company was in compliance with all pledging requirements.

Total deposits as of June 30, 2026 and December 31, 2025 were as follows:

June 30, 2026

December 31, 2025

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Total Deposits

The Company had approximately $636,183 and $647,472 of uninsured deposits as of March 31, 2026 and December 31, 2025, respectively.

Civista Bancshares, Inc.

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

(Amounts in thousands, except share data)

The Company had approximately $638,065 and $647,472 of uninsured deposits as of June 30, 2026 and December 31, 2025, respectively.

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

Total deposits at March 31, 2026 increased $35,426 from December 31, 2025.

Noninterest-bearing deposits, interest-bearing demand deposits, and savings and money market accounts increased $1,746, $18,892, and $56,660, respectively, from December 31, 2025, while time deposits and brokered deposits decreased $16,871 and $25,001, respectively, from December 31, 2025.

The increase in interest-bearing demand deposits was primarily due to an $18,568 increase in interest-bearing public fund accounts and a $4,987 increase in business interest-bearing demand deposits, slightly offset by decreases of $4,589 and $2,795 in jumbo demand deposits and retail interest-bearing demand deposits, respectively.

The increase in savings and money markets was due to increases of $27,030, $13,308, $8,814, $6,130, and $4,222 in business money market deposits, public fund money market accounts, Insured Cash Sweep (ICS) money market deposits, retail money market accounts, and statement savings, respectively.

The $16,871 decrease in time deposits was due to a decrease of $15,378 in jumbo time deposits.

Total deposits at June 30, 2026 decreased $8,221 from December 31, 2025.

Time deposits and savings and money markets increased $33,823 and $36,496, respectively, from December 31, 2025, while brokered deposits, interest-bearing demand deposits, and noninterest-bearing demand deposits decreased $51,999, $19,651, and $6,890, respectively, from December 31, 2025.

The increase in time deposits was mainly due to an increase in jumbo time deposits of $26.5 million and retail certificates of deposit of $8.8 million, respectively.

The increase in savings and money markets was due to increases of $34,150 and $10,555 in business money market deposits and public fund money market accounts, respectively, partially offset by a decrease in Insured Cash Sweep (ICS) money market deposits of $5,132.

Brokered deposits decreased $51,999 as the Company continues its strategy to reduce brokered deposits and replace them with core deposits.

The year-to-date average balance of total deposits increased $251,868, compared to the average balance for the same period in 2025, mainly due to increases of $150,746, $76,467, and $24,655 in the average balance of time deposits, demand and savings deposits, and noninterest-bearing deposits, respectively.

Short-term FHLB advances decreased $75,000 from December 31, 2025 to March 31, 2026, due to an increase in available liquidity, primarily as a result of deposit growth coupled with the net decrease in outstanding loans and leases in the first quarter of 2026.

Shareholders’ equity at March 31, 2026 was $552,243, or 12.8% of total assets, compared to $543,474, or 12.5% of total assets, at December 31, 2025.

The increase was a result of net income of $14,989, partially offset by dividends paid on common shares of $3,732 and an increase in accumulated other comprehensive loss of $2,889 resulting from the change in the unrealized loss on available-for-sale securities.

Total outstanding common shares at March 31, 2026 were 20,783,348, which increased slightly from 20,746,474 common shares outstanding at December 31, 2025.

Common shares outstanding increased due to the grant of 51,378 restricted common shares to certain officers under the Company’s 2024 Incentive Plan, partially offset by 14,504 common shares surrendered by officers to the Company to pay taxes upon vesting of restricted shares.

The decrease in interest-bearing demand deposits was primarily due to decreases of $12,448 and $10,441 in retail interest-bearing demand deposits and interest-bearing public fund accounts, respectively, partially offset by an increase of $4,566 in business interest-bearing demand deposits.

The decrease in noninterest-bearing demand deposits was mainly due to a decrease in business commercial deposits.

The year-to-date average balance of total deposits increased $273,096, compared to the average balance for the same period in 2025 due to increases of $127,663, $107,559, and $37,874 in the average balance of time deposits, demand and savings deposits, and noninterest-bearing deposits, respectively.

