10-Q

FORM 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 0-10140

CVB FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

California (State or other jurisdiction of incorporation or organization)	95-3629339 (I.R.S. Employer Identification No.)
701 North Haven Ave, Suite 350, Ontario, California (Address of Principal Executive Offices)	91764 (Zip Code)

(Registrant’s telephone number, including area code) (909) 980-4030

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, non-accelerated filer or smaller reporting company. See definition of “large accelerated filer, accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer þ Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Number of shares of common stock of the registrant: 106,435,754 outstanding as of August 4, 2010.

CVB FINANCIAL CORP.
2010 QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION (UNAUDITED)
ITEM 1. FINANCIAL STATEMENTS	3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	8
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25
GENERAL	25
OVERVIEW	25
CRITICAL ACCOUNTING POLICIES	26
ANALYSIS OF THE RESULTS OF OPERATIONS	28
RESULTS BY BUSINESS SEGMENTS	37
ANALYSIS OF FINANCIAL CONDITION	39
RISK MANAGEMENT	52
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	56
ITEM 4. CONTROLS AND PROCEDURES	60
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	61
ITEM 1A. RISK FACTORS	61
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	62
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	62
ITEM 4. REMOVED AND RESERVED	62
ITEM 5. EXHIBITS	62
SIGNATURES	64
Exhibit 3.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

2

PART I — FINANCIAL INFORMATION (UNAUDITED)

ITEM 1. FINANCIAL STATEMENTS

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
Dollar amounts in thousands

	June 30,			December 31,
	2010			2009
ASSETS
Cash and due from banks	$	451,236		$	103,254
Interest-bearing balances due from depository institutions		50,274			1,226
Total cash and cash equivalents		501,510			104,480
Investment in stock of Federal Home Loan Bank (FHLB)		93,962			97,582
Investment securities available-for-sale		2,011,492			2,108,463
Investment securities held-to-maturity		3,173			3,838
Loans held-for-sale		2,554			1,439
Loans and lease finance receivables		3,929,321			4,079,013
Allowance for credit losses		(118,548	)		(108,924	)
Net Loans and lease finance receivables		3,810,773			3,970,089
Premises and equipment, net		42,585			41,444
Bank owned life insurance		111,385			109,480
Accrued interest receivable		26,967			28,672
Intangibles		10,872			12,761
Goodwill		55,097			55,097
FDIC loss sharing asset		111,992			133,258
Other assets		78,034			73,166
TOTAL ASSETS	$	6,860,396		$	6,739,769
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
Noninterest-bearing	$	1,646,717		$	1,561,981
Interest-bearing		2,954,773			2,876,673
Total deposits		4,601,490			4,438,654
Demand Note to U.S. Treasury		2,611			2,425
Repurchase agreements		745,661			735,132
Borrowings		653,254			753,118
Accrued interest payable		5,818			6,481
Deferred compensation		9,281			9,166
Junior subordinated debentures		115,055			115,055
Other liabilities		53,242			41,510
TOTAL LIABILITIES		6,186,412			6,101,541
COMMITMENTS AND CONTINGENCIES
Stockholders’ Equity:
Preferred stock, authorized, 20,000,000 shares without par; none issued or outstanding		—			—
Common stock, authorized, 225,000,000 shares without par; issued and outstanding 106,435,754 (2010) and 106,263,511 (2009)		493,393			491,226
Retained earnings		137,670			120,612
Accumulated other comprehensive income, net of tax		42,921			26,390
Total stockholders’ equity		673,984			638,228
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	6,860,396		$	6,739,769

See accompanying notes to the consolidated financial statements.

3

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, including fees	$	59,172		$	49,771	$	126,940		$	99,296
Investment securities:
Taxable		14,391			19,134		30,475			41,570
Tax-preferred		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 and Interest bearing deposits 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		10,390			14,212		21,510			30,102
Junior subordinated debentures		828			1,029		1,633			2,219
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: Reclassification of credit-related impairment loss 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
Bankcard services		711			586		1,350			1,120
BOLI income		737			659		1,581			1,396
Reduction in FDIC loss sharing asset		(1,587	)		—		(12,170	)		—
Other		371			598		1,562			1,377
Gain on sale of securities		8,781			12,619		8,781			21,548
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 and Equipment		4,782			4,421		9,835			8,870
Professional services		2,881			1,658		5,688			3,352
Amortization of intangibles		939			734		1,889			1,523
Other		15,366			10,790		24,405			19,435
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
Preferred stock dividend and other reductions		64			2,000		119			3,993
Net earnings allocated to common shareholders	$	18,951		$	13,861	$	35,015		$	25,035
Comprehensive income	$	28,812		$	5,329	$	51,665		$	24,771
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	$	0.17		$	0.17

See accompanying notes to the consolidated financial statements.

4

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
AND COMPREHENSIVE INCOME
(Unaudited)
Amounts and shares in thousands

								Accumulated
	Common							Other
	Shares		Common		Retained			Comprehensive		Comprehensive
	Outstanding		Stock		Earnings			Income		Income		Total
Balance January 1, 2010		106,263	$	491,226	$	120,612		$	26,390			$	638,228
Proceeds from exercise of stock options		173		725									725
Tax benefit from exercise of stock options				337									337
Stock-based Compensation Expense				1,105									1,105
Cash dividends declared Common ($0.17 per share)						(18,076	)						(18,076	)
Comprehensive income:
Net earnings						35,134				$	35,134		35,134
Other comprehensive gain:
Unrealized gain on securities available-for-sale, net									16,191		16,191		16,191
Portion of impairment loss on investment securities reclassified in the current year, net									340		340		340
Comprehensive income										$	51,665
Balance June 30, 2010		106,436	$	493,393	$	137,670		$	42,921			$	673,984

										Accumulated
	Common									Other
	Shares		Preferred		Common		Retained			Comprehensive			Comprehensive
	Outstanding		Stock		Stock		Earnings			Loss			Income			Total
Balance January 1, 2009		83,270	$	121,508	$	364,469	$	100,184		$	28,731					$	614,892
Issuance of common stock		56				280											280
Tax benefit from exercise of stock options						62											62
Stock-based Compensation Expense						783											783
Amortization of preferred stock discount				711				(711	)								—
Cash dividends ($0.17 per share)
Preferred								(3,250	)								(3,250	)
Common								(14,162	)								(14,162	)
Comprehensive income:
Net earnings								29,028					$	29,028			29,028
Other comprehensive loss:
Unrealized loss on securities available-for-sale, net											(4,257	)		(4,257	)		(4,257	)
Comprehensive income													$	24,771
Balance June 30, 2009		83,326	$	122,219	$	365,594	$	111,089		$	24,474					$	623,376

	At June 30,
	2010			2009
Disclosure of reclassification amount
Unrealized gain/(loss) on securities arising during the period	$	28,501		$	(7,339	)
Tax (benefit)/expense		(11,970	)		3,082
Net unrealized gain/(loss) on securities	$	16,531		$	(4,257	)

See accompanying notes to the consolidated financial statements.

5

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Dollar amounts in thousands

	For the Six Months
	Ended June 30,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest and dividends received	$	156,010		$	155,769
Service charges and other fees received		15,668			14,494
Interest paid		(34,043	)		(46,533	)
Cash paid to vendors and employees		(54,566	)		(59,257	)
Income taxes paid		(18,522	)		(23,386	)
Net cash provided by operating activities		64,547			41,087
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of FHLB Stock		3,621			—
Proceeds from sales of investment securities		173,607			440,343
Proceeds from repayment of investment securities		142,689			210,361
Proceeds from maturity of investment securities		54,509			46,417
Purchases of investment securities		(238,172	)		(462,387	)
Net decrease in loans and lease finance receivables		136,401			95,787
Proceeds from sales of premises and equipment		87			216
Proceeds from sales of other real estate owned		7,901			9,413
Purchase of premises and equipment		(4,611	)		(2,172	)
Other, net		(330	)		(375	)
Net cash provided by investing activities		275,702			337,603
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in transaction deposits		157,890			276,273
Net increase in time deposits		5,190			198,791
Repayment of advances from Federal Home Loan Bank		(100,000	)		(600,000	)
Net increase/(decrease) in other borrowings		186			(179,037	)
Net increase in repurchase agreements		10,529			68,298
Cash dividends on preferred stock		—			(3,250	)
Cash dividends on common stock		(18,076	)		(14,162	)
Proceeds from exercise of stock options		725			280
Tax benefit related to exercise of stock options		337			62
Net cash (used in)/provided by financing activities		56,781			(252,745	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		397,030			125,945
CASH AND CASH EQUIVALENTS, beginning of period		104,480			95,297
CASH AND CASH EQUIVALENTS, end of period	$	501,510		$	221,242

See accompanying notes to the consolidated financial statements.

6

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(unaudited)
Dollar amounts in thousands

	For the Six Months
	Ended June 30,
	2010			2009
RECONCILIATION OF NET EARNINGS TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Net earnings	$	35,134		$	29,028
Adjustments to reconcile net earnings to net cash provided by operating activities:
Gain on sale of investment securities		(8,781	)		(21,548	)
Loss on sale of premises and equipment		65			57
Loss on sale of other real estate owned		(910	)		—
Increase from bank owned life insurance		(1,581	)		(1,396	)
Net amortization of premiums on investment securities		2,357			579
Accretion of SJB Discount		(17,852	)		—
Provisions for credit losses		23,200			42,000
Reduction in FDIC Loss Sharing Asset		12,170			—
Stock-based compensation		1,105			783
Depreciation and amortization		5,206			5,002
Change in accrued interest receivable		1,705			2,199
Change in accrued interest payable		(663	)		(1,182	)
Change in other assets and liabilities		13,392			(14,435	)
Total adjustments		29,413			12,059
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	64,547		$	41,087
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES
Transfer from loans to Other Real Estate Owned	$	18,227		$	7,644

See accompanying notes to the consolidated financial statements.

7

CVB FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
For the six months ended June 30, 2010 and 2009

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated unaudited financial statements and notes thereto have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission for Form 10-Q and conform to practices within the banking industry and include all of the information and disclosures required by accounting principles generally accepted in the United States of America for interim financial reporting. The results of operations for the six months ended June 30, 2010 are not necessarily indicative of the results for the full year. These financial statements should be read in conjunction with the financial statements, accounting policies and financial notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed with the Securities and Exchange Commission. In the opinion of management, the accompanying condensed consolidated unaudited financial statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair presentation of financial results for the interim periods presented. A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows.

Principles of Consolidation - The consolidated financial statements include the accounts of CVB Financial Corp. (the “Company”) and its wholly owned subsidiary: Citizens Business Bank (the “Bank”) after elimination of all intercompany transactions and balances. The Company also has three inactive subsidiaries: CVB Ventures, Inc.; Chino Valley Bancorp; and Orange National Bancorp. The Company is also the common stockholder of CVB Statutory Trust I, CVB Statutory Trust II, CVB Statutory Trust III and FCB Trust II. CVB Statutory Trusts I and II were created in December 2003 and CVB Statutory Trust III was created in January 2006 to issue trust preferred securities in order to raise capital for the Company. The Company acquired FCB Trust II through the acquisition of First Coastal Bancshares (“FCB”). These trusts do not meet the criteria for consolidation.

Nature of Operations - The Company’s primary operations are related to traditional banking activities, including the acceptance of deposits and the lending and investing of money through the operations of the Bank. The Bank also provides automobile and equipment leasing to customers through its Citizens Financial Services Division and trust and investment-related services to customers through its CitizensTrust Division. The Bank’s customers consist primarily of small to mid-sized businesses and individuals located in San Bernardino County, Riverside County, Orange County, Los Angeles County, Madera County, Fresno County, Tulare County, Kern County and San Joaquin County. The Bank operates 44 Business Financial Centers, 6 Commercial Banking Centers, and three wealth management offices with its headquarters located in the city of Ontario.

The Company’s operating business units have been divided into two main segments: (i) Business Financial and Commercial Banking Centers and (ii) Treasury. Business Financial and Commercial Banking Centers (branches) are comprised of loans, deposits, and products and services the Bank offers to the majority of its customers. The other segment is Treasury, which manages the investment portfolio of the Company. The Company’s remaining centralized functions and eliminations of inter-segment amounts have been aggregated and included in “Other.”

The internal reporting of the Company considers all business units. Funds are allocated to each business unit based on its need to fund assets (use of funds) or its need to invest funds (source of funds). Net income is determined based on the actual net income of the business unit plus the allocated income or expense based on the sources and uses of funds for each business unit. Non-interest income and non-interest expense are those items directly attributable to a business unit.

8

Cash and due from banks - Cash on hand, cash items in the process of collection, and amounts due from correspondent banks and the Federal Reserve Bank are included in Cash and due from banks.

Investment Securities - The Company classifies as held-to-maturity those debt securities that the Company has the positive intent and ability to hold to maturity. Securities classified as trading are those securities that are bought and held principally for the purpose of selling them in the near term. All other debt and equity securities are classified as available-for-sale. Securities held-to-maturity are accounted for at cost and adjusted for amortization of premiums and accretion of discounts. Trading securities are accounted for at fair value with the unrealized gains and losses being included in current earnings. Available-for-sale securities are accounted for at fair value, with the net unrealized gains and losses, net of income tax effects, presented as a separate component of stockholders’ equity. Realized gains and losses on sales of securities are recognized in earnings at the time of sale and are determined on a specific-identification basis. Purchase premiums and discounts are recognized in interest income using the effective-yield method over the terms of the securities. For mortgage-backed securities (“MBS”), the amortization or accretion is based on estimated average lives of the securities. The lives of these securities can fluctuate based on the amount of prepayments received on the underlying collateral of the securities. The Company’s investment in Federal Home Loan Bank (“FHLB”) stock is carried at cost.

At each reporting date, securities are assessed to determine whether there is an other-than-temporary impairment. Other-than-temporary impairment on investment securities is recognized in earnings when there are credit losses on a debt security for which management does not intend to sell and for which it is more-likely-than-not that the Company will not have to sell prior to recovery of the noncredit impairment. In those situations, the portion of the total impairment that is attributable to the credit loss would be recognized in earnings, and the remaining difference between the debt security’s amortized cost and its fair value would be included in other comprehensive income.

Loans and Lease Finance Receivables - Loans and lease finance receivables are reported at the principal amount outstanding, less deferred net loan origination fees. Interest on loans and lease finance receivables is credited to income based on the principal amount outstanding. Interest income is not recognized on loans and lease finance receivables when collection of interest is deemed by management to be doubtful. In the ordinary course of business, the Company enters into commitments to extend credit to its customers. These commitments are not reflected in the accompanying consolidated financial statements. As of June 30, 2010, the Company had entered into commitments with certain customers amounting to $573.3 million compared to $596.6 million at December 31, 2009. Letters of credit at June 30, 2010 and December 31, 2009, were $68.3 million and $69.5 million, respectively.

The Bank receives collateral to support loans, lease finance receivables, and commitments to extend credit for which collateral is deemed necessary. The most significant categories of collateral are real estate, principally commercial and industrial income-producing properties, real estate mortgages, and assets utilized in agribusiness.

