Civista Posts 58% Profit Jump in Q2

Key Points

• - GAAP earnings per share were $0.71 in Q2 2025, slightly exceeding analyst estimates (GAAP), driven in part by a one-time gain.

• - Net interest income (GAAP) grew year over year but missed GAAP expectations by 18.6%, while noninterest income (GAAP) declined sharply.

• - Civista announced the acquisition of Farmers Savings Bank and completed a significant capital raise to support future growth.

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Civista Bancshares (NASDAQ:CIVB), a regional banking and financial services holding company based in Ohio, reported its second-quarter earnings on July 24, 2025. The company’s GAAP earnings per share were $0.71 in Q2 2025, just above the analyst projection of $0.70 (GAAP), though net interest income (GAAP) of $34.8 million fell short of the $42.77 million estimate. Noninterest income (GAAP) dropped notably. The quarter was marked by a mix of underlying operational gains and the benefit of nonrecurring items, alongside the announcement of a sizeable capital raise and the acquisition of The Farmers Savings Bank. Overall, the results showed cost discipline and improving profitability, but also highlighted challenges in core revenue growth and deposit trends.

Source: Analyst estimates for the quarter provided by FactSet.

Company Overview and Strategic Focus

Civista Bancshares operates a network of 42 bank branches throughout Ohio, southeastern Indiana, and northern Kentucky, offering services such as retail and commercial banking, mortgage origination, equipment lease financing, and wealth management. Its earnings profile relies primarily on interest income from loans, with commercial real estate and residential mortgages forming most of the lending portfolio. This positions the bank to benefit from property market trends, but also exposes it to related risks.

The company’s recent strategic efforts center on four main areas: growing its loan portfolio (especially commercial and residential real estate), expanding and retaining core deposits, leveraging its mortgage banking platform, and maintaining strong capital and liquidity ratios. These priorities are essential for supporting lending, stabilizing funding costs, and ensuring regulatory compliance. Civista further aims to diversify revenue through fee-based services, such as originating residential mortgages for sale and operating an in-house lease finance business.

Quarterly Performance and Notable Events

Civista’s GAAP earnings per share reached $0.71 in Q2 2025, slightly above analyst expectations but benefited from a $0.76 million after-tax, nonrecurring gain related to loan valuation adjustments. Excluding this, core EPS would have matched the prior quarter (Q1 2025: $0.66) and landed just below market consensus (analyst estimate: $0.70). While net interest income (GAAP) increased year over year—rising 25.5%—it fell significantly short of the $42.77 million target.

Yield on assets increased, Meanwhile, noninterest income, which includes fees from areas like leasing, insurance, and mortgage sales, sank 36.5% from $10.377 million in Q2 2024 to $6.589 million (GAAP). This decline reflected lower leasing revenues and a one-time negative adjustment tied to the leasing division’s core system upgrade, which cut $1.0 million from the figure.

Total loans grew by $69.9 million from December 31, 2024, to June 30, 2025, buoyed by commercial real estate (up $37.6 million) and residential real estate (up $51.5 million) lending, while lease finance and real estate construction categories shrank. The bank’s loan portfolio remains heavily weighted toward commercial real estate and residential housing—segments that now account for the majority of total loans. Deposit flows, however, posed challenges. Overall deposits fell $15.7 million since year-end (December 31, 2024, to June 30, 2025), due in large part to a one-off withdrawal by a municipal customer. The mix shifted further towards higher-cost products, with time deposits (such as certificates of deposit) increasing $90.7 million and noninterest-bearing accounts dropping by $47.5 million for the period from December 31, 2024, to June 30, 2025.

The efficiency ratio (non-GAAP)—a measure of expenses relative to income—improved to 64.5% in Q2 2025 from 72.6% in Q2 2024, reflecting the company’s focus on expense management. Noninterest expenses dropped by 3.2% in the second quarter of 2025 compared to the same period last year, driven by lower headcount and reduced equipment costs. Asset quality remained stable as of June 30, 2025, with non-performing assets reduced to 0.55% of total assets. The allowance for credit losses remained steady relative to total loans, and coverage of nonperforming loans increased to 176.1%.

Civista launched a new digital deposit account system called Mantle, aiming to attract online customers beyond its existing branch network. The bank announced a definitive agreement to acquire The Farmers Savings Bank, which will add $233 million in low-cost deposits and additional lending capacity once integrated. Management indicated this move is intended to expand its presence in northeast Ohio and reinforce funding for future loan growth. Civista also completed an $80.5 million common equity capital raise in July 2025 to strengthen its capital position and support planned expansion. Following these transactions, the company expects the tangible common equity ratio to rise above 8%, specifically to 8.6% on a pro forma basis, and the Tier 1 leverage ratio to reach 10.6%.

On the dividend front, the quarterly payment was raised to $0.17 per share in Q2 2025, up from $0.16 in Q2 2024.

Looking Ahead

Civista’s management projects that the core net interest margin—a key measure of profitability, calculated as net interest income divided by average earning assets—could dip slightly in Q3 2025, settling in the low- to mid-3.50% range. This reflects ongoing funding and deposit competition, as well as the timing of new loan originations. Management expects the net interest margin to expand again in Q4 2025 as the balance sheet shifts and liquidity from the Farmers acquisition is deployed. Loan growth for the remainder of fiscal 2025 is expected in the mid-single digit range, with plans to accelerate to high-single digit expansion in 2026 using the influx of new deposits and the existing loan pipeline.

For noninterest income streams, management signaled that leasing and mortgage banking activity could stabilize and potentially rebound in the second half of 2025, following temporary system disruptions and low capital expenditure activity earlier in the period. As part of its growth plan, the bank will continue to focus on boosting core deposit balances, controlling operating costs, and integrating the Farmers acquisition. Investors should monitor any further shifts in funding costs, progress on growing fee-based revenues, and the impact of share issuance and acquisition activity on near-term earnings metrics.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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