Image source: The Motley Fool.
Date
Thursday, October 23, 2025 at 1:00 p.m. ET
Call participants
President & CEO — Dennis Shaffer
Executive Vice President, President of Civista Bank — Charles A. Parcher
Senior Vice President, CFO of Civista Bank — Ian Whinnem
Senior Vice President, COO of Civista Bank — Richard Dutton
Need a quote from a Motley Fool analyst? Email [email protected]
Takeaways
Net Income -- $12.8 million, or $0.68 per diluted share, up 53% year-over-year and 16% sequentially.
Pre-Provision Net Revenue -- Improved by $4.9 million, or 45% year-over-year, and by $1.9 million, or 14% sequentially.
Net Interest Income -- $34.5 million, flat relative to the prior quarter after adjusting for a $1.6 million non-recurring item last quarter.
Net Interest Margin -- Declined six basis points to 3.58%; excluding last quarter's one-time adjustment, margin expanded by 11 basis points.
Funding Cost -- Decreased five basis points sequentially to 2.27%, and 34 basis points year-over-year.
Common Stock Offering -- Approximately 3.78 million shares issued, raising $80.5 million in new capital in July 2025, primarily used to reduce overnight borrowings and strengthen tangible common equity.
Farmers Savings Bank Merger -- Regulatory approval received; closing expected shortly after Farmers' shareholder meeting on November 4, 2025, with system conversion planned for early February 2026.
Dividend -- Quarterly dividend of $0.17 per share declared, with a yield of 3.3% and a payout ratio near 25% based on the September 30, 2025 closing price of $20.31.
Non-Interest Income -- $9.6 million, up $3 million (46.2%) sequentially, driven by a $1.4 million increase in leasing fees, partially offset by declines due to fewer originations.
Non-Interest Expense -- $28.3 million, up 3.1% sequentially, mainly due to $700,000 in non-recurring merger-related costs; virtually unchanged year-over-year.
Efficiency Ratio -- Improved to 61.5%, compared to 64.5% in Q2 2025 and 70.5% in Q3 2024.
Effective Tax Rate -- 18.5% for the quarter, 16.2% year-to-date; 16%-16.5% expected in the fourth quarter.
Total Loans and Leases -- Declined by $55.1 million due to $120 million in payoffs. Notable changes include a $36 million decline in commercial/ag loans and $48 million in non-owner occupied CRE, offset by a $27 million increase in residential loans.
CRE to Risk-Based Capital Ratio -- 288% at September 30, 2025, with an internal limit set at 325% going forward.
Loan Origination Rates -- New and renewed commercial loans at 7.25%, residential real estate loans at 6.59%, and leasing division originations at 9.36%.
Undrawn Construction Lines -- $173 million as of September 30, 2025.
Loan-to-Deposit Ratio -- 95.8% loan-to-deposit ratio at quarter end, with a targeted reduction to 90%-95% post-merger.
Total Deposits -- Increased by $33.4 million, with a $56.4 million net increase in core deposit funding after reducing brokered funds by $23 million.
Securities Portfolio Unrealized Losses -- $44.5 million at September 30, 2025 quarter-end, reduced by $8.9 million since December 31, 2024; securities comprise 16% of assets and, together with cash, 22.3% of deposits.
Tangible Common Equity Ratio -- Increased from 6.7% at June 30 to 9.21% at September 30, 2025, quarter-over-quarter; expected to decline to 8.6% post-acquisition while maintaining capacity for growth initiatives.
Allowance for Credit Losses -- Ratio at 1.30% at September 30 versus 1.29% at December 31, 2024; covers 177% of non-performing loans, improved from 122% at December 31, 2024.
Provision Expense -- $200,000, reflecting minimal new provisioning due to stable credit quality and large loan payoffs.
NIM Guidance -- CFO Whinnem guided: "we are anticipating the margin to expand about another five basis points in the fourth quarter from where the third quarter was."
Fee Income Outlook -- CFO Whinnem indicated: "we anticipate being about $9.2 million in the fourth quarter, and that would include about $50,000 from Farmers Savings Bank."
Loan Growth Guidance -- Pipeline strength and post-merger benefits support expectations of mid-single-digit annualized loan growth in the fourth quarter and mid- to high-single-digit growth in 2026.
