The following is a summary of the Civista Bancshares, Inc. (CIVB) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Civista Bancshares reported Q2 2024 net income of $7.1 million, up from Q1 2024 by $700,000 but down by $3 million from Q2 2023.

• Earnings per diluted share for Q2 2024 were $0.45.

• Noninterest income increased by $2 million from Q1 2024, primarily driven by leasing operations fees.

• Net interest margin contracted to 3.09%, down by 13 basis points from Q1 2024.

• The efficiency ratio was 73.4%, reflecting cost pressures despite a slight reduction in expenses.

Business Progress:

• Civista is undergoing a transition focusing on replacing revenue after exiting a relationship with an income tax refund processor, with initiatives to gather core, low-cost funding.

• They are leveraging new state programs to encourage savings, like the Ohio Homebuyers Plus, to attract and secure more deposits.

• The company continues to experience strong loan demand, growing the loan and lease portfolio by 16% year over year with a focus on maintaining high loan rates for better returns.

• Civista is transitioning wealth management client cash balances to their own bank to consolidate funds and potentially reduce costs.

Opportunities:

• The Ohio Homebuyers Plus program provides an opportunity for Civista to gather low-cost funds and attract customers through state-subsidized incentives.

• Various deposit initiative efforts including new tools for securing deposits from wealth management clients and transitioning services historically managed externally.

Risks:

• The reliance on higher cost funding sources such as overnight borrowings and brokered deposits continues to pressure the net interest margin.

• A discrete fraud-related event led to a notable charge-off, highlighting operational risks associated with fraud.

More details: Civista Bancshares IR

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