Nonrefundable fees and direct costs associated with the origination or purchase of loans are deferred and netted against outstanding loan balances. The deferred net loan fees and costs are recognized in interest income over the loan term using the effective-yield method.

Acquired loans for which there is deterioration in credit quality between origination and acquisition of the loans and the bank does not expect to collect all amounts due according to the loan’s contractual terms are accounted for individually or in pools of loans based on common risk characteristics. These loans are within the scope of accounting guidance for loans acquired with deteriorated credit quality. The excess of the loan’s or pool’s scheduled contractual principal and interest payments over all cash flows expected at acquisition is the nonaccretable difference. The remaining amount, representing the excess of the loan’s cash flows expected to be collected over the fair value is the accretable yield (accreted into interest income over the remaining life of the loan or pool). The Bank has also elected to account for acquired loans not within the scope of accounting guidance using this same methodology.

9

Provision and Allowance for Credit Losses - The determination of the balance in the allowance for credit losses is based on an analysis of the loan and lease finance receivables portfolio using a systematic methodology and reflects an amount that, in management’s judgment, is adequate to provide for probable credit losses inherent in the portfolio, after giving consideration to the character of the loan portfolio, current economic conditions, past credit loss experience, and such other factors that would deserve current recognition in estimating inherent credit losses. The estimate is reviewed quarterly by the Board of Directors and management and periodically by various regulatory entities and, as adjustments become necessary, they are reported in earnings in the periods in which they become known. The provision for credit losses is charged to expense. During the first six months of 2010, we recorded a provision for credit losses of $23.2 million. The allowance for credit losses was $118.5 million as of June 30, 2010, or 3.38% of total non-covered loans and leases.

In addition to the allowance for credit losses, the Company also has a reserve for undisbursed commitments for loans and letters of credit. This reserve is carried in the liabilities section of the balance sheet in other liabilities. Provisions to this reserve are included in other expense. For the first six months of 2010, the Company recorded an increase of $1,700,000 in the reserve for undisbursed commitments. As of June 30, 2010, the balance in this reserve was $9.6 million.

A loan for which collection of principal and interest according to its original terms is not probable is considered to be impaired. The Company’s policy is to record a specific valuation allowance, which is included in the allowance for credit losses, or charge off that portion of an impaired loan that exceeds its fair value less selling costs. Fair value is usually based on the value of underlying collateral.

At June 30, 2010, the Company had non-covered impaired loans of $86.5 million. Of this amount, $2.8 million consisted of non-accrual residential construction and land loans, $39.1 million in non-accrual commercial construction loans, $12.7 million of non-accrual single family mortgage loans, $20.7 million of non-accrual commercial real estate loans, $7.5 million of non-accrual commercial and industrial loans, and $143,000 of non-accrual consumer loans. Non-covered impaired loans also include $24.2 million of loans whose terms were modified in a troubled debt restructure, of which $20.6 million are classified as non-accrual. The remaining balance of $3.6 million consists of three loans performing according to the restructured terms. The non-covered impaired loans of $86.5 million, net of $7.5 million in charge-offs, are supported by collateral with a fair value less selling costs and net of prior liens. For the collateral-deficient loans, the amount of specific reserve was $807,000 at June 30, 2010. At December 31, 2009, the Bank had classified as impaired, non-covered loans with a balance of $72.3 million.

Premises and Equipment - Premises and equipment are stated at cost, less accumulated depreciation, which is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives using the straight-line method. Properties under capital lease and leasehold improvements are amortized over the shorter of estimated economic lives of 15 years or the initial terms of the leases. Estimated lives are 3 to 5 years for computer and equipment, 5 to 7 years for furniture, fixtures and equipment, and 15 to 40 years for buildings and improvements. Long-lived assets are reviewed periodically for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The existence of impairment is based on undiscounted cash flows. To the extent impairment exists, the impairment is calculated as the difference in fair value of assets and their carrying value. The impairment loss, if any, would be recorded in noninterest expense.

FDIC Loss Sharing Asset - The FDIC loss sharing asset is initially recorded at fair value which represents the present value of the estimated cash payments from the FDIC for future losses on covered loans. The ultimate collectability of this asset is dependent upon the performance of the underlying covered loans, the passage of time and claims paid by the FDIC.

10

Other Real Estate Owned - Other real estate owned (“OREO”) represents real estate acquired through foreclosure in satisfaction of commercial and real estate loans and is stated at fair value, minus estimated costs to sell (fair value at time of foreclosure). Loan balances in excess of fair value of the real estate acquired at the date of acquisition are charged against the allowance for credit losses. Any subsequent operating expenses or income, reduction in estimated values, and gains or losses on disposition of such properties are charged to current operations. OREO is recorded in other assets on the consolidated balance sheets.

Business Combinations and Intangible Assets - The Company has engaged in the acquisition of financial institutions and the assumption of deposits and purchase of assets from other financial institutions in its market area. The Company has paid premiums on certain transactions, and such premiums are recorded as intangible assets, in the form of goodwill or other intangible assets. Goodwill is not being amortized whereas identifiable intangible assets with finite lives are amortized over their useful lives. On an annual basis, the Company tests goodwill and intangible assets for impairment.

At June 30, 2010 goodwill was $55.1 million. As of June 30, 2010, intangible assets that continue to be subject to amortization include core deposit premiums of $10.9 million (net of $21.1 million of accumulated amortization). Amortization expense for such intangible assets was $1.9 million for the six months ended June 30, 2010. Estimated amortization expense, for the remainder of 2010 is expected to be $1.8 million. Estimated amortization expense, for the succeeding five fiscal years is $3.5 million for year one, $2.2 million for year two, $1.1 million for year three, $475,000 for year four and $1.8 million thereafter. The weighted average remaining life of intangible assets is approximately 3.6 years.

Bank Owned Life Insurance - The Bank invests in Bank-Owned Life Insurance (“BOLI”). BOLI involves the purchasing of life insurance by the Bank on a select group of employees. The Bank is the owner and beneficiary of these policies. BOLI is recorded as an asset at cash surrender value. Increases in the cash value of these policies, as well as insurance proceeds received, are recorded in other non-interest income and are not subject to income tax.

Income Taxes - Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character (for example, ordinary income or capital gain) within the carryback or carryforward periods available under the tax law. Based on historical and future expected taxable earnings and available strategies, the Company considers the future realization of these deferred tax assets more likely than not.

The tax effects from an uncertain tax position are recognized in the financial statements only if, based on its merits, the position is more likely than not to be sustained on audit by the taxing authorities. Interest and penalties related to uncertain tax positions are recorded as part of other operating expense.

Earnings per Common Share - The Company calculates earnings per common share (“EPS”) using the two-class method. The two-class method requires the Company to present EPS as if all of the earnings for the period are distributed to common shareholders and any participating securities, regardless of whether any actual dividends or distributions are made. All outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends are considered participating securities. The Company grants restricted shares under the 2008 Equity Incentive Plan that qualify as participating securities. Restricted shares issued under this plan are entitled to dividends at the same rate as common stock.

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Basic earnings per common share are computed by dividing income allocated to common stockholders by the weighted-average number of common shares outstanding during each period. The computation of diluted earnings per common share considers the number of tax-effected shares issuable upon the assumed exercise of outstanding common stock options. Share and per share amounts have been retroactively restated to give effect to all stock dividends and splits. The number of shares outstanding at June 30, 2010 was 106,435,754. The tables below presents the reconciliation of earnings per share for the periods indicated.

Earnings Per Share Reconciliation
(Dollars and shares in thousands, except per share amounts)

	For the six months ended				For the three months ended
	June 30,				June 30,
	2010		2009		2010		2009
Earnings per common share
Net earnings	$	35,134	$	29,028	$	19,015	$	15,861
Less: Dividends on preferred stock and discount amortization		—		3,961		—		1,983
Net earnings available to common shareholders	$	35,134	$	25,067	$	19,015	$	13,878
Less: Net earnings allocated to restricted stock		119		32		64		17
Net earnings allocated to common shareholders (numerator)	$	35,015	$	25,035	$	18,951	$	13,861
Weighted Average Shares Outstanding (denominator)		105,961		83,199		105,989		83,222
Earnings per common share	$	0.33	$	0.30	$	0.18	$	0.17
Diluted earnings per common share
Net income allocated to common shareholders (numerator)	$	35,015	$	25,035	$	18,951	$	13,861
Weighted Average Shares Outstanding		105,961		83,199		105,989		83,222
Incremental shares from assumed exercise of outstanding options		271		100		284		69
Diluted Weighted Average Shares Outstanding (denominator)		106,232		83,299		106,273		83,291
Diluted earnings per common share	$	0.33	$	0.30	$	0.18	$	0.17

Stock-Based Compensation - At June 30, 2010, the Company has three stock-based employee compensation plans, which are described more fully in Note 16 in the Company’s Annual Report on Form 10-K. The Company accounts for stock compensation using the “modified prospective” method. Under this method, awards that are granted, modified, or settled after December 31, 2005, are fair valued as of grant date and compensation costs recognized over the vesting period on a straight-lined basis. Also under this method, unvested stock awards as of January 1, 2006 are recognized over the remaining service period with no change in historical reported earnings.

Derivative Financial Instruments - All derivative instruments, including certain derivative instruments embedded in other contracts, are recognized on the consolidated balance sheet at fair value. For derivatives designated as fair value hedges, changes in the fair value of the derivative and the hedged item related to the hedged risk are recognized in earnings. Changes in fair value of derivatives designated and accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in “Other Comprehensive Income,” net of deferred taxes and are subsequently reclassified to earnings when the hedged transaction affects earnings. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item.

Statement of Cash Flows - Cash and cash equivalents as reported in the statements of cash flows include cash and due from banks. Cash flows from loans and deposits are reported net.

CitizensTrust - This division provides trust, investment and brokerage related services, as well as financial, estate and business succession planning services. CitizensTrust services its clients through three offices in Southern California: Pasadena, Ontario, and Irvine. CitizensTrust has approximately $2.0 billion in assets under administration, including $1.1 billion in assets under management. The amount of these funds and the related liability have not been recorded in the accompanying consolidated balance sheets because they are not assets or liabilities of the Bank or Company, with the exception of any funds held on deposit with the Bank.

12

Use of Estimates in the Preparation of Financial Statements - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. A material estimate that is particularly susceptible to significant change in the near term relates to the determination of the allowance for credit losses. Other significant estimates which may be subject to change include fair value disclosures, impairment of investments and goodwill, and valuation of deferred tax assets, other intangibles and OREO.

Recent Accounting Pronouncements - In July 2010, the FASB issued an accounting standards update (ASU) 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, which amends FASB ASC Topic 310, Receivables. The update will significantly increase disclosures that entities must make about the credit quality of financing receivables and the allowance for credit losses. The disclosures will provide financial statement users with additional information about the nature of credit risks inherent in entities’ financing receivables, how credit risk is analyzed and assessed when determining the allowance for credit losses, and the reasons for the change in the allowance for credit losses. The guidance in the ASU is effective for interim and annual reporting periods beginning after December 15, 2010. The Company does not expect the adoption of ASU 2010-20 to have a material effect on the Company’s consolidated financial position or results of operations.

Shareholder Rights Plan - The Company had a shareholder rights plan designed to maximize long-term value and to protect shareholders from improper takeover tactics and takeover bids which are not fair to all shareholders. In accordance with the plan, preferred share purchase rights were distributed as a dividend at the rate of one right to purchase one one-thousandth of a share of the Company’s Series A Participating Preferred Stock at an initial exercise price of $50.00 (subject to adjustment as described in the terms of the plan) upon the occurrence of certain triggering events. The shareholder rights plan expired pursuant to its terms on June 21, 2010.

Other Contingencies - In the ordinary course of business, the Company becomes involved in litigation. Based upon the Company’s internal records and discussions with legal counsel, the Company records reserves for estimates of the probable outcome of all cases brought against them. Except as discussed in Part II — Other Information Item 1.“Legal Proceedings,” at June 30, 2010 the Company does not have any litigation reserves and is not aware of any material pending legal action or complaints asserted against the Company.

13

2. INVESTMENTS

The amortized cost and estimated fair value of investment securities are shown below. The majority of securities held are publicly traded, and the estimated fair values were obtained from an independent pricing service based upon market quotes.

	June 30, 2010
			Gross		Gross
			Unrealized		Unrealized
	Amortized		Holding		Holding					Total
	Cost		Gain		Loss			Fair Value		Percent
	(Amounts in thousands)
Investment Securities Available-for-Sale:
Government agency & government-sponsored enterprises	$	219,305	$	563	$	—		$	219,868		10.93	%
Mortgage-backed securities		547,310		27,424		—			574,734		28.57	%
CMO’s / REMIC’s		534,980		25,717		(45	)		560,652		27.87	%
Municipal bonds		632,219		22,764		(1,330	)		653,653		32.50	%
Other securities		2,586		—		—			2,586		0.13	%
Total Investment Securities	$	1,936,400	$	76,468	$	(1,375	)	$	2,011,493		100.00	%

	December 31, 2009
			Gross		Gross
			Unrealized		Unrealized
	Amortized		Holding		Holding					Total
	Cost		Gain		Loss			Fair Value		Percent
	(Amounts in thousands)
Investment Securities Available-for-Sale:
U.S. Treasury securities	$	507	$	—	$	—		$	507		0.02	%
Government agency & government-sponsored enterprises		21,574		140		(1	)		21,713		1.03	%
Mortgage-backed securities		629,998		18,138		(968	)		647,168		30.70	%
CMO’s / REMIC’s		759,179		17,297		(3,311	)		773,165		36.67	%
Municipal bonds		647,556		18,290		(2,420	)		663,426		31.46	%
Other securities		2,484		—		—			2,484		0.12	%
Total Investment Securities	$	2,061,298	$	53,865	$	(6,700	)	$	2,108,463		100.00	%

Approximately 66% of the available-for-sale portfolio represents securities issued by the U.S. government or U.S. government-sponsored enterprises, which guarantee payment of principal and interest.

The remaining CMO/REMICs are backed by agency-pooled collateral or whole loan collateral. All non-agency available-for-sale CMO/REMIC issues held are rated investment grade or better by either Standard & Poor’s or Moody’s, as of June 30, 2010 and December 31, 2009.

Gross realized gains in our available-for-sale portfolio were $8.8 million for the six months ended June 30, 2010 and $21.5 million for the same period in 2009. There were no realized losses.

