EX-99.1 2 c03714exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
Press Release
For Immediate Release
         
 
  Contact:   Christopher D. Myers
President and CEO
(909) 980-4030
CVB Financial Corp. Reports Record Second Quarter
Earnings for 2010
  •   Net income of $19.0 million for the second quarter of 2010
  •   Diluted earnings per common share $0.18
  •   Completed FDIC and Department of Financial Institutions Safety and Soundness Examination
  •   Sold $162.8 million in securities and achieved a gain of $8.8 million
  •   Prepaid $100 million of our $250 million in repurchase agreement debt and took a one-time charge of $5.7 million
  •   Allowance for credit losses increased to 3.38% of total CBB non-covered loans & leases
Ontario, CA, July 21, 2010-CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (“the Company”), announced record earnings for the second quarter of 2010.
CVB Financial Corp. reported net income of $19.0 million for the second quarter of 2010. This is the highest second quarter earnings in the history of the Company. This represents an increase of $3.1 million, or 19.88%, when compared with net income of $15.9 million for the second quarter of 2009. Diluted earnings per share were $0.18 for the second quarter of 2010. This was up $0.01, or 7.38%, from diluted earnings per share of $0.17 for the same period last year. Second quarter operating results include an $11.0 million provision for credit losses, an $8.8 million gain on sale of securities, and a $5.7 million charge for the prepayment of borrowings.
Net income for the second quarter of 2010 produced a return on beginning equity of 11.68%, a return on average equity of 11.44% and a return on average assets of 1.11%. The efficiency ratio, excluding the provision for credit losses, was 52.05% for the quarter. Operating expenses as a percentage of average assets were 2.42%.

 

 

 

Net income for the six months ending June 30, 2010 was $35.1 million. This represents an increase of $6.1 million, or 21.03%, when compared with net income of $29.0 million for the same period of 2009. Diluted earnings per share for the six months ending June 30, 2010 were $0.33, an increase of $0.03, or 9.90%, over diluted earnings per share of $0.30 for the same period last year. The operating results for the first six months of 2010 include a provision for credit losses of $23.2 million. Net income for the six months ending June 30, 2010 produced a return on beginning equity of 11.10%, a return on average equity of 10.77% and a return on average assets of 1.03%.
The operating results for the second quarter and first six months of 2010 were impacted by the accounting treatment of credit-related transactions from the San Joaquin Bank (“SJB”) loan portfolio as discussed below.
Interest income on loans for the second quarter of 2010 totaled $59.2 million, which includes a $4.5 million discount accretion on covered loans acquired from SJB. This amount represents the discount recognized from accelerated principal payments on SJB loans. It is recorded as a yield adjustment in interest income. Excluding the discount accretion, interest income on loans would have been $54.7 million for the second quarter of 2010. This represents an increase of $4.9 million when compared to interest income on loans of $49.8 million for the same period last year.
The yield adjustment to interest income of $4.5 million for the second quarter of 2010 was partially offset by a $1.6 million reduction in the FDIC loss sharing asset and a loss on sale of covered OREO of $1.1 million. Both the reduction in the FDIC loss sharing asset and the loss on sale of covered OREO appear as a reduction of other operating income.
Interest income on loans for the first six months of 2010 totaled $126.9 million, which includes a $17.9 million discount accretion on covered loans acquired from SJB. This amount represents the discount recognized from accelerated principal payments on SJB loans. It is recorded as a yield adjustment in interest income. Excluding the discount accretion, interest income on loans would have been $109.1 million for the first six months of 2010. This represents an increase of $9.8 million when compared to interest income on loans of $99.3 million for the same period last year.
The yield adjustment to interest income of $17.9 million for the first six months of 2010 was partially offset by a $12.2 million reduction in the FDIC loss sharing asset and a loss on sale of covered OREO of $1.1 million. Both the reduction in the FDIC loss sharing asset and the loss on sale of covered OREO appear as a reduction of other operating income.
Net Interest Income and Net Interest Margin
Net interest income, before the provision for credit losses, totaled $64.2 million for the three months ending June 30, 2010. Excluding the SJB yield adjustments; this was the highest quarterly net interest income in the history of the Company. Net interest income for the second quarter 2010 increased $10.1 million, or 18.71%, compared to the same period in 2009. This is attributed to a $4.5 million increase in interest income and a $5.6 million decrease in interest expense. The increase in interest income includes a $4.5 million yield adjustment to covered loans. The decrease in interest expense was primarily due to the decrease in average borrowed funds of $383.4 million.