Short-term FHLB advances decreased $51,500 from December 31, 2025 to June 30, 2026, due to liquidity generated from reductions in loans and in our securities portfolio, together with operating cash flows, which were used to repay short-term FHLB advances.

Shareholders’ equity at June 30, 2026 was $566,785, or 13.2% of total assets, compared to $543,474, or 12.5% of total assets, at December 31, 2025.

The increase was a result of net income of $29,304 and a decrease in accumulated other comprehensive loss of $645 resulting from the change in the unrealized loss on available-for-sale securities and derivatives, in addition to an increase of $1,153 in stock compensation , partially offset by dividends paid on common shares of $7,473.

Total outstanding common shares at June 30, 2026 were 20,794,238, which increased slightly from 20,746,474 common shares outstanding at December 31, 2025.

Common shares outstanding increased due to the grant of 10,890 common shares to Civista directors as payment for their service on the Civista Board of Directors and 51,378 restricted common shares to certain officers under the Company’s 2024 Incentive Plan, partially offset by 14,504 common shares surrendered by officers to the Company to pay taxes upon vesting of restricted shares.

Results of Operations

Three Months Ended March 31, 2026 and 2025

The Company had net income of $14,989 for the three months ended March 31, 2026, an increase of $4,821 from net income of $10,168 for the same period of 2025.

Basic and diluted earnings per common share were $0.72 for the quarter ended March 31, 2026, compared to $0.66 for the same period of 2025.

In the first quarter of 2026, net income was decreased by $358 from non-recurring adjustments resulting from acquisition-related expenses from the FSB merger relating to the core system conversion that was completed in February 2026.

Three Months Ended June 30, 2026 and 2025

The Company had net income of $14,315 for the three months ended June 30, 2026, an increase of $3,300 from net income of $11,015 for the same period of 2025.

Basic and diluted earnings per common share were $0.69 for the quarter ended June 30, 2026, compared to $0.71 for the same period of 2025.

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.

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

Net interest income for the three months ended March 31, 2026 was $37,823, an increase of $5,050 from $32,773 for the same period of 2025.

This increase was a result of an increase of $2,076 in total interest and dividend income, coupled with a $2,974 decrease in total interest expense.

Total interest-earning assets averaged $4,003,144 during the three months ended March 31, 2026, an increase of $201,435 from $3,801,709 for the same period of 2025.

The Company’s total average interest-bearing liabilities increased from

Net interest income for the three months ended June 30, 2026 was $38,593, an increase of $3,779 from $34,814 for the same period of 2025.

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

The quarterly increase was a result of an increase of $276 in total interest and dividend income, coupled with a $3,503 decrease in total interest expense.

Total interest-earning assets averaged $3,992,950 during the three months ended June 30, 2026, an increase of $151,581 from $3,841,369 for the same period of 2025.

The Company’s total average interest-bearing liabilities decreased from $3,062,324 during the three months ended June 30, 2025 to $2,997,826 during the three months ended June 30, 2026.

The Company’s fully tax equivalent net interest margin for the three months ended June 30, 2026 and 2025 was 3.89% and 3.64%, respectively.

Total interest and dividend income was $56,547 for the three months ended June 30, 2026, an increase of $276 from $56,271 for the same period of 2025.

The increase in interest and dividend income is mainly attributable to increases of $156 and $264 in taxable securities and deposits in other banks, respectively, partially offset by a decrease in interest and fees on loans of $84 which was impacted by the non-recurring adjustment mentioned above in the second quarter of 2025.

The average balance of loans increased by $107,864, or 3.4%, to $3,243,955 for the three months ended June 30, 2026, as compared to $3,136,091 for the same period of 2025.

Civista Bancshares, Inc.

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(Amounts in thousands, except share data)

$3,006,090 during the three months ended March 31, 2025 to $3,023,372 during the three months ended March 31, 2026.

The Company’s fully tax equivalent net interest margin for the three months ended March 31, 2026 and 2025 was 3.85% and 3.51%, respectively.

Total interest and dividend income was $55,809 for the three months ended March 31, 2026, an increase of $2,076 from $53,733 for the same period of 2025.