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Composition of the Fair Value and Gross Unrealized Losses of Securities:

	June 30, 2010
	Less than 12 months				12 months or longer				Total
			Gross				Gross				Gross
			Unrealized				Unrealized				Unrealized
			Holding				Holding				Holding
Description of Securities	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
	(amounts in thousands)
Held-To-Maturity
CMO	$	—	$	—	$	3,173	$	1,115	$	3,173	$	1,115
Available-for-Sale
CMO/REMICs		—		—		6,729		45		6,729		45
Municipal bonds		51,374		837		4,083		493		55,457		1,330
	$	51,374	$	837	$	10,812	$	538	$	62,186	$	1,375

	December 31, 2009
	Less than 12 months				12 months or longer				Total
			Gross				Gross				Gross
			Unrealized				Unrealized				Unrealized
			Holding				Holding				Holding
Description of Securities	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
	(amounts in thousands)
Held-To-Maturity
CMO (1)	$	—	$	—	$	3,838	$	1,671	$	3,838	$	1,671
Available-for-Sale
Government agency	$	5,022	$	1	$	—	$	—	$	5,022	$	1
Mortgage-backed securities		73,086		968		—		—		73,086		968
CMO/REMICs		179,391		3,025		9,640		286		189,031		3,311
Municipal bonds		80,403		2,122		1,785		298		82,188		2,420
	$	337,902	$	6,116	$	11,425	$	584	$	349,327	$	6,700

(1) For the twelve months ended December 31, 2009, the Company recorded $1.7 million, on a pre-tax basis, of the non-credit portion of OTTI for this security in other comprehensive income, which is included as gross unrealized losses.

The tables above show the Company’s investment securities’ gross unrealized losses and fair value by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2010 and December 31, 2009. The Company has reviewed individual securities to determine whether a decline in fair value below the amortized cost is other-than-temporary.

The following summarizes our analysis of these securities and the unrealized losses. This assessment was based on the following factors: i) the length of the time and the extent to which the fair value has been less than amortized cost; ii) adverse condition specifically related to the security, an industry, or a geographic area and whether or not the Company expects to recover the entire amortized cost, iii) historical and implied volatility of the fair value of the security; iv) the payment structure of the security and the likelihood of the issuer being able to make payments in the future; v.) failure of the issuer of the security to make scheduled interest or principal payments, vi) any changes to the rating of the security by a rating agency, and vii) recoveries or additional declines in fair value subsequent to the balance sheet date.

CMO Held-to-Maturity - We have one investment security classified as held-to-maturity. This security was issued by Countrywide Financial and is collateralized by Alt-A mortgages. The mortgages are primarily fixed-rate, 30-year loans, originated in early 2006 with average FICO scores of 715 and an average LTV of 71% at origination. The security was a senior security in the securitization, was rated AAA at origination and was supported by subordinate securities. This security is classified as held-to-maturity as we have both the intent and ability to hold this debt security to maturity as the amount of the security, $3.2 million, is not significant to our liquidity needs. We acquired this security in February 2008 at a price of 98.25%. The significant decline in the fair value of the security first appeared in August 2008 as the current financial crisis in the markets occurred and the market for securities collateralized by Alt-A mortgages diminished.

15

As of June 30, 2010, the unrealized loss on this security was $1.1 million and the fair value on the security was 74% of the current par value. The security is rated non-investment grade. We evaluated the security for an other than temporary decline in fair value as of June 30, 2010. We assess for credit impairment using a cash flow model. The key assumptions include default rates, severities and prepayment rates. This security was determined to have additional credit impairment during the first quarter of 2010 due to continued degradation in expected cash flows primarily due to higher loss forecasts. We determined the amount of the credit impairment by discounting the expected future cash flows of the underlying collateral. We recognized an other-than-temporary impairment loss of $685,000 during the first six months of 2010.

The following table provides a roll-forward of credit-related other-than-temporary impairment recognized in earnings for the six months ended June 30, 2010.

	For the six
	months ended
	June 30, 2010
	(in thousands)
Balance, beginning of the period	$	323
Addition of OTTI that was not previously recognized		685
Reduction for securities sold during the period		—
Reduction for securities with OTTI recognized in earnings because the security might be sold before recovery of its amortized cost basis		—
Addition of OTTI that was previously recognized because the security might not be sold before recovery of its amortized cost basis		—
Reduction for increases in cash flows expected to be collected that are recognized over the remaining life of the security		—
Balance, end of the period	$	1,008

Government Agency - The government agency bonds are backed by the full faith and credit of Agencies of the U.S. Government. These securities are bullet securities, that is, they have a defined maturity date on which the principal is paid. The contractual term of these investments provides that the Bank will receive the face value of the bond at maturity which will equal the amortized cost of the bond. Interest is received throughout the life of the security. There was no loss greater than 12 months on these securities at June 30, 2010.

Mortgaged-Backed Securities and CMO/REMICs - Almost all of the mortgage-backed and CMO/REMICs securities are issued by the government-sponsored enterprises such as Ginnie Mae, Fannie Mae and Freddie Mac. These securities are collateralized or backed by the underlying residential mortgages. All mortgage-backed securities are rated investment grade with an average life of approximately 3.7 years. The contractual cash flows of 98.0% of these investments are guaranteed by U.S. government-sponsored agencies. The remaining 2.0% are issued by banks. Accordingly, it is expected the securities would not be settled at a price less than the amortized cost of the bonds. The unrealized loss greater than 12 months on these securities at June 30, 2010 is $45,000. This loss is primarily comprised of three bonds issued by non-government sponsored enterprises such as financial institutions. Because we believe the decline in fair value is attributable to the changes in interest rates and not credit quality and because the Company does not intend to sell the investments and it is more likely than not that the Company will not be required to sell the investments before recovery of their amortized costs, which may be at maturity, management does not consider these investments to be other than temporarily impaired at June 30, 2010.

16

Municipal Bonds - Ninety-six percent of our $653.7 million municipal bond portfolio contains securities which have an underlying rating of investment grade. The majority of our municipal bonds are insured by the largest bond insurance companies with maturities of approximately 5.4 years. The unrealized loss greater than 12 months on these securities at June 30, 2010 was $493,000. The Bank diversifies its holdings by owning selections of securities from different issuers and by holding securities from geographically diversified municipal issuers, thus reducing the Bank’s exposure to any single adverse event. Because we believe the decline in fair value is attributable to the changes in interest rates and not credit quality and because the Company does not intend to sell the investments and it is more likely than not that the Company will not be required to sell the investments before recovery of their amortized costs, which may be at maturity, management does not consider these investments to be other than temporarily impaired at June 30, 2010.

We are continually monitoring the quality of our municipal bond portfolio in light of the current financial problems exhibited by certain monoline insurance companies. While most of our securities are insured by these companies, we feel that there is minimal risk of loss due to the problems these insurers are having. Many of the securities that would not be rated without insurance are pre-refunded and/or are general obligation bonds. Based on our monitoring of the municipal marketplace, to our knowledge, none of the municipalities are exhibiting financial problems that would lead us to believe there is a loss in any given security.

At June 30, 2010 and December 31, 2009, investment securities having an amortized cost of approximately $1.88 billion and $2.02 billion respectively, were pledged to secure public deposits, short and long-term borrowings, and for other purposes as required or permitted by law.

The amortized cost and fair value of debt securities at June 30, 2010, by contractual maturity, are shown below. Although mortgage-backed securities and CMO/REMICs have contractual maturities through 2029, expected maturities will differ from contractual maturities because borrowers may have the right to prepay such obligations without penalty. Mortgage-backed securities and CMO/REMICs are included in maturity categories based upon estimated prepayment speeds.

	Available-for-sale
					Weighted-
	Amortized		Fair		Average
	Cost		Value		Yield
	(amounts in thousands)
Due in one year or less	$	379,766	$	383,196		2.92	%
Due after one year through five years		782,392		819,972		4.25	%
Due after five years through ten years		700,282		734,440		4.31	%
Due after ten years		73,959		73,884		3.81	%
	$	1,936,399	$	2,011,492		4.00	%

The investment in FHLB stock is periodically evaluated for impairment based on, among other things, the capital adequacy of the FHLB and its overall financial condition. No impairment losses have been recorded through June 30, 2010.

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3. FAIR VALUE INFORMATION

The following disclosure provides fair value information for financial assets and liabilities as of June 30, 2010 and December 31, 2009. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels (Level 1, Level 2, and Level 3).

• Level 1 — Valuation is based upon quoted prices for identical instruments traded in active markets.

• Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 — Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flows and similar techniques.

Determination of Fair Value

The following is a description of valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value for financial instruments not recorded at fair value.

Cash - The carrying amount of cash and cash equivalents is considered to be a reasonable estimate of fair value.

Investment securities available-for-sale - Investment securities available-for-sale are valued based upon quotes obtained from a reputable third-party pricing service. The service uses evaluated pricing applications and model processes. Market inputs, such as, benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data are considered as part of the evaluation. The inputs are related directly to the security being evaluated, or indirectly to a similarly situated security. Market assumptions and market data are utilized in the valuation models. Accordingly, the Company categorized its investment portfolio as a Level 2 valuation.

Investment security held-to-maturity - Investment security held-to-maturity is carried at amortized cost-basis on the balance sheet. The fair value is determined using the same process described above for available-for-sale securities. During the first quarter ended, an other-than-temporary impairment loss was recognized and the carrying balance was reduced to fair value.

Non-covered Loans - The carrying amount of loans and lease finance receivables is their contractual amounts outstanding, reduced by deferred net loan origination fees and the allocable portion of the allowance for credit losses.

The fair value of loans, other than loans on non-accrual status, was estimated by discounting the remaining contractual cash flows using the estimated current rate at which similar loans would be made to borrowers with similar credit risk characteristics and for the same remaining maturities, reduced by deferred net loan origination fees and the allocable portion of the allowance for credit losses. Accordingly, in determining the estimated current rate for discounting purposes, no adjustment has been made for any change in borrowers’ credit risks since the origination of such loans. Rather, the allocable portion of the allowance for credit losses is considered to provide for such changes in estimating fair value. As a result, this fair value is not necessarily the value which would be derived using an exit price.

Non-covered Impaired loans and OREO are generally measured using the fair value of the underlying collateral, which is determined based on the most recent appraisal information received, less costs to sell. Appraised values may be adjusted based on factors such as the changes in market conditions from the time of valuation or discounted cash flows of the property. As such, these loans fall within Level 3 of the fair value hierarchy.

The fair value of commitments to extend credit and standby letters of credit were not significant at either June 30, 2010 or December 31, 2009, as these instruments predominantly have adjustable terms and are of a short-term nature.

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Covered Loans - Covered loans were measured at fair value on the date of acquisition. Thereafter, covered loans are not measured at fair value on a recurring basis. The above valuation discussion for non-covered loans is applicable to covered loans following their acquisition date.

Swaps - The fair value of the interest rate swap contracts are provided by our counterparty using a system that constructs a yield curve based on cash LIBOR rates, Eurodollar futures contracts, and 3-year through 30-year swap rates. The yield curve determines the valuations of the interest rate swaps. Accordingly, the swap is categorized as a Level 2 valuation.

Deposits & Borrowings - The amounts payable to depositors for demand, savings, and money market accounts, and the demand note to the U.S. Treasury, and short-term borrowings are considered to be stated at fair value. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. The fair value of long-term borrowings and junior subordinated debentures is estimated using the rates currently offered for borrowings of similar remaining maturities.

Accrued Interest Receivable/Payable - The amounts of accrued interest receivable on loans and lease finance receivables and investments and accrued interest payable on deposits and borrowings are considered to be stated at fair value.

The table below presents the balances of assets and liabilities measured at fair value on a recurring basis as of June 30, 2010 and December 31, 2009.

Assets & Liabilities Measured at Fair Value on a Recurring Basis
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Carrying Value at		Assets		Inputs		Inputs
(in thousands)	June 30, 2010		(Level 1)		(Level 2)		(Level 3)
Description of Assets
U.S. Treasury securities	$	—	$	—	$	—	$	—
Mortgage-backed securities		574,734		—		574,734		—
CMO’s / REMIC’s		560,652		—		560,652		—
Government agency		219,867		—		219,867		—
Municipal bonds		653,653		—		653,653		—
Other securities		2,586				2,586
Investment Securities-AFS	$	2,011,492	$	—	$	2,011,492	$	—
Interest Rate Swaps		10,579		—		10,579		—
Total Assets	$	2,022,071	$	—	$	2,022,071	$	—
Description of Liability
Interest Rate Swaps	$	10,579	$	—	$	10,579	$	—

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Assets & Liabilities Measured at Fair Value on a Recurring Basis
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Carrying Value at		Assets		Inputs		Inputs
(in thousands)	December 31, 2009		(Level 1)		(Level 2)		(Level 3)
Description of Assets
U.S. Treasury securities	$	507	$	—	$	507	$	—
Mortgage-backed securities		647,168		—		647,168		—
CMO’s / REMIC’s		773,165		—		773,165		—
Government agency		21,713		—		21,713		—
Municipal bonds		663,426		—		663,426		—
Other securities		2,484				2,484
Investment Securities-AFS	$	2,108,463	$	—	$	2,108,463	$	—
Interest Rate Swaps		4,334		—		4,334		—
Total Assets	$	2,112,797	$	—	$	2,112,797	$	—
Description of Liability
Interest Rate Swaps	$	4,334	$	—	$	4,334	$	—

We may be required to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. For assets measured at fair value on a nonrecurring basis that were still held in the balance sheet at June 30, 2010 and December 31, 2009, the following table provides the level of valuation assumptions used to determine each adjustment and the carrying value of the related assets.

Assets & Liabilities Measured at Fair Value on a Non-Recurring Basis
			Quoted Prices in		Significant
			Active Markets		Other		Significant		For the six
			for Identical		Observable		Unobservable		months ended
	Carrying Value at		Assets		Inputs		Inputs		June 30, 2010
(in thousands)	June 30, 2010		(Level 1)		(Level 2)		(Level 3)		Total Losses
Description of Assets
Investment Security-HTM	$	3,173	$	—	$	3,173	$	—	$	(685	)
Impaired Loans-Noncovered	$	19,935	$	—	$	3,610	$	16,325	$	(7,469	)
OREO-Noncovered	$	15,001	$	—	$	—	$	15,001	$	(667	)
OREO-Covered	$	5,092	$	—	$	—	$	5,092	$	—

Assets & Liabilities Measured at Fair Value on a Non-Recurring Basis
			Quoted Prices in		Significant				For the year
			Active Markets		Other		Significant		ended
			for Identical		Observable		Unobservable		December 31,
	Carrying Value at		Assets		Inputs		Inputs		2009
(in thousands)	December 31, 2009		(Level 1)		(Level 2)		(Level 3)		Total Losses
Description of Assets
Investment Security-HTM	$	3,838	$	—	$	3,838	$	—	$	(323	)
Impaired Loans-Noncovered	$	29,982	$	—	$	2,500	$	27,482	$	(18,450	)
OREO-Noncovered	$	3,936	$	—	$	—	$	3,936	$	(848	)
OREO-Covered	$	5,565	$	—	$	—	$	5,565	$	—

The following table presents estimated fair value of financial instruments. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to develop the estimates of fair value. Accordingly, the estimates presented below are not necessarily indicative of the amounts the Company could have realized in a current market exchange as of June 30, 2010 and December 31, 2009. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

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FAIR VALUE INFORMATION

	June 30, 2010				December 31, 2009
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value		Amount		Fair Value
	(amounts in thousands)
Assets
Cash and due from banks	$	451,236	$	451,236	$	103,254	$	103,254
Interest-bearing balances due from depository institutions		50,274		50,274		1,226		1,226
FHLB Stock		93,962		93,962		97,582		97,582
Investment securities available-for-sale		2,011,492		2,011,492		2,108,463		2,108,463
Investment securities held-to-maturity		3,173		3,173		3,838		3,838
Total Loans, net of allowance for credit losses		3,810,773		3,894,229		3,970,089		3,955,500
Accrued interest receivable		26,967		26,967		28,672		28,672
Swaps		10,579		10,579		4,334		4,334
Liabilities
Deposits:
Noninterest-bearing	$	1,646,717	$	1,646,717	$	1,561,981	$	1,561,981
Interest-bearing		2,954,773		2,957,333		2,876,673		2,879,305
Demand note to U.S. Treasury		2,611		2,611		2,425		2,425
Borrowings		1,398,915		1,454,389		1,488,250		1,536,933
Junior subordinated debentures		115,055		115,867		115,055		115,817
Accrued interest payable		5,818		5,818		6,481		6,481
Swaps		10,579		10,579		4,334		4,334

The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2010 and December 31, 2009. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date, and therefore, current estimates of fair value may differ significantly from the amounts presented above.

