Civista Bancshares, Inc.

Second-quarter net income was $14.3 million, or $0.69 per diluted share, up $3.3 million, or 30%, from the second quarter of 2025 and down $674,000 from the linked quarter. Pre-provision net revenue was $5 million higher year over year and up $1.6 million, or 9%, sequentially. Net interest income was $38.6 million, up $770,000, or 2%, from the prior quarter, and net interest margin expanded 4 bps to 3.89%; earning asset yield was 5.67% and overall funding cost was 1.94%. Noninterest income was $9 million, down $424,000 from the linked quarter, while noninterest expense was $28.7 million, down $1.2 million, or 4.1%, sequentially and up $1.2 million, or 4.3%, year over year. Loans and leases grew $25 million, or an annualized 3.1%, and deposits declined $44 million, or 1.2%. For the balance of 2026, management expects loan growth at a mid-single-digit rate. On expenses, CFO Ian Whinnem said noninterest expense should be about $29.6 million to $30 million in Q3 and roughly the same in Q4. He also guided to Q3 fee income of $9 million to $9.3 million and Q4 roughly flat. On margin, he said Q3 should be flat plus or minus 1 to 2 bps, with another 1 to 2 bps of expansion possible in Q4, taking the margin into the upper 3.80s to low 3.90s.

Dennis Shaffer emphasized disciplined balance sheet management, strong earnings generation, and flexibility to use capital across organic growth, technology, people, and possible M&A. He said the bank has been adding producers, investing in infrastructure, considering more branches and technology, and sees share repurchases, dividends, and acquisitions as options, though current focus is on investing back into the company. His tone was confident and upbeat, and he closed by noting this was his final CEO earnings call while expressing confidence in Chuck Parcher and the leadership team.

Ian Whinnem highlighted better-than-guided quarterly expenses of $28.7 million versus prior guidance of $29.2 million to $29.7 million, but said reinvestment will push expenses back to about $29.6 million to $30 million in both Q3 and Q4. He also said fee income should run $9 million to $9.3 million in Q3 and then be roughly flat in Q4, and he framed margin outlook as modestly positive, with Q3 flat to down/up 1 to 2 bps and possible further expansion in Q4. On funding and capital, management pointed to a 1.94% cost of funds, continued brokered deposit runoff, and ongoing capital generation, including a $0.18 quarterly dividend and no recent share repurchases.

Analysts focused on expenses, margin upside, capital deployment, deposit competition, loan growth drivers, fee income, and credit. Management said expense growth should resume modestly due to hiring, marketing, and technology investments; margin could still expand a bit if rate movement stays stable; and loan growth should be supported by lower payoffs and draws on a strong construction pipeline. They also said deposit competition is intense across markets, brokered deposits should come down by about $25 million over the next two quarters, and M&A remains quiet in Ohio and Indiana.