Civista Bancshares (NASDAQ:CIVB) released first-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below.
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Summary
Civista Bancshares Inc reported a net income of $15 million for Q1 2026, a 47% increase compared to Q1 2025.
The company successfully completed the core system conversion of Farmer's Savings Bank, impacting net income by $400,000 in one-time expenses.
Net interest margin expanded to 3.85% with a strategic reduction in brokered deposits and an increase in core deposit funding.
Loan production was strong at $214 million despite significant payoffs, with a focus on maintaining a diversified loan portfolio.
The company announced a consistent quarterly dividend of $0.18 per share and renewed a $25 million stock repurchase program.
Non-interest income saw a decline from the linked quarter but increased compared to the prior year, driven by gains on loan sales and other income.
Operational highlights include a reduction in non-interest expense due to a commission accrual adjustment and an increase in compensation expenses.
Future outlook includes expectations of mid-single-digit loan and deposit growth for 2026, with a focus on maintaining a strong net interest margin.
Management is confident in their ability to manage costs and capitalize on market opportunities, particularly in Ohio and southeastern Indiana.
Full Transcript
OPERATOR
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 involve risks and uncertainties. Various factors could cause actual results to be materially different from any future results expressed or implied by such forward looking 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. This call will be recorded and made available on Civista Bancshares' website at www.civb.com. at the conclusion of Mr. Shaffer's remarks, he and the Civista management team will take any questions you may have now. I will turn the call over to Mr. Shaffer. Please go ahead.
Dennis Schaefer (President and CEO)
Good afternoon, this is Dennis Schaefer, President and CEO of Civista Bancshares and I would like to thank you for joining us for our first quarter 2026 earnings call. I'm joined today by Chuck Parcher, EVP of the company and President of the Bank Rich Dutton, SVP of the Company and Chief Operating Officer Ian Whittom, SVP of the Company and Chief Financial Officer and other members of our executive team. This morning we reported net income for the first quarter of $15 million or $0.72 per diluted share, which represents a $4.8 million or 47% increase over our first quarter of 2025 and a $2.7 million or 22% increase over our linked quarter. This also represented an increase in pre provision net revenue of $3.8 million, or 29% over our first quarter in 2025 and a $3.2 million or 3.8% increase over our linked quarter. Our first quarter highlights include the successful completion of the core system conversion of the Farmer's Savings bank that we acquired during the fourth quarter of 2025. As a result, our first quarter earnings include what should be the last expenses associated with the acquisition. These onetime expenses impacted our first quarter net income by approximately $400,000 or $0.02 for common share. For the quarter, core deposit funding increased organically by over $60 million. This allowed us to reduce brokered deposits by $25 million. This represents the sixth consecutive quarter in which we reduced brokered funding. Our net interest margin expanded by 16 basis points to 3.85% as we continued our disciplined approach to managing our asset pricing and funding costs. Our earning asset yield for the quarter increased by 5 basis points over our linked quarter to 5.66%. Our cost of funds was 1.96% for the quarter, down 35 basis points from the first quarter of 2025 and 12 basis points from the linked quarter, while our cost of deposits was 1.81%, down 19 basis points year over year and 11 basis points sequentially. Our decline in funding costs was largely attributable to $125 million in brokered CDs that matured in late December that carried a weighted average rate of 4.23%. We were able to replace and reduce These maturing brokerage CDs with $100 million in brokerage CDs with a weighted average rate of 3.87%, representing a savings of 36 basis points. In addition to reducing the amount of broker funding, net interest income for the quarter was $37.8 million, which represents an increase of $5.1 million, or 15%, compared to the first quarter of 2025 and an increase of $1.4 million, or 4% compared to our linked quarter. Despite loan balances being down, we had strong loan production across our footprint during the quarter that was offset by significant payoffs. Our lending teams generated $214 million of new loan production during the quarter that was offset by $83 million. In addition to normal principal pay down, our ROA for the quarter was 1.41%. Our ROE for the quarter improved to 10.97% and our tangible book value per share improved to $19.70. Our continued strong financial performance and ability to consistently create capital gives us options as we think about the best ways to to deploy our capital. Earlier this week we announced