시비스타 방크셰어스(CIVB) 2026년 3분기 실적 발표 컨퍼런스 콜: 마진 및 핵심 자금 조달 개선

핵심 요약

• 시비스타 뱅크셰어스의 2026년 3분기 순이익은 1,600만 달러(희석 주당 0.77달러)로 전년 동기 대비 26%, 전분기 대비 12% 증가했습니다.
• 순이자이익은 3,940만 달러를 기록해 전분기 대비 2% 증가했습니다. 순이자마진(NIM)은 4bp 확대된 3.93%를 나타냈습니다.
• 대출 및 리스는 4,700만 달러를 넘는 조기 상환에도 불구하고 3,800만 달러 증가하며 연환산 4.7% 성장을 기록했습니다. 경영진은 2026년 말 및 2027년까지 한 자릿수 중반대의 대출 성장을 예상하고 있습니다.
• 핵심 자금 조달은 무이자 예금이 3,030만 달러 증가하고 저축 및 머니마켓 예금 잔액이 1,580만 달러 늘어나며 개선되었습니다. 중개 자금 조달은 9개 분기 동안 2억 2,300만 달러(41%) 감소했습니다.
• 영업이익경비율(효율성 비율)은 매출 증가와 비용 통제에 힘입어 전분기 58.2%, 전년 동기 61.4%에서 55.3%로 개선되었습니다.
• 경영진은 4분기 수수료 수익 가이던스를 900만~950만 달러로, 비이자 비용 가이던스를 2,870만~2,950만 달러로 제시했습니다.

핵심 재무 데이터

사업 및 영업 실적

시비스타의 영업 지역 전반에서 대출 수요는 견조하게 유지되었습니다. 주택 대출은 2,500만 달러 증가했고, 부동산 건설 포트폴리오는 1,500만 달러 성장했습니다. 미인출 건설 약정액은 2억 6,800만 달러에 달해 6월 30일의 2억 5,000만 달러, 3월 31일의 2억 800만 달러, 2025년 말의 1억 9,500만 달러에서 늘어났습니다.

조기 대출 상환액은 4,700만 달러를 초과했습니다. 경영진은 이를 주로 기업 및 자산 매각과 완공된 부동산 프로젝트가 상업용 부동산 담보부 증권(CMBS) 시장으로 전환된 데 따른 것으로 분석했습니다.

신규 및 갱신 상업용 대출의 평균 금리는 6.87%를 기록했습니다. 주택용 부동산 대출 신규 집행 금리는 평균 6.45%, 리스 부문은 평균 9.75%였습니다. 경영진은 또한 약 2억 7,000만 달러 규모의 상업용 대출이 향후 12개월 동안 금리 재조정될 예정이어서 자산 수익률 상승 요인으로 작용할 잠재력이 있다고 언급했습니다.

이번 분기 예금은 중개 예금이 2,500만 달러 감소했음에도 1,900만 달러 증가했습니다. 이러한 성장은 무이자 예금 3,030만 달러 증가와 저축 및 머니마켓 계좌 1,580만 달러 증가에 힘입은 것입니다. 정기예금은 변동이 없었습니다.

시비스타는 저비용 자금 조달 개선이 기업 및 지자체 고객, 자금 관리 및 프라이빗 뱅킹에 대한 투자에 힘입은 것이라고 설명했습니다. 은행은 영업 지역 내 지자체 전반에서 5억 4,400만 달러 이상의 공공 자금을 유치하고 있습니다.

유가증권 포트폴리오는 총 6억 4,000만 달러로 총자산의 15%를 나타냈습니다. 여기에는 포트폴리오의 9.3%에 해당하는 5,990만 달러의 평가손실이 포함되어 있습니다. 시비스타는 수익률 1.3%의 유가증권 약 800만 달러를 매각해 160만 달러의 손실을 인식하고, 수익률 4.6%의 변동금리 유가증권 약 660만 달러를 매수했습니다.