 

- 2 -

 

Excluding the impact of the yield adjustment to covered loans, net interest margin (tax equivalent) increased from 3.76% for the second quarter of 2009 to 3.99% for the second quarter of 2010. Total average earning asset yields decreased from 5.17% for the second quarter of 2009 to 5.01% for the second quarter of 2010. The cost of funds decreased from 1.98% for the second quarter of 2009 to 1.41% for the second quarter of 2010.
Net interest income, before the provision for credit losses, totaled $137.6 million for the six months ending June 30, 2010. This represents an increase of $28.2 million, or 25.75%, compared to the same period in 2009. The increase resulted from a $16.1 million increase in interest income and a $12.1 million decrease in interest expense. The increase in interest income includes a $17.9 million yield adjustment to covered loans. This was partially offset by decreases in interest income on investments due to a decrease in average investments. Conversely, our net interest income was augmented by a decrease in interest expense on borrowings due to a decrease in borrowed funds.
Excluding the impact of the yield adjustment to covered loans, net interest margin (tax equivalent) increased from 3.75% for the first six months of 2009 to 3.98% for the first six months of 2010. Total average earning asset yields decreased from 5.22% for the first six months of 2009 to 5.02% for the first six months of 2010. The cost of funds decreased from 2.03% for the first six months of 2009 to 1.46% for the first six months of 2010.
Assets
The Company reported total assets of $6.86 billion at June 30, 2010. This represents an increase of $120.6 million, or 1.79%, over total assets of $6.74 billion at December 31, 2009. Earning assets totaling $5.97 billion decreased $210.4 million, or 3.40%, when compared with earning assets of $6.18 billion at December 31, 2009. The decrease in earning assets was due to a decrease in both our loan and investment portfolios. Total loans and leases of $3.93 billion at June 30, 2010 decreased $149.7 million, or 3.67%, from $4.08 billion at December 31, 2009. We continue to see soft loan demand in our market areas as a result of the weaknesses in the state and local economies.
Investment Securities
Investment securities totaled $2.01 billion at June 30, 2010. This represents a decrease of $97.6 million, or 4.62%, when compared with $2.11 billion in investment securities at December 31, 2009. During the second quarter of 2010, we sold $162.8 million of investment securities and recognized a gain on sale of $8.8 million.

 

- 3 -

 

Our investment portfolio continues to perform well. As of June 30, 2010 we had a net unrealized gain of $42.9 million. We have no preferred stock and no trust preferred securities. Virtually all of our mortgage-backed securities are issued by Freddie Mac or Fannie Mae, which have the guarantee of the U.S. Government. Our private-label mortgage-backed issues of approximately $26.0 million are fully performing. Our municipal securities, totaling $653.7 million, are located throughout the United States, with approximately $42.0 million, or 6.4%, located within the state of California. All municipal bond securities are also performing.
Deposits & Customer Repurchase Agreements
Total deposits and customer repurchase agreements were $5.20 billion at June 30, 2010. This represents an increase of $273.4 million, or 5.55%, when compared with total deposits and customer repurchase agreements of $4.92 billion at December 31, 2009. Our cost of total deposits and customer repurchase agreements was 0.47% for the three months ending June 30, 2010, compared to our cost of total deposits and customer repurchase agreements of 0.71% for the same period last year. Our cost of total deposits was 0.43% for the three months ending June 30, 2010.
Borrowings
At June 30, 2010, we had $805.9 million in borrowings. This represents a decrease of $199.7 million, or 19.86%, from borrowings of $1.01 billion at December 31, 2009 and a decrease of $408.1 million, or 33.62%, from borrowings of $1.21 billion at June 30, 2009. During the second quarter of 2010, we prepaid $100.0 million of a $250.0 million structured repurchase agreement with an interest rate of 4.95%. This transaction resulted in a $5.7 million prepayment charge recorded in other operating expense. As a result of the increase in deposits and customer repurchase agreements, we continue to reduce our reliance on borrowed funds.
Asset Quality
We completed our annual FDIC and Department of Financial Institutions Safety and Soundness Examination during May 2010.
We have separated the discussion of asset quality into two sections: non-covered loans and covered loans. The non-covered loans represent the legacy Citizens Business Bank loans and exclude all loans acquired in the SJB acquisition. The SJB loans are “covered” loans as defined in the loss sharing agreement with the FDIC. These loans have been marked to fair value and also have a guarantee by the FDIC. The allowance for credit losses as of June 30, 2010 pertains only to those loans made by Citizens Business Bank and not those acquired through the San Joaquin Bank transaction.
Citizens Business Bank Asset Quality (non-covered loans)
The allowance for credit losses increased from $108.9 million as of December 31, 2009 to $118.5 million as of June 30, 2010. The increase was primarily due to a provision for credit losses of $23.2 million during the first six months of 2010, offset by net loan charge-offs of $13.6 million. By comparison, for the first six months of 2009, the Company had a $42.0 million provision for credit losses and net charge-offs of $21.2 million. The allowance for credit losses was 3.38% and 2.07% of total loans and leases outstanding as of June 30, 2010 and 2009, respectively.