The increase in interest and dividend income is mainly attributable to a $1,584 increase in interest and fees on loans and a $399 increase in interest income on taxable securities.

The $1,584 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 $152,902, or 4.9%, to $3,252,342 for the three months ended March 31, 2026, as compared to $3,099,440 for the same period of 2025.

Interest on taxable securities increased $399 to $3,954 for the three months ended March 31, 2026, compared to $3,555 for the same period of 2025.

The average balance of taxable securities increased $35,867 to $432,760 for the three months ended March 31, 2026, as compared to $396,893 for the same period of 2025.

The yield on taxable securities increased 18 basis points to 3.49% for the three months ended March 31, 2026, compared to 3.31% for the same period of 2025, 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 $37 to $2,303 for the three months ended March 31, 2026, compared to $2,340 for the same period of 2025.

The average balance of tax-exempt securities decreased $1,204 to $285,277 for the three months ended March 31, 2026, as compared to $286,481 for the same period of 2025.

The yield on tax-exempt securities increased 3 basis points to 3.94% for the three months ended March 31, 2026, compared to 3.91% for the same period of 2025.

Interest on deposits in other banks increased $130 to $322 for the three months ended March 31, 2026, compared to $192 for the same period of 2025.

The average balance of interest-bearing deposits in other banks increased $13,870 to $32,765 for the three month period ended March 31, 2026, compared to $18,895 for the same period of 2025.

The yield on interest-bearing deposits in other banks decreased 22 basis points to 3.91% for the three months ended March 31, 2026, compared to 4.13% for the same period of 2025.

Total interest expense decreased $2,974, or 14.2%, to $17,986 for the three months ended March 31, 2026, compared to $20,960 for the same period of 2025.

For the three months ended March 31, 2026, the average balance of interest-bearing liabilities increased $17,282 to $3,023,372, as compared to $3,006,090 for the same period of 2025.

Interest incurred on deposits decreased by $263 to $15,453 for the three months ended March 31, 2026, compared to $15,716 for the same period of 2025.

The average balance of interest-bearing deposits increased by $227,213 to $2,765,773 for the three months ended March 31, 2026, as compared to the same period in 2025, which was more than offset by a decrease in the rate paid on interest-bearing deposits from 2.51% for the first three months ended March 31, 2025 to 2.27% in the first three months of 2026.

The decrease in rates was mainly driven by time deposits related to paying lower rates on retail and brokered CDs due to the lower rate environment in the first quarter of 2026 compared to the same period of 2025.

Interest expense incurred on short-term FHLB advances decreased mainly due to the average balance of short-term FHLB advances decreasing by $206,933 to $148,656 for the three months ended March 31, 2026, as compared to the same period in 2025.

The following table presents the condensed average balance sheets for the three months ended March 31, 2026 and 2025.

Interest on taxable securities increased $156 to $3,907 for the three months ended June 30, 2026, compared to $3,751 for the same period of 2025.

The average balance of taxable securities increased $13,820 to $417,924 for the three months ended June 30, 2026, as compared to $404,104 for the same period of 2025.

The yield on taxable securities increased 9 basis points to 3.51% for the three months ended June 30, 2026, compared to 3.42% for the same period of 2025, 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 $60 to $2,278 for the three months ended June 30, 2026, compared to $2,338 for the same period of 2025.

Interest on deposits in other banks increased $264 to $474 for the three months ended June 30, 2026, compared to $210 for the same period of 2025.

The average balance of interest-bearing deposits in other banks increased $29,676 to $52,919 for the three month period ended June 30, 2026, compared to $23,243 for the same period of 2025.

The yield on interest-bearing deposits in other banks decreased 2 basis points to 3.59% for the three months ended June 30, 2026, compared to 3.61% for the same period of 2025.

Total interest expense decreased $3,503, or 16.3%, to $17,954 for the three months ended June 30, 2026, compared to $21,457 for the same period of 2025.

For the three months ended June 30, 2026, the average balance of interest-bearing liabilities decreased $64,498 to $2,997,826, as compared to $3,062,324 for the same period of 2025.