비일회성 항목에는 12월 지점 화재 관련 순보험금 수령액 180만 달러가 포함되었습니다. 또한 회사는 평균 단가 26.96달러에 자사주 82,075주를 매입했으며, 주당 0.18달러의 분기 배당금을 유지했습니다.

신용 비용에는 대손충당금 82만 3,000달러, 미인출 약정 충당금 47만 2,000달러, 순상각액 13만 9,000달러가 포함되었습니다. 경영진은 신용 지표가 잘 관리되고 있으며 지속적으로 정상화되고 있다고 설명했습니다.

경영진 가이던스

• 대출 및 예금 성장: 경영진은 대출 파이프라인, 건설 약정, 대출 담당 인력 확충에 힘입어 2026년 말 및 2027년까지 대출과 핵심 예금이 한 자릿수 중반대의 성장을 기록할 것으로 예상하고 있습니다.
• 4분기 수수료 수익: 900만~950만 달러로 예상되며, 주택담보대출 수익은 금리 상황에 따라 좌우될 수 있습니다. 경영진은 또한 연말 연시 카드 가맹점 수수료 활동의 계절적 호조와 리스 부문의 지속적인 강세를 기대하고 있습니다.
• 4분기 비이자 비용: 2,870만~2,950만 달러로 예상되며, 3분기 말 또는 4분기 초에 시작된 직원, 마케팅 및 기술 분야 투자를 반영하고 있습니다.
• 순이자마진: 경영진은 4분기 마진이 3분기 수준인 3.93% 대비 약 1~2bp 상회하거나 하회할 것으로 예상하고 있습니다. 여기에는 1개월 동안의 후순위채 금리 재조정으로 인한 4분기 예상 영향 약 2bp가 포함됩니다.
• 금리 민감도: 경영진은 약간의 자산 민감형 재무상태표 특성을 반영하여 기준금리가 1회 추가 인상될 때마다 마진이 1~2bp 확대될 수 있다고 추정합니다.
• 예금 베타: 시비스타는 재조정 시차를 두고 이자 지급 예금에 대해 약 50%의 베타가 적용될 것으로 예상합니다.

리스크 및 관전 포인트

후순위채 금리는 12월 1일 고정 3.25%에서 3개월 SOFR + 219bp로 재설정됩니다. 경영진은 한 분기 전체에 미치는 마진 영향이 5~6bp 수준일 것으로 추정하지만, 인상된 금리가 1개월 동안만 적용되기 때문에 4분기에는 약 2bp의 영향만 줄 것으로 보입니다. 시비스타는 현재 이 채권을 상환하거나 일부 중도 상환할 계획이 없습니다.

금리 상승은 주택담보대출 활동을 위축시키고 차입자의 재무 상태에 압박을 가할 수 있습니다. 경영진은 일부 차입자들이 거래를 성사시키기 위해 이미 더 많은 자기자본을 납입했다고 밝혔습니다. 추가적인 금리 인상은 예금 유치 경쟁을 심화시키고 자금 조달 비용을 높일 수도 있습니다.

조기 대출 상환은 공시되는 대출 잔액 성장의 제약 요인으로 남아 있습니다. 경영진은 거시경제적 불확실성도 언급했지만, 분기 말 기준 오하이오주와 인디애나주 동남부 지역에서는 경제 악화 징후가 나타나지 않았다고 밝혔습니다.

애널리스트 Q&A 주요 내용

경영진은 무이자예금의 호조가 2분기 저점에서의 계절적 회복과 자금 관리 및 프라이빗 뱅킹에 대한 투자 결과를 부분적으로 반영한 것이라고 설명했습니다.

대출 수요와 관련해 경영진은 고금리로 인한 역풍 우려에도 불구하고 주택 대출을 포함한 파이프라인이 여전히 견조하다고 밝혔습니다. 오피스 대출 등 특정 분야에 대해서는 신중한 태도를 취하고 있으나, 일률적인 배제보다는 차입자와의 관계 및 거래 구조를 중시하고 있음을 강조했습니다.

