Civista Bancshares (CIVB) Q3 2026 Earnings Call Transcript

Image source: The Motley Fool.

DATE

Oct. 22, 2026

CALL PARTICIPANTS

• President and Chief Executive Officer - Charles Parcher
• Senior Vice President of the company and Chief Operating Officer of the Bank - Rich Dutton
• Senior Vice President of the company and Chief Financial Officer of the Bank - Ian Whinnem

TAKEAWAYS

• Net Income -- $16.0 million, growing 25.5% year over year reflecting higher net interest income and managed noninterest expenses.
• NIM -- 3.93%, expanding 35 basis points year over year due to disciplined deposit pricing and reduced reliance on wholesale funding.
• Diluted EPS -- $0.77, increasing from $0.68 in the third quarter of 2025 as a result of higher profitability.
• PPNR -- $21.1 million, rising 33% year over year driven by expanded net interest income and diversified revenue streams.
• Total Loans -- $3.3 billion, growing at an annualized rate of 4.7% for the quarter reflecting increased residential and construction lending activity.
• New Organic Production -- $343 million, generated by lending and leasing teams during the quarter across the company's footprint.
• Early Loan Payoffs -- $47 million, representing a headwind to total portfolio growth driven by property sales and projects transitioning to permanent financing.
• Noninterest-bearing Deposits -- $725.4 million, increasing $30.3 million during the quarter primarily from business and municipal customers.
• Savings and Money Market Deposits -- $1.3 billion, growing $15.8 million in the quarter as the company prioritized lower-cost core funding.
• Brokered Funding -- $325.1 million, declining $25.0 million during the quarter as management optimized the funding mix.
• Efficiency Ratio -- 55.3%, improving from 61.4% year over year reflecting top-line growth outpacing noninterest expense.
• Return on Assets -- 1.48%, increasing from 1.22% in the prior year's third quarter due to improved earnings capacity.
• Return on Equity -- 11.21%, compared to 10.70% in the third quarter of 2025.
• Tangible Common Equity Ratio -- 9.88%, improving from 9.54% at Dec. 31, 2025, as a result of consistent capital creation.
• Noninterest Income -- $9.7 million, growing 7% over the linked quarter reflecting higher leasing revenue and mortgage banking volume.
• Noninterest Expense -- $28.0 million, declining 1.2% year over year due to the absence of prior-year acquisition and conversion costs.
• Quarterly Dividend -- $0.18 per share, representing a 2.73% annualized yield based on the September 30 closing price.
• Share Repurchases -- 82,075 shares, acquired during the quarter at an average price of $26.96 per share.
• Undrawn Construction Lines -- $268 million, increasing from $250 million at June 30, 2026, and $195 million at year-end 2025.
• Allowance for Credit Losses -- 1.29% of total loans, maintained at a level consistent with the 1.28% reported at Dec. 31, 2025.
• Net Insurance Proceeds -- $1.8 million, recognized as other income during the third quarter related to a branch fire from December 2025.
• Security Portfolio Repositioning -- $1.6 million loss, recognized on the sale of $8 million in fixed-rate securities to purchase higher-yielding floating-rate assets.
• Subordinated Debt Repricing -- 5 to 6 basis points, expected negative impact on quarterly net interest margin starting in December 2026 as $104.4 million in debt moves to a variable rate.

Need a quote from a Motley Fool analyst? Email pr@fool.com

RISKS

• Whinnem stated, "And so that’s going to cost us on a quarterly basis between 5 and 6 basis points is what we’re anticipating now," referring to the repricing of subordinated debt from a fixed rate to a variable rate in December 2026.
• Parcher warned that while payoffs of loans from successful real estate projects are positive, "they continue to present headwinds to growing our loan totals."