a quarterly dividend of $0.18 per share, which is consistent with our prior dividend and the renewal of our stock repurchase program authorizing management to repurchase up to $25 million in outstanding common shares during the quarter. Non interest income declined by $453,000, or 4.6%, from our linked quarter and increased $1.6 million, or 20% over the first quarter of 2025. The primary driver of the decline from our linked quarter was a $336,000 decline in card fees due to the typical elevated spending that comes during the holiday. The primary drivers of the increase in non interest income over the prior year for a $190,000 increase in service charges, a $1 million increase in net gains on loan and lease sales, and a $444,000 increase in other income related to reserves that have been established at our insurance subsidiary for claims that subsequently never materialize. Non interest expense declined by $1.1 million, or 3.6% from our linked quarter and decreased or increased $2.7 million, or 10% over the prior year. The decline from our linked quarter was the result of a commission accrual adjustment in the fourth quarter of 2025. Our actual commission expense was $1.4 million lower than what had been accrued and was adjusted in the fourth quarter. We are now adjusting all accruals at least quarterly. The primary driver of the increase in non interest expense over the prior year was a $2.2 million increase in compensation expense associated with increased salaries, commissions and medical expenses. In addition to annual increases, our average FTE employees increased from 520 in the first quarter of last year to 535 in the first quarter of 2026. Much of the increase in FTEs came from the employees that joined us through our recent farmers acquisition. We also had $400,000 in other expenses that we believe will be the last significant expenses related to the acquisition. Our efficiency ratio for the quarter improved to 60.1% compared to 64.9% for the prior year. First quarter our effective tax rate was 16.8% for the quarter. Turning our focus to the balance sheet. Strong loan production across our footprint was offset by significant payoffs during the quarter. Our lending teams generated $214 million of new loan production during the quarter. That was offset by $83 million in payoffs in addition to normal principal paydown. This compares to the prior year's first quarter when we originated $181 million in new we experienced $21 million in loan payoffs. We consider these good payoffs as they were successful real estate projects that were sold or taken to the permanent market. We also had a few loans to operating companies that were sold during the quarter and paid off their loans. Loan production grew with each month's production during the quarter from $49 million in January to $59 million in February to to $106 million in large during the quarter. New and renewed commercial loans were originated at an average rate of 6.52% and leases were originated at an average rate of 9.03%. Additionally, our undrawn construction lines were $175 million at quarter end compared to $161 million at year end. We ended the quarter with a loan to deposit ratio of 92%. Loans secured by office buildings make up only 4.7% 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 central business districts. We also have very little exposure to non deposit financial institutions. As a commercial real estate lending bank, we are mindful of our non owner occupied CRE concentration and continue to diversify our loan portfolio. At 3-31-2026, our CRE to risk based capital ratio was 261%. While we experienced a reduction in total loans during the quarter, loan demand remains solid in each of our markets and our pipelines continue to grow. At 3-31-2026, our residential mortgage loan pipeline was up 25% and our commercial loan pipeline was up 102% over the prior year. We anticipate growing the loan portfolio at a mid single digit rate over the balance of the year. On the funding side, total deposits increased $35.4 million or an annualized growth rate of 4%. However, if we back out the broker deposits, our core deposit balances grew by $60.4 million or 8% for the quarter. This represents six of the last seven quarters in which we have grown our core deposit balances while reducing our cost of funds. Much of this growth came in interest bearing demand accounts and in our savings and money market accounts. This increase in lower rate deposits combined with our continued shift from broker deposits to more deposit funding Contributed to an 11 basis point decline in our cost of deposits from the linked quarter. Our deposit base remains fairly granular with our average deposit account excluding CDs approximately $28,000. Other than the $523 million of public funds which are primarily operating accounts with various municipalities across our footprint, we had no deposit concentrations at quarter ed. Our commercial bankers, treasury management officers, private bankers and retail staff continue to have success gathering additional deposits from our commercial, small business and retail customers. As evidenced by our organic deposit growth. We believe our