시비스타는 2027년에도 인력, 마케팅, 기술 분야에 수익 창출형 투자를 지속할 계획입니다. 경영진은 이러한 노력이 손익분기점에 도달하기까지 시간이 걸릴 수 있다고 언급했습니다.

은행 M&A와 관련해 찰스 파처(Charles Parcher) CEO는 임박한 거래는 없지만 지속적으로 논의를 이어가고 있다고 말했습니다. 시비스타는 특별히 전략적인 기회가 없는 한, 주식 가치 희석이 제한적이고 수익성이 높으며 투자금 회수 기간이 일반적으로 3년 이내인 전략적 M&A 거래를 우선시할 방침입니다.

실적 발표 콘퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Thank you. Good afternoon, ladies and gentlemen, and welcome to the Civista Bancshares, Inc. Third Quarter 2026 Earnings Call. [Operator Instructions] Before we begin, I would like to remind you that this conference call may contain forward-looking statements with respect to the future performance and financial condition of Civista Bancshares Inc. that involves risks and uncertainties. These factors could cause actual results to be materially different from any future results expressed or implied by such forward-thinking statements. These factors are discussed in the company's SEC filings, which are available on the company's website. The company disclaims any obligation to update any forward-looking statements made during the call. Additionally, management may refer to non-GAAP measures which are intended to supplement, but not substitute, the most directly comparable GAAP measures. The press release, also available on the company's website, contains the financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures.

The call will be recorded and made available on Civista Bancshares' website at www.civb.com. At the conclusion of Mr. Parcher's remarks, he and the Civista management team will take any questions you may have.

Charles Parcher

Good afternoon, this is Chuck Parcher, President and CEO of Civista Bancshares. I'd like to thank you for joining us for our third quarter 2026 earnings call. I am joined today by Rich Dutton, SVP of the company and Chief Operating Officer of the bank, Ian Whinnem, SVP of the company and Chief Financial Officer of the bank, and other members of our executive team.

This morning, we reported net income for the third quarter of $16 million, or $0.77 per diluted share, which represents a $3.3 million, or 26% increase over our third quarter in 2025, and a $1.7 million, or 12% increase over our linked quarter. This also represents an increase in pre-provision net revenue of $5.3 million, or 33% over our third quarter in 2025, and a $2.2 million, or 11% increase, over our linked quarter. Net interest income for the quarter totaled $39.4 million, which is 2% higher than the linked quarter. As a result, our net interest margin expanded by 4 basis points over our linked quarter to 3.93%, and by 35 basis points over the prior year's first 9 months.

Our funding costs for the quarter increased by 3 basis points to 1.97%, which is 30 basis points lower than the previous year's third quarter, as we continue our disciplined approach to managing how we fund our balance sheet. A big part of our funding story during the quarter was our ability to grow non-interest-bearing deposits by $30.3 million and savings and money market accounts by $15.8 million, as we were able to attract new and additional deposits primarily from our business and municipal customers. Our cost of core deposits was 1.61%, excluding brokered funding, which is just a 2 basis point increase compared to our linked quarter, as we were able to replace our recent trend of CD growth with growth in lower cost deposit accounts. This success in attracting core funding allowed us to again reduce our reliance on brokered funding. During the quarter, we replaced $150 million of brokered CDs bearing a weighted average rate of 3.89%, with $125 million of brokered CDs maturing over the next 9 months with an average rate of 4.08%. During the past 9 quarters, we have reduced our brokered funding by $223 million, or 41%.