SUMMARY

Civista Bancshares, Inc. (NASDAQ:CIVB) reported third quarter results featuring net interest margin expansion and a 33% increase in preprovision net revenue. Management reported that the company successfully grew core deposits from business and municipal customers while reducing reliance on higher-cost brokered funding by $25.0 million. Total loans increased at a 4.7% annualized rate, supported by growth in residential and real estate construction portfolios, and results reflect the full impact of the acquisition of The Farmers Savings Bank from November 2025. Executives noted that asset quality remains well managed, as nonperforming assets declined and credit metrics continued to normalize across the bank's geographic footprint.

• Ian Whinnem projected fourth-quarter noninterest expense to range between $28.7 million and $29.5 million due to planned investments in talent, marketing, and technology.
• Management expects fourth-quarter noninterest income to range from $9 million to $9.5 million, with the final result dependent on interest rate impacts on mortgage banking activity.
• Charles Parcher stated, "I think we’ve got about $270 million over the next 12 months... that are going to reprice off of a roughly 5% rate into something 250 to 300 over the 5-year treasury."
• The company reported that its deposit base remains granular, with the average deposit account excluding certificates of deposit valued at approximately $29,000.
• Management indicated that deposit beta expectations for interest-bearing accounts are approximately 50%, with a lag associated with competitive pricing in local markets.
• The bank's securities portfolio and cash balances together represent 20% of total deposits, which management views as a significant source of liquidity.

INDUSTRY GLOSSARY

• ACL: Allowance for credit losses, a valuation account used to estimate the portion of a loan portfolio that the bank does not expect to collect.
• Brokered Deposits: Deposits obtained through a third-party intermediary or broker rather than directly from a local bank customer.
• Efficiency Ratio: A non-GAAP measure calculated by dividing noninterest expense by the sum of tax-equivalent net interest income and noninterest income.
• FTE: Full-time equivalent, a unit that indicates the workload of an employed person in a way that makes workloads comparable across various contexts.
• NIM: Net interest margin, the difference between the interest income earned on assets and the interest expense paid on liabilities, expressed as a percentage of earning assets.
• PPNR: Preprovision net revenue, calculated as net interest income plus noninterest income minus noninterest expense.
• SOFR: Secured Overnight Financing Rate, a benchmark interest rate for dollar-denominated derivatives and loans.
• TCE Ratio: Tangible common equity ratio, a measure of a company's capital adequacy that excludes intangible assets like goodwill.

Full Conference Call Transcript

Operator: Good afternoon, ladies and gentlemen, and welcome to the Civista Bancshares, Inc. Third Quarter 2026 Earnings Call. [Operator Instructions] Before we begin, I would like to remind you that this conference call may contain forward-looking statements with respect to the future performance and financial condition of Civista Bancshares, Inc. that involves risks and uncertainties. Various factors could cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These factors are discussed in the company's SEC filings, which are available on the company's website. The company disclaims any obligation to update any forward-looking statements made during the call.

Additionally, management may refer to non-GAAP measures which are intended to supplement, but not substitute, the most directly comparable GAAP measures. The press release, also available on the company's website, contains the financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures. The call will be recorded and made available on Civista Bancshares' website at www.civb.com. At the conclusion of Mr. Parcher's remarks, he and the Civista management team will take any questions you may have. Now I will turn the call over to Mr. Parcher. Thank you. Please go ahead.

Charles Parcher: Good afternoon, this is Chuck Parcher, President and CEO of Civista Bancshares. And I'd like to thank you for joining us for our third quarter 2026 earnings call. I am joined today by Rich Dutton, SVP of the company and Chief Operating Officer of the Bank, Ian Whinnem, SVP of the company and Chief Financial Officer of the Bank, and other members of our executive team. This morning, we reported net income for the third quarter of $16 million, or $0.77 per diluted share, which represents a $3.3 million, or 26% increase over our third quarter in 2025, and a $1.7 million, or 12% increase over our linked quarter.

