CIVB — Civista Bancshares, Inc.

Summary of CIVB Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Income: $12.3 million (61¢ per diluted share), a 24% increase year-over-year.
• Full-Year Net Income: $46.2 million ($2.64 per diluted share), up from $31.7 million ($2.01 per diluted share) in 2024.
• Nonrecurring Expenses: $3.4 million pretax related to the acquisition of Farmers Savings Bank, impacting earnings by 14¢ per share.
• Pre-Provision Net Revenue: Increased by $6.7 million (55%) year-over-year.
• Return on Assets (ROA): 1.14% for the quarter; 1.11% for the year.
• Net Interest Income: $36.5 million, a 5.5% increase from the linked quarter.
• Net Interest Margin: Expanded by 11 basis points to 3.69%.
• Efficiency Ratio: Improved to 57.7% from 61.4% in the previous quarter.
• Dividends: Increased to $0.18 per share, representing a 3.2% annual yield.

2. Strategic Updates and Business Highlights

• Acquisition: Successfully closed the acquisition of Farmers Savings Bank, adding $106 million in loans and $236 million in low-cost deposits.
• Loan Growth: Organic loan growth of $68.7 million (annualized growth rate of 8.7%) excluding Farmers' loans.
• Deposit Strategy: Focused on reducing reliance on brokered deposits, achieving nearly $30 million in organic growth in non-brokered deposits.
• Digital Initiatives: Launched a new digital deposit account platform and redesigned deposit products, with plans for a comprehensive digital marketing campaign post-acquisition integration.

3. Forward Guidance and Outlook

• Loan Growth: Anticipated mid-single-digit growth in 2026, with a focus on commercial and C&I loans.
• Margin Expectations: Expected to expand by 2-3 basis points in Q1 2026, with further growth anticipated as interest rates stabilize.
• Noninterest Income: Projected to stabilize around $7.08 to $8.02 million in Q1 2026, with potential increases in subsequent quarters.

4. Bad News, Challenges, or Points of Concern

• Nonperforming Loans: Increased by $8.5 million to $31.3 million, with total nonperforming loans to total loans at 0.95%, slightly up from the linked quarter but down from 1.06% year-over-year.
• Credit Quality: One significant credit issue led to the increase in nonperforming loans; however, management believes it is an isolated incident.
• Noninterest Income Decline: Year-over-year decrease of $3.8 million (10%) primarily due to reduced lease revenue and residual income.
• Economic Conditions: Mixed economic signals across the country, though local economies in Ohio and Southeastern Indiana remain stable.

5. Notable Q&A Insights

• Loan Composition: Management indicated a return to more normalized growth in 2026, with a focus on commercial loans and potential for increased leasing growth.
• Digital Channel Growth: While optimistic about the digital platform's potential, management remains cautious about its immediate impact on growth rates.
• Expense Management: Anticipated higher expenses in Q1 due to ongoing integration costs, with expectations for reductions post-conversion.
• Credit Quality Management: Management expressed confidence in resolving the isolated credit issue and emphasized strong organic growth in their loan portfolio.

In summary, Civista Bancshares reported solid financial performance in Q4 2025, driven by strategic acquisitions and effective cost management, while navigating challenges related to credit quality and noninterest income. The outlook for 2026 remains cautiously optimistic with a focus on loan growth and digital initiatives.