Cost Synergies from Merger -- Anticipated "system conversion in early February of 2026," according to Dennis Shaffer, reducing contract processing and some staffing expenses.
Summary
Civista Bancshares (CIVB 1.25%) delivered notable sequential and year-over-year improvements in earnings and efficiency in Q3 2025, while deploying new capital to reduce funding costs and support future growth. Management confirmed near-term expansion in both net interest margin and fee income for the fourth quarter, attributing improvements in part to planned cost synergies following the Farmers Savings Bank merger. The loan portfolio saw temporary contraction from significant payoffs in the third quarter, but management asserted that enhanced pricing strategy, increased pipelines, and post-merger deposit leverage are expected to restore and accelerate loan growth across core markets.
President Shaffer stressed that new capital is being allocated toward organic growth, technology, and infrastructure rather than near-term M&A activity, with future acquisitions considered only when meeting strict return thresholds.
Executive Vice President Parcher described elevated loan pipelines and a strategic shift toward more aggressive commercial real estate pricing post-capital raise as drivers for anticipated lending growth.
CFO Whinnem quantified purchase accounting accretion from the merger at "$150,000 in the fourth quarter" and "maybe $280,000" in a full quarter post-close.
Company representatives noted that deposit granularity and an absence of large deposit concentrations (outside of public fund relationships) support the bank’s funding stability and margin profile.
The system conversion is expected to reduce contract processing and some staffing expenses following the deal.
Industry glossary
CMBS: Commercial Mortgage-Backed Securities, a type of asset-backed security secured by commercial real estate loans.
CRE: Commercial Real Estate, referring to income-producing property or loans secured by such property.
Core Deposits: Customer deposits considered stable funding sources, such as checking, savings, or money market accounts, excluding brokered and large institutional deposits.
Full Conference Call Transcript
Dennis Shaffer: Great, thank you. Good afternoon, this is Dennis Shaffer, President and CEO of Civista Bancshares, Inc., and I would like to thank you for joining us for our third quarter 2025 earnings call. I am joined today by Charles A. Parcher, Executive Vice President of the Company and President of Civista Bank, Richard Dutton, Senior Vice President of the Company and Chief Operating Officer of Civista Bank, Ian Whinnem, Senior Vice President of the Company and Chief Financial Officer of Civista Bank, and other members of our executive team.
This morning, we reported net income for the third quarter of $12.8 million, or $0.68 per diluted share, which represents a $4.4 million or 53% increase over the third quarter in 2024, and a $1.8 million or 16% increase over our linked quarter. This also represents an increase in pre-provision net revenue of $4.9 million or 45% over our third quarter in 2024, and a $1.9 million or 14% increase over our linked quarter. Net interest income for the quarter totaled $34.5 million, which is in line with the linked quarter. As a reminder, last quarter included a one-time $1.6 million adjustment stemming from the conversion of our core lease accounting system.
This non-recurring item boosted net interest income and contributed to our second quarter reported margin of 3.64%. As a result, our net interest margin declined by six basis points to 3.58%. However, excluding the prior quarter's adjustment, our margin would have been 3.47%, resulting in an 11 basis point expansion in our margin. Our funding cost for the quarter declined by five basis points to 2.27%, which is 34 basis points lower than the previous year's third quarter. In July, we successfully completed our follow-on common stock offering, issuing approximately 3.78 million new shares and raising $80.5 million of new capital.
This additional capital will allow us to continue growing our franchise by accelerating organic growth, investing in technology, people, and infrastructure. More immediately, we used our new capital to reduce overnight borrowings and to strengthen our tangible common equity that we thought might have weighed on our stock. Earlier this month, we also announced that we have received regulatory approval from both the Federal Reserve and the Ohio Department of Financial Institutions to complete our previously announced merger of Farmers Savings Bank into our bank. Farmers will hold their shareholder meeting to formally approve the merger agreement on November 4th, and we plan to close the transaction shortly thereafter.