 

- 4 -

 

We had $82.9 million in non-performing loans at June 30, 2010, or 2.36% of total non-covered loans. This compares to non-performing loans of $69.8 million at December 31, 2009. The non-performing loans consist of $2.8 million in residential construction and land loans, $39.1 million in commercial construction loans, $12.7 million in single-family mortgage loans, $20.7 million in commercial real estate loans, $7.5 million in commercial loans and $143,000 in consumer loans.
At June 30, 2010, we had $15.0 million in Other Real Estate Owned (“OREO”), down from $15.2 million at March 31, 2010 and an increase of $11.1 million from OREO of $3.9 million at December 31, 2009. At December 31, 2009, we had two OREO properties. During the first six months of 2010, we added five properties for a total of $12.6 million to OREO. We sold three properties with an OREO value of $1.5 million for cash proceeds of $1.7 million. We now have four OREO properties.
At June 30, 2010, we had loans delinquent 30 to 89 days of $14.4 million. This compares to delinquent loans of $17.9 million at March 31, 2010 and $10.5 million at December 31, 2009. As a percentage of total loans, delinquencies, excluding non-accruals, were 0.41% at June 30, 2010, 0.51% at March 31, 2010 and 0.29% at December 31, 2009.
San Joaquin Bank Asset Quality (covered loans)
At June 30, 2010 we had $583.8 million in gross loans from SJB with a carrying value of $424.4 million. Of the gross loans, we have $191.1 million in loans delinquent greater than 30 days. These loans represent 32.73% of gross covered loans. We have four properties in OREO totaling $5.1 million.
CitizensTrust
CitizensTrust has approximately $2.0 billion in assets under administration, including $1.1 billion in assets under management, as of June 30, 2010. This compares with $1.9 billion in assets under administration, including $1.0 billion in assets under management, at December 31, 2009. CitizensTrust provides trust, investment and brokerage related services, as well as financial, estate and business succession planning.
Corporate Overview
CVB Financial Corp. is the holding company for Citizens Business Bank, a financial services company based in Ontario, California. Citizens Business Bank serves 42 cities with 44 business financial centers and 6 commercial banking centers in the Inland Empire, Los Angeles County, Orange County and the Central Valley areas of California.
Shares of CVB Financial Corp. common stock are listed on the NASDAQ under the ticker symbol of CVBF. For investor information on CVB Financial Corp., visit our Citizens Business Bank website at www.cbbank.com and click on the CVB Investor tab.

