v3.26.1
Acquisitions
 3 Months Ended
Mar. 31, 2026
Business Combination [Abstract]  
Acquisitions

NOTE 19 - ACQUISITIONS

At the close of business on November 6, 2025 ("Acquisition Date"), the Company completed its acquisition of FSB for aggregate stock and cash consideration of approximately $66,758, through a merger transaction accounted for as a business combination under ASC 805, Business Combinations. As a result of the FSB acquisition, CBI issued 1,434,473 common shares and paid approximately $35,544 in cash to the former shareholders of FSB. The Company and FSB had first announced that they had entered into an agreement to merge in July of 2025. Upon the closing of the merger, FSB was merged with and into Civista.

The acquisition of FSB was not material for purposes of requiring pro forma financial information under Article 11 of Regulation S-X, based on quantitative and qualitative factors. Accordingly, certain disclosures typically required for material business combinations have been omitted.

The results of FSB's operations have been included in the Company's Consolidated Financial Statements from the Acquisition Date. Given the immaterial nature of the acquisition, pro forma financial information for the combined entity has not been presented, as such information would not be meaningful to users of the financial statements.

 

The acquisition resulted in the recognition of goodwill, which represents the excess of the purchase consideration over the fair value of net assets acquired. Goodwill arising from the transaction is primarily attributable to expected costs synergies, enhanced market presence, and future growth opportunities. The goodwill recognized is not deductible for federal income tax purposes but is evaluated for impairment, at least annually.

Loans acquired in the FSB acquisition were recorded at their fair value as of November 6, 2025, in accordance with ASC 805 and the Company's accounting policies.

The unpaid principal balance of loans acquired from FSB was $110.2 million at the Acquisition Date. Based on a third-party valuation, the loans were recorded at an estimated fair value of $104.2 million, which reflects credit, interest rate, liquidity, and other market-based valuation factors. The difference between the unpaid principal balance and fair value of approximately $6.0 million is primarily the non-credit purchase discount of $4.0 million that will be accreted into interest income over the average life of the portfolio using the level yield method and the $2.0 million addition to the ACL related to the acquired FSB loan portfolio. The amount of accretion recognized from the FSB acquisition life-to-date was $813 as of March 31, 2026, representing $477 in the first quarter of 2026 and $336 in the fourth quarter of 2025.

The Company early adopted the amended Purchased Financial Assets ("PFA") guidance under ASC 326, under which all acquired loans are accounted for under a single credit loss model. Accordingly, at the Acquisition Date, the Company recorded an ACL of $2.0 million related to the acquired FSB loan portfolio, with a corresponding gross-up of loan balances, to reflect expected lifetime credit losses inherent in the loans. The ACL recognized at acquisition did not impact earnings, as it was recorded as part of the purchase accounting.

Subsequent changes in expected credit losses for the acquired loans are estimated as part of the total loan portfolio and will be recognized through the provision for credit losses in the Company's Consolidated Statements of Operations.

Core deposit intangibles are amortized over the expected useful lives, which was determined to be eight years using the sum-of-years-digits method. The net carrying amount of the core deposit intangible at March 31, 2026 was $6,329. The amount of amortization expense recognized on the FSB core deposit intangibles life-to-date was $646 as of March 31, 2026, representing $388 in the first quarter of 2026 and $258 in the fourth quarter of 2025.

 

As of March 31, 2026, the estimated future amortization expense for the core deposit intangible is as follows:

 

 

 

Core deposit intangibles

 

2026 (1)

 

$

1,130

 

2027

 

 

1,324

 

2028

 

 

1,130

 

2029

 

 

936

 

2030

 

 

743

 

Thereafter

 

 

1,066

 

 

 

$

6,329

 

 

(1) 2026 includes nine months of amortization expense for the period from April 1, 2026 through December 31, 2026.

 

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for FSB.

 

Cash paid

 

 

 

 

$

35,544

 

Common shares issued (1,434,473 shares)

 

 

 

 

 

31,214

 

Total

 

 

 

 

$

66,758

 

 

 

 

 

 

 

 

Net assets acquired:

 

 

 

 

 

 

Cash and due from financial institutions

 

$

185,018

 

 

 

 

Loans, net

 

 

104,200

 

 

 

 

Other securities

 

 

259

 

 

 

 

Premises and equipment

 

 

1,993

 

 

 

 

Accrued interest receivable

 

 

440

 

 

 

 

Core deposit intangible

 

 

6,975

 

 

 

 

Deferred taxes

 

 

(514

)

 

 

 

Other assets

 

 

392

 

 

 

 

Time deposits

 

 

(112,174

)

 

 

 

Noninterest-bearing deposits

 

 

(33,846

)

 

 

 

Interest-bearing deposits

 

 

(90,076

)

 

 

 

Other liabilities

 

 

(827

)

 

 

 

 

 

 

 

 

 

61,840

 

Goodwill resulting from the FSB acquisition

 

 

 

 

$

4,918

 

The FSB acquisition did not have a material impact on the Company's capital ratios. Integration activities, including the core conversion of FSB into CBI, have been completed in the first quarter of 2026. The Company has incurred approximately $4,500 in acquisition related expenses life-to-date as of March 31, 2026, with $4,100 being expensed in 2025 and $400 in the first quarter of 2026, that are included in Other operating expenses in the Consolidated Statements of Operations.