Interest incurred on deposits increased by $336 to $15,894 for the three months ended June 30, 2026, compared to $15,558 for the same period of 2025.

The average balance of interest-bearing deposits increased by $243,145 to $2,781,645 for the three months ended June 30, 2026, as compared to the same period in 2025, which was almost fully offset by the decrease in the rate paid on interest-bearing deposits from 2.46% for the second quarter of 2025 to 2.29% in the second quarter of 2026.

The decrease in rates was mainly driven by time deposits related to paying lower rates on retail and brokered CDs due to the lower rate environment in the second quarter of 2026 compared to the same period of 2025.

Interest expense incurred on short-term FHLB advances decreased mainly due to the average balance of short-term FHLB advances decreasing by $304,722 to $107,823 for the three months ended June 30, 2026, as compared to the same period in 2025.

The following table presents the condensed average balance sheets for the three months ended June 30, 2026 and 2025.

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

Rates are annualized and taxable equivalent yields are computed using a

Civista Bancshares, Inc.

1 unchanged sentence

(Amounts in thousands, except share data)

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

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 March 31,

Three Months Ended June 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 $612 and $622 for the periods ended March 31, 2026 and 2025, respectively.

The tax equivalent effect associated with loans and investments, included in the yields above, was $606 and $622 for the three months ended June 30, 2026 and 2025, 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 March 31, 2026 and 2025.

Civista Bancshares, Inc.

1 unchanged sentence

(Amounts in thousands, except share data)

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, 2026 and 2025.

Increase (decrease) due to:

16 unchanged sentences

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

During the three months ended March 31, 2026, the Company recorded a credit to the provision for credit losses for loans and off-balance sheet credit exposures of $629, a decrease of $2,196, from an expense of $1,567 during the three months ended March 31, 2026.

Noninterest income for the three month periods ended March 31, 2026 and 2025 was as follows:

Three Months Ended March 31,

During the three months ended June 30, 2026, the Company recorded a provision for credit losses for loans and off-balance sheet credit exposures of $1,770, an increase of $745, from an expense of $1,025 during the three months ended June 30, 2025.

Noninterest income for the three month periods ended June 30, 2026 and 2025 was as follows:

Three Months Ended June 30,

Service charges

6 unchanged sentences

Total noninterest income

Total noninterest income for the three months ended March 31, 2026 was $9,431, an increase of $1,571, or 20.0%, from $7,860 for the same period of 2025.

Net gain on sale of loans and leases increased $1,001 for the three months ended March 31, 2026, compared to the same period of 2025, resulting from changes in the rate environment at the time of sale that resulted in higher sales volume.

Lease revenue and residual income decreased $266 for the three months ended March 31, 2026, compared to the same period of 2025, mainly due to a decrease in operating lease originations as the Company continues to shift towards finance leases.

Other income increased $444 for the three months ended March 31, 2026, compared to the same period of 2025, due to income from the Company's captive insurance subsidiary, CIVB Risk Management, recording $487 of income related to the resolution of three prior period claims that were closed without payment, resulting in a reduction of ceded reserves in the first quarter of 2026.

Total noninterest income for the three months ended June 30, 2026 was $9,007, an increase of $2,418, or 36.7%, from $6,589 for the same period of 2025.

Noninterest income was reduced by $1,044 in the second quarter of 2025 from non-recurring adjustments resulting from the CLF core system conversion.

Service charges increased $325 for the three months ended June 30, 2026, compared to the same period of 2025, primarily from higher business service charges and retail overdrafts.

Net gain on sale of loans and leases increased $660 for the three months ended June 30, 2026, compared to the same period of 2025, resulting from favorable secondary market conditions resulting in higher sales volumes for both loans and leases.

Lease revenue and residual income increased $879 for the three months ended June 30, 2026, compared to the same period of 2025, mainly due to the non-recurring adjustment noted above.

Civista Bancshares, Inc.