low cost deposit franchise continues to be one of civista's most valuable characteristics contributing 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 $682 billion which represents 16% of our balance sheet and when combined with our cash balances represents 22% of our total deposit. Our securities are classified as available for sale and had $49 million or approximately 7% of unrealized losses associated with them. Divista's Strong Earnings Continue to Create Capital Our overall goal remains to maintain our capital at a level that supports organic growth and allows for prudent investment into our company. Earlier this week we announced an 18 cent per share dividend based on the quarter end market close of $22.79. This represents an annualized yield of 3.16% and a payout ratio of 25%. We view this as a sign of confidence management and our board of Directors have in Civista's ability to continue generating strong earnings. Additionally, Civista's Board of Directors increased and renewed a $25 million common share repurchase authorization earlier this week. While we have not repurchased any shares over the past several quarters, our regulatory capital and tangible common equity ratios are strong and continue to grow. We continue to believe our stock is at value and will continue to evaluate repurchase opportunities. During the quarter we made a $768,000 credit to our provision and had net charge offs of $716,000. The credit to our provision was attributable to lower expected losses due to lower outstanding loans and our continued strong credit metrics. Our ratio of the allowance for credit losses to total loans is 1.26% at March 31, 2026, which is consistent with the 1.28% at December 31, 2025. Similarly, our ratio of allowance to non performing loans of 135% was virtually unchanged when comparing the same period. Other than the general concern over the impact of macroeconomic uncertainties, the economy across Ohio and southeastern Indiana is showing no sign of deterioration and our credit quality remains strong. In summary, we are very pleased with the continued expansion in our net interest margin, our ability to generate non interest income from diversified revenue streams and to control our non interest expense. We are also very pleased with our team's success in attracting more lower cost funding which allowed us to continue reducing our dependency on brokered funding and anticipate mid single digit deposit and and loan growth for the balance of 2026. Overall, 2026 is off to a good start and our focus continues to be on creating shareholder value. Thank you for your attention this afternoon and in 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. Should you have a question, please press star followed by the number one. On your touchstone phone you will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you're using a speakerphone, please lift the headset before pressing any keys. Our first question comes from the line of Brendan Nossel from Hobdigroup. Your line is now open.
Brendan Nossel (Equity Analyst at Hobdigroup)
Hey, good afternoon guys. Hope you're doing well. Maybe just starting off here on the loan growth outlook. Totally get the moving pieces this quarter. I mean it sounds like origination activity is quite strong with the payoffs for a significant headwind for this quarter. I guess just as you look ahead, what gives you confidence that payoff levels will decline such that you can get back to that mid single digit pace of growth?
Chuck Parcher (EVP and President of the Bank)
You know we watch those closely. This is Chuck. We watch those closely. You know we've got a couple other large ones we know that we're going to look at here in the second quarter, but we still think we're going to see some growth in the second quarter and we feel like that mid single digit outlook is pretty good. Looking forward, I've got confidence and you know, as Dennis mentioned in his comments, our pipeline today is twice as large as it was the pipeline at the same time last year. And you know, we just got to get those to the closing table and our, you know, just based on the production we had in the first quarter as Dennis also alluded to, you know, our undrawn construction funds are 14 million higher at the end of this quarter than they were at the end of the year. So we feel good about you know, kind of cascading out that mid single
Dennis Schaefer (President and CEO)
digits and then first quarter typically is slower for us too Brendan, just you know, because we do some, you know, construction type commercial construction loans and stuff. And as Chuck alluded to, I think we put on a lot of balances there towards the end of the first quarter and some of those were construction projects that we think those funds will draw up.
Brendan Nossel (Equity Analyst at Hobdigroup)
Okay, okay, thanks for the color there. Maybe pivoting to the net interest marginal out of margin expansion this quarter. Certainly more than I was expecting. Just as we look ahead, you know, if we're in an environment where we, we don't get any more Fed rate cuts this year, how do you see the margin trending from this quarter's 385 level?