4. BUSINESS SEGMENTS

The Company has identified two principal reportable segments: Business Financial and Commercial Banking Centers and the Treasury Department. The Company’s subsidiary bank has 44 Business Financial Centers and 6 Commercial Banking Centers (branches), organized in 6 geographic regions, which are the focal points for customer sales and services. The Company utilizes an internal reporting system to measure the performance of various operating segments within the Bank which is the basis for determining the Bank’s reportable segments. The Chief Operating Decision Maker (currently our CEO) regularly reviews the financial information of these segments in deciding how to allocate resources and assessing performance. The Bank’s Business Financial and Commercial Banking Centers are considered one operating segment as their products and services are similar and are sold to similar types of customers, have similar production and distribution processes, have similar economic characteristics, and have similar reporting and organizational structures. The Treasury Department’s primary focus is managing the Bank’s investments, liquidity, and interest rate risk. Information related to the Company’s remaining operating segments which include construction lending, dairy and livestock lending, SBA lending, leasing, and centralized functions have been aggregated and included in “Other.” In addition, the Company allocates internal funds transfer pricing to the segments using a methodology that charges users of funds interest expense and credits providers of funds interest income with the net effect of this allocation being recorded in administration.

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The following table represents the selected financial information for these two business segments. Accounting principles generally accepted in the United States of America do not have an authoritative body of knowledge regarding the management accounting used in presenting segment financial information. The accounting policies for each of the business units is the same as those policies identified for the consolidated Company and identified in the footnote on the summary of significant accounting policies. The income numbers represent the actual income and expenses of each business unit. In addition, each segment has allocated income and expenses based on management’s internal reporting system, which allows management to determine the performance of each of its business units. Loan fees, included in the “Business Financial and Commercial Banking Centers” category are the actual loan fees paid to the Company by its customers. These fees are eliminated and deferred in the “Other” category, resulting in deferred loan fees for the consolidated financial statements. All income and expense items not directly associated with the two business segments are grouped in the “Other” category. Future changes in the Company’s management structure or reporting methodologies may result in changes in the measurement of operating segment results.

The following tables present the operating results and other key financial measures for the individual reportable segments for the three and six months ended June 30, 2010 and 2009:

	Six Months Ended June 30, 2010
	Business
	Financial
	Centers		Treasury		Other			Eliminations			Total
Interest income, including loan fees	$	85,760	$	43,927	$	41,138		$	—		$	170,825
Credit for funds provided (1)		34,722		—		17,684			(52,406	)		—
Total interest income		120,482		43,927		58,822			(52,406	)		170,825
Interest expense		12,586		19,196		1,490			—			33,272
Charge for funds used (1)		6,574		19,091		26,741			(52,406	)		—
Total interest expense		19,160		38,287		28,231			(52,406	)		33,272
Net interest income		101,322		5,640		30,591			—			137,553
Provision for credit losses		—		—		23,200						23,200
Net interest income after provision for credit losses	$	101,322	$	5,640	$	7,391		$	—		$	114,353
Non-interest income		11,804		8,096		(6,693	)		—			13,207
Non-interest expense		26,300		6,440		44,629			—			77,369
Segment pretax profit (loss)	$	86,826	$	7,296	$	(43,931	)	$	—		$	50,191
Segment assets as of June 30, 2010	$	4,978,792	$	2,575,934	$	764,079		$	(1,458,409	)	$	6,860,396

	Six Months Ended June 30, 2009
	Business
	Financial
	Centers		Treasury		Other			Eliminations			Total
Interest income, including loan fees	$	77,079	$	55,489	$	22,168		$	—		$	154,736
Credit for funds provided (1)		22,649		—		9,734			(32,383	)		—
Total interest income		99,728		55,489		31,902			(32,383	)		154,736
Interest expense		14,462		28,114		2,774			—			45,350
Charge for funds used (1)		6,803		11,172		14,408			(32,383	)		—
Total interest expense		21,265		39,286		17,182			(32,383	)		45,350
Net interest income		78,463		16,203		14,720			—			109,386
Provision for credit losses		—		—		42,000						42,000
Net interest income after provision for credit losses	$	78,463	$	16,203	$	(27,280	)	$	—		$	67,386
Non-interest income		9,612		21,548		4,906			—			36,066
Non-interest expense		24,703		739		38,934			—			64,376
Segment pretax profit (loss)	$	63,372	$	37,012	$	(61,308	)	$	—		$	39,076
Segment assets as of June 30, 2009	$	4,132,820	$	2,571,892	$	754,565		$	(1,044,380	)	$	6,414,897

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	Three Months Ended June 30, 2010
	Business
	Financial
	Centers		Treasury		Other			Eliminations			Total
Interest income, including loan fees	$	43,008	$	21,123	$	16,142		$	—		$	80,273
Credit for funds provided (1)		17,899		—		10,668			(28,567	)		—
Total interest income		60,907		21,123		26,810			(28,567	)		80,273
Interest expense		5,950		9,289		820			—			16,059
Charge for funds used (1)		3,053		10,235		15,279			(28,567	)		—
Total interest expense		9,003		19,524		16,099			(28,567	)		16,059
Net interest income		51,904		1,599		10,711			—			64,214
Provision for credit losses		—		—		11,000			—			11,000
Net interest income after provision for credit losses	$	51,904	$	1,599	$	(289	)	$	—		$	53,214
Non-interest income		6,200		8,781		437			—			15,418
Non-interest expense		13,168		6,060		22,219			—			41,447
Segment pretax profit (loss)	$	44,936	$	4,320	$	(22,071	)	$	—		$	27,185

	Three Months Ended June 30, 2009
	Business
	Financial
	Centers		Treasury		Other			Eliminations			Total
Interest income, including loan fees		38,556	$	26,030	$	11,189		$	—		$	75,775
Credit for funds provided (1)		12,717		—		5,233			(17,950	)		—
Total interest income		51,273		26,030		16,422			(17,950	)		75,775
Interest expense		7,300		13,188		1,192			—			21,680
Charge for funds used (1)		3,236	$	6,993		7,721			(17,950	)		—
Total interest expense		10,536		20,181		8,913			(17,950	)		21,680
Net interest income		40,737		5,849		7,509			—			54,095
Provision for credit losses		—		—		20,000			—			20,000
Net interest income after provision for credit losses	$	40,737	$	5,849	$	(12,491	)	$	—		$	34,095
Non-interest income		4,800		12,619		2,290			—			19,709
Non-interest expense		12,363	$	377		20,239			—			32,979
Segment pretax profit (loss)	$	33,174	$	18,091	$	(30,440	)	$	—		$	20,825

(1) Credit for funds provided and charge for funds used is eliminated in the consolidated presentation.

5. DERIVATIVE FINANCIAL INSTRUMENTS

The Bank is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are market risk and interest rate risk. As of June 30, 2010, the Bank entered into 38 interest-rate swap agreements with customers and 38 with a counterparty bank. The swaps are not designated as hedging instruments. The purpose of entering into offsetting derivatives not designated as a hedging instrument is to provide the Bank a variable-rate loan receivable and provide the customer the financial effects of a fixed-rate loan without creating volatility in the bank’s earnings.

The structure of the swaps is as follows. The Bank enters into a swap with its customers to allow them to convert variable rate loans to fixed rate loans, and at the same time, the Bank enters into a swap with the counterparty bank to allow the Bank to pass on the interest-rate risk associated with fixed rate loans. The net effect of the transaction allows the Bank to receive interest on the loan from the customer at a variable rate based on LIBOR plus a spread. The changes in the market value of the swaps primarily offset each other and therefore do not have a significant impact on the Company’s results of operations.

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As of June 30, 2010, the total notional amount of the Bank’s swaps was $267.6 million. The following tables present the location of the asset and liability and the amount of gain recognized as of and for the three months ended June 30, 2010.

Fair Value of Derivative Instruments

	Asset Derivatives			Liability Derivatives
	June 30, 2010			June 30, 2010
	(amounts in thousands)
Derivatives Not Designated as	Balance Sheet			Balance Sheet
Hedging Instruments	Location	Fair Value		Location	Fair Value
Interest Rate Swaps	Other Assets	$	10,579	Other Liabilities	$	10,579
Total Derivatives		$	10,579		$	10,579

The Effect of Derivative Instruments on the Consolidated Statement of Earnings for
six months ended June 30, 2010
(amounts in thousands)

		Amount of Gain
		Recognized in Income
Derivatives Not Designated as	Location of Gain Recognized in	on Derivative
Hedging Instruments	Income on Derivative	June 30, 2010
Interest Rate Swaps	Other Income	$	636
Total		$	636

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

Management’s discussion and analysis is written to provide greater insight into the results of operations and the financial condition of CVB Financial Corp. and its subsidiaries. Throughout this discussion, “Company” refers to CVB Financial Corp. and its subsidiaries as a consolidated entity. “CVB” refers to CVB Financial Corp. as the unconsolidated parent company and “Bank” refers to Citizens Business Bank. For a more complete understanding of the Company and its operations, reference should be made to the financial statements included in this report and this discussion and analysis should be read in conjunction with the Company’s 2009 Annual Report on Form 10-K. Certain statements in this Report on Form 10-Q constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995 which involve risks and uncertainties. Our actual results may differ significantly from the results discussed in such forward-looking statements. Factors that might cause such a difference 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; the effect of acquisitions we may make; the effect of changes in laws and regulations (including laws and regulations concerning financial reform, 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. For additional information concerning these factors and other factors which may cause actual results to differ from the results discussed in our forward-looking statements, see the periodic filings the Company makes with the Securities and Exchange Commission, and in particular “Item 1A. Risk Factors” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

OVERVIEW

We are a bank holding company with one bank subsidiary, Citizens Business Bank. We have three other inactive subsidiaries: CVB Ventures, Inc.; Chino Valley Bancorp and Orange National Bancorp. We are also the common stockholder of CVB Statutory Trust I, CVB Statutory Trust II and CVB Statutory Trust III, statutory trusts which were formed to issue trust preferred securities in order to increase the capital of the Company. Through our acquisition of FCB in June 2007, we acquired FCB Capital Trust II, another statutory trust. We are based in Ontario, California in what is known as the “Inland Empire” of California. Our geographical market area encompasses the City of Stockton (the middle of the Central Valley) in the center of California to the City of Laguna Beach (in Orange County) in the southern portion of California. Our mission is to offer the finest financial products and services to professionals and businesses in our market area while maintaining a strong capital base and prudent loan loss reserves. We intend to grow our business through targeted efforts at our existing customers, attracting new associates who bring customers relationships with them and acquisitions.

25

Our primary source of income is from the interest earned on our loans and investments and our primary area of expense is the interest paid on deposits, borrowings, and salaries and benefits. As such our net income is subject to fluctuations in interest rates and their impact on our income statement. We are also subject to competition from other financial institutions, which may affect our pricing of products and services, and the fees and interest rates we can charge on them.

Economic conditions in our California service area impact our business. We have seen a significant decline in the housing market resulting in slower growth in construction loans. Unemployment is high in our market areas and areas of our marketplace have been significantly impacted by adverse economic conditions, both nationally and in California. Approximately 22% of our total loan portfolio of $3.9 billion is located in the Inland Empire region of California. The balance of the portfolio is from outside of this region. We continue to see the impact of deteriorating economic conditions on our loan portfolio. Continued weaknesses in the local and state economy could adversely affect us through diminished loan demand, credit quality deterioration, and increases in provisions for credit losses, loan delinquencies and defaults.

Over the past few years, we have been active in acquisitions and we will continue to consider acquisition targets, including FDIC-assisted acquisitions, which will enable us to meet our business objectives and enhance shareholder value along with organic growth. Since 2000, we have acquired five banks and a leasing company, and we have opened four de novo branches: Bakersfield, Fresno, Madera, and Stockton, California. We also opened six Commercial Banking Centers since 2008.

Our net income increased to $35.1 million for the first six months of 2010 compared with $29.0 million for the first six months of 2009, an increase of $6.1 million, or 21.03%. Diluted earnings per share increased to $0.33 per share for 2010, from $0.30 per share for 2009. Operating results for the first six months of 2010 include a $23.2 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.

For the quarter ended June 30, 2010, our net income increased to 19.0 million compared to $15.9 million for the quarter ended June 30, 2009, an increase of 3.1 million, or 19.88%. Diluted earnings per share were $0.18 for the second quarter of 2010 compared to $0.17 for the second quarter of 2009.

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. For further discussion, see “Analysis of the Results of Operations” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

CRITICAL ACCOUNTING ESTIMATES

Critical accounting estimates are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. We believe that our most critical accounting estimates upon which our financial condition depends, and which involve the most complex or subjective decisions or assessments are as follows:

Allowance for Credit Losses: Arriving at an appropriate level of allowance for credit losses involves a high degree of judgment. Our allowance for credit losses provides for probable losses based upon evaluations of known and inherent risks in the loan portfolio. The determination of the balance in the allowance for credit losses is based on an analysis of the loan and lease finance receivables portfolio using a systematic methodology and reflects an amount that, in our judgment, is adequate to provide for probable credit losses inherent in the portfolio, after giving consideration to the character of the loan portfolio, current economic conditions, past credit loss experience, and such other factors as deserve current recognition in estimating inherent credit losses. The provision for credit losses is charged to expense. For a full discussion of our methodology of assessing the adequacy of the allowance for credit losses, see the “Risk Management” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

26

Investment Portfolio: The investment portfolio is an integral part of our financial performance. We invest primarily in fixed income securities. Accounting estimates are used in the presentation of the investment portfolio and these estimates do impact the presentation of our financial condition and results of operations. We classify securities as held-to-maturity those debt securities that we have the positive intent and ability to hold to maturity. Securities classified as trading are those securities that are bought and held principally for the purpose of selling them in the near term. All other debt and equity securities are classified as available-for-sale. Securities held-to-maturity are accounted for at cost and adjusted for amortization of premiums and accretion of discounts. Trading securities are accounted for at fair value with the unrealized holding gains and losses being included in current earnings. Securities available-for-sale are accounted for at fair value, with the net unrealized gains and losses, net of income tax effects, presented as a separate component of stockholders’ equity. At each reporting date, securities are assessed to determine whether there is an other-than-temporary impairment. Such impairment, if any, is required to be recognized in current earnings rather than as a separate component of stockholders’ equity. Realized gains and losses on sales of securities are recognized in earnings at the time of sale and are determined on a specific-identification basis. Purchase premiums and discounts are recognized in interest income using the effective-yield method over the terms of the securities. Our investment in Federal Home Loan Bank (“FHLB”) stock is carried at cost.