Another big part of our story is the return of solid organic loan growth. Despite the continued headwinds of $47 million in early payoffs during the quarter, our loan balances grew by $38 million, or at an annual growth rate of 4.7%. Our lending and leasing teams generated $343 million in new organic production during the quarter that was partially offset by those early payoffs in addition to normal principal payouts. Our ROA and ROE for the quarter were 1.48% and 11.21% respectively. Continued strong financial performance and our ability to consistently create capital continues to provide options as we evaluate the most optimal ways to put our capital to use. One of those options is repurchasing shares when we feel the opportunity warrants, as it did during the quarter. During the quarter, we repurchased 82,075 shares of Treasury stock at an average price of $26.96. We ended the quarter with a healthy tangible common equity ratio of 9.88% compared to 9.54% at December 31st, 2025. Earlier this week, we announced a quarterly dividend of 18 cents per share, which is consistent with our prior quarter.

Based on our September 30 closing share price of $26.38, this represents a 2.73% yield and a dividend payout ratio of 24.75%. During the quarter, net interest income increased $644,000, or 7% over the linked quarter, and was consistent with the third quarter of 2025. Controlling expenses is another area of focus and is evidenced by slight declines when comparing non-interest expense to both our linked quarter, which declined $675,000, or 2.4%, in our prior year's quarter, which declined $349,000 or 1.2%. While there was some noise from non-recurring costs associated with our acquisition of Farmers Savings Bank and our leasing division's core conversion in the prior year, there were no other significant changes in our non-interest expense categories. Our efficiency ratio for the quarter improved to 55.3% compared to 58.2% for the linked quarter and 61.4% for the prior year's third quarter. Our effective tax rate was 19.1% for the quarter and 17.6% year-to-date.

Turning our focus to the balance sheet. For the quarter, total loans and leases grew by $38 million for an annualized rate of 4.7%. Loan demand remained solid across our footprint, while early payoffs seemed to subside, we experienced over $47 million of payoffs during the quarter. These early payoffs were primarily the result of businesses and properties being sold and real estate projects leasing up and moving on to the CMBS permanent market. While we view these payoffs as good, due to their successful nature, they continue to present headwinds to growing our loan totals. While loans were steady in nearly every category, we did experience a $25 million increase in our residential loan portfolio and a $15 million increase in our real estate construction portfolio. Loans we originate for our portfolio continue to be virtually all adjustable rate, and our leases primarily all have maturities of 5 years or less. Additionally, our undrawn construction lines were $268 million on September 30th, which compares favorably to $250 million on June 30th, $208 million at March 31st and $195 million at December 31st.

This trend, coupled with additions to our lending team and the solid economic performance of Ohio and the greater Midwest, give us confidence that we will continue with mid single digit growth as we finish out 2026 and move into 2027. During the quarter, new and renewed commercial loans originated at an average rate of 6.87%, residential real estate loans originated at 6.45%, and loans and leases originated by our leasing division were at an average rate of 9.75%. With the rapid increase in interest rates during the second quarter of September, we anticipate that these rates will continue increasing during the fourth quarter. On the funding side, total deposits grew by $19 million, which is meaningful given that we were able to further reduce our dependence on broker deposits by $25 million during the quarter. As I mentioned, this growth was a result of a $30 million increase in non-interest-bearing accounts and a nearly $16 million increase in savings and money market accounts. This represents a $44 million increase in core deposit funding during the quarter as we continue to focus on core deposit generating initiatives. And while a quarter does not imply a trend, migration from non-interest-bearing and interest-bearing demand accounts into higher-rate time deposits subsided during the quarter, with our time deposit balances remaining unchanged during the quarter. The result, our total funding costs increased by only 3 basis points during the quarter as we continue to focus on attracting lower cost for deposits from our retail customers and operating accounts from our business and municipal customers.

Our deposit base continues to be fairly granular, with our average deposit account excluding CDs of approximately $29,000. At quarter end, our loan to deposit ratio was 94.7%, which is consistent with our linked quarter. With more than $544 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. We view our securities portfolio as a significant source of liquidity. At quarter end, our securities portfolio totaled $640 million, which represented 15% of our balance sheet, and when combined with our cash balances, represents 20% of our total deposits. Our securities are classified as available for sale and had $59.9 million or 9.3% of unrealized losses associated with them.