This also represents an increase in pre-provision net revenue of $5.3 million, or 33% over our third quarter in 2025, and a $2.2 million, or 11% increase, over our linked quarter. Net interest income for the quarter totaled $39.4 million, which is 2% higher than the linked quarter. As a result, our net interest margin expanded by 4 basis points over our linked quarter to 3.93%, and by 35 basis points over the prior year's first 9 months. Our funding costs for the quarter increased by 3 basis points to 1.97%, which is 30 basis points lower than the previous year's third quarter, as we continue our disciplined approach to managing how we fund our balance sheet.

A big part of our funding story during the quarter was our ability to grow noninterest-bearing deposits by $30.3 million and savings and money market accounts by $15.8 million, as we were able to attract new and additional deposits primarily from our business and municipal customers. Our cost of core deposits was 1.61%, excluding brokered funding, which is just a 2-basis-point increase compared to our linked quarter, as we were able to replace our recent trend of CD growth with growth in lower-cost deposit accounts. This success in attracting core funding allowed us to again reduce our reliance on brokered funding.

During the quarter, we replaced $150 million of brokered CDs bearing a weighted average rate of 3.89%, with $125 million of brokered CDs maturing over the next 9 months with an average rate of 4.08%. During the past 9 quarters, we have reduced our brokered funding by $223 million, or 41%. Another big part of our story is the return of solid organic loan growth. Despite the continued headwinds of $47 million in early payoffs during the quarter, our loan balances grew by $38 million, or at an annual growth rate of 4.7%.

Our lending and leasing teams generated $343 million in new organic production during the quarter that was partially offset by those early payoffs in addition to normal principal payouts. Our ROA and ROE for the quarter were 1.48% and 11.21% respectively. This continued strong financial performance and our ability to consistently create capital continues to provide options as we evaluate the most optimal ways to put our capital to use. One of those options is repurchasing shares when we feel the opportunity warrants, as it did during the quarter. During the quarter, we repurchased 82,075 shares of treasury stock at an average price of $26.96.

We ended the quarter with a healthy tangible common equity ratio of 9.88% compared to 9.54% at December 31, 2025. Earlier this week, we announced a quarterly dividend of $0.18 per share, which is consistent with our prior quarter. Based on our September 30 closing share price of $26.38, this represents a 2.73% yield and a dividend payout ratio of 24.75%. During the quarter, noninterest income increased $644,000, or 7% over the linked quarter, and was consistent with the third quarter of 2025. Controlling expenses is another area of focus and is evidenced by slight declines when comparing noninterest expense to both our linked quarter, which declined $675,000, or 2.4%, and our prior year's quarter, which declined $349,000 or 1.2%.

While there was some noise from nonrecurring costs associated with our acquisition of The Farmers Savings Bank and our leasing division's core conversion in the prior year, there were no other significant changes in our noninterest expense categories. Our efficiency ratio for the quarter improved to 55.3% compared to 58.2% for the linked quarter and 61.4% for the prior year's third quarter. Our effective tax rate was 19.1% for the quarter and 17.6% year-to-date. Turning our focus to the balance sheet. For the quarter, total loans and leases grew by $38 million for an annualized rate of 4.7%.

Loan demand remained solid across our footprint, while early payoffs seemed to subside, we experienced over $47 million of payoffs during the quarter. These early payoffs were primarily the result of businesses and properties being sold and real estate projects leasing up and moving on to the CMBS permanent market. While we view these payoffs as good, due to their successful nature, they continue to present headwinds to growing our loan totals. While loans were steady in nearly every category, we did experience a $25 million increase in our residential loan portfolio and a $15 million increase in our real estate construction portfolio.

The loans we originate for our portfolio continue to be virtually all adjustable rate, and our leases primarily all have maturities of 5 years or less. Additionally, our undrawn construction lines were $268 million on September 30, which compares favorably to $250 million on June 30, $208 million at March 31, and $195 million at December 31. This trend, coupled with additions to our lending team and the solid economic performance of Ohio and the Greater Midwest, give us confidence that we will continue with mid-single-digit growth as we finish out 2026 and move into 2027.