Our teams have already begun preparations for a successful system conversion in early February of 2026. We look forward to welcoming Farmers employees and customers into the Civista family. Earlier this week, we announced a quarterly dividend of $0.17 per share, which is consistent with the prior quarter. Based on September 30 closing market price of $20.31, this represents a 3.3% yield and a dividend payout ratio of nearly 25%. During the quarter, non-interest income increased $3 million, or 46.2% over the linked quarter, and was consistent with the third quarter of 2024. The primary driver of the increase from our linked quarter was a $1.4 million increase in fees related to leasing operations.
This increase was attributable to a $1 million reduction in fee income resulting from a non-recurring adjustment in the second quarter of 2025 related to the Civista leasing and finance core system conversion, coupled with increased leasing activity in the third quarter of 2025, resulting in a $0.3 million increase in revenues. Non-interest income for the quarter was $9.6 million, which was consistent with the prior year's third quarter. We did experience a $494,000 decline in leasing fees on fewer originations. However, this decline was offset by increases in nearly every other non-interest income category. We continue to focus on controlling expenses.
For the quarter, non-interest expense was $28.3 million, which represents an increase of $845,000 or 3.1% over the linked quarter. However, the primary driver of the increase was $700,000 in non-recurring acquisition expenses related to the merger with Farmers Savings Bank. In looking at our non-interest expense compared to the prior year's third quarter, while some of the line items fluctuated, total non-interest expense was virtually unchanged. The main category fluctuations for the third quarter comparisons were compensation expense decreased $700,000 for the third quarter of 2025 compared to the prior year's third quarter due to an increase in the deferral of salaries and wages related to the loan originations in 2025.
Marketing expense decreased $300,000 for the third quarter of 2025 compared to the prior year's third quarter, mainly due to a shift to lower-cost digital marketing and lower promotional expenses related to advertising and product marketing. These decreases were offset by the aforementioned acquisition expenses that increased non-interest expense by $700,000. Our efficiency ratio for the quarter improved to 61.5% compared to 64.5% for the linked quarter and 70.5% for the prior year's third quarter. Our effective tax rate was 18.5% for the quarter and 16.2% year-to-date. Turning our focus to the balance sheet, for the quarter, total loans and leases declined by $55.1 million. Loan demand remains strong across our footprint.
However, we experienced over $120 million of payoffs during the quarter. Most of these payoffs were the result of businesses being sold and real estate projects leasing up and moving on to the CMBS permanent market. While we view most of these payoffs as good due to their successful nature, it does present some headwinds when a significant number of loan payoffs pay off in one quarter. While loans were flat or declined in nearly every category, our most significant declines were a $36 million decline in commercial and ag loans and a $48 million decline in non-owner occupied CRE. Both were primarily the result of the previously mentioned payoffs. We did have a $27 million increase in residential loans.
The loans we originate for our portfolio continue to be virtually all adjustable rate, and our leases all have maturities of five years or less. Year-to-date, we have grown our loan portfolio by $14 million. As we have shared on previous calls, we've been pricing commercial and ag opportunities aggressively and had been more conservative in how we price commercial real estate opportunities, attempting to manage our concentration in the CRE portfolio. Post-capital raise, we have become more aggressive in pricing CRE opportunities, which has contributed to substantially increasing our pipelines going into the fourth quarter. That said, we are mindful of making sure we have the funding and capital to support our CRE growth.
At September 30th, our CRE to risk-based capital ratio was 288%. We have established an internal CRE limit of approximately 325% of our risk-based capital going forward. During the quarter, new and renewed commercial loans were originated at an average rate of 7.25%. Residential real estate loans were originated at 6.59%, and loans and leases originated by our leasing division were at an average rate of 9.36%. Loans secured by office buildings make up 4.8% of our total loan portfolio. As we have stated previously, these loans are not secured by high-rise metro office buildings. Rather, they are predominantly secured by single or two-story offices located outside of our central business districts.
Along with year-to-date loan production, our pipelines are strong and our undrawn construction lines were $173 million at September 30th. This should allow our organic loan growth to return to an annualized mid-single-digit range for the fourth quarter and increase into the mid to high single digits in 2026 as we leverage Farmers' excess deposits and our loan pipelines continue to build. On the funding side, total deposits grew by $33.4 million, which is meaningful given that we were able to reduce our dependence on brokered funds by $23 million during the quarter. This represents a $56.4 million increase in core deposit funding during the quarter as we continue to focus on our deposit-generating initiatives.
