On July 29, 2024, Civista Bancshares Inc (CIVB, Financial) released its 8-K filing announcing its unaudited financial results for the second quarter of 2024. Civista Bancshares Inc is a financial holding company that operates through its subsidiary, Civista Bank, engaging in community banking activities such as collecting deposits, making loans, purchasing securities, and offering trust services.
Performance Overview
For the second quarter of 2024, Civista Bancshares Inc reported a net interest income of $27.8 million, a decrease of 2.2% from the previous quarter and an 11.4% decline from the same period last year. The company faced a significant increase in interest expenses, which rose by $9.6 million compared to the same quarter in 2023, driven by higher rates and increased volume of interest-bearing liabilities.
Key Financial Metrics
Despite the challenges, Civista Bancshares Inc saw an increase in interest income by $6.0 million year-over-year, attributed to a 27-basis point increase in yield and a $264.8 million rise in average earning assets. However, the net interest margin fell to 3.09%, down from 3.22% in the previous quarter and 3.75% in the same quarter last year.
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Net Interest Income | $27.8 million | $31.4 million | -11.4% |
| Net Interest Margin | 3.09% | 3.75% | -66 bps |
| Interest Expense | $22.9 million | $13.3 million | 72.2% |
Noninterest Income and Expenses
Noninterest income for the quarter was $10.5 million, a 15.2% increase from the previous year, driven by higher lease revenue and residual income. However, noninterest expenses also rose by 3.3% year-over-year to $28.6 million, primarily due to increased compensation expenses and software maintenance costs.
CEO Commentary
"Our second quarter earnings report shows solid loan and revenue growth compared to the last quarter, even with the higher interest expense on deposits," said Dennis G. Shaffer, CEO and President of Civista. "We kept our credit quality strong while funding new loans, especially in residential real estate and construction. This growth highlights our focus on expanding our lending to meet the rising demand for housing and construction financing. By offering customized loan solutions, we’ve been able to support the needs of our customers and communities."
Balance Sheet and Asset Quality
Total assets increased by $131.7 million from the previous quarter, primarily due to loan portfolio growth. However, total deposits saw a slight decrease of $3.1 million. The allowance for credit losses to loans ratio stood at 1.32%, up from 1.30% at the end of 2023, reflecting a cautious approach to credit risk.
Conclusion
While Civista Bancshares Inc faced challenges with rising interest expenses impacting net interest income and margins, the company demonstrated resilience through growth in interest income and noninterest income. The focus on maintaining credit quality and expanding loan portfolios, particularly in residential real estate and construction, underscores the company's commitment to supporting community banking needs.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Civista Bancshares Inc for further details.