 

- 5 -

 

Safe Harbor
Certain matters set forth herein (including the exhibits hereto) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company’s current business plan and expectations regarding future operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, local, regional, national and international economic conditions and events and the impact they may have on us and our customers; ability to attract deposits and other sources of liquidity; oversupply of inventory and continued deterioration in values of California real estate, both residential and commercial; a prolonged slowdown in construction activity; changes in the financial performance and/or condition of our borrowers; changes in the level of non-performing assets and charge-offs; ability to repurchase our securities issued to the U.S. Treasury pursuant to its Capital Purchase Program; the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, executive compensation and insurance) with which we and our subsidiaries must comply; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; inflation, interest rate, securities market and monetary fluctuations; political instability; acts of war or terrorism, or natural disasters, such as earthquakes, or the effects of pandemic flu; the timely development and acceptance of new banking products and services and perceived overall value of these products and services by users; changes in consumer spending, borrowing and savings habits; technological changes; the ability to increase market share and control expenses; changes in the competitive environment among financial and bank holding companies and other financial service providers; continued volatility in the credit and equity markets and its effect on the general economy; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; changes in our organization, management, compensation and benefit plans; the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; our success at managing the risks involved in the foregoing items and other factors set forth in the Company’s public reports including its Annual Report on Form 10-K for the year ended December 31, 2009, and particularly the discussion of risk factors within that document. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by law.
###

 

- 6 -

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(unaudited)
dollars in thousands
                         
    June 30,     December 31,  
    2010     2009     2009  
Assets:
                        
Cash and due from banks
   $ 451,236     $ 221,242     $ 103,254  
 
                        
Investment Securities available-for-sale
     2,011,492       2,271,393       2,108,463  
Investment Securities held-to-maturity
     3,173       6,347       3,838  
Federal funds sold and Interest-bearing balances due from depository institutions
     50,274       1,785       1,226  
Investment in stock of Federal Home Loan Bank (FHLB)
     93,962       93,240       97,582  
 
                        
Loans held-for-sale
     2,554       —       1,439  
Loans and lease finance receivables
     3,929,321       3,614,756       4,079,013  
Less allowance for credit losses
     (118,548 )     (74,755 )     (108,924 )
 
                  
Net loans and lease finance receivables
     3,810,773       3,540,001       3,970,089  
 
                  
Total earning assets
     5,972,228       5,912,766       6,182,637  
Premises and equipment, net
     42,585       42,838       41,444  
Intangibles
     10,872       9,497       12,761  
Goodwill
     55,097       55,097       55,097  
Cash value of life insurance
     111,385       108,045       109,480  
FDIC loss sharing asset
     111,992       —       133,258  
Other assets
     105,001       65,412       101,838  
 
                  
TOTAL
   $ 6,860,396     $ 6,414,897     $ 6,739,769  
 
                  
 
                        
Liabilities and Stockholders’ Equity
                        
Liabilities:
                        
Deposits:
                        
Demand Deposits (noninterest-bearing)
   $ 1,646,717     $ 1,420,535     $ 1,561,981  
Investment Checking
     448,566       410,107       469,413  
Savings/MMDA
     1,307,003       923,658       1,213,002  
Time Deposits
     1,199,204       1,228,920       1,194,258  
 
                  
Total Deposits
     4,601,490       3,983,220       4,438,654  
 
                        
Demand Note to U.S. Treasury
     2,611       8,995       2,425  
Customer Repurchase Agreements
     595,661       426,111       485,132  
Repurchase Agreements
     150,000       250,000       250,000  
Borrowings
     653,254       955,000       753,118  
Junior Subordinated Debentures
     115,055       115,055       115,055  
Other liabilities
     68,341       53,140       57,157  
 
                  
Total Liabilities
     6,186,412       5,791,521       6,101,541  
Stockholders’ equity:
                        
Stockholders’ equity
     631,063       598,902       611,838  
Accumulated other comprehensive income (loss), net of tax
     42,921       24,474       26,390  
 
                  
 
     673,984       623,376       638,228  
 
                  
TOTAL
   $ 6,860,396     $ 6,414,897     $ 6,739,769  
 
                  

 

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEET
(unaudited)
dollars in thousands
                                 
    Three months ended June 30,     Six months ended June 30,  
    2010     2009     2010     2009  
Assets:
                                