A few of the more significant non-recurring items during the quarter included the receipt of $1.8 million of net insurance proceeds related to last December's branch fire, which was recorded as other income. Separately, we sold approximately $8 million of 1.3%, recognizing a $1.6 million loss and purchased approximately $6.6 million of floating rate securities, currently yielding 4.6%. This is an example of the kind of opportunistic improvement in our securities portfolio that we think makes sense for Civista and our shareholders. As I mentioned, we purchased 82,075 shares of Treasury stock during the quarter at an average price of $26.96. We continue to believe our stock is of value and will continue to evaluate repurchase opportunities. Thus, this 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 payments of dividends and annual repurchases with building capital to support our growth. During the quarter, we made an $823,000 provision to our allowance for credit losses and a $472,000 provision for unfunded commitment and had net charge-offs of $139,000.

Our ratio of the allowance for credit loss total loans is 1.29% at September 30, 2026, which is consistent with the 1.28% at December 31, 2025. Our ratio of allowance to non-performing loans of almost 153.3% and impaired improved when compared to the same period. This was largely the result of charging off a relationship that had been in workout for some time and had been fully reserved during 2025. Other than general concern over the impact of macroeconomic uncertainties, the economy across Ohio and Southeastern Indiana is showing no signs of deterioration. Overall, I would characterize our credit metrics as well managed and continuing to normalize.

In summary, this was another solid, sophisticated quarter. We are pleased with the increase in our pre-provisioned net revenue, which was the result of continued expansion in our net interest margin, our ability to generate non-interest income from diversified revenue streams, and our continued control of non-interest expense. The growth in core funding allowed us to further reduce our reliance on broker funding and loan demand across our footprint continues to build, giving us confidence in our ability to grow both core deposits and loans at a mid single digit rate as we end 2026 and beyond. The first 3 quarters of 2026 have set us up for what should be another good year. I don't know what I could have asked for for a better start to my tenure as President and CEO. Civista will continue taking care of our customers, supporting our communities, investing in our people, and creating value for our shareholders. Thank you for your attention this afternoon and your investment, and now we will be happy to address any questions you may have.

Operator

Thank you. Ladies and gentlemen, we will now begin the question and answer session. [Operator Instructions] One moment please for your first question. Thank you. And your first question comes from the line of Brendan Nosal from Hovde Group. Please go ahead.

질의응답

Brendan Nosal

Hey, good afternoon, folks. Thanks for taking the questions.

Ian Whinnem

Hi, Brendan.

Brendan Nosal

Hey, maybe just starting off on fee income here. I think you folks restated some of your fee lines, and if I were to guess, you took the lease gain on sale income out of the gain on sale line and put it into the lease revenue. Is that the right way to interpret that change broadly?

Ian Whinnem

Yes, we separated out the gain on sale into both the mortgage and the leasing lines.

Brendan Nosal

Okay, perfect. And then just kind of on a related follow-up, you know, nice strong fee income result this quarter at almost $9.4 million. Any thoughts on kind of the major drivers for fee income as we kind of move through the next few quarters?

Ian Whinnem

Yes, I think for the most part, you know, the fourth quarter will end up being a little bit stronger for interchange income just because of holiday spending. Interest rates can be a big driver on the mortgage side. The leasing side really had a strong third quarter as well as we're anticipating a strong fourth quarter from them also. Now, from a guidance standpoint, Q3 was strong. We came in a little bit above the guidance that we provided back in July. I think for the fourth quarter, we'd anticipate by $9 million to $9.5 million, the fourth quarter, with that being dependent on just really what interest rates do to the mortgage business.