Ian Whittom (SVP and Chief Financial Officer)
Hey Brendan, this is Ian. So second quarter we expect flat to maybe a little bit of expansion 1 to 2 basis points and then likely putting that in the mid to upper 380s and then leveling out into high 380s in Q3 and beyond. That's with no rate cuts being planned. If there is a rate cut we expect that to be maybe 1 to 2 basis points lower if there's a rate increase at the end of the year because we want two basis points higher. And Brendan, we do have about $60 million of loans repricing in the second quarter and I think about 140 after that for the remainder of the year. So a couple hundred million dollars of loans will reprice from the 475 range to if they reprice today, the sixes.
Brendan Nossel (Equity Analyst at Hobdigroup)
Okay. Okay, that's very helpful. Color. Thank you for taking my questions.
OPERATOR
Our next question comes from the line of Jeff Dulis from DA Davidson. Your line is now open.
Jeff Dulis (Equity Analyst at DA Davidson)
Thanks. Good afternoon. Late last year we had discussions at kind of the bank putting up 75 cents in quarterly earnings towards the end of 26, implying a $3 annual run rate. Kind of seems like you pulled that forward nine to 12 months. You're basically at that at the core level. I guess as you think about where you reorient with kind of the outlook from here, not to put you on the spot of earnings, but I guess how do you met that opportunity with also as you talked about the buyback,
Dennis Schaefer (President and CEO)
I would say Jeff, you know the part of the earnings lift this time was that provision we didn't have to fund any loan growth that's going to cost us a couple of cents every quarter on top of the couple of cents reduction that we got this quarter. So from a normalized basis that 72 is probably more in the mid-60s. So not quite into that run rate of $0.75 yet. But we do still anticipate getting there towards the end of this year, maybe the first quarter next year.
Jeff Dulis (Equity Analyst at DA Davidson)
Got it. Appreciate that. And then I guess on the on the expense run rate, I think we talked previously that as merit increases kind of kick in in the second quarter offset by maybe some the conversions complete. So just trying to walk through the quarterly progression, you see sort of flat link quarter on a core basis and then maybe inch to a little some savings or how do you see the outlook on run rate?
Ian Whittom (SVP and Chief Financial Officer)
So excluding the non recurring Items we're at 29,400 for the first quarter. So that would include some of the, I'll call them duplicative operating expenses pre conversion of having two cores and some staff that's no longer with Civista So we've also done reinvestment back into the company by hiring some revenue generating colleagues, some marketing spend and some tech improvements. So with that we're anticipating second quarter being 29.5 to 30 and then probably a little bit of an expansion maybe to 30, 30.7 in the third quarter and fourth quarter. But we have merit increases that took effect in the took effect April 1st. So that's in those expense numbers of the.
Jeff Dulis (Equity Analyst at DA Davidson)
Okay. And so any sort of cost saves kind of offset by investment, kind of getting to that run rate that you outlined?
Ian Whittom (SVP and Chief Financial Officer)
That's correct, yeah. It's helping to fund some of those cost or cost investments or spend investments that were mentioned.
Jeff Dulis (Equity Analyst at DA Davidson)
Perfect. Okay, thank you. I'll step back.
OPERATOR
Your next question comes from the line of Adam Kroll from Piper Sandler. Your line is now open.
Adam Kroll (Equity Analyst at Piper Sandler)
Hey guys, good afternoon and thanks for taking my questions. Yeah, maybe just starting on deposits, some, some really impressive core deposit growth during the quarter. And just given some of the recent investments you made on the tax side, I was just curious how large of a contributor was the digital channel to that growth and maybe just overall prospects within that segment?
Chuck Parcher (EVP and President of the Bank)
Well, we think it's helping some. You know, most of our investments are aimed at making it easier to do business with us. So it is helping some. You know, we have all, you know, set up to do online account opening now with our digital apps and stuff. So we are, you know, we are getting that. The bigger thing that's helping us in some of the deposit growth, at least to the organic stuff, is, is just some of the recent disruption within our marketplace. Ohio's had quite a bit of disruption and we think by one, the investments we made into the technology and making it easier to do business with us and then just that disruption. We think we're very well positioned, I think to attract new clients to the bank and to expand existing relationships. So our teams are doing a fantastic job with their calling efforts. We're being really collaborative and we're going to market as a team and I think through their efforts and just making it easier to do business with us and that disruption, that's the reason behind a lot of that deposit growth.