Cash and due from banks
   $ 412,607     $ 101,092     $ 338,847     $ 98,232  
Investment securities available-for-sale
     2,022,697       2,299,700       2,059,585       2,397,601  
Investment securities held-to-maturity
     3,303       6,432       3,480       6,561  
Federal funds sold and Interest-bearing balances due from depository institutions
     50,222       61,283       26,009       30,953  
Investment in stock of Federal Home Loan Bank (FHLB)
     95,792       93,240       96,682       93,240  
 
                                
Loans held-for-sale
     1,055       —       1,596       —  
Loans and lease finance receivables
     3,937,448       3,654,189       3,974,467       3,667,152  
Less allowance for credit losses
     (117,368 )     (75,390 )     (115,960 )     (67,898 )
 
                        
Net loans and lease finance receivables
     3,820,080       3,578,799       3,858,507       3,599,254  
 
                        
Total earning assets
     5,993,149       6,039,454       6,045,859       6,127,609  
Premises and equipment, net
     41,907       43,778       41,671       44,158  
Intangibles
     11,285       9,782       11,758       10,149  
Goodwill
     55,097       55,097       55,097       55,097  
Cash value of life insurance
     110,877       107,612       110,332       107,163  
FDIC loss sharing asset
     117,467       —       125,261       —  
Other assets
     123,816       84,947       123,220       82,604  
 
                        
TOTAL
   $ 6,866,205     $ 6,441,762     $ 6,852,045     $ 6,525,012  
 
                        
 
                                
Liabilities and Stockholders’ Equity
                                
Liabilities:
                                
Deposits:
                                
Noninterest-bearing
   $ 1,621,507     $ 1,375,054     $ 1,598,199     $ 1,358,732  
Interest-bearing
     2,922,559       2,506,064       2,913,978       2,384,135  
 
                        
Total Deposits
     4,544,066       3,881,118       4,512,177       3,742,867  
 
                                
Other borrowings
     1,485,896       1,723,364       1,513,045       1,965,178  
Junior Subordinated Debentures
     115,055       115,055       115,055       115,055  
Other liabilities
     54,589       85,547       53,874       71,677  
 
                        
Total Liabilities
     6,199,606       5,805,084       6,194,151       5,894,777  
Stockholders’ equity:
                                
Stockholders’ equity
     633,367       601,788       628,027       598,373  
Accumulated other comprehensive income (loss), net of tax
     33,232       34,890       29,867       31,862  
 
                        
 
     666,599       636,678       657,894       630,235  
 
                        
TOTAL
   $ 6,866,205     $ 6,441,762     $ 6,852,045     $ 6,525,012  
 
                        

 

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
dollar amounts in thousands, except per share
                                 
    For the Three Months     For the Six Months  
    Ended June 30,     Ended June 30,  
    2010     2009     2010     2009  
Interest Income:
                                
Loans held-for-sale
   $ 15     $ —     $ 33     $ —  
Loans and leases, including fees
     59,157       49,771       126,907       99,296  
Investment securities:
                                
Taxable
     14,391       19,134       30,475       41,570  
Tax-advantaged
     6,409       6,815       12,941       13,811  
 
                        
Total investment income
     20,800       25,949       43,416       55,381  
Dividends from FHLB Stock
     63       —       129       —  
Federal funds sold & Interest-bearing CDs with other institutions
     238       55       340       59  
 
                        
Total interest income
     80,273       75,775       170,825       154,736  
Interest Expense:
                                
Deposits
     4,841       6,439       10,129       13,029  
Borrowings and junior subordinated debentures
     11,218       15,241       23,143       32,321  
 
                        
Total interest expense
     16,059       21,680       33,272       45,350  
 
                        
Net interest income before provision for credit losses
     64,214       54,095       137,553       109,386  
Provision for credit losses
     11,000       20,000       23,200       42,000  
 
                        
Net interest income after provision for credit losses
     53,214       34,095       114,353       67,386  
Other Operating Income:
                                
Impairment loss on investment securities
     —       —       (98 )     —  
Plus: Portion of loss reclassified from other comprehensive income
     —       —       (587 )     —  
 