Brendan Nosal

Yep, that's helpful. I'm going to sneak one more in here. Just to the expense base. Just came in a lot lower than your outlook from last call for the, you know, what was the third and fourth quarter at the time. When we look forward to next quarter, does the cost run rate stay at this $28 million level, or does it revert back to the prior outlook, which I think was $29.6 million to $30 million?

Ian Whinnem

Yes, it's, you know, the $28 million did come in better than expected as a result of good expense management, as well as we ended up with slightly better operating losses than what we anticipated. You know, some of the investments that we talked about back in July for colleagues, some marketing and some IT spend, those would have occurred late in the third quarter, even early in the fourth quarter. And so what we do anticipate is probably that expense being in the fourth quarter being closer to the $28.7 million to $29.5 million range.

Brendan Nosal

Got it. Thanks so much for taking my questions. Thank you. Thanks.

Operator

Thank you. And your next question comes from the line of Jeff Rulis from DA-Davidson. Please go ahead.

Jeff Rulis

Thanks. Appreciate it. On the non-interest bearing, the strength there, really a strong quarter. I guess... you outlined kind of both commercial and public funds. I gotta assume maybe some seasonal trends in there, but also just any other detail about the trend, that strength in the quarter.

Ian Whinnem

Yes, this is Ian again. I think from a deposit standpoint, we do seasonality hit our kind of low point in deposits at the end of second quarter. And so that's primarily kind of a rundown in those public funds as maybe some consumer spending that occurs around that too. So in that third quarter, we end up with a rebound and an additional in the fourth quarter. We've done a nice investment over the last year within treasury management colleagues, as well as private banking. And that's done a nice contributor into building up those non-interest-bearing and non-maturity deposits.

Jeff Rulis

That's great. And I guess I'll kind of roll the deposit strength into the next question on the margin. You've got some pieces there where running down the brokerage, you talked about the asset repricing tailwinds. Maybe I'd step back, the securities repositioning is timing of when that occurred in the quarter and is there a tail of maybe benefit that you didn't fully capture in the third quarter from that piece alone.

Ian Whinnem

Yes, there is a tail to that. It happened towards the end of the quarter.

Jeff Rulis

Okay, so Ian, if I package a lot of these sort of tailwinds of into the fourth quarter. Sounds like a nice margin uptick late quarter in the third quarter, but safe to assume there's still some upward trajectory here.

Ian Whinnem

Yes, I think that the headwind that we're going to have, or at least for one item, is going to be that subordinated debt that reprices. It moves from a 3 and a quarter fixed rate on December 1st to a variable rate of 3 months SOFR plus 219. And so that's going to cost us on a quarterly basis is between 5 and 6 basis points is what we're anticipating now. In the fourth quarter alone, it's only there for 1 month. So it's really only a 2 basis point impact for that. So we think that for the fourth quarter, we came in in line with the guidance we had for July. Going forward, we anticipate probably plus or minus 1 to 2 basis points above where we came in for third quarter, including that offset for the subject. And then as with any kind of a rate increase that happens in December, heading into 2027, probably another 1 to 2 basis points improvement there.

Jeff Rulis

Okay, and then, Ian, I guess the full sub-debt impact is maybe an offset for the full quarter in the first quarter then? Is that right?

Ian Whinnem

That's correct. Yeah, that's the right way to think of that.

Charles Parcher

Okay. And Jeff, we do feel we have some tailwinds too on the repricing of some of our commercial portfolio. Bob can speak to it, but I mean, I think we've got about $270 million over the next 12 months, 930 to 930. They're going to reprice off of a roughly 5% rate into something 250 to 300 over the 5-year Treasury.

Jeff Rulis

No, that's great. Sounds positive. Thank you.

Charles Parcher

Thank you.

Operator

Thank you. And your next question comes from the line of Adam Kroll from Piper Sandler. Please go ahead.

