Civista Bancshares, Inc. Q4 FY2025 earnings call

• Net income for 2025 was $12.3M, up 24% from Q4 2024, and year-end net income was $46.2M, up from 2024.
• Closed transaction with Farmers Savings Bank, adding $106M loans and $236M low-cost deposits; system conversion in February.
• Net interest income $36.5M, up 5.5% linked quarter; net interest margin expanded 11 basis points to 3.69%.
• Excluding acquired loans, organic loan growth $68.7M, annualized 8.7% in Q4; anticipate mid-single-digit loan growth in 2026.
• Nonbroker deposits grew organically by nearly $30M, reducing brokered funding.
• Quarterly dividend increased to $0.18 per share, annualized yield 3.2%.
• Noninterest income increased $251,000 or 2.6% linked quarter; drivers: interchange fees, other fees; offset by prior quarter policy proceeds and leasing residual income decline.
• Balance sheet: Loans grew in nearly all categories; CRE to risk-based capital ratio 275% at year-end; security portfolio $685M, 15.8% of balance sheet.
• Capital ratios: Tier one leverage ratio 11.32%, tangible common equity ratio 9.54% at year-end.
• Credit quality: Delinquencies low, net charge-offs slightly lower in 2025; nonperforming loans $31.3M, 0.95% of total loans.

In 2025, net income was $12.3 million or 61¢ per diluted share, a 24% increase over Q4 2024. Year-end net income was $46.2 million or $2.64 per diluted share, up from $31.7 million in 2024. Net interest income for the quarter totaled $36.5 million, a 5.5% increase over the linked quarter. Noninterest income increased $251,000 or 2.6% from the linked quarter. ROA for the quarter was 1.14%, and excluding one-time expenses was 1.42%. Excluding newly acquired Farmers loans, the loan and lease portfolio grew $68.7 million, an annualized 8.7% in Q4. Nonbroker deposit funding grew organically by nearly $30 million during the quarter. The quarterly dividend was increased to $0.18 per share.

• Anticipate mid-single-digit loan growth in 2026.
• Net interest margin expected to expand: first quarter 2-3 basis points, then another 3-4 basis points in Q2 and beyond.
• Quarterly dividend increased to $0.18 per share.
• $13.5 million share repurchase authorization in place.

• Economic conditions across the country remain mixed.
• Integration risks from acquisition of Farmers Savings Bank, including potential expenses during conversion.
• Credit risks, such as an isolated $8 million participation non-accrual loan.

Q: Justin Crowley asked about the complexion of loan growth between commercial and residential.

A: Charles A. Parcher said commercial and C&I growth expected, residential growth may adjust with interest rates.

Q: Justin Crowley inquired about the digital channel's impact on growth.

A: Charles A. Parcher said digital channel may accelerate growth but hard to quantify yet.

Q: Justin Crowley asked about NIM trend.

A: Ian Whinnem said margin expected to expand 2-3 basis points in Q1, then 3-4 basis points in Q2 and beyond.

Q: Justin Crowley asked about expenses.

A: Charles A. Parcher said first quarter expenses similar to '29 range, second quarter to have merit increases.

Q: Jeff Rulis asked about credit side details.

A: Mike Mulford said non-performing loans increase not from acquired quality, isolated instance.

Q: Terry McEvoy asked about commercial loan yields and offense in 2026.

A: Charles A. Parcher said hiring new lenders, picking up talent from disrupted banks.

Q: Timothy Switzer asked about capital stack and leasing revenue.

A: Dennis Shaffer said share repurchase authorization in place; Ian Whinnem said leasing revenue expected to have lumpy nature, first quarter slowdown expected.