1 unchanged sentence

(Amounts in thousands, except share data)

Noninterest expense for the three month periods ended March 31, 2026 and 2025 was as follows:

Three Months Ended March 31,

Noninterest expense for the three month periods ended June 30, 2026 and 2025 was as follows:

Three Months Ended June 30,

Compensation expense

9 unchanged sentences

Total noninterest expense

Total noninterest expense for the three months ended March 31, 2026 was $29,873, an increase of $2,747 or 10.1%, from $27,126 compared to the same period of 2025.

The increase in total noninterest expense was primarily due to increases in compensation and other expenses, partially offset by decreases in FDIC assessment and professional fees.

The increase in compensation expense was primarily due to increases in salaries, commissions, and medical expenses associated from operating with higher full-time equivalent (FTE) employees year-over-year.

The number of FTEs at March 31, 2026 was 535, compared to 520 for the same period of 2025.

The increase in other expense is mainly related to acquisition-related expenses in the first quarter of 2026 of $427 for the FSB merger.

The decrease in FDIC assessment is related to better credit ratings lowering the Company's overall quarterly assessment in the first quarter of 2026 compared to the same period of 2025.

Total noninterest expense for the three months ended June 30, 2026 was $28,653, an increase of $1,171 or 4.3%, from $27,482 compared to the same period of 2025.

Noninterest expenses were reduced by $311 in the second quarter of 2025 from non-recurring adjustments resulting from the CLF core system conversion.

The increase in total noninterest expense was primarily due to increases in compensation, amortization of core deposit intangibles, and other expenses, partially offset by decreases in FDIC assessment and professional fees.

The increase in compensation expense was primarily due to increases in salaries, commissions, and medical expenses associated with operating with higher average full-time equivalent (FTE) employees year-over-year.

The average number of FTEs for the three months ended June 30, 2026 was 549, compared to 526 for the same period of 2025.

The increase in amortization of core deposit intangibles is related to the FSB merger.

The increase in other expense is mainly related to the non-recurring adjustment mentioned above in the second quarter of 2025.

The decrease in FDIC assessment is mainly due to an improvement in Civista's risk-based assessment rate, reflecting favorable trends in regulatory ratios and supervisory metrics used in the FDIC's pricing methodology.

The decrease in professional fees is primarily due to higher consulting expenses in 2025 related to CLF's core system conversion.

Income tax expense for the three months ended June 30, 2026 totaled $2,862, up $981 compared to the same period of 2025.

The effective tax rates for the three month periods ended June 30, 2026 and 2025 were 16.7% and 14.6%, respectively.

The increase in the effective tax rate for the three month period ended June 30, 2026, was primarily due to an increase in the forecasted pre-tax income outpacing the permanent differences for 2026, 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, 2026 and 2025

The Company had net income of $29,304 for the six months ended June 30, 2026, an increase of $8,121 from $21,183 for the same period of 2025.

Basic and diluted earnings per common share were $1.41 for the six months ended June 30, 2026, compared to $1.37 for the same period of 2025.

For the six months ended June 30, 2026, net income was reduced by $374 from non-recurring adjustments related to acquisition-related expenses associated with the FSB merger.

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.

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

Net interest income for the six months ended June 30, 2026 was $76,416, an increase of $8,829 from $67,587 for the same period of 2025.

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

The year-to-date increase was a result of an increase of $2,352 in total interest and dividend income, coupled with a $6,477 decrease in total interest expense.

Total interest-earning assets averaged $3,998,020 during the six months ended June 30, 2026, an increase of $176,371 from $3,821,649 for the same period of 2025.

The Company’s total average interest-bearing liabilities decreased from $3,010,528 during the six months ended June 30, 2025 to $3,034,362 during the six months ended

Civista Bancshares, Inc.

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

(Amounts in thousands, except share data)

June 30, 2026.

The Company’s fully tax equivalent net interest margin for the six months ended June 30, 2026 and 2025 was 3.87% and 3.57%, respectively.

Total interest and dividend income was $112,356 for the six months ended June 30, 2026, an increase of $2,352 from $110,004 for the same period of 2025.

The increase in interest and dividend income is mainly attributable to increases of $1,500, $555 and $394 in interest and fees on loans, taxable securities and deposits in other banks, respectively, partially offset by a decrease in tax-exempt securities of $97.