Income Taxes: We account for income taxes using the asset and liability method by deferring income taxes based on estimated future tax effects of differences between the tax and book basis of assets and liabilities considering the provisions of enacted tax laws. These differences result in deferred tax assets and liabilities, which are included in our balance sheets. We must also assess the likelihood that any deferred tax assets will be recovered from future taxable income and establish a valuation allowance for those assets determined to not likely be recoverable. Our judgment is required in determining the amount and timing of recognition of the resulting deferred tax assets and liabilities, including projections of future taxable income. Although we have determined a valuation allowance is not required for any of our deferred tax assets, there is no guarantee that these assets are recoverable.

Goodwill and Intangible Assets: We have acquired entire banks and branches of banks. Those acquisitions accounted for under the purchase method of accounting have given rise to goodwill and intangible assets. We record the assets acquired and liabilities assumed at their fair value. These fair values are arrived at by use of internal and external valuation techniques. The excess purchase price is allocated to assets and liabilities respectively, resulting in identified intangibles. The identified intangibles are amortized over the estimated lives of the assets or liabilities. Any excess purchase price after this allocation results in goodwill. Goodwill is tested on an annual basis for impairment.

Acquired Loans: Loans acquired from SJB were recorded at fair value as of the acquisition date. In estimating the fair value, the portfolio was segregated into two groups: credit-impaired covered loans and other covered loans. Credit-impaired loans are those loans showing evidence of credit deterioration since origination and it is probable, at the date of acquisition, that the Company will not collect all contractually required principal and interest payments. For the credit-impaired loans, the fair value was estimated by using observable market data for similar types of loans. For the other covered loans, the fair value was estimated by calculating the undiscounted expected cash flows based on estimated levels of prepayments, default factors, and loss severities and discounting the expected cash flows at a market rate. Significant estimates are used in calculating the fair value of acquired loans; as a result, actual results may be different than estimates.

27

Fair Value of Financial Instruments: We use fair value measurements to record fair value adjustments to certain financial instruments and to determine fair value disclosures. Investment securities available-for-sale and interest-rate swaps are financial instruments recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record at fair value other financial assets on a non-recurring basis, such as impaired loans and OREO. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-market accounting or write-downs of individual assets. Further, we include in the Notes to Financial Statements information about the extent to which fair value is used to measure assets and liabilities, the valuation methodologies used and its impact to earnings. Additionally, for financial instruments not recorded at fair value we disclose the estimate of their fair value.

ANALYSIS OF THE RESULTS OF OPERATIONS

Earnings

We reported net earnings of $35.1 million for the six months ended June 30, 2010. This represented an increase of $6.1 million or 21.03%, from net earnings of $29.0 million for the six months ended June 30, 2009. Basic and diluted earnings per common share for the six-month period increased to $0.33 per common share for 2010, compared to $0.30 per common share for 2009. The annualized return on average assets was 1.03 % for the six months of 2010 compared to an annualized return on average assets of 0.90% for the six months of 2009. The annualized return on average equity was 10.77% for the six months ended June 30, 2010, compared to an annualized return of 9.29% for the six months ended June 30, 2009.

For the quarter ended June 30, 2009, our net earnings were $19.0 million. This represents an increase of $3.1 million, or 19.88%, over net earnings of $15.9 million for the second quarter of 2009. Basic and diluted earnings per common share increased to $0.18 per share for the second quarter of 2010 compared to $0.17 per share for the second quarter of 2009. The annualized return on average assets was 1.11% and 0.99% for the second quarter of 2010 and 2009, respectively. The annualized return on average equity was 11.44% and 9.99% for the second quarter of 2010 and 2009, respectively.

Net Interest Income

The principal component of our earnings is net interest income, which is the difference between the interest and fees earned on loans and investments (earning assets) and the interest paid on deposits and borrowed funds (interest-bearing liabilities). Net interest margin is the taxable-equivalent of net interest income as a percentage of average earning assets for the period. The level of interest rates and the volume and mix of earning assets and interest-bearing liabilities impact net interest income and net interest margin. The net interest spread is the yield on average earning assets minus the cost of average interest-bearing liabilities. Our net interest income, interest spread, and net interest margin are sensitive to general business and economic conditions. These conditions include short-term and long-term interest rates, inflation, monetary supply, and the strength of the economy, in general, and the local economies in which we conduct business. Our ability to manage the net interest income during changing interest rate environments will have a significant impact on our overall performance. Our balance sheet is currently liability-sensitive; meaning interest-bearing liabilities will generally reprice more quickly than earning assets. Therefore, our net interest margin is likely to decrease in sustained periods of rising interest rates and increase in sustained periods of declining interest rates. We manage net interest income by affecting changes in the mix of earning assets as well as the mix of interest-bearing liabilities, changes in the level of interest-bearing liabilities in proportion to earning assets, and in the growth of earning assets.

Our net interest income, before the provision for credit losses, totaled $137.6 million for the six months ended June 30, 2010. This represented an increase of $28.2 million, or 25.75%, over net interest income, before provision for credit losses, of $109.4 million for the same period in 2009. The increase in net interest income of $28.2 million resulted from a $16.1 million increase in interest income and a $12.1 million decrease in interest expense.

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Interest income totaled $170.8 million for the first six months of 2010. This represented an increase of $16.1 million, or 10.4%, compared to total interest income of $154.7 million for the same period last year. The increase in interest income is primarily due to a $17.9 million discount accretion on covered loans acquired from SJB. The discount accretion represents accelerated principal payments on SJB loans and is recorded as a yield adjustment to interest income. As a result, average yield on earning assets increased to 5.75% for the six months of 2010 from 5.22% for the same period of 2009, or 53 basis points. Average earning assets decreased by $33.7 million, or 0.54%, from $6.20 billion to $6.16 billion.

Interest expense totaled $33.3 million for the first six months of 2010. This represented a decrease of $12.1 million, or 26.63%, from total interest expense of $45.4 million for the same period last year. The decrease in interest expense was due to the decrease in average borrowings of $452.1 million, from $1.97 billion as of June 30, 2009 to $1.51 billion as of June 30, 2010. The average rate paid on interest-bearing liabilities decreased to 1.46% for the first six months of 2010 from 2.03% for the same period in 2009, or 57 basis points. The average cost of deposits decreased to 0.70% for the first six months of 2010 from 1.10% for the same period in 2009, or 40 basis points. The decrease in rates paid on deposits and borrowings was offset by an increase in average interest-bearing deposits of $529.8 million, or 22.22%, from $2.38 billion to $2.91 billion.

For the second quarter ended June 30, 2010, our net interest income, before provision for credit losses, totaled $64.2 million. This represented an increase of $10.1 million, or 18.71%, over net interest income of $54.1 million for the same period in 2009. The increase in net interest income of $10.1 million resulted from an increase in interest income of 4.5 million and a decrease in interest expense of $5.6 million.

Interest income totaled $80.3 million for the second quarter of 2010. This represented an increase of $4.5 million, or 5.94%, compared to total interest income of $75.8 million for the same period last year. The increase in interest income for the second quarter ending June 30, 2010 as compared to the second quarter ending June 30, 2009 was primarily due to 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 to interest income.

Interest expense totaled $16.1 million for the second quarter of 2009. This represented a decrease of $5.6 million or 25.93%, from total interest expense of $21.7 million for the same period last year. The decrease in interest expense was due to the decrease in average borrowings of $237.5 million, or 12.92%. The average rate paid on interest-bearing liabilities decreased to 1.41% for the second quarter ending June 30, 2010 from 1.98% for the same period in 2009, or 57 basis points. The average cost of deposits decreased to 0.66% for the second quarter ending June 30, 2010 from 1.03% for the same period in 2009, or 37 basis points. The decrease in yields was offset by an increase in average interest-bearing deposits of $416.5 million, or 16.62%, from $2.51 billion to $2.92 billion.

29

Table 1 shows the average balances of assets, liabilities, and stockholders’ equity and the related interest income, expense, and yields/rates for the three-month period and six-month period ended June 30, 2010 and 2009. Yields for tax-preferenced investments are shown on a taxable equivalent basis using a 35% tax rate.

TABLE 1 — Distribution of Average Assets, Liabilities, and Stockholders’ Equity; Interest Rates and Interest Differentials

	Six-month period ended June 30,
	2010							2009
	Average				Average			Average				Average
	Balance		Interest		Yield/Rate			Balance		Interest		Yield/Rate
	(amounts in thousands)
ASSETS
Investment Securities
Taxable	$	1,401,840	$	30,475		4.35	%	$	1,732,406	$	41,570		4.84	%
Tax preferenced (1)		655,148		12,941		5.59	%		671,756		13,811		5.79	%
Investment in FHLB stock		96,682		129		0.27	%		93,240		—		0.00	%
Federal Funds Sold & Interest Bearing
Deposits with other institutions		32,086		340		2.12	%		30,953		59		0.38	%
Loans HFS		1,596		33		4.17	%		—		—		0.00	%
Loans (2) (3)		3,974,467		126,907		6.44	%		3,667,152		99,296		5.46	%
Total Earning Assets		6,161,819		170,825		5.75	%		6,195,507		154,736		5.22	%
Total Non Earning Assets		690,226							329,505
Total Assets	$	6,852,045						$	6,525,012
LIABILITIES AND STOCKHOLDERS’ EQUITY
Savings Deposits (4)	$	1,696,482	$	5,360		0.64	%	$	1,238,592	$	5,004		0.81	%
Time Deposits		1,217,496		4,769		0.79	%		1,145,543		8,025		1.41	%
Total Deposits		2,913,978		10,129		0.70	%		2,384,135		13,029		1.10	%
Other Borrowings		1,628,100		23,143		2.83	%		2,080,233		32,321		3.09	%
Interest Bearing Liabilities		4,542,078		33,272		1.46	%		4,464,368		45,350		2.03	%
Non-interest bearing deposits		1,598,199							1,358,732
Other Liabilities		53,874							71,677
Stockholders’ Equity		657,894							630,235
Total Liabilities and Stockholders’ Equity	$	6,852,045						$	6,525,012
Net interest income			$	137,553						$	109,386
Net interest spread — tax equivalent						4.29	%						3.19	%
Net interest margin						4.50	%						3.57	%
Net interest margin — tax equivalent						4.67	%						3.75	%
Net interest margin excluding loan fees						4.45	%						3.52	%
Net interest margin excluding loan fees — tax equivalent						4.62	%						3.71	%

(1)	Non tax-equivalent rate was 3.96% for 2010, 4.12% for 2009
(2)	Loan fees are included in total interest income as follows, (000)s omitted: 2010, $1,567; 2009, $ 1,393
(3)	Non-performing, non-covered loans are included in net loans as follows: 2010, $82.9 million; 2009, $51.3 million
(4)	Includes interest bearing demand and money market accounts

30

TABLE 1 — Distribution of Average Assets, Liabilities, and Stockholders’ Equity; Interest Rates and Interest Differentials

	Three Months Ended June 30,
	2010							2009
	Average				Average			Average				Average
	Balance		Interest		Rate			Balance		Interest		Rate
	(amounts in thousands)
ASSETS
Investment Securities
Taxable	$	1,375,632	$	14,391		4.18	%	$	1,642,964	$	19,134		4.73	%
Tax preferenced (1)		650,368		6,409		5.57	%		663,168		6,815		5.79	%
Investment in FHLB stock		95,792		63		0.26	%		93,240		—		0.00	%
Federal Funds Sold & Interest Bearing
Deposits with other institutions		50,222		238		1.90	%		61,283		55		0.36	%
Loans HFS		1,055		15		5.70	%		—		—		—
Loans (2) (3)		3,937,448		59,157		6.03	%		3,654,189		49,771		5.46	%
Total Earning Assets		6,110,517		80,273		5.44	%		6,114,844		75,775		5.17	%
Total Non Earning Assets		755,688							326,919
Total Assets	$	6,866,205						$	6,441,763
LIABILITIES AND STOCKHOLDERS’ EQUITY
Savings Deposits (4)	$	1,727,842	$	2,628		0.61	%	$	1,292,070	$	2,439		0.76	%
Time Deposits		1,194,717		2,213		0.74	%		1,213,994		4,000		1.32	%
Total Deposits		2,922,559		4,841		0.66	%		2,506,064		6,439		1.03	%
Other Borrowings		1,600,951		11,218		2.77	%		1,838,419		15,241		3.28	%
Interest Bearing Liabilities		4,523,510		16,059		1.41	%		4,344,483		21,680		1.98	%
Non-interest bearing deposits		1,621,507							1,375,054
Other Liabilities		54,589							85,547
Stockholders’ Equity		666,599							636,679
Total Liabilities and Stockholders’ Equity	$	6,866,205						$	6,441,763
Net interest income			$	64,214						$	54,095
Net interest spread — tax equivalent						4.03	%						3.19	%
Net interest margin						4.22	%						3.57	%
Net interest margin — tax equivalent						4.39	%						3.76	%
Net interest margin excluding loan fees						4.17	%						3.53	%
Net interest margin excluding loan fees — tax equivalent						4.34	%						3.71	%

(1)	Non tax equivalent rate was 3.94% for 2010 and 4.11% for 2009.
(2)	Loan fees are included in total interest income as follows, (000)s omitted: 2010, $816; 2009, $ 679
(3)	Non-performing, non-covered loans are included in net loans as follows, (000)s omitted: 2010, $82.9 million; 2009, $51.3 million
(4)	Includes interest bearing demand and money market accounts

As stated above, the net interest margin measures net interest income as a percentage of average earning assets. Our tax effected (TE) net interest margin was 4.67% for the first six months of 2010, compared to 3.75% for the first six months of 2009. Our tax effected (TE) net interest margin for the second quarter of 2010 was 4.39%, compared to 3.76% for the second quarter of 2009. The increase in the net interest margin over the same period last year is primarily the result of the $17.9 million discount accretion on covered SJB loans which impacted interest income on loans. This was partially offset by changes in the mix of assets and liabilities as discussed in the following paragraphs. Generally, our net interest margin improves in a decreasing interest rate environment as our deposits and borrowings reprice much faster than our loans and securities.

