CIVISTA BANCSHARES, INC. Q4 FY2024 earnings call

• Net income and ROA improved, with Q4 net income up from linked quarter and prior year.
• 2024 was a transition year to replace noninterest income losses through various means.
• Focus on core deposit funding, with organic growth in Q4.
• Net interest income increased due to lower funding costs, with margin expanding in Q4.
• Noninterest expense had some increases but efforts in expense control and initiatives like branch closure and automated system transition for after-hour calls.
• Balance sheet details: loan and lease growth, deposit changes, security portfolio with unrealized losses.
• Executive change: Chuck Parcher promoted to EVP and Chief Lending Officer.

For the fourth quarter of 2024, net income was $9.9 million, or $0.63 per diluted share, a $1.5 million (18%) increase over the linked-quarter and a $237,000 increase over Q4 2023. Annual net income was $31.7 million, or $2.01 per diluted share. ROA for the year was 0.80%, with 0.97% for the quarter. Net interest income for Q4 was $31.4 million, an increase of $2.1 million (7.3%) over the linked quarter. Noninterest income decreased $671,000 (6.9%) from the linked quarter but increased $192,000 (2.2%) from Q4 2023. The loan and lease portfolio grew 7.7% for the year and 4.9% in the fourth quarter. Core deposit funding grew organically by over $36 million during the quarter, reducing reliance on brokered funding.

• Margin expected to continue expanding over the next few quarters.
• Quarterly dividend increased by $0.01 per share to $0.17 per share.
• Goal to rebuild tangible common equity ratio to between 7% and 7.5%.
• Anticipate deposit gathering initiatives to aid in funding and loan growth.

• Liquidity issues as a potential risk to banks, as banks have failed due to liquidity problems.
• Uncertainties in interest rate movements and economic conditions affecting loan demand and deposit costs.

Q: Brendan Nosal asks about the run rate for leasing fees and overall fee base in 2025.

A: Dennis Shaffer says they're optimistic about leasing fees continuing to improve, wealth management fees growing with higher assets under management, and treasury management fees expected to improve, with residential mortgage loans being a wildcard.

Q: Justin Crowley asks about margin and deposit costs.

A: Dennis Shaffer and Ian Whinnem discuss proactive rate reduction with Fed cuts, funding costs expected to come down, and first quarter expense expectations.

Q: Tim Switzer asks about loan growth acceleration and credit risk.

A: Richard Dutton and Dennis Shaffer talk about loan demand in markets and credit risk being one-offs with no systemic issues.

Q: Terry McEvoy asks about loan-to-deposit ratio and multifamily loan markets.

A: Dennis Shaffer and Richard Dutton discuss loan-to-deposit ratio target and positive outlook on multifamily markets in metro Ohio.

Q: Manuel Navas asks about deposit gathering initiatives and securities book.

A: Dennis Shaffer and Ian Whinnem detail deposit gathering initiatives like dashboards and MANTL system, and securities book as a liquidity source.