During the quarter, new and renewed commercial loans originated at an average rate of 6.87%, residential real estate loans originated at 6.45%, and loans and leases originated by our leasing division were at an average rate of 9.75%. With the rapid increase in interest rates during the second quarter of September, we anticipate that these rates will continue increasing during the fourth quarter. On the funding side, total deposits grew by $19 million, which is meaningful given that we were able to further reduce our dependence on brokered deposits by $25 million during the quarter.

As I mentioned, this growth was a result of a $30 million increase in noninterest-bearing accounts and a nearly $16 million increase in savings and money market accounts. This represents a $44 million increase in core deposit funding during the quarter as we continue to focus on core deposit-generating initiatives. And while a quarter does not imply a trend, migration from noninterest-bearing and interest-bearing demand accounts into higher-rate time deposits subsided during the quarter, with our time deposit balances remaining unchanged during the quarter.

The result, our total funding costs increased by only 3 basis points during the quarter as we continue to focus on attracting lower-cost core deposits from our retail customers and operating accounts from our business and municipal customers. Our deposit base continues to be fairly granular, with our average deposit account excluding CDs of approximately $29,000. At quarter end, our loan-to-deposit ratio was 94.7%, which is consistent with our linked quarter. Other than $544 million of public funds with various municipalities across our footprint, we had no deposit concentrations at September 30. We believe our low-cost deposit franchise is one of Civista's most valuable characteristics, contributing significantly to our solid net interest margin and overall profitability.

We view our securities portfolio as a significant source of liquidity. At quarter end, our securities portfolio totaled $640 million, which represented 15% of our balance sheet, and when combined with our cash balances, represents 20% of our total deposits. Our securities are classified as available for sale and had $59.9 million or 9.3% of unrealized losses associated with them. A few of the more significant nonrecurring items during the quarter included the receipt of $1.8 million of net insurance proceeds related to last December's branch fire, which was recorded as other income. Separately, we sold approximately $8 million of fixed-rate securities yielding 1.3%, recognizing a $1.6 million loss, and purchased approximately $6.6 million of floating-rate securities, currently yielding 4.6%.

This is an example of the kind of opportunistic improvement in our securities portfolio that we think makes sense for Civista and our shareholders. As I mentioned, we repurchased 82,075 shares of treasury stock during the quarter at an average price of $26.96. We continue to believe our stock is a value and will continue to evaluate repurchase opportunities. Civista's earnings continue to create capital, and our overall goal remains to maintain adequate capital to support organic growth and prudent investment into our company. We will continue to focus on earnings and will balance the payments of dividends and any repurchases with building capital to support our growth.

During the quarter, we made an $823,000 provision to our allowance for credit losses and a $472,000 provision for unfunded commitments and had net charge-offs of $139,000. Our ratio of the allowance for credit losses to total loans is 1.29% at September 30, 2026, which is consistent with the 1.28% at December 31, 2025. Our ratio of allowance to non-performing loans of almost 153.3% improved when compared to the same period. This was largely the result of charging off a relationship that not -- that had been in workout for some time and had been fully reserved during 2025.

Other than general concern over the impact of macroeconomic uncertainties, the economy across Ohio and Southeastern Indiana is showing no signs of deterioration. Overall, I would characterize our credit metrics as well-managed and continuing to normalize. In summary, this was another solid Civista quarter. We are pleased with the increase in our pre-provision net revenue, which was the result of continued expansion in our net interest margin, our ability to generate noninterest income from diversified revenue streams, and our continued control of noninterest expense.

The growth in core funding allowed us to further reduce our reliance on brokered funding, and loan demand across our footprint continues to build, giving us confidence in our ability to grow both core deposits and loans at a mid-single-digit rate as we end 2026 and beyond. The first 3 quarters of 2026 have set us up for what should be another good year. I don't know what I could have asked for, for a better start to my tenure as President and CEO. Civista will continue taking care of our customers, supporting our communities, investing in our people, and creating value for our shareholders.