This helped us lower our overall cost of funding by 5 basis points during the quarter to 2.27%. We continue to see migration from interest-bearing demand accounts into higher-rate deposit accounts during the quarter, which caused our cost of funds to increase 15 basis points. However, as we previously mentioned, our total funding cost declined by 5 basis points as we executed the funding approach that we messaged on last quarter's call. We continue to focus on growing core funding. In July, we launched our new digital deposit account opening platform. We started slowly, limiting online account opening to CDs and markets near our current branch locations where we felt we had some name recognition.
We plan to begin offering checking and money market accounts during the fourth quarter. We are also preparing to roll out our deposit product redesign initiative during the fourth quarter. The goal of this initiative will be to streamline deposit accounts that we acquired through various acquisitions and align our product set with our new digital channels. Our deposit base continues to be fairly granular, with our average deposit account, excluding CDs, approximately $27,500. Non-interest-bearing deposit and business operating accounts continue to be a focus. In addition to those already mentioned, we have several initiatives underway to gather these types of deposits, including monthly marketing blitzes and marketing to low and no deposit balance customers, which are yielding some success.
At quarter end, our loan-to-deposit ratio was 95.8%, which is down from the linked quarter. We anticipate further reducing this ratio into our targeted range of 90 to 95% once the Farmers acquisition closes. Other than the $509.5 million of public funds with various municipalities across our footprint, we had no deposit concentrations at September 30th. 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, and look forward to adding Farmers' low-cost deposit base to our franchise. The declining interest rate environment reduced some of the pressure on bond portfolios.
At September 30th, our securities were all classified as available for sale and had $44.5 million of unrealized losses associated with them. This represented a reduction in unrealized losses of $8.9 million since December 31st, 2024. At September 30th, our security portfolio was $657 million, which represented 16% of our balance sheet, and when combined with cash balances, it represents 22.3% of our deposits. We ended the quarter with our tier one leverage ratio at 11%, which is deemed well capitalized for regulatory purposes. Our tangible common equity ratio increased from 6.7% at June 30th to 9.21% at September 30th on our strong earnings and successful capital raise.
However, post-closing on our Farmers acquisition, we anticipate our tangible common equity ratio declining to 8.6%, which we feel gives us capital to support organic growth, invest in technology, people, and infrastructure. 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 payment of dividends and any repurchases with building capital to support our growth. Although we did not repurchase any shares during the quarter, we continue to believe our stock is of value.
Despite comments made during some of the large bank earning calls, the economy across our footprint continues to show no real signs of concern. For the most part, our borrowers plan for and continue to successfully navigate tariff and other economic issues specific to their industries. Our credit quality remains strong and our credit metrics remain stable. Civista, like most community banks, has no exposure to shared national credits, nor do we have significant exposure to floor plans, indirect auto lending, or loans to non-depository financial institutions, which seems to be the types of credit that have caused much of the recent concern. For the quarter, criticized credits were virtually unchanged at $93.3 million.
The continued strong performance of our credits, coupled with significant loan payoffs, resulted in a minimal $200,000 provision for the quarter. Our ratio of our allowance for credit losses to loans is 1.30% at September 30, which is consistent with the 1.29% at December 31, 2024. In addition, our allowance for credit losses to non-performing loans is 177% at September 30, an improvement when compared to 122% at December 31, 2024. In summary, it has been a very busy and productive quarter. We reported strong earnings that were 53% higher than the previous year's quarter. We grew pre-provision net revenue by 45% over the previous year's quarter.
After adjusting for one-time items, we expanded our margin by 11 basis points over our linked quarter. We continue to gather new customers, increasing core deposits by $87 million year-to-date. We had a very successful capital raise, and our teams are working toward the successful integration of our new Farmers team members and customers. That is a pretty productive quarter and one that I believe sets us up for a strong finish to the year and one that should get us off to a strong start in 2026. I cannot be more bullish for Civista and our shareholders. Thank you for your attention this afternoon and your investment, and now we'll be happy to address any questions you may have.
Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press the pound key. We'll pause for a moment to compile the Q&A roster. Our first question comes from the line of Ryan Payne from D.A. Davidson. Your line is open.