The net interest spread is the difference between the yield on average earning assets and the cost of average interest-bearing liabilities. The net interest spread is an indication of our ability to manage rates received on loans and investments and rates paid on deposits and borrowings in a competitive and changing interest rate environment. Our net interest spread (TE) was 4.29% for the first six months of 2010 and 3.19% for the same period last year. The increase in the net interest spread for the six months ended June 30, 2010 resulted from a 53 basis point increase in the yield on earning assets and a 57 basis point decrease in the cost of interest-bearing liabilities, thus generating a 110 basis point increase in the net interest spread from the same period last year. The net interest spread was positively impacted by the $17.9 million discount accretion on covered SJB loans recognized as a yield adjustment to interest income during the first quarter of 2010.

31

For the second quarter of 2010, the Company’s net interest spread (TE) was 4.03% as compared to 3.19% for the same period last year. The increase in net interest spread for the second quarter ended June 30, 2010 resulted from a 27 basis point increase in yield on earning assets and a 57 basis point decrease in the cost of interest-bearing liabilities, thus generating a 84 basis point increase in the net interest spread from the same period last year.

The yield (TE) on earning assets increased to 5.75% for the six months of 2010, from 5.22% for the same period last year. Average loans as a percent of earning assets increased to 64.50% in the six months of 2010 over 59.19% for the same period in 2009. Average investments as a percent of earning assets decreased to 33.38% in the six months of 2010 from 38.80% for the same period in 2009. The yield on loans for the first six months of 2010 increased to 6.44% as compared to 5.46% for the same period in 2009 as a result of $17.9 million discount accretion on SJB covered loans. The yield on loans decline at a slower rate than general interest rates as approximately 57% of the Company’s loans are fixed-rate loans or hybrid adjustable loans with interest rates that are typically fixed for the first five years of the loans and reset at fixed rates for the remaining 5-year terms. The yield (TE) on investments for the first six months of 2010 decreased to 4.74% compared to 5.11% for the same period in 2009.

The cost of average interest-bearing liabilities decreased to 1.46% for the first six months of 2010 as compared to 2.03% for the same period in 2009, reflecting a decrease in interest rates and change in the mix of interest-bearing liabilities. Average borrowings as a percent of average interest-bearing liabilities decreased to 35.84% during the first six months of 2010 as compared to 46.60% for the same period in 2009. Average borrowings were $1.63 billion as of June 30, 2010. This represents a decrease of $452.1 million or 21.73%, from average borrowings of $2.08 billion as of June 30, 2009. The cost of borrowings for the first six months of 2010 decreased to 2.83% as compared to 3.09% for the same period in 2009. Borrowings typically have a higher cost than interest-bearing deposits. The cost of interest-bearing deposits for the first six months of 2010 decreased to 0.70% as compared to 1.10% for the same period in 2009, while average deposits increased $529.8 million or 22.22% over the same periods. The FDIC has approved the payment of interest on certain demand deposit accounts. This could have a negative impact on our net interest margin, net interest spread, and net earnings, should this be implemented fully. Currently, we pay interest on NOW and Money Market Accounts. The overall decrease in interest rates and decrease in average borrowings, offset by an increase in average deposits, resulted in a decrease in our interest expense.

For the second quarter of 2010, the yield (TE) on earning assets increased to 5.44%, from 5.17% for the same period last year. The cost of average interest-bearing liabilities decreased to 1.41% for the second quarter of 2010 as compared to 1.98% for the same period in 2009. The changes reflect the decreasing interest rate environment and change in mix of earning assets and interest-bearing liabilities, reflecting similar trends as described above.

Table 2 presents a comparison of interest income and interest expense resulting from changes in the volumes and rates on average earning assets and average interest-bearing liabilities for the periods indicated. Changes in interest income or expense attributable to volume changes are calculated by multiplying the change in volume by the initial average interest rate. The change in interest income or expense attributable to changes in interest rates is calculated by multiplying the change in interest rate by the initial volume. The changes attributable to both interest rate and volume changes are calculated by multiplying the change in rate times the change in volume.

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TABLE 2 — Rate and Volume Analysis for Changes in Interest Income, Interest Expense and Net Interest Income

	Comparison of six months ended June 30,
	2010 Compared to 2009
	Increase (Decrease) Due to
							Rate/
	Volume			Rate			Volume			Total
	(amounts in thousands)
Interest Income:
Taxable investment securities	$	(7,644	)	$	(4,208	)	$	757		$	(11,095	)
Tax-advantaged securities		(500	)		(366	)		(4	)		(870	)
Fed funds sold & interest-bearing deposits with other institutions		2			269			10			281
Investment in FHLB stock		—			126			3			129
Loans HFS		—			—			33			33
Loans		8,321			17,821			1,469			27,611
Total interest on earning assets		179			13,642			2,268			16,089
Interest Expense:
Savings deposits		1,839			(1,044	)		(455	)		340
Time deposits		503			(3,522	)		(221	)		(3,240	)
Other borrowings		(7,024	)		(2,719	)		565			(9,178	)
Total interest on interest-bearing liabilities		(4,682	)		(7,285	)		(111	)		(12,078	)
Net Interest Income	$	4,861		$	20,927		$	2,379		$	28,167

TABLE 2 — Rate and Volume Analysis for Changes in Interest Income, Interest Expense and Net Interest Income

	Comparison of quarters ended June 30,
	2010 Compared to 2009
	Increase (Decrease) Due to
							Rate/
	Volume			Rate			Volume			Total
	(amounts in thousands)
Interest Income:
Taxable investment securities	$	(2,851	)	$	(2,223	)	$	331		$	(4,743	)
Tax-advantaged securities		(185	)		(223	)		2			(406	)
Fed funds sold & interest-bearing deposits with other institutions		(10	)		236			(43	)		183
Investment in FHLB stock		—			61			2			63
Loans HFS		—			—			15			15
Loans		3,856			5,193			337			9,386
Total interest on earning assets		810			3,044			644			4,498
Interest Expense:
Savings deposits		826			(483	)		(151	)		192
Time deposits		(63	)		(1,755	)		28			(1,790	)
Other borrowings		(1,969	)		(2,370	)		316			(4,023	)
Total interest on interest-bearing liabilities		(1,206	)		(4,608	)		193			(5,621	)
Net Interest Income	$	2,016		$	7,652		$	451		$	10,119

33

Interest and Fees on Loans

Our major source of revenue and primary component of interest income is interest and fees on loans. Interest and fees on loans totaled $126.9 million for the first six months of 2010. This represented an increase of $27.6 million, or 27.84%, over interest and fees on loans of $99.3 million for the same period in 2009. The increase in interest on loans was primarily due to the $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 to interest income. As a result, the yield on loans increased to 6.44% for the first six months of 2010, compared to 5.46% for the same period in 2009. Average loans increased $307.3 million, or 8.38%, from $3.67 billion for the first six months of 2009 to $3.97 billion for the first six months of 2010 due to the acquisition of SJB.

Interest and fees on loans totaled $59.2 million for the second quarter of 2010. This represented an increase of $9.4 million, or 18.89%, over interest and fees on loans of $49.8 million for the same period in 2009. The increase was due to the $4.5 million discount accretion on covered loans acquired from SJB and increases in average loan balances.

In general, we stop accruing interest on a loan after its principal or interest becomes 90 days or more past due. When a loan is placed on nonaccrual, all interest previously accrued but not collected is charged against earnings. There was no interest income that was accrued and not reversed on non-performing loans at June 30, 2010 and 2009.

Fees collected on loans are an integral part of the loan pricing decision. Loan fees and the direct costs associated with the origination of loans are deferred and deducted from the loan balance. Deferred net loan fees are recognized in interest income over the term of the loan using the effective-yield method. We recognized loan fee income of $1.6 million for the first six months of 2010, as compared to $1.4 million for the same period in 2009, an increase of $175,000 or 12.56%.

Interest on Investments

The second most important component of interest income is interest on investments, which totaled $43.4 million for the first six months of 2010. This represented a decrease of $12.0 million, or 21.61%, from interest on investments of $55.4 million for the same period in 2009. The decrease in interest on investments for the six months of 2010 from the same period last year was primarily the result of a decrease in yield on investments and a decrease in average investments. The interest rate environment and the investment strategies we employ directly affect the yield on the investment portfolio. We continually adjust our investment strategies in response to the changing interest rate environment in order to maximize the rate of total return consistent within prudent risk parameters, and to minimize the overall interest rate risk of the Company. The total yield (TE) on investments decreased to 4.74% for the first six months of 2010 compared to 5.11% for the first six months of 2009. Average investment balances for the first six months for 2010 decreased $341.1 million, or 14.19% from the same period last year.

For the second quarter of 2010, interest income on investments totaled $20.8 million. This represented a decrease of $5.1 million or 19.84%, from interest on investments of $25.9 million for the same period in 2009. The decrease in interest on investments for the second quarter of 2010 from the same period last year reflected decreases in the average balance of investments and in the interest rates. The total yield (TE) on investments decreased to 4.63% for the second quarter of 2010, compared to 5.04% for the same period in 2009 as a result of the decreasing interest rate environment.

Interest on Deposits

Interest on deposits totaled $10.1 million for the first six months of 2010. This represented a decrease of $2.9 million, or 22.26%, from interest on deposits of $13.0 million for the first six months of 2009. The decrease is due to the decrease in interest rates on deposits offset by increases in average interest-bearing deposit balances. The cost of interest-bearing deposits decreased to 0.70% for the first six months of 2010 from 1.10% for the first six months of 2009. The cost of total deposits decreased to 0.45% for the first six months of 2010 from 0.70% for the first six months of 2009. Average interest-bearing deposits increased $529.8 million, or 22.22%, over the same period last year.

34

For the second quarter of 2010, interest on deposits totaled $4.8 million. This represented a decrease of $2.0 million, or 24.83%, from interest on deposits of $6.4 million for the same period in 2009. The decrease is due to the decrease in interest rates on deposit offset by increases in average interest-bearing deposit balances. The cost of interest-bearing deposits decreased to 0.66% for the second quarter of 2010 from 1.03% for the second quarter of 2009. The cost of total deposits decreased to 0.43% for the second quarter of 2010 from 0.67% for the second quarter of 2009. Average interest-bearing deposits increased $416.5 million, or 16.62%, over the same period last year.

Interest on Borrowings

Interest on borrowings totaled $21.5 million for the first six months of 2010. This represented a decrease of $8.6 million, or 28.54%, from interest on borrowings of $30.1 million for the same period of 2009. The decrease is due to the decrease in average borrowings of $452.1 million, or 21.73%, compared to the same period last year. Interest rates on borrowings decreased to 2.83% for the first six months of 2010 from 3.05% first six months of 2009.

For the second quarter of 2010, interest on borrowings totaled $10.4 million. This represented a decrease of $3.8 million, or 26.89%, from interest on borrowings of $14.2 million for the same period of 2009. The decrease is due to the decrease in interest rates paid on borrowings and a decrease in average borrowings. Interest rates on borrowings decreased 49 basis points, from 3.26% for the second quarter of 2009 to 2.77% for the second quarter of 2010. Average borrowings decreased $237.5 million, or 13.78%.

Provision for Credit Losses

We maintain an allowance for inherent credit losses that is increased by a provision for credit losses charged against operating results. The provision for credit losses is determined by management as the amount to be added to the allowance for probable credit losses after net charge-offs have been deducted to bring the allowance to an adequate level which, in management’s best estimate, is necessary to absorb probable credit losses within the existing loan portfolio.

We made a provision for credit losses of $23.2 million during the first six months of 2010 and $42.0 million during the same period in 2009. The decrease in the provision for credit losses during the first six months of 2010 was primarily due to the decrease in incremental classified assets from December 31, 2009 to June 30, 2010 compared to the same period last year. We continue to make provisions for credit losses in order to build our reserves based on historical losses and current economic indicators. We believe the allowance is appropriate as of the end of the period covered by this report. We continually assess the quality of our portfolio to determine whether additional provision for credit losses is necessary. We anticipate future provisions will be required to account for probable credit losses. The ratio of the allowance for credit losses to total loans as of June 30, 2010 and 2009 was 3.38% and 2.07%, respectively.

No assurance can be given that economic conditions which adversely affect the Company’s service areas, past credit loss experience, the characteristics of our loan portfolio or other circumstances will not be reflected in increased provisions for credit losses in the future. The nature of this process requires considerable judgment. Net charge-offs totaled $13.6 million for the first six months of 2010 and $21.2 million during the same period of 2009. See “Risk Management – Credit Risk” herein.

Other Operating Income

Other operating income for the Company includes income derived from special services offered by the Bank, such as CitizensTrust, merchant card, international banking, and other business services. Also included in other operating income are service charges and fees, primarily from deposit accounts; gains (net of losses) from the sale of investment securities, other real estate owned, and fixed assets; and other revenues not included as interest on earning assets.

35

We reported other operating income of 13.2 million for the first six months of 2010, compared to other operating income of $36.1 million during the same period of 2009. This represents a decrease of $22.9 million, or 63.38% partially due to a $12.2 million reduction in the FDIC loss sharing asset during the first six months of 2010. During the first six months of 2010, we sold $162.8 million in securities in recognized a gain on sale of $8.8 million. In contrast, during the first six months of 2009, we realized a gain on sale of securities of $21.5 million.

During the first six months of 2010, we reported increases in service charge fee income, trust and investment services income, BOLI income and bankcard services income compared to the same period last year. Service charge fee income of $8.5 million for the six months ended June 30, 2010 increased $1.1 million, or 14.96%, over service charge fee income of $7.4 million for the same period last year. Trust and investment services income of $4.3 million during the first six months of 2010 increased $1.1 million, or 32.53%, over trust and investment service income of $3.3 million during the first six months of 2009.

Other operating income totaled $15.4 million for the quarter ended June 30, 2010. This represents a decrease of $4.3 million, or 21.77%, from total other operating income of $19.7 million for the quarter ended June 30, 2009. The decrease was primarily due to the gain on sale of securities of $12.6 million during the quarter ended June 30, 2009 compared to a gain on sale of securities of $8.8 million and reduction in FDIC loss sharing asset of $1.6 million during the quarter ended June 30, 2010.

During the second quarter of 2010, we reported increases in service charge fee income, trust and investment services income, BOLI income, and bankcard income compared to the same period last year. Service charge fee income of $4.2 million for the quarter ended June 30, 2010 increased $553,000, or 15.18%, over service charge fee income of $3.6 million for the same period last year. Trust and investment services income of $2.2 million during the second quarter of 2010 increased $605,000, or 37.71%, over trust and investment services income of $1.6 million during the second quarter of 2009.

Other Operating Expenses

Other operating expenses for the Company include expenses for salaries and benefits, occupancy, equipment, stationary and supplies, professional services, amortization of intangibles, and other expenses. Other operating expenses totaled $77.4 million for the first six months of 2010. This represents an increase of $13.0 million, or 20.18% over other operating expenses of $64.4 million for the same period in 2009. This was primarily due to a $5.7 million prepayment charge on borrowings and an increase in salaries and employee expenses of $4.4 million, or 13.97%, as a result of the acquisition of SJB. In addition, professional services expenses were up $2.3 million, or 69.66%, compared to the same period last year, primarily due to increases in acquisition costs, as well as, legal expenses for the management of non-accrual loans and OREO.