Thank you for your attention this afternoon and your investment, and now we will be happy to address any questions you may have.

Operator: [Operator Instructions] Your first question comes from the line of Brendan Nosal from Hovde Group.

Brendan Nosal: Maybe just starting off on fee income here. I think you folks restated some of your fee lines, and if I were to guess, you took the lease gain on sale income out of the gain on sale line and put it into the lease revenue. Is that the right way to interpret that change broadly?

Ian Whinnem: Yes, we separated out the gain on sale into both the mortgage and the leasing lines.

Brendan Nosal: Okay, perfect. And then just kind of on a related follow-up, nice strong fee income result this quarter at almost $9.4 million. Any thoughts on kind of the major drivers for fee income as we kind of move through the next few quarters?

Ian Whinnem: Yes, I think for the most part, the fourth quarter will end up being a little bit stronger for interchange income just because of holiday spending. Interest rates can be a big driver on the mortgage side. The leasing side really had a strong third quarter as well, as we're anticipating a strong fourth quarter from them also. Now, from a guidance standpoint, Q3 was strong. We came in a little bit above the guidance that we provided back in July. I think for the fourth quarter, we'd anticipate $9 million to $9.5 million in the fourth quarter, with that being dependent on just really what interest rates do to the mortgage business.

Brendan Nosal: Yep, that's helpful. I'm going to sneak one more in here. Just pivoting to the expense base. Costs just came in a lot lower than your outlook from last call for the, what was the third and fourth quarter at the time. When we look forward to next quarter, does the cost run rate stay at this $28 million level, or does it revert back to the prior outlook, which I think was $29.6 million to $30 million?

Ian Whinnem: Yes, the $28 million did come in better than expected as a result of good expense management, as well as we ended up with slightly better operating losses than what we anticipated. Some of the investments that we talked about back in July for colleagues, some marketing, and some IT spend, those would have occurred late in the third quarter, even early in the fourth quarter. And so what we do anticipate is probably that expense being in the fourth quarter being closer to the $28.7 million to $29.5 million range.

Operator: Your next question comes from the line of Jeff Rulis from D.A. Davidson.

Jeff Rulis: Appreciate it. On the noninterest-bearing, the strength there, really a strong quarter. I guess you outlined kind of both commercial and public funds. I got to assume maybe some seasonal trends in there, but also just any other detail about the attributing that strength in the quarter?

Ian Whinnem: Yes, this is Ian again. I think from a deposit standpoint, we do seasonally hit our kind of low point in deposits at the end of the second quarter. And so that's primarily kind of a rundown in those public funds as maybe some consumer spending that occurs around that too. So in that third quarter, we end up with a rebound and an additional in the fourth quarter. We've made a nice investment over the last year within treasury management colleagues, as well as private banking. And that's been a nice contributor into building up those noninterest-bearing and non-maturity deposits.

Jeff Rulis: That's great. And I guess I'll kind of roll the deposit strength into the next question on the margin. You've got some pieces there we're running down the brokered, you talked about the asset repricing tailwinds. Maybe I'd step back, the securities repositioning timing of when that occurred in the quarter and is there a tail of maybe benefit that you didn't fully capture in the third quarter from that piece alone?

Ian Whinnem: Yes, there is a tail to that. It happened towards the end of the quarter.

Jeff Rulis: Okay, so Ian, if I package a lot of these sort of tailwinds into the fourth quarter. It sounds like a nice margin uptick linked quarter in the third quarter, but safe to assume there's still some upward trajectory here?

Ian Whinnem: Yes, I think that the headwind that we're going to have, or at least for one item, is going to be that subordinated debt that reprices. It moves from a 3.25% fixed rate on December 1 to a variable rate of 3-month SOFR plus 2.19%. And so that's going to cost us on a quarterly basis between 5 and 6 basis points is what we're anticipating now. In the fourth quarter alone, it's only there for 1 month. So it's really only a 2-basis-point impact for that. So we think that for the fourth quarter, we came in line with the guidance we had for July.