Ryan Payne: Hey, good afternoon, guys.
Dennis Shaffer: Hi, Ryan.
Ryan Payne: Maybe starting with the margin, how do you see that shaking out on a rate sensitivity basis? If we do see a few more cuts before the end of the year, and any expected impact from further cuts if we kind of think into 2026?
Ian Whinnem: Yeah, hey, Ryan, good to hear you. The way that we're really looking at it right now is just a cut in October, another cut in December, and then we're still working through kind of that 2026 guidance. At least from a baseline of if there's a cut in October and December. Also, with the addition of Farmers Savings Bank coming in, we are anticipating the margin to expand about another five basis points in the fourth quarter from where the third quarter was.
Ryan Payne: Got it. Helpful. Moving to capital, on capital priorities post-close of Farmers, sounds like that'll be reserved for organic growth, and you will remain opportunistic on repurchases. Maybe on M&A, how conversations are going, and has the deal kind of brought in more inbounds or interest?
Dennis Shaffer: No, I wouldn't say it has. I mean, I think, you know, really, we're really focused right now on growing organically, first off, and we want to increase our tangible book value. We want to continue to see our earnings per share grow. M&A can be tough at times. For instance, last year, we looked at six deals, and we passed on all six of those deals because they just didn't meet our criteria. We feel we're pretty disciplined when we evaluate an M&A transaction, and we're going to continue to stay disciplined as opportunities present themselves. The Farmers Savings Bank deal checked a lot of boxes for us and gave us some much-needed liquidity.
That's why we went ahead and did that deal. There have been other deals announced here even this week in Ohio that certainly probably do spur some interest. Really, the main reason we raised the capital was to help support our organic growth and allow us to make the necessary investments, like I mentioned, in technology and people and infrastructure. Our real focus is really on deepening our relationships and growing fee income, expanding our digital services and bringing new products and verticals, because we want to gain just a greater share of our customers' wallet, and we want to focus on attracting new customers to the bank.
Our data tells us that customers with strong relationships bring in about four times the revenue compared to other customers. In order to deepen those relationships and bring in those customers, we have to make capital investments in things like artificial intelligence and profitability tools. I think these investments will enable us to precisely target our best opportunities, improve the effectiveness of our cross-selling efforts, improve retention, and just optimize profitability by putting these pricing tools in the hands of our sales teams. That's just one example of how we plan to use the capital. I think another example that we've talked about on previous calls is how we've been using it to make investments into robotic process automation.
We'll continue to focus on just leveraging that type of automation to help us grow the bank, while just improving our operating leverage. We've had some success with that, and we're going to continue to make improvements, because I think that just makes us a more efficient organization. Again, we will look at M&A if it meets our criteria, but our main focus is really to organically grow the bank and just increase our earnings. There's just a lot of disruption right now in our markets, and we feel there's really a lot of organic opportunity for us as we continue to make the necessary capital investments to take advantage of those opportunities.
Ryan Payne: Great. Got it. The last one for me, just a housekeeping item. The effective tax rate coming in higher than historical. Anything impacting that this quarter? Would you expect to stay in kind of this range going forward?
Ian Whinnem: Yeah, we ended up increasing our expected earnings for the remainder of the year. To balance that out, it did increase the third quarter. On a year-to-date basis, we're at that 16 to 16.5% range. We anticipate that for the fourth quarter.
Ryan Payne: Got it. All right. Thanks for the detail, guys. I'll step back.
Ian Whinnem: Thanks, Ryan. Thank you.
Operator: Our next question comes from the line of Brendan Jeffrey Nosal from Healthy Group. Your line is open.
Brendan Jeffrey Nosal: Good afternoon. Maybe just starting off here on the outlook for loan growth. I hear you loud and clear on the mid-single-digit pace for the fourth quarter and then mid to high across 2026. Can you just kind of talk about your confidence in achieving that, given that year-to-date loan balances are pretty flat? That's a pretty meaningful ramp. Just talk about why you have confidence in your ability to achieve that.
