Civista Bancshares, Inc. (NASDAQ:CIVB) Q3 2020 Earnings Conference Call - Final Transcript

Oct 23, 2020 • 01:00 pm ET

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Civista Bancshares, Inc. (NASDAQ:CIVB) Q3 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Terry McEvoy from Stephens. Please go ahead.

Analyst
Terry McEvoy

Hi. Good afternoon.

Executive
Dennis G. Shaffer

Hi, Terry.

Analyst
Terry McEvoy

First question I have is on the loan modification, the $52 million which are down nicely, are those loans still, in round one or is there a segment that has moved into what I'll call, round two?

Executive
Paul J. Stark

The majority of those -- this is Paul Stark. The majority of these -- about $43 million are still in round two. And they're going to run out here in October about eight of them have gone on and further deferments in mostly interest only.

Executive
Dennis G. Shaffer

And Terry, most of the $259 million in round one were 90-day extensions.

Analyst
Terry McEvoy

Great. And then, as a follow-up question. The 3.84% core net interest margin, what are your thoughts on the fourth quarter and heading into next year. Just as you face this low rate environment and potentially some pressure on your asset yields?

Executive
Richard J. Dutton

Terry, this is Rich. And I think, like we said last quarter, most of the compression that we're going to see over the next number of quarters happened during the second quarter. We will continue to probably battle some contraction. But if the way we look at it, excuse me, margin for the second quarter was 3.61% and the margin for the third quarter was 3.44%. But if we back out the impact of those PPP loans and the yield that they have that would have increased the margin of the second quarter by 22 basis points and increased our margin in the third quarter by 40 basis points. I know I am throwing a lot of numbers at you.

But what was that equates to is our kind of normalized yield for the second quarter was 3.83%. Our normalized yield for the third quarter was 3.84% actually expanded by a basis point may be kind of surprised us a little bit, but what we said on the last call was that we expected basis points of compression. And our loan guys have been doing a great job of just fighting the battle every day and keeping the rates where they are.

Executive
Dennis G. Shaffer

Yeah. And then, Terry, as Rich said, I think we did bear the brunt of that in the second quarter. Remember the rate reduction was in March. We bear a little bit more and I think as you go forward that becomes that compression at least becomes a little bit narrower but we could still see a little bit as we move forward in the fourth quarter and the first quarter, it is very competitive on the lending side, we have widened spreads and things like that, but it's still competitive and we are trying to protect margin, but we do need to get and we do want some growth too. So we're kind of balance both of those things.

Analyst
Terry McEvoy

That sounds great. Thanks for taking my questions.

Executive
Richard J. Dutton

You bet.

Executive
Dennis G. Shaffer

Thanks.

Operator
Operator

Our next question comes from