                        
Net impairment loss on investment securities recognized in earnings
     —       —       (685 )     —  
Service charges on deposit accounts
     4,196       3,643       8,461       7,360  
Trust and investment services
     2,209       1,604       4,327       3,265  
Gain on sale of investment securities
     8,781       12,619       8,781       21,548  
Reduction in FDIC loss sharing asset
     (1,587 )     —       (12,170 )     —  
Other
     1,819       1,843       4,493       3,893  
 
                        
Total other operating income
     15,418       19,709       13,207       36,066  
Other operating expenses:
                                
Salaries and employee benefits
     17,479       15,376       35,552       31,196  
Occupancy
     2,947       2,686       6,081       5,538  
Equipment
     1,835       1,735       3,754       3,332  
Professional services
     2,881       1,658       5,688       3,352  
Amortization of intangible assets
     939       734       1,889       1,523  
Provision for unfunded commitments
     450       450       1,700       1,350  
OREO Expense
     654       143       667       1,174  
Other
     14,262       10,197       22,038       16,911  
 
                        
Total other operating expenses
     41,447       32,979       77,369       64,376  
 
                        
Earnings before income taxes
     27,185       20,825       50,191       39,076  
Income taxes
     8,170       4,964       15,057       10,048  
 
                        
Net earnings
   $ 19,015     $ 15,861     $ 35,134     $ 29,028  
 
                        
 
                                
Basic earnings per common share
   $ 0.18     $ 0.17     $ 0.33     $ 0.30  
 
                        
Diluted earnings per common share
   $ 0.18     $ 0.17     $ 0.33     $ 0.30  
 
                        
 
                                
Cash dividends per common share
   $ 0.085     $ 0.085     $ 0.170     $ 0.170  
 
                        

 

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
                                 
    Three months ended June 30,     Six months ended June 30,  
    2010     2009     2010     2009  
 
                                
Interest income — (Tax-Effected) (te)
   $ 82,915     $ 78,559     $ 176,150     $ 160,367  
Interest Expense
     16,059       21,680       33,272       45,350  
 
                        
Net Interest income — (te)
   $ 66,856     $ 56,879     $ 142,878     $ 115,017  
 
                        
 
                                
Return on average assets
     1.11 %     0.99 %     1.03 %     0.90 %
Return on average equity
     11.44 %     9.99 %     10.77 %     9.29 %
Efficiency ratio
     60.39 %     61.29 %     60.65 %     62.23 %
Net interest margin (te) excluding discount
     3.99 %     3.76 %     3.98 %     3.75 %
 
                                
Weighted average shares outstanding
                                
Basic
     105,988,971       83,222,011       105,961,239       83,198,635  
Diluted
     106,272,867       83,290,941       106,231,807       83,299,071  
Dividends declared
   $ 9,041     $ 7,079     $ 18,076     $ 14,162  
Dividend payout ratio
     47.55 %     44.63 %     51.45 %     48.79 %
 
                                
Number of shares outstanding-EOP
     106,435,754       83,326,511                  
Book value per share
   $ 6.33     $ 6.00                  
                                 
    June 30,                  
    2010     2009                  
(Non-covered loans)
                                
Non-performing Assets (dollar amount in thousands):
                                
Non-accrual loans
   $ 82,850     $ 51,265                  
Loans past due 90 days or more and still accruing interest
     —       —                  
Other real estate owned (OREO), net
     15,001       4,035                  
 
                            
Total non-performing assets
   $ 97,851     $ 55,300                  
 
                            
 
                                
Percentage of non-performing assets to total loans outstanding and OREO
     2.78 %     1.53 %                
 
                                
Percentage of non-performing assets to total assets
     1.43 %     0.86 %                
 
                                
Allowance for loan losses to non-performing assets
     121.15 %     135.18 %                
 
                                
Net Charge-off to Average loans
     0.38 %     0.58 %                
 
                                
Allowance for Credit Losses:
                                
Beginning Balance
   $ 108,924     $ 53,960                  
Total Loans Charged-Off
     (13,771 )     (21,850 )                
Total Loans Recovered
     195       645                  
 
                            
Net Loans Charged-off
     (13,576 )     (21,205 )                
Provision Charged to Operating Expense
     23,200       42,000                  
 
                            
Allowance for Credit Losses at End of period
   $ 118,548     $ 74,755                  
 
                            