Charles A. Parcher: Sure, Brendan. This is Chuck. You know, if you look historically, we've always been a great loan-generating operation. You know, with where our real estate concentrations were earlier in the year, we really weren't, I don't want to say weren't competitive, but we weren't very aggressive in trying to bring new business into the bank. It kind of caught up with us a little bit here in the third quarter where we had a bunch of expected payoffs. As Dennis mentioned, most of them, what I would call good payoffs, a couple of companies selling and a few projects going out to the permanent market.
You know, our pipeline right now is sitting high, higher than it was last year, significantly higher than it was earlier in the year. We feel good with the momentum going into the fourth quarter. We know we got a few more payoffs that we're kind of staring at in the fourth quarter, but not to the same level that we had in the third. We feel good about looking out to that mid-single-digit growth going forward.
Dennis Shaffer: Brendan, I would mention that I think it's important to note on the payoffs that we had several of our business clients that we were really successful in maintaining some of those deposits, both at the bank and at the wealth management level, in areas of the bank. Even though we lost some of the interest income from the payoffs of the loan, we maintained that relationship and we're making money in other areas of the bank. I think that's important to note. I sat in our wealth and trust wealth meeting yesterday and a couple of those loan payoffs, we've got significant wealth related. We're now managing that money that the business owner received.
We are making some money from that. I just think it's important to note that we didn't include that in our earlier comments.
Brendan Jeffrey Nosal: Yep. That's a helpful call. I appreciate it. Maybe moving over to the fee income. Gain on sale of loans was up significantly for the quarter. Can you just kind of decompose that into, you know, one to four family gains versus lease gain on sale and how you should think about that in line item going forward?
Ian Whinnem: Yeah, absolutely. In the third quarter, roughly $1.1 million gain on sale. It was about $850,000 if it was mortgage, $300,000 if it was CLF or our leasing side of things. There was an additional $300,000 on that for gain on disposal of equipment on the leasing side. That's kind of that lumpy stuff that we end up seeing as opposed to the more traditional gain on sale.
Dennis Shaffer: Brendan, I will say, I think probably like almost every other community bank in the country, we really do feel like we'll see a major uptick in gain on sale if we see the 30-year mortgage refinance rates go under 6%. We've got a backlog of what we would consider a lot of refinance opportunity if we do see those rates dip down for a while. Okay. Good. While I have you, just maybe on fee income overall, I know that it tends to be volatile quarter to quarter, and this felt like a particularly strong quarter versus earlier in the year. Any thoughts on the overall level of fee income to wrap up the year?
Ian Whinnem: If we take that $9.6 million that we had in the third quarter, if we back out the BOLI and the security gains, getting us down to about $9 million, we anticipate being about $9.2 million in the fourth quarter, and that would include about $50,000 from Farmers Savings Bank.
Brendan Jeffrey Nosal: Fantastic. Thanks for taking the questions.
Operator: Our next question comes from the line of Terence James McEvoy from Stephens. Your line is open.
Terence James McEvoy: Hi. Good afternoon, everybody. Maybe a question on the decline in loan yields in the third quarter relative to the second quarter. Could you just talk about, is that just a mix shift? You were building the residential portfolio, some pricing competition, and then looking out into the fourth quarter, do you see an opportunity to expand loan yields kind of on a core basis before the merger, just on some fixed asset repricing?
Ian Whinnem: Yeah, just a reminder, Terry, this is Ian. In the second quarter, we had that non-recurring item that was in the interest income, which is about $1 billion. If that gets excluded, we end up being much more normalized on the yields on loans.
Dennis Shaffer: Terry, to your point, I just got the 9/30 report. We're watching very closely the amount of loans that are repriced over the next 12 months, and we've got about $225 million that are repriced here over the next 12 months in those adjustable rates, most of them five and three-year mortgages. We do feel we'll see a pickup in yield on that $225 million as we fight a little bit of the probably floating rate stuff going down during the same time period.
Terence James McEvoy: Great, thanks for the reminder and the update there. Much appreciated. I believe you said the systems conversion early February. Could you talk about the timing of the cost saves and, in the back half of next year, do you expect that to be fully in the run rate?
Ian Whinnem: Yes. We anticipate, as you mentioned, the system conversion occurring. That reduces a lot of the contract expenses for processing, as well as some of the staffing reductions will take place following that deal.
Terence James McEvoy: Great. Thanks for taking my questions.
Ian Whinnem: Thanks, Terry.
