Civista Bancshares, Inc. (NASDAQ:CIVB) Q3 2020 Earnings Conference Call - Final Transcript
Oct 23, 2020 • 01:00 pm ET
Dennis G. Shaffer
million during the quarter.
Given the uncertainties associated with the COVID-19 and its impact on the economy, we continue to review and refine the qualitative factors in our allowance for our loan loss model. As a result, we recorded $2.25 million provision expense for the quarter and $7.9 million provision expense for the year. The ratio of our allowance for loan losses to loans increased to 1.11% from year-end, which was 0.86%. Exclusive of the PPP loans this ratio would have been 1.27%.
Our allowance for loan losses to non-performing loans also increased to 292.88% at the end of the first quarter from 161.95% at the end of 2019. While these reflect very strong credit metrics by historical standards, given the -- the uncertain nature of our current economy, we will continue to monitor our portfolio and the economy making further adjustments as our model dictates. As a reminder, we did meet the guidelines for the delayed implementation of CECL and will not be required to adopt it until 2023.
On the funding side, our deposits increased $390 million or 23.2% since the beginning of the year. While we have seen increases in every deposit category, the most significant increases came in our business checking accounts, where the proceeds from the PPP loans were deposited. In addition, over $108.9 million of our year-to-date deposit growth came in personal checking and savings accounts. The increase in deposits allowed us to reduce our reliance on FHLB advances by $101.5 million or 44.8% since December 31.
In addition, we borrowed $183.7 million from the PPP liquidity facility to assist with funding the PPP loans originated during the second quarter. These borrowings carry a low rate of 35 basis points and also provide for advantageous regulatory capital treatment of the PPP loans. In spite of the challenges of the current environment, we are pleased with another quarter fueled by solid core earnings
Throughout today's comments, I hope I've conveyed how proud I am of the great team we have here at Civista and the quality customers that have chosen to work with us. We couldn't have one without the other. Our people have accomplished much through the first three quarters of 2020. Despite the pandemic, we reported earnings per share for the third quarter of 2020 that exceeded earnings in the same period of 2019.
While the next several months, we'll continue to test the banking industry and the larger business world, I'm confident that Civista is well positioned with a solid balance sheet, strong capital levels, and a diverse revenue stream to meet the challenges that lie ahead.
Thank you for your attention this afternoon and now, we will be happy to address any questions that you may have.