Adam Kroll (Equity Analyst at Piper Sandler)
Got it. Yeah, I really appreciate the color there. Thinking on the funding side, you know, deposit costs came down quite nicely during the quarter. I was just curious, are you still seeing opportunities to reduce funding costs on both the maturity and non maturity side if the Fed were to remain on hold? Yeah.
Ian Whittom (SVP and Chief Financial Officer)
So right now if the rates stay flat on the CDs that are maturing, we're we're renewing those or picking up new CDS at about the same. Same with those brokers. We're not going to see that significant increase that we saw from the Q4 maturities into Q1. So though we have some wiggle room on top of our non maturities for the most part, I think most of that's passed and we'll be staying about the same.
Adam Kroll (Equity Analyst at Piper Sandler)
Got it. And last one for me, Ian, I was wondering if you had the purchase accounting accretion number for the quarter.
Ian Whittom (SVP and Chief Financial Officer)
I will have to follow up with you on that.
Adam Kroll (Equity Analyst at Piper Sandler)
Okay, perfect. And thanks for taking my questions.
OPERATOR
Your next question comes from the line of Tim Switzer from kbw. Your line is now open.
Tim Switzer (Equity Analyst at KBW)
Hey, good afternoon. Thanks for taking my question. Well, first off, congrats on the retirement announcement, Dennis, and for Chuck on becoming CEO on exciting news.
Chuck Parcher (EVP and President of the Bank)
Thank you. Thank you.
Tim Switzer (Equity Analyst at KBW)
Most of my questions have been asked already but the first one I have is on deposit competition. There's been some chatter about it picking up a little bit. Can you talk about what you guys have seen, your markets and if there's any specific geographies or deposit categories where it's been a little bit more intense,
Chuck Parcher (EVP and President of the Bank)
I would tell you. Tim, this is Chuck. I think it's almost equally intense across almost all of our, at least our major metro markets. You know, obviously there's the most banked of all the cities is Columbus. So we're probably seeing a little bit more pressure there from the rate side. But you know, we've held our own pretty well as you can tell by the deposit growth that we've had. And we feel like we're, we're priced properly to continue to retain our clients and grow at that, you know, that mid single digit pace. So it is very competitive. We're still seeing some banks, you know, with some four handles and we're kind of in the high threes right now, but we feel good about where we're positioning. Yeah, we're really just focused on, you know, relationships, growing relationships and you know, providing value and providing solutions for our clients. And again, I think, you know, attacking the market from a team perspective by, you know, bringing different business lines in to meet a lot of our business customers. I think, you know, it's been working for us and that's really going to be our focus. And with that disruption, I think it gives us opportunity there.
Dennis Schaefer (President and CEO)
Yeah. To Dennis's point that the disruption, some of the bigger players in our market, Huntington's Fifth Thirds, Parks, First Financials are all working on acquisitions, not just in Ohio, but, you know, in other regions I feel like their eyes off the ball a little bit on Ohio. Our biggest competition is coming from, you know, really some of the smaller institutions from a rate perspective, not from a, I guess, competitive perspective, but from a rate perspective.
Tim Switzer (Equity Analyst at KBW)
Very, very helpful. And then the last question I had was in terms of credit, any areas that have, you know, caused you guys to want to pull back at all or any levels of concern and do you have exposure to any end market that could maybe be exposed by the higher oil prices?
Mike
Go ahead, Mike. This is Mike. No, we don't. We're not seeing anything it's market specific or industry specific right now that's causing us any concerns, especially to pull back on any areas.
Tim Switzer (Equity Analyst at KBW)
Great. Good to hear. Thank you guys.
OPERATOR
Thank you.
Jim
Thanks, Jim.
OPERATOR
Your next question comes from the line of Matthew Brees from Stephens. Your line is now open.
Matthew Brees (Equity Analyst at Stephens)
Hey, good afternoon.
Dennis Schaefer (President and CEO)
Good to have you, man.