Operator: Our next question comes from the line of Timothy Jeffrey Switzer from KBW. Your line is open.
Timothy Jeffrey Switzer: Hey, good afternoon. Thanks for taking my question.
Dennis Shaffer: Hi, Tim.
Timothy Jeffrey Switzer: Most of mine have been answered already, but could you, are you able to tie down at all when in November you guys are expecting to close Farmers? Is it the beginning of the quarter or towards the end, just to kind of help us with the modeling.
Dennis Shaffer: Yeah, we hope, you know, they have their shareholders meeting on November 4, and we hope to close it shortly thereafter, definitely probably before the middle of the month. If you're modeling, you're going to have at least 45 days for the quarter, but we'll have both banks together. That would probably be fairly conservative. We hope to be a few days ahead of that, but, you know, to be safe on your modeling.
Timothy Jeffrey Switzer: Gotcha. Okay. The NIM guidance has been very helpful. Are you able to quantify at all what maybe the purchase accounting impact is on the NIM and what you guys expect on like a full quarter basis?
Ian Whinnem: Let me see if I have that handy. I do not have that in front of me, actually.
Dennis Shaffer: We'll shoot that out to all of the analysts on the call today.
Timothy Jeffrey Switzer: Okay. I was wondering what you guys are seeing in terms of loan competition on pricing in your markets. Any kind of changes there recently?
Ian Whinnem: I think everybody's gotten a little bit more aggressive. We're seeing that the rates kind of fall down below that 6.5% level, probably somewhere between the 6% and 6.5% level on the better deals. It's pretty competitive across. I wouldn't tell you there's any one market here in Ohio or Indiana that's any less or more competitive. They're all very competitive right now, both on the deposit and on the loan side.
Dennis Shaffer: I would say, Tim, the disruption in the marketplace is obviously, I think, going to help us. You've got some of the bigger players like Huntington and Fifth Third who have announced some deals out of state. Their focus is probably, their attention is elsewhere. We still, the premier West Banco thing is less than a year old. We just saw the Middlefield announcement yesterday. All that disruption really helps us in that change. We think that, we think that'll benefit us both from a loan and deposit standpoint.
Timothy Jeffrey Switzer: Okay, that's helpful. Outside of the disruption that you mentioned, do you have a sense for the loan pricing specifically, how much of that competition is being driven by either slowing demand from borrowers versus simply the lower rates from the Fed?
Ian Whinnem: Yeah, I think the demand's been pretty consistent. As I said earlier, we weren't quite as aggressive in the first half of the year just based on what we were sitting out on the balance sheet. I would tell you, demand has been pretty consistent in Ohio all year. We don't, knock on wood, the economy here, especially in the three C's in Ohio, has been really good. We don't see that changing anytime soon.
Dennis Shaffer: Yeah, we feel the economy and our customers have really adapted to some of the conditions, as I stated in the earlier comments. I think it's probably more driven by rate than anything else. I mean, the lower rates by the Fed, that's going to hopefully spur a little bit more activity as well.
Ian Whinnem: I do think, especially some of our competition, there's a lot more confidence around commercial real estate than there was 12 to 18 months ago. I think everybody was a little bit leery of it, which helped us keep rates up on certain things. Now I think that's started to subside, obviously, and rates are starting to shoot back down.
Timothy Jeffrey Switzer: Gotcha. Very helpful. Thank you, guys.
Ian Whinnem: Hey, Tim. This is Ian. On the accretion question that you had, it'd be about $150,000 in the fourth quarter.
Timothy Jeffrey Switzer: Okay. We get into the full quarter in Q1, that would be 300?
Ian Whinnem: Yeah, in that range, maybe $280.
Timothy Jeffrey Switzer: Perfect. All right, thank you so much.
Operator: There are no further questions at this time. I would now like to turn the conference back to Mr. Shaffer. Please go ahead.
Dennis Shaffer: Thank you. In closing, I just want to thank everyone for joining us for today's call and for your investment in Civista Bancshares, Inc. I remain really confident that this quarter's list of accomplishments and strong financial results and just our disciplined approach to managing the company's position, you know, positioned us really well for long-term future success. I look forward to talking to you all again in a few months to share our year-end results. Thank you for your time today.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.