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Civista Bancshares' (CIVB) Q1 Earnings In Line, Stock Up 4.6%

Zacks Equity Research

Shares of Civista Bancshares, Inc CIVB gained 4.6% following the release of its first-quarter 2019 results. Earnings per share of 57 cents came in line with the Zacks Consensus Estimate. The figure also reflects year-over-year growth of 3.6%.

Results benefited from a rise in revenues, and decent growth in loan and deposit balances. Further, higher net interest margin and a fall in efficiency ratio acted as tailwinds. However, expense growth was an undermining factor.

Net income for the quarter jumped 38.3% year over year to $9.7 million.

Revenues Increase, Costs Flare Up

Net revenues for the quarter came in at $28 million, up 37.4% from the year-ago quarter. The revenue figure, however, surpassed the Zacks Consensus Estimate of $27 million.

Net interest income for the quarter was $21.7 million, up 47% from the year-earlier quarter. Further, tax equivalent net interest margin expanded 40 basis points (bps) year over year to 4.45%.

Non-interest income of $6.3 million increased 11.9% compared to the prior-year quarter. This upside was mainly driven by an increase in service charges and ATM/Interchange fees.

Non-interest expenses 34.8% from the prior-year quarter to $16.4 million. Increase in all components of non-interest expenses led to this upswing.

The company’s efficiency ratio was 58%, down from 59.2% recorded a year ago. A fall in efficiency ratio indicates higher profitability.

At the end of the reported quarter, return on average equity was 13%, down from 15.37% witnessed at the end of the prior-year quarter. Return on average assets was 1.72% compared with 1.70% at the end of the year-ago quarter.

Loans & Deposits Rise

As of Mar 31, 2019, net loans amounted to $1.6 billion, up from $1.5 billion recorded as of Dec 31, 2018. Also, customer deposit accounts were $1.8 billion, up from $1.6 billion as of Dec 31, 2018.

Credit Quality: A Mixed Bag

As of Mar 31, 2019, the ratio of allowance for loan losses to total loans was 0.88%, down 23 bps from 1.11% recorded as of Mar 31, 2018. Further, the allowance for loan losses to non-performing loans was 150.6%, down from 154.41% recorded at the end of the year-earlier quarter.

Moreover, the company recorded net recoveries of $0.14 million compared with net charge-offs of $0.32 million reported in the year-ago quarter. However, total non-performing assets were nearly $9.2 million, up from the prior-year quarter’s $8.3 million.

Capital Ratios

As of Mar 31, 2019, tier I leverage ratio and tier I risk based capital ratio was 11.64% and 15.64%, down from 11.82% and 15.87%, respectively, witnessed at the end of the prior-year quarter.

Our View

Civista Bancshares is well poised to grow organically, supported by continued rise in loan and deposit balances. Additionally, its solid capital and liquidity position will aid the company’s growth. Nevertheless, persistently rising expenses might keep curbing the company’s bottom-line growth.

Civista Bancshares, Inc. Price, Consensus and EPS Surprise


Civista Bancshares, Inc. Price, Consensus and EPS Surprise | Civista Bancshares, Inc. Quote

Currently, Civista Bancshares carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

Associated Banc-Corp’s ASB first-quarter 2019 adjusted earnings of 50 cents per share came in line with the Zacks Consensus Estimate. The figure reflected year-over-year growth of 25%.

Huntington Bancshares HBAN reported first-quarter 2019 earnings per share of 32 cents, in line with the Zacks Consensus Estimate. The bottom line was up 14% from the prior-year quarter.

TCF Financial Corporation TCF reported a positive earnings surprise of 2.2% in first-quarter 2019. Adjusted earnings per share of 46 cents surpassed the Zacks Consensus Estimate by a penny. Further, the reported figure came in 17.9% higher than the year-ago tally.

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