 

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(unaudited)
Quarterly Common Stock Price
                                                 
    2010     2009     2008  
Quarter End   High     Low     High     Low     High     Low  
March 31,
   $ 10.89     $ 8.44     $ 12.11     $ 5.31     $ 11.45     $ 8.40  
June 30,
   $ 11.85     $ 9.00     $ 7.77     $ 5.69     $ 12.62     $ 9.18  
September 30,
                   $ 8.70     $ 4.90     $ 20.00     $ 7.12  
December 31,
                   $ 9.00     $ 6.93     $ 14.75     $ 8.58  
Quarterly Consolidated Statements of Earnings
                                         
    2Q     1Q     4Q     3Q     2Q  
    2010     2010     2009     2009     2009  
 
                                        
Interest income
                                        
Loans, including fees
   $ 59,172     $ 67,768     $ 56,222     $ 50,561     $ 49,771  
Investment securities and federal funds sold
     21,101       22,784       23,881       25,358       26,004  
 
                              
 
     80,273       90,552       80,103       75,919       75,775  
 
                                        
Interest expense
                                        
Deposits
     4,841       5,288       5,993       5,934       6,439  
Other borrowings
     11,218       11,925       16,039       15,179       15,241  
 
                              
 
     16,059       17,213       22,032       21,113       21,680  
 
                                        
Net interest income before provision for credit losses
     64,214       73,339       58,071       54,806       54,095  
Provision for credit losses
     11,000       12,200       25,500       13,000       20,000  
 
                              
Net interest income after provision for credit losses
     53,214       61,139       32,571       41,806       34,095  
 
                                        
Non-interest income
     15,418       (2,211 )     29,903       15,102       19,709  
Non-interest expenses
     41,447       35,922       39,365       29,845       32,979  
 
                              
Earnings before income taxes
     27,185       23,006       23,109       27,063       20,825  
Income taxes
     8,170       6,887       6,041       7,741       4,964  
 
                              
Net earnings
   $ 19,015     $ 16,119     $ 17,068     $ 19,322     $ 15,861  
 
                              
 
                                        
Basic earning per common share
   $ 0.18     $ 0.15     $ 0.16     $ 0.10     $ 0.17  
Diluted earnings per common share
   $ 0.18     $ 0.15     $ 0.16     $ 0.10     $ 0.17  
 
                                        
Cash dividends per common share
   $ 0.085     $ 0.085     $ 0.085     $ 0.085     $ 0.085  
 
                                        
Dividends Declared
   $ 9,041     $ 9,035     $ 9,054     $ 9,012     $ 7,079  

 

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
Distribution of Loan Portfolio
                                         
    6/30/2010     3/31/2010     12/31/2009     9/30/2009     6/30/2009  
 
Commercial and Industrial
   $ 513,483     $ 471,071     $ 475,517     $ 385,274     $ 372,162  
Real Estate:
                                        
Construction
     305,724       351,567       401,509       295,315       303,629  
Commercial Real Estate
     2,321,257       2,318,905       2,346,784       1,959,725       1,964,258  
SFR Mortgage
     254,499       261,676       283,053       290,831       306,225  
Consumer
     73,342       74,308       78,759       67,317       67,947  
Municipal lease finance receivables
     154,042       156,392       160,565       162,962       165,527  
Auto and equipment leases
     23,754       27,546       30,337       34,072       37,242  
Dairy and Livestock
     448,448       458,057       493,451       411,574       405,427  
 
                              
Gross Loans
     4,094,549       4,119,522       4,269,975       3,607,070       3,622,417  
Less:
                                        
Purchase Accounting Discount
     (159,393 )     (163,842 )     (184,419 )                
Deferred net loan fees
     (5,835 )     (6,030 )     (6,543 )     (6,983 )     (7,661 )
Allowance for credit losses
     (118,548 )     (112,321 )     (108,924 )     (87,316 )     (74,755 )
 
                              
Net Loans
   $ 3,810,773     $ 3,837,329     $ 3,970,089     $ 3,512,771     $ 3,540,001  
 
                              

 