The average balance of loans increased by $130,259, or 4.2%, to $3,248,126 for the six months ended June 30, 2026, as compared to $3,117,867 for the same period of 2025.

Interest on taxable securities increased $555 to $7,861 for the six months ended June 30, 2026, compared to $7,306 for the same period of 2025.

The average balance of taxable securities increased $24,783 to $425,301 for the six months ended June 30, 2026, as compared to $400,518 for the same period of 2025.

The yield on taxable securities increased 13 basis points to 3.50% for the six months ended June 30, 2026, compared to 3.37% for the same period of 2025, 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 deposits in other banks increased $394 to $796 for the six months ended June 30, 2026, compared to $402 for the same period of 2025.

The average balance of interest-bearing deposits in other banks increased $21,817 to $42,898 for the six months ended June 30, 2026, compared to $21,081 for the same period of 2025.

The yield on interest-bearing deposits in other banks decreased 13 basis points to 3.71% for the six months ended June 30, 2026, compared to 3.84% for the same period of 2025.

Total interest expense decreased $6,477, or 15.3%, to $35,940 for the six months ended June 30, 2026, compared to $42,417 for the same period of 2025.

For the six months ended June 30, 2026, the average balance of interest-bearing liabilities decreased $23,834 to $3,010,528, as compared to $3,034,362 for the same period of 2025.

Interest incurred on deposits were basically flat at $31,347 for the six months ended June 30, 2026, compared to $31,274 for the same period of 2025.

The average balance of interest-bearing deposits increased by $235,222 to $2,773,752 for the six months ended June 30, 2026, as compared to the same period in 2025, which was fully offset by the decrease in the rate paid on interest-bearing deposits from 2.48% for the six months ended June 30, 2025 to 2.28% for the six months ended June 30, 2026.

The decrease in rates was mainly driven by paying lower rates on retail and brokered CDs due to the lower rate environment in the first six month of 2026 compared to the same period of 2025.

Interest expense incurred on short-term FHLB advances decreased mainly due to the average balance of short-term FHLB advances decreasing by $256,097 to $128,127 for the six months ended June 30, 2026, as compared to the same period in 2025.

The following table presents the condensed average balance sheets for the six months ended June 30, 2026 and 2025.

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 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.

Civista Bancshares, Inc.

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

(Amounts in thousands, except share data)

Six Months Ended June 30,

Interest-earning assets:

Loans, including fees**

Taxable securities

Tax-exempt securities

Interest-bearing deposits in other banks

Total interest-earning assets

Noninterest-earning assets:

Cash and due from financial institutions

Premises and equipment, net

Accrued interest receivable

Intangible assets

Bank owned life insurance

Less allowance for loan losses

Liabilities and Shareholders Equity:

Interest-bearing liabilities:

Demand and savings

Short-term FHLB advance

Long-term FHLB advance

Other borrowings

Subordinated debentures

Total interest-bearing liabilities

Noninterest-bearing deposits

Other liabilities

Shareholders’ Equity

Total Liabilities and Shareholders’ Equity

Net interest income and interest rate spread (1)

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 $1.2 million for the six month periods ended June 30, 2026 and 2025, 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, 2026 and 2025.

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

Civista Bancshares, Inc.

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

(Amounts in thousands, except share data)

Increase (decrease) due to:

(Dollars in thousands)

Interest income:

Loans, including fees

Taxable securities

Tax-exempt securities

Federal funds purchased

Interest-bearing deposits in other banks

Total interest income

Interest expense:

Demand and savings

Short-term FHLB advance

Long-term FHLB advance

Other borrowings

Subordinated debentures

Total interest expense

Net interest income

(1) The change in interest income and interest expense due to changes in both volume and rate, which cannot be segregated, has been allocated proportionately to the change due to volume and the change due to rate.

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

During the six months ended June 30, 2026, the Company recorded a provision for credit losses of $1,141, a decrease of $1,451, from $2,592 during the six months ended June 30, 2025.

