CIVISTA BANCSHARES, INC. Income Taxes Disclosure
NOTE 14 - INCOME TAXES
Income tax expense (benefit) from continuing operations was as follows for the year ended December 31, 2025, in accordance with ASU 2023-09 (See Note 1 for additional details on adopting ASU 2023-09):
|
|
2025 |
|
|
Federal |
|
|
|
|
Current |
|
$ |
7,380 |
|
Deferred |
|
|
1,171 |
|
Total federal |
|
|
8,551 |
|
|
|
|
|
|
State |
|
|
|
|
Current |
|
$ |
455 |
|
Deferred |
|
|
17 |
|
Total state |
|
|
472 |
|
|
|
|
|
|
Total income taxes (1) |
|
$ |
9,023 |
|
(1) The Company does not have pretax income from continuing foreign operations or foreign tax expense.
Income tax expense (benefit) from continuing operations was as follows for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09:
|
|
2024 |
|
|
2023 |
|
||
Current - federal |
|
$ |
6,498 |
|
|
$ |
8,256 |
|
Current - state |
|
|
246 |
|
|
|
68 |
|
Deferred |
|
|
(1,853 |
) |
|
|
(675 |
) |
Income taxes |
|
$ |
4,891 |
|
|
$ |
7,649 |
|
Effective tax rates differed from the statutory federal income tax rate of 21% in 2025 due to the following, in accordance with ASU 2023-09:
|
|
2025 |
|
|||||
|
|
Amount |
|
|
Percent |
|
||
|
$ |
11,599 |
|
|
|
21.0 |
% |
|
State and local income tax, net of federal income tax benefit (1) |
|
|
373 |
|
|
|
0.7 |
% |
Tax Credits |
|
|
|
|
|
|
||
LIHTC and HTC investments, net (2) |
|
|
(477 |
) |
|
|
-0.9 |
% |
Nontaxable or Nondeductible Items |
|
|
|
|
|
|
||
Tax-exempt income, net (3) |
|
|
(2,336 |
) |
|
|
-4.2 |
% |
Other Adjustments |
|
|
(136 |
) |
|
|
-0.3 |
% |
Effective Tax Rate |
|
$ |
9,023 |
|
|
|
16.3 |
% |
(1) Indiana and Kentucky make up the majority (greater than 50%) of the state tax effect in this category.
(2) Low-income housing tax credits ("LIHTC") and historic rehabilitation tax credits ("HTC") equity investments. The tax credits category includes tax credits net of proportional amortization, and other tax benefits.
(3) Includes income from tax-exempt securities, net of disallowed interest expense, and income from the increase in cash surrender value of bank-owned life insurance.
Effective tax rates differed from the statutory federal income tax rate of 21% in 2024 and 2023 due to the following, prior to the adoption of ASU 2023-09:
|
|
2024 |
|
|
2023 |
|
||
Income taxes computed at the statutory federal tax |
|
$ |
7,681 |
|
|
$ |
10,629 |
|
Add (subtract) tax effect of: |
|
|
|
|
|
|
||
Tax-exempt interest income, net |
|
|
(1,975 |
) |
|
|
(1,938 |
) |
Low income housing investments |
|
|
(555 |
) |
|
|
(620 |
) |
Cash surrender value of BOLI |
|
|
(471 |
) |
|
|
(233 |
) |
Other |
|
|
211 |
|
|
|
(189 |
) |
Income tax expense |
|
$ |
4,891 |
|
|
$ |
7,649 |
|
Year-end deferred tax assets and liabilities were due to the following:
|
|
2025 |
|
|
2024 |
|
||
Deferred tax assets |
|
|
|
|
|
|
||
Allowance for credit losses |
|
$ |
9,109 |
|
|
$ |
8,554 |
|
Unrealized loss on securities available for sale |
|
|
9,549 |
|
|
|
13,104 |
|
Unrealized loss on minimum pension liability |
|
|
1,259 |
|
|
|
1,198 |
|
Unrealized loss on interest rate swaps |
|
|
16 |
|
|
|
— |
|
Deferred compensation |
|
|
1,323 |
|
|
|
1,241 |
|
Unfunded commitment liability |
|
|
701 |
|
|
|
733 |
|
Deferred loan fees, net |
|
|
— |
|
|
|
583 |
|
Purchase accounting adjustments |
|
|
(971 |
) |
|
|
524 |
|
Accrued compensation |
|
|
840 |
|
|
|
674 |
|
Lease liability |
|
|
517 |
|
|
|
231 |
|
Other |
|
|
25 |
|
|
|
74 |
|
Deferred tax asset |
|
|
22,368 |
|
|
|
26,916 |
|
Deferred tax liabilities |
|
|
|
|
|
|
||
Fixed assets depreciation |
|
|
(2,236 |
) |
|
|
(1,968 |
) |
Prepaid pension |
|
|
(1,680 |
) |
|
|
(1,602 |
) |
Loan servicing rights |
|
|
(582 |
) |
|
|
(624 |
) |
Discount accretion on securities |
|
|
(289 |
) |
|
|
(244 |
) |
FHLB stock dividends |
|
|
(46 |
) |
|
|
(126 |
) |
Right of use asset |
|
|
(517 |
) |
|
|
(231 |
) |
Prepaids |
|
|
(308 |
) |
|
|
(297 |
) |
Other |
|
|
(209 |
) |
|
|
(143 |
) |
Deferred tax liability |
|
|
(5,867 |
) |
|
|
(5,235 |
) |
Net deferred tax asset |
|
$ |
16,501 |
|
|
$ |
21,681 |
|
Income taxes paid (net of refunds received): |
|
2025 |
|
|
|
|
|
|
|
Federal |
|
$ |
7,600 |
|
State |
|
|
457 |
|
Total |
|
|
8,057 |
|
|
|
|
|
|
|
|
|
|
|
Income taxes paid (net of refunds) exceeding 5% of total income taxes paid (net of refunds) in the following jurisdictions: |
|
2025 |
|
|
|
|
|
|
|
State |
|
|
— |
|
N/A (1) |
|
|
|
|
(1) There are no state jurisdictions exceeding 5% of total cash taxes paid. |
|
|
|
|
At December 31, 2025, after considering all available positive and negative evidence, management concluded that a valuation allowance against deferred tax assets was not necessary because it is more likely than not that these tax benefits will be fully realized in future periods. While management continues to evaluate the need for a valuation allowance prospectively, it is not expected that a valuation allowance will be required based upon currently projected profitability.
At December 31, 2025 and 2024, the Company had no material unrecognized tax benefits or accrued interest and penalties recorded. The Company does not expect the total amount of unrecognized tax benefits to significantly
increase within the next twelve months. The Company's policy is to recognize interest and penalties on income taxes in income tax expense.
The Company and its subsidiaries are subject to income tax within U.S. federal and various state jurisdictions. The Company remains subject to examination for income tax returns in all applicable federal and state jurisdictions for the years ending on or after December 31, 2022.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 6, 2026 | Showing above |
| 2024 | Mar 10, 2025 | |
| 2023 | Mar 14, 2024 | |
| 2022 | Mar 15, 2023 | |
| 2021 | Mar 15, 2022 | |
| 2020 | Mar 15, 2021 | |
| 2019 | Mar 16, 2020 | |
| 2018 | Mar 15, 2019 | |
| 2017 | Mar 8, 2018 | |
| 2016 | Mar 15, 2017 | |
| 2015 | Mar 15, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.