For the second quarter of 2010, other operating expenses totaled $41.4 million. This represents an increase of $8.5 million, or 25.68%, over other operating expenses of $33.0 million for the same period last year.

At June 30, 2010, we employed 774 full time equivalent employees, compared to 686 full time equivalent employees at June 30, 2009.

For the most part, other operating expenses reflect the direct expenses and related administrative expenses associated with staffing, maintaining, promoting, and operating branch facilities. Our ability to control other operating expenses in relation to asset growth can be measured in terms of other operating expenses as a percentage of average assets. Operating expenses measured as a percentage of average assets was 2.28% and 1.99% for the first six months of 2010 and 2009, respectively.

36

Our ability to control other operating expenses in relation to the level of net revenue (net interest income plus other operating income) is measured by the efficiency ratio and indicates the percentage of net revenue that is used to cover expenses. For the first six months of 2010, the efficiency ratio was 60.65%, compared to a ratio of 62.23% for the same period in 2009. The efficiency ratio, before the provision for credit losses, was 51.32% for the first six months of 2010 and 44.26% for the first six months of 2009. The increase in the efficiency ratio was primarily due to the $5.7 million prepayment charge on borrowings as discussed above.

Income Taxes

The Company’s effective tax rate for the three and six months of 2010 was 30.06% and 30.00%, compared to 23.84% and 25.71% for the same period in 2009. The effective tax rates are below the nominal combined Federal and State tax rates as a result of the tax-preferenced income from certain investments and municipal loans/leases as a percentage of total income for each period. The majority of tax preferenced income is derived from municipal securities.

RESULTS BY BUSINESS SEGMENTS

We have two reportable business segments: Business Financial and Commercial Banking Centers, and Treasury. The results of these two segments are included in the reconciliation between business segment totals and our consolidated total. Our business segments do not include the results of administration units that do not meet the definition of an operating segment.

Business Financial and Commercial Banking Centers

Key measures we use to evaluate the Business Financial and Commercial Banking Center’s performance are included in the following table for the three and six months ended June 30, 2010 and 2009. The table also provides additional significant segment measures useful to understanding the performance of this segment.

	Six months ended						Three months ended
	June 30,						June 30,
	2010			2009			2010			2009
	(amounts in thousands)
Key Measures:
Statement of Operations
Interest income (1)	$	120,482		$	99,728		$	60,907		$	51,273
Interest expense (1)		19,160			21,265			9,003			10,536
Net Interest Income	$	101,322		$	78,463		$	51,904		$	40,737
Non-interest income		11,804			9,612			6,200			4,800
Non-interest expense		26,300			24,703			13,168			12,363
Segment pretax profit (loss)	$	86,826		$	63,372		$	44,936		$	33,174
Balance Sheet
Average loans	$	4,150,731		$	3,667,152		$	4,101,302		$	3,654,189
Average non-interest bearing deposits	$	1,598,199		$	1,358,732		$	1,621,507		$	1,375,054
Average interest-bearing deposits	$	2,913,978		$	2,384,135		$	2,922,559		$	2,506,064
Yield on loans (2)		5.30	%		5.46	%		5.35	%		5.46	%
Rate paid on deposits		0.70	%		1.10	%		0.66	%		1.03	%

(1)	Interest income and interest expense include credit for funds provided and charge for funds used, respectively. These are eliminated in the consolidated presentation.
(2)	Yield on loans excludes SJB discount accretion as this is accounted for at the corporate level.

For the six months ended June 30, 2010, segment profit increased by $23.5 million, or 37.01%, compared to the same period last year. This was primarily due to the increase in net interest income of $22.9 million, or 29.13%, due to increases in loan balances as a result of the SJB acquisition. Average loan balances increased $483.6 million or 13.19%, from the same period last year. This increase was offset by a decrease in loan yield of 16 basis points. Rates paid on deposits decreased 40 basis points, while average interest-bearing deposits increased $529.8 million, or 22.22%. Non-interest income increased by $2.2 million, or 22.80%, compared to the first six months of 2009. Non-interest expense increased $1.6 million, or 6.46%, compared to the same period last year.

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For the quarter ended June 30, 2010, segment profit increased by $11.8 million, or 35.46%, compared to the same period last year. This was primarily due to the increase in net interest income. Non-interest income increased by $1.4 million, or 29.17%, compared to the quarter ended June 30, 2009. Non-interest expense increased $805,000, or 6.51%, compared to the same period last year.

Treasury

Key measures we use to evaluate the Treasury’s performance are included in the following table for the three and six months ended June 30, 2010 and 2009. The table also provides additional significant segment measures useful to understanding the performance of this segment.

	Six months ended						Three months ended
	June 30,						June 30,
	2010			2009			2010			2009
	(amounts in thousands)
Key Measures:
Statement of Operations
Interest income (1)	$	43,927		$	55,489		$	21,123		$	26,030
Interest expense (1)		38,287			39,286			19,524			20,181
Net Interest Income	$	5,640		$	16,203		$	1,599		$	5,849
Non-interest income (expense)		8,096			21,548			8,781			12,619
Non-interest expense		6,440			739			6,060			377
Segment pretax profit (loss)	$	7,296		$	37,012		$	4,320		$	18,091
Balance Sheet
Average investments	$	2,185,756		$	2,528,355		$	2,172,014		$	2,460,655
Average borrowings	$	1,513,045		$	1,965,178		$	1,485,896		$	1,723,364
Yield on investments-TE		4.74	%		5.11	%		4.63	%		5.04	%
Non-tax equivalent yield		3.96	%		4.12	%		3.96	%		4.11	%
Rate paid on borrowings		2.83	%		3.05	%		2.77	%		3.26	%

(1) Interest income and interest expense include credit for funds provided and charge for funds used, respectively. These are eliminated in the consolidated presentation.

For the six months ended June 30, 2010, segment profits decreased by $29.7 million from the same period last year. The decrease is primarily due to the $21.5 million gain on sale of securities recognized during the first six months of 2009 and the decrease in net interest income of $10.6 million year over year. The decrease in net interest income is due to the decrease in average investments of $342.6 million, or 13.55%, and a decrease in yield on investments of 37 basis points from the six months ended June 30, 2009.

For the quarter ended June 30, 2010, segment profit decreased by $13.8 million over the same period last year. This is due to a decrease of $4.9 million, or 18.85%, in interest income on investments year over year. In addition, we recognized a $12.6 million gain on sale of securities during the three months ended June 30, 2009 compared to a gain on sale of securities of $8.8 million during the three months ended June 30, 2010.

There are no provisions for credit losses or taxes in the segments as these are accounted for at the corporate level.

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Other

	Six months ended						Three months ended
	June 30,						June 30,
	2010			2009			2010			2009
	(amounts in thousands)
Key Measures:
Statement of Operations
Interest income (1)	$	58,822		$	31,902		$	26,810		$	16,422
Interest expense (1)		28,231			17,182			16,099			8,913
Net interest income	$	30,591		$	14,720		$	10,711		$	7,509
Provision for Credit Losses		23,200			42,000			11,000			20,000
Non-interest income (expense)		(6,693	)		4,906			437			2,290
Non-interest expense		44,629			38,934			22,219			20,239
Pre-tax loss	$	(43,931	)	$	(61,308	)	$	(22,071	)	$	(30,440	)

(1) Interest income and interest expense include credit for funds provided and charge for funds used, respectively. These are eliminated in the consolidated presentation.

The Company’s administration and other operating departments reported pre-tax loss of $43.9 million for the first six months of 2010. This represents a decrease in pre-tax loss of $17.4 million or 28.34%, from a pre-tax loss of $61.3 million for the same period in 2009. The decrease in pre-tax loss is primarily attributed to the decrease in provision for credit losses of $18.8 million. The increase in net interest income of $15.9 million is primarily due to the $17.9 million discount accretion on SJB loans. This is offset by a decrease in non-interest income (expense) of $11.6 million which is primarily due to the reduction in the FDIC loss sharing asset of $12.2 million.

For the quarter ended June 30, 2010, the company’s administration and other operating departments reported pre-tax loss of $22.1 million. This represents a decrease of $8.4 million or 27.49%, from a pre-tax loss of $30.4 million for the same period in 2009. The decrease in pre-tax loss is primarily attributed to the decrease in provision for credit losses of $9.0 million.

ANALYSIS OF FINANCIAL CONDITION

The Company reported total assets of $6.86 billion at June 30, 2010. This represented an increase of $120.6 million, or 1.79%, over total assets of $6.74 billion at December 31, 2009 primarily due to an increase in cash and due from banks of $348.0 million, or 337.02%, offset by a decrease in earning assets. Earning assets totaled $5.97 billion at June 30, 2010. This represented a decrease of $210.4 million, or 3.40%, from total earning assets of $6.18 billion at December 31, 2009, due to a decrease in both loans and investments. Total liabilities were $6.19 billion at June 30, 2010, up $84.9 million, or 1.39%, over total liabilities of $6.10 billion at December 31, 2009. Total equity increased $35.8 million, or 5.60%, to $674.0 million at June 30, 2010, compared with total equity of $638.2 million at December 31, 2009.

Investment Securities

The Company reported total investment securities of $2.01 billion at June 30, 2010. This represented a decrease of $97.6 million, or 4.62%, from total investment securities of $2.11 billion at December 31, 2009. Investment securities comprise 33.73% of the Company’s total earning assets at June 30, 2010.

Securities held as “available-for-sale” are reported at fair value for financial reporting purposes. The related unrealized gains or losses, net of income taxes, are recorded in stockholders’ equity. At June 30, 2010, securities held as available-for-sale had a fair value of $2.01 billion, representing 99.8% of total investment securities, with an amortized cost of $1.94 billion. At June 30, 2010, the net unrealized holding gain on securities available-for-sale was $75.1 million and that resulted in accumulated other comprehensive income of $42.9 million (net of $32.2 million in deferred taxes). At December 31, 2009, the Company reported net unrealized gain on investment securities available-for-sale of $47.2 million and accumulated other comprehensive income of $26.4 million (net of deferred taxes of $20.8 million).

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Table 3 sets forth investment securities available-for-sale at June 30, 2010 and December 31, 2009.

Table 3 — Composition of Investment Securities
(amounts in thousands)

	June 30, 2010					December 31, 2009
			Total						Total
	Fair Value		Percent			Fair Value		Percent
Investment Securities Available-for-Sale:
U.S. Treasury securities	$	—		0.00	%	$	507		0.02	%
Mortgage-backed securities		574,734		28.57	%		647,168		30.70	%
CMO’s / REMIC’s		560,652		27.87	%		773,165		36.67	%
Government agency		219,867		10.93	%		21,713		1.03	%
Municipal bonds		653,653		32.50	%		663,426		31.46	%
Other securities		2,586		0.13	%		2,484		0.12	%
Total Investment Securities	$	2,011,492		100.00	%	$	2,108,463		100.00	%

The weighted-average yield (TE) on the investment portfolio at June 30, 2010 was 4.00% with a weighted-average life of 4.1 years. This compares to a yield of 4.41% at December 31, 2009 with a weighted-average life of 4.7 years and a yield of 4.66% at June 30, 2009 with a weighted-average life of 4.8 years. The weighted average life is the average number of years that each dollar of unpaid principal due remains outstanding. Average life is computed as the weighted-average time to the receipt of all future cash flows, using as the weights the dollar amounts of the principal paydowns.

Approximately 66% of the available-for-sale portfolio represents securities issued by the U.S. government or U.S. government-sponsored enterprises, which guarantee payment of principal and interest.

The remaining CMO/REMICs are backed by agency-pooled collateral or whole loan collateral. All non-agency available-for-sale CMO/REMIC issues held are rated investment grade or better by either Standard & Poor’s or Moody’s, as of June 30, 2010 and December 31, 2009.

40

Composition of the Fair Value and Gross Unrealized Losses of Securities:

	June 30, 2010
	Less than 12 months				12 months or longer				Total
			Gross				Gross				Gross
			Unrealized				Unrealized				Unrealized
			Holding				Holding				Holding
Description of Securities	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
	(amounts in thousands)
Held-To-Maturity
CMO	$	—	$	—	$	3,173	$	1,115	$	3,173	$	1,115
Available-for-Sale
CMO/REMICs		—		—		6,729		45		6,729		45
Municipal bonds		51,374		837		4,083		493		55,457		1,330
	$	51,374	$	837	$	10,812	$	538	$	62,186	$	1,375

	December 31, 2009
	Less than 12 months				12 months or longer				Total
			Gross				Gross				Gross
			Unrealized				Unrealized				Unrealized
			Holding				Holding				Holding
Description of Securities	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
	(amounts in thousands)
Held-To-Maturity
CMO (1)	$	—	$	—	$	3,838	$	1,671	$	3,838	$	1,671
Available-for-Sale
Government agency	$	5,022	$	1	$	—	$	—	$	5,022	$	1
Mortgage-backed securities		73,086		968		—		—		73,086		968
CMO/REMICs		179,391		3,025		9,640		286		189,031		3,311
Municipal bonds		80,403		2,122		1,785		298		82,188		2,420
	$	337,902	$	6,116	$	11,425	$	584	$	349,327	$	6,700

(1) For the twelve months ended December 31, 2009, the Company recorded $1.7 million, on a pre-tax basis, of the non-credit portion of OTTI for this security in other comprehensive income, which is included as gross unrealized losses.

The tables above show the Company’s investment securities’ gross unrealized losses and fair value by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2010 and December 31, 2009. The Company has reviewed the individual securities to determine whether a decline in fair value below the amortized cost basis is other-than-temporary. A summary of our analysis of these securities and the unrealized losses is described more fully in Note 2 – Investment Securities in the notes to the consolidated financial statements. Economic trends may adversely affect the value of the portfolio of investment securities that we hold.

During the first six months of 2010, the Company recognized an other-than-temporary impairment on the held-to-maturity investment security. The credit-impairment loss of $685,000 was recognized as an offset to other operating income.

Loans

At June 30, 2010, we reported total loans, net of deferred loan fees, of $3.9 billion. This represents a decrease of $149.7 million, or 3.67%, from total loans, net of deferred loan fees, of $4.08 billion at December 31, 2009. Total loans, net of deferred loan fees, comprise 65.80% of our total earning assets. The following tables present our loan portfolio, segregated into covered versus non-covered loans, by category as of June 30, 2010 and December 31, 2009.