Noninterest income for the six months ended June 30, 2026 and 2025 was as follows:

Six Months Ended June 30,

Service charges

Net gain (loss) on equity securities

Net gain on sale of loans and leases

ATM/Interchange fees

Wealth management fees

Lease revenue and residual income

Bank owned life insurance

Total noninterest income

Total noninterest income for the six months ended June 30, 2026 was $18,438, an increase of $3,989, or 27.6%, from $14,449 for the same period of 2025.

Noninterest income was reduced by $1,044 for the six months ended June 30, 2025, from non-recurring adjustments resulting from the CLF core system conversion.

Service charges increased $515 for the six months ended June 30, 2026, compared to the same period of 2025, primarily from higher business service charges and retail overdrafts.

Net gain on sale of loans and leases increased $1,661 for the six months ended June 30, 2026, compared to the same period of 2025, resulting from favorable secondary market conditions resulting in higher sales volumes for both loans and leases, coupled with disciplined pricing strategies on both the loan and lease gain on sale margins.

Lease revenue and residual income increased $613 for the six months ended June 30, 2026, compared to the same period of 2025, mainly due to the non-recurring adjustment noted above.

Civista Bancshares, Inc.

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

(Amounts in thousands, except share data)

The components of noninterest expense for the six month periods ended June 30, 2026 and 2025 are as follows:

Six Months Ended June 30,

Compensation expense

Net occupancy expense

Contracted data processing

FDIC Assessment

State franchise tax

Professional services

Equipment expense

ATM/Interchange expense

Amortization of core deposit intangibles

Software maintenance expense

Total noninterest expense

Total noninterest expense for the six months ended June 30, 2026 was $58,526, an increase of $3,918, or 7.2%, from $54,608 compared to the same period of 2025.

Noninterest expenses were reduced by $311 for the six months ended June 30, 2025 from non-recurring adjustments resulting from the CLF core system conversion.

The increase in total noninterest expense was primarily due to increases in compensation, marketing, amortization of core deposit intangibles, software maintenance, and other expenses, partially offset by decreases in FDIC assessment and professional fees.

The increase in compensation expense was primarily due to increases in salaries, commissions, and medical expenses resulting from operating with higher average full-time equivalent (FTE) employees year-over-year.

The average number of FTEs for the six months ended June 30, 2026 was 548, compared to 523 for the same period of 2025.

The increase in marketing expenses is related to an increase in digital marketing campaigns.

The increase in amortization of core deposit intangibles is related to the FSB merger.

The increase in software maintenance expense is primarily related to year-over-year maintenance increases as well as having more users increasing licensing costs.

The increase in other expense is mainly related to the non-recurring adjustments related to the FSB merger for the six months ended June 30, 2026 and the non-recurring adjustment mentioned above related to the CLF core system conversion for the six months ended June 30, 2025.

The decrease in professional fees is primarily due to lower consulting expenses related to CLF's core system conversion.

Income tax expense for the three months ended March 31, 2026 totaled $3,021, up $1,249 compared to the same period of 2025.

The effective tax rates for the three month periods ended March 31, 2026 and 2025 were 16.8% and 14.8%, respectively.

The increase in the effective tax rate for the three month period ended March 31, 2026, was primarily due to an increase in the forecasted pre-tax income outpacing the permanent differences for 2026, thus, creating more taxable income at the statutory tax rate of 21% and increasing the Company's effective tax rate.

Income tax expense for the six months ended June 30, 2026 totaled $5,883, up $2,230 compared to the same period of 2025.

The effective tax rates for the six month periods ended June 30, 2026 and 2025 were 16.7% and 14.7%, respectively.

The increase in the effective tax rate for the six month period ended June 30, 2026, was primarily due to an increase in the forecasted pre-tax income outpacing the permanent differences for 2026, thus, creating more taxable income at the statutory tax rate of 21% and increasing the Company's effective tax rate.

Capital Resources

Shareholders’ equity at March 31, 2026 was $552,243, or 12.8% of total assets, compared to $543,474, or 12.5% of total assets, at December 31, 2025.