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
Non-Performing Assets & Delinquency Trends
(Non-Covered Loans)
                                         
    June 30,     March 31,     December 31,     September 30,     June 30,  
    2010     2010     2009     2009     2009  
Non-Performing Loans
                                        
Residential Construction and Land
   $ 2,789     $ 2,855     $ 13,843     $ 15,729     $ 17,348  
Commercial Construction
     39,114       31,216       23,832       19,636       21,270  
Residential Mortgage
     12,638       13,726       11,787       8,102       4,632  
Commercial Real Estate
     20,639       22,041       17,129       13,522       7,041  
Commercial and Industrial
     7,527       6,879       3,173       1,045       859  
Consumer
     143       123       15       100       115  
 
                              
Total
   $ 82,850     $ 76,840     $ 69,779     $ 58,134     $ 51,265  
 
                              
 
                                        
% of Total Loans
     2.36 %     2.19 %     1.93 %     1.61 %     1.42 %
 
                                        
Past Due 30-89 Days
                                        
Residential Construction and Land
   $ —     $ —     $ —     $ —     $ —  
Commercial Construction
     9,093       8,143       —       —       —  
Residential Mortgage
     2,552       3,746       4,921       1,510       2,069  
Commercial Real Estate
     1,966       3,286       2,407       190       1,074  
Commercial and Industrial
     634       2,714       2,973       5,094       590  
Dairy & Livestock
     —       —       —       —       3,551  
Consumer
     139       28       239       87       8  
 
                              
Total
   $ 14,384     $ 17,917     $ 10,540     $ 6,881     $ 7,292  
 
                              
 
                                        
% of Total Loans
     0.41 %     0.51 %     0.29 %     0.19 %     0.20 %
 
                                        
OREO
                                        
Residential Construction and Land
   $ 11,113     $ 11,113     $ —     $ 1,137     $ 1,789  
Commercial Construction
     —       —       —       —       —  
Commercial Real Estate
     3,220       3,746       3,936       —       1,187  
Commercial and Industrial
     668       —       —       —       893  
Residential Mortgage
     —       319       —       —       —  
Consumer
     —       —       —       —       166  
 
                              
Total
   $ 15,001     $ 15,178     $ 3,936     $ 1,137     $ 4,035  
 
                              
 
                                        
Total Non-Performing, Past Due & OREO
   $ 112,235     $ 109,935     $ 84,255     $ 66,152     $ 62,592  
 
                              
 
                                        
% of Total Loans
     3.20 %     3.13 %     2.33 %     1.84 %     1.73 %
 
                                        
Total Loans
     3,504,944       3,511,112       3,614,916       3,600,087       3,614,756  

 

 

Net interest income and net interest margin reconciliations (Non-GAAP)
We use certain non-GAAP financial measures to provide supplemental information regarding our performance. The second quarter of 2010 net interest income and net interest margin include a yield adjustment of $4.5 million from discount accretion on covered loans. The adjustment for the first six months of 2010 was $17.9 million. We believe that presenting the net interest income and net interest margin excluding the yield adjustment provides additional clarity to the users of financial statements regarding core net interest income and net interest margin.
                                                 
    Three months ended     Six months ended  
    June 30, 2010     June 30, 2010  
    (amounts in thousands)  
    Average                     Average              
    Volume     Interest     Yield     Volume     Interest     Yield  
Total interest-earning assets
   $ 6,110,517     $ 80,273       5.44 %   $ 6,161,819     $ 170,825       5.75 %
Less:
                                                
Yield adjustment to interest income from discount accretion
     163,854       (4,472 )             176,264       (17,852 )        
 
                                        
Total interest-earning assets, excluding SJB loan discount and yield adjustment
   $ 6,274,371     $ 75,801       5.01 %   $ 6,338,083     $ 152,973       5.02 %
 
                                        
 
                                                
Net interest income and net interest margin
           $ 64,214       4.39 %           $ 137,553       4.67 %
Less:
                                                
Yield adjustment to interset income from discount accretion
             (4,472 )                     (17,852 )        
 
                                            
Net interest income and net interest margin, excluding yield adjustment
           $ 59,742       3.99 %           $ 119,701       3.98 %