Adam Kroll

Hope you're doing well. Thank you. Maybe starting out for Ian on funding costs. 50% interest rate and deposit beta. But I'd be curious to hear just sort of expectations for deposit betas, with this hike and potentially additional hikes, just given some of the optimization you've had within your funding base over the past several quarters.

Ian Whinnem

Yeah, from a beta standpoint, we've put into place our playbook, which anticipates both a lag as well as a beta approach. I think 50% is probably about right, with a lag associated with that. We have had some customers that are asking for some exceptions or rate increases, but for the most part, we haven't had to move our RAC rates. Our best rates are still on the 15 to 36 month at 4% and less than 1 year at 375 for our CDs.

Adam Kroll

Got it. And maybe moving to loan growth on the mid-single-digit loan growth guide, I'd just be curious to hear which segments you kind of expect to drive that over the next several quarters and just how the pipelines are shaking out today.

Unknown Speaker

Yes, this is Papi Titus. And, you know, I think from a general perspective, we are, um, there's not really any specific lines. I mean, you know, you have office and, you know, you have some categories that we're definitely more bearish in, but overall, it's really more about the relationship for us. So I'm not sure there's any segments that we truly shy away from per se. As far as the pipelines, the pipelines are actually quite strong. Feel really good about where we're at there, including the residential pipeline, which we expect some headwinds with increased rates. So, so far, so good from that perspective.

Charles Parcher

We do feel good about what we talked about with the amount of unfunded construction loans that are out there right now. It's built back up to $270 million on our balance sheet at quarter end. That's funds that will go out the door, some through the balance of the year. It'll be winter pretty soon, and the construction will slow down a little bit. It'll give us a nice jump start into the end of the first quarter, second quarter of next year.

Adam Kroll

Got it. I appreciate the color there. And maybe just one last one for me, follow up on expenses. You know, you've had another quarter of really strong cost controls. But I was just curious how you're thinking about expenses in 2027. If there's any significant investments within tech or talent additions planned within that?

Ian Whinnem

Yes, I think that's the plan. You know, we are looking at revenue generating investments. So whether that be colleagues, marketing, or in technology investments that drive revenue. So some of those do have a little bit of a period where it takes time to get to that break-even point. We do anticipate the continuation of those investments.

Adam Kroll

Got it. Thanks for taking my questions.

Operator

Thank you. Once again, should you have a question, please press star 4, then the 1 on your telephone keypad. Your next question comes from the line of Timothy Switzer from KBW. Please go ahead.

Timothy Switzer

Hey, good afternoon. Thanks for taking my questions and Chuck, congrats on the good first quarter.

Charles Parcher

Hey, thanks Tim.

Timothy Switzer

I had to follow up on the beta, deposit beta real quick. Can you repeat what that number was? I didn't hear it. And then was that for total deposits or just interest bearing?

Ian Whinnem

So that'd be just the interest bearing side of things. I think we're anticipating what will work out to be about a 50% beta. We're, you know, our playbook has both a lag as well as a beta assigned to it, so those get factored in.

Timothy Switzer

Okay, so it sounds like that beta kind of picks up over the course of the rate hike cycle, assuming you get several.

Ian Whinnem

Yes. Yes, we're, like, as I mentioned earlier, we're seeing, you know, good results and not a lot of pressure to raise our RAC rates or even exceptions right now. So we're staying positive with that. But as more rate increases come, whether it be later this year into next year, might do a little more pressure on that. But we, you know, we think our playbook is going to work, allowing us to keep that lag going.

Timothy Switzer

Okay, I guess that's kind of a reflection maybe of pretty rational deposit pricing in your markets right now?

Ian Whinnem

You know, there's some of that. We still see some irrational offers. There's a lot of fine print on them. And so our sales team is, you know, knowledgeable about that and teaching our customers about the fine print and the value of the relationship that Civista brings. A lot of those customers not necessarily move for a small change.

Charles Parcher

I'd love to say there was not any irrational competition out there, but it seems like every market's got one or two.