All of the Company’s capital ratios exceeded the regulatory minimum guidelines as of March 31, 2026 and December 31, 2025 as identified in the following table:

Company Ratios—March 31, 2026

Company Ratios—December 31, 2025

For Capital Adequacy Purposes

Shareholders’ equity at June 30, 2026 was $566,785, or 13.2% of total assets, compared to $543,474, or 12.5% of total assets, at December 31, 2025.

The increase was a result of net income of $29,304 and a decrease in accumulated other comprehensive loss of $645 resulting from the change in the unrealized loss on available-for-sale securities and derivatives, in addition to an increase of $1,153 in stock compensation, partially offset by dividends paid on common shares of $7,473.

Civista Bancshares, Inc.

1 unchanged sentence

(Amounts in thousands, except share data)

All of the Company’s capital ratios exceeded the regulatory minimum guidelines as of June 30, 2026 and December 31, 2025 as identified in the following table:

Company Ratios—June 30, 2026

Company Ratios—December 31, 2025

For Capital Adequacy Purposes

The Company maintains a conservative liquidity position.

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

Securities, with maturities of one year or less, totaled $23,781, or 3.50% of the total securities portfolio, at March 31, 2026.

Securities, with maturities of one year or less, totaled $7,748, or 1.2% of the total securities portfolio, at June 30, 2026.

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

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 $12,180 and $3,612 for the three months ended March 31, 2026 and 2025, respectively.

Net cash provided by operating activities was $29,286 and $14,693 for the six months ended June 30, 2026 and 2025, 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 provided/(used) for investing activities was $38,261 and $(21,231) for the three months ended March 31, 2026 and 2025, respectively, principally reflecting our loan and investment security activities.

Net cash (used)/provided by financing activities was ($44,236) and $44,920 for the three months ended March 31, 2026 and 2025, respectively.

The primary changes in financing activities is the decrease in short-term FHLB advances and the payment of common dividends, somewhat offset by an increase in deposits.

Net cash provided/(used) for investing activities was $23,912 and $(76,078) for the six months ended June 30, 2026 and 2025, respectively, principally reflecting our loan and investment security activities.

Net cash (used)/provided by financing activities was $(68,775) and $72,088 for the six months ended June 30, 2026 and 2025, respectively.

The primary changes in financing activities is the decrease in short-term FHLB advances, payment of common dividends, and change 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 March 31, 2026, Civista had total credit availability with the FHLB of $1,022,339 with standby letters of credit totaling $132,700 and a remaining borrowing capacity of approximately $788,900.

As of June 30, 2026, Civista had total credit availability with the FHLB of $1,050,078 with standby letters of credit totaling $132,700 and a remaining borrowing capacity of approximately $793,317.

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 March 31, 2026.

No borrowings were outstanding by CBI under this credit line as of June 30, 2026.

Civista Bancshares, Inc.

29 unchanged sentences

If, alternatively, more liabilities than assets will reprice, the institution is in a liability sensitive position.

Accordingly, net interest income would decline when rates rose and increase when rates fell.

Accordingly, net interest income would decrease when rates rose and increase when rates fell.

Also, these examples assume that interest rate changes for assets and liabilities are of the same magnitude, whereas actual interest rate changes generally differ in magnitude for assets and liabilities.

15 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 and March 31, 2026 and December 31, 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 March 31, 2026 and December 31, 2025.

Net Portfolio Value

March 31, 2026

During the second quarter of 2026, the Company enhanced its interest rate risk disclosure to focus on net interest income sensitivity rather than economic value of equity.

Management believes that net interest income sensitivity better reflects the Company's near-term earnings exposure to changes in interest rates and aligns more closely with how interest rate risk is managed internally.

The following table provides information about the Company’s earnings at risk that were sensitive to changes in interest rates as of and June 30, 2026 and December 31, 2025, based on certain prepayment and account decay assumptions that management believes are reasonable.

The table shows the changes in the Company’s net interest income (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, 2026 and December 31, 2025.

Net Interest Income

June 30, 2026

December 31, 2025

Change in Rates

The change in net portfolio value from December 31, 2025 to March 31, 2026, 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 decreased while deposits increased, coupled with the volume of short-term FHLB advances has decreased in the first quarter of 2026.

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

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.

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