Going forward, we anticipate probably plus or minus 1 to 2 basis points above where we came in for the third quarter, including that offset for the sub debt. And then as with any kind of a rate increase that happens in December, heading into 2027, probably another 1 to 2 basis points improvement there.

Jeff Rulis: Okay, and then, Ian, I guess the full sub-debt impact is maybe an offset for the full quarter in the first quarter then? Is that right?

Ian Whinnem: That's correct. Yes, that's the right way to think of that.

Charles Parcher: And Jeff, we do feel we have some tailwinds too on the repricing of some of our commercial portfolio. Bob can speak to it, but I mean, I think we've got about $270 million over the next 12 months, $930 million that are going to reprice off of a roughly 5% rate into something 250 to 300 over the 5-year treasury.

Operator: Your next question comes from the line of Adam Kroll from Piper Sandler.

Adam Kroll: Maybe starting out for Ian on funding costs. 50% interest-bearing deposit beta. But I'd be curious to hear just sort of expectations for deposit betas, with this hike and potentially additional hikes, just given some of the optimization you've had within your funding base over the past several quarters.

Ian Whinnem: Yes, from a beta standpoint, we've put into place our playbook, which anticipates both a lag as well as a beta approach. I think 50% is probably about right, with a lag associated with that. We have had some customers that are asking for some exceptions or rate increases, but for the most part, we haven't had to move our rack rates. Our best rates are still on the 15- to 36-month at 4% and less than 1 year at 3.75% for our CDs.

Adam Kroll: Got it. And maybe moving to loan growth on the mid-single-digit loan growth guide, I'd just be curious to hear which segments you kind of expect to drive that over the next several quarters and just how the pipelines are shaking out today?

Robert Katitus: Yes, this is Bob Katitus. And I think from a general perspective, we are, there's not really any specific lines. I mean, you have office and you have some categories that we're definitely more bearish in, but overall, it's really more about the relationship for us. So I'm not sure there's any segments that we truly shy away from per se. As far as the pipelines, the pipelines are actually quite strong. Feel really good about where we're at there, including the residential pipeline, which we expect some headwinds with increased rates. So, so far, so good from that perspective.

Charles Parcher: And we do feel good Adam, about what we talked about with the amount of unfunded construction loans that are out there right now. It's built back up to $270 million on our balance sheet at quarter end. That's funds that will go out the door, some through the balance of the year. It'll be winter pretty soon, and construction will slow down a little bit. It'll give us a nice jump start into the end of the first quarter, second quarter of next year.

Adam Kroll: Got it. I appreciate the color there. And maybe just one last one for me, a follow up on expenses. You've had another quarter of really strong cost controls. But I was just curious how you're thinking about expenses in 2027. If there's any significant investments within tech or talent additions planned within that?

Ian Whinnem: Yes, I think that's the plan. We are looking at revenue-generating investments. So whether that be colleagues, marketing, or technology investments that drive revenue. So some of those do have a little bit of a period where it takes time to get to that break-even point. We do anticipate the continuation of those investments.

Operator: [Operator Instructions] Your next question comes from the line of Timothy Switzer from KBW.

Timothy Switzer: Chuck, congrats on the good third quarter. I had a follow-up on the deposit beta real quick. Can you repeat what that number was? I didn't hear it. And then was that for total deposits or just interest-bearing?

Ian Whinnem: So I think just the interest-bearing side of things. I think we're anticipating what will work out to be about a 50% beta. Where, our playbook has both a lag as well as a beta assigned to it, so those get factored into that.

Timothy Switzer: Okay, so it sounds like that beta kind of picks up over the course of the rate hike cycle, assuming we get several?

Ian Whinnem: Yes, as I mentioned earlier, we're seeing good results and not a lot of pressure to raise our rack rates or even exceptions right now. So we're staying positive with that. But as more rate increases come, whether it be later this year into next year, might put a little more pressure on that. But we think our playbook is going to work, allowing us to keep that lag going.