Matthew Brees (Equity Analyst at Stephens)
I wanted to just touch on the NIM a little bit. You know, I know you didn't have a critical yield at your fingertips, but maybe you could help me out. To what extent did prepayment fees play a role this quarter in loan yields in the nim? Was that a factor and is that a factor in kind of your more stable guide in the back half of the year?
Ian Whittom (SVP and Chief Financial Officer)
Now the payoffs really didn't impact the NIM that way. We got a little, little bit of fee income on those of just breakage fees, but nothing in the nim. And we, as Dennis had mentioned earlier, we have a lot of loans that are just going to be repricing in the remainder of the year. So they're going to be moving from these mid fours into the low sixes. So that's the stuff that we saw come across in first quarter and we'll continue to see for the remainder of the year. Just some NIM lifts coming from that. Yeah, the biggest NIM lift again was the repricing of that brokerage CD and the reduction of it. So we reduced to 25 million. Then we repriced 100 million and picked up 36 basis points that contributed to more. And then on the fee income side, it was just really, you know, most of those fees were generated by our residential mortgage teams and our leasing group who both had much better production and results than we had a year ago. So, you know, that's where a lot of the fees came from.
Matthew Brees (Equity Analyst at Stephens)
Understood. You had mentioned just some of the fixed asset repricing. So outside of loans that are pure floating, you know, priced off of prime or sofr. What is kind of the cash flow schedule and maturity schedule for fixed rate and adjustable rate loans for the rest of the year and new origination yields I'm assuming are kind of in the mid to high sixes. Is that accurate there?
Ian Whittom (SVP and Chief Financial Officer)
That's correct. On what's, you know, the repricing. We're, you know, we're somewhere in that six and a half percent range as far as new loans going on and you know things that would adjust, most of them are, you know the real estate loans are written on five year adjustables and you know the average margin on Those are probably 275 over a five year treasury or so. So which will take us, you know, a little bit, you know, maybe six, five, six, six today. And we're looking for your. What was your other question?
Matthew Brees (Equity Analyst at Stephens)
Just for loans that are either fixed rate or adjustable kind of quarterly maturities or quarterly cash flows. You had mentioned that the, you know, what's maturing is going from a four handle to a six handle. I just want to get some sense for how much is going to mature this year.
Rich Dutton (SVP and Chief Operating Officer)
I would tell you over the next, over the next 12 months we got a little over 200 million. Yeah, 60 million of that. This is rich. 60 million of that will happen in the next quarter in Q2, the balance of it's the rest of the year.
Matthew Brees (Equity Analyst at Stephens)
And then you'd mentioned brokered being, you know, the big area of deposit cost pickup. How much of that is maturing over. Over the next three quarters and what are the rates or what is the, you know, estimated rate on the stuff that's maturing?
Ian Whittom (SVP and Chief Financial Officer)
Yeah, so we had some that matured in April or is maturing this month. That was, that was at 370 repricing a little bit under 4. Then we have about another 125 maturing still this quarter outside of April, that's in that 380 range and then a little bit in September. We've stayed relatively short on all of that. So you know it's going to reprice pretty close to where it's at today, maybe a little bit higher. But again our plan is to continue to gather deposits and reduce brokered to help offset some of that too.
Matthew Brees (Equity Analyst at Stephens)
Got it. Okay. Last one for me is just on you know, resi production that you keep for yourselves and put on the balance sheet versus pursue the secondary market and gain on sale. What is kind of the breakdown of that and did it shift more towards gain on sale this quarter? Just seasonality wise I would expect gain on sale to be down this quarter. But you were up modestly. I'm just curious how that breakdown was.
Ian Whittom (SVP and Chief Financial Officer)
Our breakdown by number is usually or has been here for the last couple quarters is about 60% sold, 40% portfolio. I would tell you that from a balance perspective, that probably runs close to 50, 50, just because the stuff that we have to hold on the balance sheet is usually some of our private banking, what I call physician loans, and some of the higher balance things, higher balance construction. So, you know, dollar volume, 50, 50 numbers, 60, 40. And we feel like it's going to probably continue to trend that way. You know, if we get any kind of blip downward in interest rates, we'll see a little bit more refinance action. And that refinance action is normally much more 80, 20 ish. That would be sold versus held. But that's kind of the run rate we've had here over the last couple quarters.