Timothy Switzer

Okay, yeah, make sense. And then the last one is, you know, any updated thoughts you guys have on participating in Bank M&A, just your level of interest generally, and then maybe what criteria you'd be looking for.

Charles Parcher

I don't think really, Tim, our criteria has changed much. You know, obviously, I'm talking to a lot of people and I think it'll be interesting to see what the sentiment is coming out the back side of the election because it seems like some people are starting to at least think about what the future of their banks are. But we don't have anything imminent right now, but we're continuing to have dialogue. And if it makes sense to us, you know, we're not going to, unless it was a massively strategic thing, we're not going to get outside of any parameters that would be considered, you know, any, anything really longer than 3 years or very diluted. We really want to protect our shareholders. But if we can do the right deals that are profitable for them with a short payback, you know, we'll consider them.

Timothy Switzer

Okay, great. Thank you.

Operator

Thank you. And your next question comes from the line of Tyler Cacciatori from Stephens. Please go ahead.

Tyler Cacciatori

Hey, good morning. This is Tyler from Apprise.

Charles Parcher

Enjoy, Tyler.

Tyler Cacciatori

Just starting on loan demands, with the higher rates, are you starting to see any impact on borrower activity or the pipeline? And then just on overall yields, can you talk a little bit about roll-on versus roll-off dynamics?

Unknown Speaker

Yes, I mean, we really haven't seen a whole lot of pullback so far, and I think we're expecting it. But so far, the pipelines continue to increase, and, you know, we feel good about the right now where things are going. So again, I remain bullish in that single digit growth.

Charles Parcher

That's very achievable. And I think Tyler, if we get a much more increase, I think some of the deals will become, you're going to have to see some pullback or you're going to have to put more equity in the deals. I mean, a couple of deals we've seen already that got a little tight, they've agreed to put more equity in to make the deals work, but obviously, you know, depending on where the Fed goes and where the long-term Treasury goes, that'll kind of affect that going forward.

Unknown Speaker

Great, so we're putting one in. Oh, great, I'm sorry. Right, so we're putting them on. We're in the mid to high 7s right now on a 5 year. I'm trying to hold that 275 tight margin and following the market. If anything, we might be coming down on duration a little bit.

Tyler Cacciatori

Just to remain competitive. Got it. That's helpful. And then just on the sub debt, I hear you on the impacts there, but any thoughts on redeeming that when it comes due in December? Or are you prioritizing buybacks and organic growth ahead of that?

Ian Whinnem

Yes, Ian. We've done our analysis, kind of looked at different scenarios. As of now, there's no plans to redeem the sub-debt nor even do a partial pay down of it. We just think that as, you know, even though the capital efficacy is declining on December 1st, still a good rate in terms of the borrowing side of it and for the amount of capital that we get from it. So we'll continue to evaluate that, but right now we think the best use for capital is either to have it there for organic growth or for some of that stock buyback.

Tyler Cacciatori

Got it. And then, sorry if I missed it. But, you know, how do more hikes affect the margin here?

Ian Whinnem

Yes, for each rate hike, we would anticipate 1 to 2 basis points per quarter, or with each hike, I should say, of expansion, yes. We may be in a slightly asset sensitive position.

Tyler Cacciatori

Thanks. That'll be it for me.

Charles Parcher

Thanks, Tyler.

Ian Whinnem

Thank you.

Charles Parcher

Thank you.

Operator

Thank you. And there are no further questions at this time. I will now hand the call back to Mr. Parcher for any closing remarks.

Charles Parcher

In closing, I'd like to thank everyone for joining me today for my first earnings call as the President, CEO, and for your investment in Civista. I remain confident that this quarter's list of accomplishments, strong financial results, and our disciplined approach to managing the company position us well for long-term future success. I look forward to talking to you again in a few months to share our year-end results. Thank you for your time today.

Operator

And this does conclude today's call. Thank you for participating. You may all disconnect.

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