TSX runs higher on rate cut expectations
On Friday, Stephens analysts increased the price target on Civista Bancshares (NASDAQ:CIVB) to $25 from $24, while keeping an Equal Weight rating on the stock. Currently trading at $20.85, with a market capitalization of $323 million, the stock has shown strong momentum with a 43% return over the past year according to InvestingPro data. The revision follows Civista’s notable performance in the last quarter, with a quarter-over-quarter expansion in the net interest margin (NIM) by 15 basis points, attributed to the value of the bank’s deposit base, a 9 basis point improvement in loan yield, and a reduction in wholesale funding costs. The bank maintains a healthy dividend yield of 3.26% and has raised its dividend for 14 consecutive years, as highlighted in InvestingPro’s analysis.
The bank’s net interest income (NII) exceeded both Stephens’ and the consensus estimates by 5.7%. This performance, coupled with a lower run-rate of operating expenses, has led to an approximate 21% increase in Stephens’ 2025 earnings per share (EPS) estimate for Civista.
Despite the positive pre-provision net revenue (PPNR) performance last quarter and higher EPS estimates, Civista’s shares did not perform as well as those of its peers following the earnings announcement. Trading at an attractive P/E ratio of 9.2x and price-to-book ratio of 0.81, the stock appears undervalued based on InvestingPro’s comprehensive analysis, which includes over 30 financial metrics and detailed valuation models available to subscribers. This underperformance may be linked to the company’s relatively low tangible common equity (TCE) ratio, which stood at 6.6%, and higher levels of non-performing assets (NPAs).
Stephens analysts forecast that the TCE ratio will reach the management’s target range of 7.0%-7.5% by the end of 2025. Additionally, NPAs are expected to decline in the second quarter of 2025, reflecting the resolution of two larger credits in the multifamily and commercial & industrial (C&I) sectors.
The firm maintains its Equal Weight rating on Civista Bancshares and has set the new price target at $25, up from the previous target of $24, based on the bank’s recent financial outcomes and forward-looking expectations. For deeper insights into Civista’s financial health, which currently scores "GOOD" on InvestingPro’s comprehensive assessment framework, investors can access the full Pro Research Report, offering detailed analysis of the bank’s performance metrics, peer comparisons, and growth prospects.
In other recent news, Civista Bancshares reported impressive financial results for the first quarter of 2025, exceeding analysts’ expectations. The company achieved an earnings per share (EPS) of $0.66, surpassing the forecasted $0.51 by 29.4%. Revenue also slightly exceeded projections, reaching $40.63 million compared to the anticipated $40.33 million. Civista Bancshares demonstrated a strong net income increase to $10.2 million, marking a 60% rise from the same period last year. The firm also saw a 47% rise in pre-provision net revenue, attributed to a 4.5% quarter-over-quarter increase in net interest income. Analysts from Piper Sandler noted Civista’s success in reducing funding costs, which contributed to margin expansion. Additionally, Civista Bancshares is set to launch a digital online account opening software in July, signaling a focus on technological advancements. The company anticipates mid-single-digit loan growth for 2025, with further net interest margin expansion expected in the coming quarters.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.