Timothy Switzer: Okay, I guess that's kind of a reflection maybe of pretty rational deposit pricing in your markets right now?

Ian Whinnem: Yes, there's some of that. We still see some irrational offers. There's a lot of fine print on them. And so our sales team is knowledgeable about that and teaching our customers about the fine print and the value of the relationship that Civista brings. A lot of those customers not necessarily move for a small change.

Charles Parcher: I'd love to say there was not any irrational competition out there, but it seems like every market's got 1 or 2.

Timothy Switzer: Okay, yeah, makes sense. And then the last one is, any updated thoughts you guys have on participating in bank M&A, just your level of interest generally, and then maybe what criteria you'd be looking for?

Charles Parcher: Yes. I don't think really, Tim, our criteria has changed much. Obviously, I'm talking to a lot of people and I think it'll be interesting to see what the sentiment is coming out the back side of the election because it seems like some people are starting to at least think about what the future of their banks are. But we don't have anything imminent right now, and so we're continuing to have dialogue. And if it makes sense to us, we're not going to, unless it was a massively strategic thing, we're not going to get outside of any parameters that would be considered anything really longer than 3 years or very dilutive.

We really want to protect our shareholders. But if we can do the right deals that are profitable for them with a short payback, we'll consider them.

Operator: Your next question comes from the line of Tyler Cacciatori from Stephens.

Tyler Cacciatori: This is Tyler on for Matt Breese. Just starting on loan demand, with the higher rates, are you starting to see any impact on borrower activity or the pipeline? And then just on overall yields, can you talk a little bit about roll-on versus roll-off dynamics?

Robert Katitus: Yes, I mean, we really haven't seen a whole lot of pullback so far, and I think we're expecting it. But so far, the pipelines continue to increase, and we feel good about right now where things are going. So again, I remain bullish in that single-digit growth. That's very achievable.

Charles Parcher: And I think Tyler, if we get much more increase, I think some of the deals will become, you're going to have to see some pullback or you're going to have to put more equity in the deals. I mean, a couple of deals we've seen already that got a little tight, they've agreed to put more equity in to make the deals work, but obviously, depending on where the Fed goes and where the long-term treasury goes, that'll kind of affect that going forward.

Robert Katitus: Rates that we're putting on? I'm sorry. Rates we're putting on, we're in the mid- to high 7s right now on a 5-year, trying to hold that 2.75% type margin and following the market. If anything, we might be coming down on duration a little bit just to remain competitive.

Tyler Cacciatori: Got it. That's helpful. And then just on the sub debt, I hear you on the impacts there, but any thoughts on redeeming that when it comes due in December? Or are you prioritizing buybacks and organic growth ahead of that?

Ian Whinnem: Yes, this is Ian. We've done our analysis, kind of looked at different scenarios. As of now, there's no plans to redeem the sub debt nor even do a partial paydown of it. We just think this -- even though the capital efficacy is declining on December 1, still a good rate in terms of the borrowing side of it and for the amount of capital that we get from it. So we'll continue to evaluate that, but right now we think the best use for capital is either to have it there for organic growth or for some of that stock buyback.

Tyler Cacciatori: Got it. And then, sorry if I missed it. But, how do more hikes affect the margin here?

Ian Whinnem: Yes, for each rate hike, we would anticipate 1 to 2 basis points per quarter, or with each hike, I should say, of expansion, yes. We maintain a slightly asset-sensitive position.

Operator: There are no further questions at this time. I will now hand the call back to Mr. Parcher for any closing remarks.

Charles Parcher: In closing, I'd like to thank everyone for joining me today for my first earnings call as the President, CEO, and for your investment in Civista. I remain confident that this quarter's list of accomplishments, strong financial results, and our disciplined approach to managing the company position us well for long-term future success. I look forward to talking to you again in a few months to share our year-end results. Thank you for your time today.

Operator: And this does conclude today's call. Thank you for participating. You may all disconnect.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.