Matthew Brees (Equity Analyst at Stephens)
All right, I'll leave it there. Thank you for taking my questions.
OPERATOR
Thanks, Pat.
Adam Kroll (Equity Analyst at Piper Sandler)
Your next question comes from the line of Adam Kroll from Piper Sandler. Your line is now open. Hey guys, just to follow up for me, you know, it's a pretty strong start to the year on the core fee income side and I know leasing can kind of jump around, but I'm just curious how you're thinking about core fee income growth for the remainder of the year.
Ian Whittom (SVP and Chief Financial Officer)
Yeah, so for the non interest income. So as you mentioned, strong first quarter, had a good recovery on the mortgage and CLF when compared to this time last year. We did have a captive reinsurance reserve release that occurred in the first quarter. So that would be non recurring and only a small amount of security gains. So when we adjust for the seasonality of gain on sale, thinking that Q2 comes in between 9.1 and 9.5 and then maybe increasing another quarter million in the third quarter just due to seasonality on gain on sale.
Adam Kroll (Equity Analyst at Piper Sandler)
Okay, got it. Thanks for taking my questions.
OPERATOR
Your next question comes from the line of Daniel Cardenas from Brayan Capital. Your line is now open.
Daniel Cardenas (Equity Analyst at Brayan Capital)
Good afternoon, guys. Just a quick question. Given the market disruption that we've seen in Ohio, what kind of opportunities is that presenting for you on the talent addition side?
Chuck Parcher (EVP and President of the Bank)
It's been really good for us, to be honest with you, Dan. we've had a lot of not moving as far as lenders moving out, but we've reassigned some people, people got promoted, et cetera. And we've done a really good job of picking up talent from those institutions that have had some MA activities with them. The one we still benefit from even today, even though it's probably the farthest one away, is the whole West Banco Premier piece. We continue to get some talent from that area. It's probably the one that we've probably got the most talent from in our entire organization. But it's been good. And you know, everybody sitting around our table right now is continuing to get calls from some of those institutions to see if they've got. If we've got opportunities here. Probably our most recent acquisition came from the Westfield deal that got sold. Our new treasurer just came over and started a month ago, you know, from their institution. So it's been really good for us to be able to upgrade talent.
Dennis Schaefer (President and CEO)
Excellent. And then I know you just completed the FSB deal, but, you know, as you look at, you know, future acquisitions, I mean, geographically, where do you see yourself, you know, targeting? You want to take it or you want me to? I mean, you know, I think we're going to be very similar. Our thoughts are still very similar to what they always have been. You know, Ohio and adjoining states is probably as far as we would look right now. And obviously if it's a fill in, it would be a little bit more preferable than to an add on in some of those locations. But I think that we're not going to jump to Tennessee or to South Carolina or whatever. We're going to kind of stick to our knitting and stay within our marketplace right now. Ohio, in the adjoining states. And I would just say, Dan, that our first priority really is, is on organic initiatives that create sustainable value for the company. We made, as I mentioned, those, you know, we made a lot of, you know, investments in technology that makes it easier to do business with us. And with all that disruption, we think we're really well positioned to attract new clients and deepen those relationships. You know, we continue to maintain pretty good dialogue with Liza Banks within our footprint here. But, you know, anything we would do, I think would need to create great strategic value for us and be financially compelling. But the first, you know, our main focus really right now is on building capacity from within and prioritizing just some of that organic development.
Daniel Cardenas (Equity Analyst at Brayan Capital)
Great. Appreciate that. Thank you.
OPERATOR
There are no further questions at this time. I will now turn the call over to Mr. Shaffer. Please continue.
Dennis Schaefer (President and CEO)
Okay. Well, in closing, I just want to thank everyone for their investment in Civista and for joining today's call. Our first quarter results, I think we're due in large parts of the hard work and discipline of our team. I'M very pleased with this quarter's accomplishments, our strong financial results, and just the disciplined approach that we have here in managing Civista. And I remain very confident that we are well positioned for long term future success. So I look forward to talking to you all again in a few months to share our second quarter results. Thank you for your time today.
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