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Table 4 — Distribution of Loan Portfolio by Type (Dollar amounts in thousands)

	June 30, 2010
	Non-Covered
	Loans			Covered Loans			Total
Commercial and Industrial	$	456,200		$	57,283		$	513,483
Real Estate:
Construction		185,237			120,487			305,724
Commercial Real Estate		2,003,439			317,818			2,321,257
SFR Mortgage		246,812			7,687			254,499
Consumer		62,282			11,060			73,342
Municipal lease finance receivables		153,262			780			154,042
Auto and equipment leases, net of unearned discount		23,754			—			23,754
Dairy and Livestock/Agribusiness		379,793			68,655			448,448
Gross Loans	$	3,510,779		$	583,770		$	4,094,549
Less: Purchase Accounting Discount		—			(159,393	)		(159,393	)
Less: Deferred net loan fees		(5,835	)		—			(5,835	)
Gross loans, net of deferred loan fees	$	3,504,944		$	424,377		$	3,929,321
Less: Allowance for credit losses		(118,548	)		—			(118,548	)
Net Loans	$	3,386,396		$	424,377		$	3,810,773
Allowance for Credit Losses as a % of Loans, net of deferred loan fees		3.38	%					3.02	%

	December 31, 2009
	Non-Covered
	Loans			Covered Loans			Total
Commercial and Industrial	$	413,715		$	61,802		$	475,517
Real Estate:
Construction		265,444			136,065			401,509
Commercial Real Estate		1,989,644			357,140			2,346,784
SFR Mortgage		265,543			17,510			283,053
Consumer		67,693			11,066			78,759
Municipal lease finance receivables		159,582			983			160,565
Auto and equipment leases, net of unearned discount		30,337			—			30,337
Dairy and Livestock/Agribusiness		422,958			70,493			493,451
Gross Loans	$	3,614,916		$	655,059		$	4,269,975
Less: Purchase Accounting Discount		—			(184,419	)		(184,419	)
Less: Deferred net loan fees		(6,537	)		(6	)		(6,543	)
Gross loans, net of deferred loan fees	$	3,608,379		$	470,634		$	4,079,013
Less: Allowance for credit losses		(108,924	)		—			(108,924	)
Net Loans	$	3,499,455		$	470,634		$	3,970,089
Allowance for Credit Losses as a % of Loans, net of deferred loan fees		3.02	%					2.67	%

Commercial and industrial loans are loans and leases to commercial entities to finance capital purchases or improvements, or to provide cash flow for operations. Real estate loans are loans secured by trust deeds on real property, including property under construction, commercial property and single family and multifamily residences. Consumer loans include installment loans to consumers as well as home equity loans and other loans secured by junior liens on real property. Municipal lease finance receivables provide financing to municipalities, school districts, and other special districts. Auto and equipment leases provide financing to both commercial entities as well as consumers. Dairy and livestock loans are loans to finance the operating needs of wholesale dairy farm operations, cattle feeders, livestock raisers, and farmers.

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Our loan portfolio is from a variety of areas throughout our marketplace. The following is the breakdown of our total loans and commercial real estate loans by region as of June 30, 2010.

	June 30, 2010
					Non-Covered
Non-Covered					Commercial
Loans by Market Area	Total Non-Covered Loans				Real Estate Loans
	(amounts in thousands)
Los Angeles County	$	1,147,123	32.7	%	$	725,859	36.2	%
Inland Empire		775,033	22.1	%		621,875	31.0	%
Central Valley		605,497	17.2	%		298,011	14.9	%
Orange County		524,359	14.9	%		199,820	10.0	%
Other Areas		458,767	13.1	%		157,874	7.9	%
	$	3,510,779	100.0	%	$	2,003,439	100.0	%

	June 30, 2010
Covered Loans					Covered Commercial
Loans by Market Area	Total Covered Loans				Real Estate Loans
	(amounts in thousands)
Los Angeles County	$	20,046	3.4	%	$	2,995	0.9	%
Inland Empire		3,175	0.5	%		225	0.1	%
Central Valley		445,649	76.4	%		270,155	85.0	%
Orange County		7,225	1.2	%		3,507	1.1	%
Other Areas (1)		107,675	18.5	%		40,936	12.9	%
	$	583,770	100.0	%	$	317,818	100.0	%

(1) Other areas include church and hotel loans that are out-of-state or in other areas of California

Of particular concern in the current credit and economic environments is our real estate and real estate construction loans. Our real estate loans are comprised of single-family residences, multifamily residences, industrial, office and retail. We strive to have a maximum loan-to-value ratio of 65-75%. This table breaks down our real estate portfolio, with the exception of construction loans, which are discussed in greater detail below.

	June 30, 2010
						Percent			Average
Non-Covered Real Estate Loans						Owner-			Loan
(amounts in thousands)	Loan Balance		Percent			Occupied (1)			Balance
Single Family-Direct	$	55,289		2.5	%		100.0	%	$	825
Single Family-Mortgage Pools		191,523		8.5	%		100.0	%		329
Multifamily		121,010		5.4	%		0.0	%		992
Industrial		644,817		28.6	%		36.8	%		864
Office		380,252		16.9	%		24.8	%		998
Retail		263,252		11.7	%		12.9	%		1,155
Medical		144,390		6.4	%		38.4	%		1,875
Secured by Farmland		160,278		7.1	%		100.0	%		2,137
Other		289,440		12.9	%		50.3	%		1,196
	$	2,250,251		100.0	%		44.5	%		1,070

(1) Represents percentage of owner-occupied in each real estate loan category

43

In the table above, Single Family-Direct represents those single-family residence loans that we have made directly to our customers. These loans total $55.3 million. In addition, we have purchased pools of owner-occupied single-family loans from real estate lenders, Single Family-Mortgage Pools, totaling $191.5 million. These loans were purchased with FICO scores predominantly ranging from 700 to over 800 and original loan-to-value ratios of 60% to 80%. These pools were purchased to diversify our loan portfolio since we make few single-family loans. Due to market conditions, we have not purchased any mortgage pools since August 2007.

The table below provides a breakdown of our covered real estate loans.

	June 30, 2010
Covered Real Estate Loans						Average Loan
(amounts in thousands)	Loan Balance		Percent			Balance
Single Family-Direct	$	7,687		2.4	%	$	296
Multifamily		20,688		6.4	%		643
Industrial		41,695		12.8	%		532
Office		31,151		9.6	%		554
Retail		39,939		12.3	%		401
Medical		28,268		8.7	%		646
Secured by Farmland		6,680		2.1	%		1,275
Secured by Hotels		61,594		18.8	%		3,623
Church Loans		45,640		14.0	%		1,755
Other		42,163		12.9	%		628
	$	325,505		100.0	%		1,154

As of June 30, 2010, the Company had $305.7 million in construction loans. This represents 7.5% of gross loans outstanding of $4.1 billion. The following table presents a break-down of our non-covered construction loans by county and type.

	June 30, 2010
Non-Covered	SFR & Multifamily
Construction Loans	Land
(amounts in thousands)	Development				Construction				Total
Inland Empire	$	163	3.2	%	$	1,260	8.3	%	$	1,423	6.9	%
Los Angeles		—	0.0	%		10,014	64.7	%		10,014	48.6	%
Central Valley		1,860	36.2	%		140	0.9	%		2,000	9.7	%
San Diego		3,121	60.6	%		4,039	26.1	%		7,160	34.8	%
	$	5,144	100.0	%	$	15,453	100.0	%	$	20,597	100.0	%

	Commercial
	Land
	Development				Construction				Total
Inland Empire	$	12,579	38.8	%	$	49,220	37.2	%	$	61,799	37.5	%
Los Angeles		2,100	6.5	%		40,130	30.3	%		42,230	25.6	%
Central Valley		10,723	33.1	%		14,643	11.1	%		25,366	15.4	%
Other (includes out-of-state)		6,977	21.5	%		28,268	21.4	%		35,245	21.4	%
	$	32,379	99.9	%	$	132,261	100.0	%	$	164,640	99.9	%

Of this $185.2 million in non-covered construction loans, approximately 11.1%, or $20.6 million, were for single-family residences, residential land loans, and multi-family land development loans. The remaining construction loans, totaling $164.6 million, were related to commercial construction. The average balance of any single construction loan is approximately $3.4 million. Our construction loans are located throughout our marketplace as can be seen in the table above. Of the total SFR and multifamily loans, one loan of $7.2 million is a multifamily loan and the remainder represents single-family loans.

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The following table presents a break-down of our covered construction loans by county and type.

	June 30, 2010
Covered	SFR & Multifamily
Construction Loans	Land
(amounts in thousands)	Development				Construction				Total
Central Valley		43,221	83.2	%		12,648	85.6	%		55,869	83.8	%
Other (includes out-of-state)		8,710	16.8	%		2,120	14.4	%		10,830	16.2	%
	$	51,931	100.0	%	$	14,768	100.0	%	$	66,699	100.0	%

	Commercial
	Land
	Development				Construction				Total
Central Valley		13,537	100.0	%		31,451	78.1	%		44,988	83.6	%
Other (includes out-of-state)		—	0.0	%		8,800	21.9	%		8,800	16.4	%
	$	13,537	100.0	%	$	40,251	100.0	%	$	53,788	100.0	%

Allowance for Credit Losses

The allowance for credit losses was $118.5 million as of June 30, 2010. This represents an increase of $9.6 million, or 8.84%, compared to allowance for credit losses of $108.9 million as of December 31, 2009. Activity in the allowance for credit losses was as follows for the first six months of 2010 and for the year ended December 31, 2009.

	June 30,			December 31,
	2010			2009
	(amounts in thousands)
Balance, beginning of year	$	108,924		$	53,960
Provision charged to operations		23,200			80,500
Loans charged-off		(13,771	)		(26,339	)
Recoveries on loans previously charged-off		195			803
Balance, end of the period	$	118,548		$	108,924

Non-performing Assets (Non-Covered)

We had non-covered non-performing assets of $97.9 million at June 30, 2010. Non-performing assets represent 2.78% of total loans and OREO and 1.43% of total assets at June 30, 2010. We had non-performing assets of $73.7 million at December 31, 2009. Non-performing assets include non-accrual loans plus other real estate owned (foreclosed property).

45

TABLE 5 — Non-Performing Assets
(Non-Covered)

	June 30,			December 31,
	2010			2009
	(amounts in thousands)
Non-accrual loans	$	62,265		$	68,762
Restructured loans (non-performing)		20,585			1,017
Other real estate owned (OREO)		15,001			3,936
Total nonperforming assets	$	97,851		$	73,715
Restructured loans (performing)	$	3,610		$	2,500
Percentage of nonperforming assets to total loans outstanding & OREO		2.78	%		2.04	%
Percentage of nonperforming assets to total assets		1.43	%		1.09	%

We had loans with a balance of $86.5 million classified as impaired at June 30, 2010. This balance includes the non-performing loans of $62.3 million and loans which were restructured in a troubled debt restructuring with a balance of $24.2 million as of June 30, 2010. At December 31, 2009, we had impaired loans with a balance of $72.3 million. Impaired loans measured 2.26% of total non-covered loans as of June 30, 2010.

As of June 30, 2010, we had $15.0 million in non-covered OREO compared to $3.9 million as of December 31, 2009, an increase of $11.1 million. This was primarily due to the sales of existing OREO properties of $1.5 million, offset by the transfer of $12.6 million from non-performing loans during the first six months of 2010. During the first six months of 2010, the Bank incurred expenses of $667,000 related to the holding of OREO.

The table below provides trends in our non-covered non-performing assets and delinquencies over the past year.

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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	%

We had $82.9 million in non-covered non-performing loans at June 30, 2010, or 2.36% of total non-covered loans. This compares to $69.8 million in non-performing loans at December 31, 2009 and $51.3 million in non-performing loans at June 30, 2009. Non-performing loans consist of $2.8 million in residential real estate 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 other commercial loans and $0.1 million in consumer loans.

The economic downturn has had an impact on our market area and on our loan portfolio. With the exception of assets discussed above, we are not aware of any other loans as of June 30, 2010 for which known credit problems of the borrower would cause serious doubts as to the ability of such borrowers to comply with their present loan repayment terms, or any known events that would result in the loan being designated as non-performing at some future date. We anticipate that there will be some additional losses in the loan portfolio given the current state of the economy. However, we cannot predict the extent to which the deterioration in general economic conditions, real estate values, increase in general rates of interest, change in the financial conditions or business of a borrower may adversely affect a borrower’s ability to pay. See “Risk Management – Credit Risk” herein.

Deposits

The primary source of funds to support earning assets (loans and investments) is the generation of deposits from our customer base. The ability to grow the customer base and subsequently deposits is a crucial element in the performance of the Company.

47

At June 30, 2010, total deposits were $4.60 billion, representing an increase of $162.8 million, or 3.67%, over total deposits of $4.44 billion at December 31, 2009. The composition of deposits is as follows:

	June 30, 2010				December 31, 2009
	(Amounts in thousands)
Non-interest bearing deposits
Demand deposits	$	1,646,717	35.7	%	$	1,561,981	35.2	%
Interest bearing deposits
Savings Deposits		1,755,569	38.2	%		1,682,415	37.9	%
Time deposits		1,199,204	26.1	%		1,194,258	26.9	%
Total deposits	$	4,601,490	100.0	%	$	4,438,654	100.0	%

The amount of non-interest-bearing demand deposits in relation to total deposits is an integral element in achieving a low cost of funds. Demand deposits totaled $1.65 billion at June 30, 2010, representing an increase of $84.7 million, or 5.42%, over total demand deposits of $1.56 billion at December 31, 2009. Non-interest-bearing demand deposits represented 35.7% of total deposits as of June 30, 2010 and 35.2% of total deposits as of December 31, 2009.

Savings deposits, which include savings, interest-bearing demand, and money market accounts, totaled $1.76 billion at June 30, 2010, representing an increase of $73.2 million, or 4.35%, over savings deposits of $1.68 billion at December 31, 2009.

Time deposits totaled $1.20 billion at June 30, 2010. This represented an increase of $4.9 million, or 0.41%, over total time deposits of $1.19 billion at December 31, 2009.

Other Borrowed Funds

To achieve the desired growth in earning assets and to fully utilize our capital, we first pursue non-interest-bearing deposits (the lowest cost of funds to the Company). Next, we pursue interest-bearing deposits and finally we supplement the growth in deposits with borrowed funds. Average borrowed funds, as a percent of average total funding (total deposits plus demand notes plus borrowed funds) was 25.11% as of June 30, 2010, as compared to 31.23% as of December 31, 2009.

We enter into short-term borrowing agreements (borrowings with original maturities of one year or less) with the Federal Home Loan Bank (FHLB) and other institutions. The Bank had no outstanding balances under these agreements at June 30, 2010 and December 31, 2009. As a result of the increase in our deposits and customer repurchases, it was possible for us to reduce our reliance on borrowings.

In June 2006, the Company purchased securities totaling $250.0 million. This purchase was funded by a repurchase agreement with J.P. Morgan of $250.0 million, with a double cap embedded in the repurchase agreement. The interest rate on this agreement is fixed at 4.95% and the maturity is September 30, 2011. During the second quarter of 2010, we prepaid $100.0 million of this structured repurchase agreement. The transaction resulted in a $5.7 million prepayment charge recorded in other operating expense.

In November 2006, we began a repurchase agreement product with our customers. This product, known as Citizens Sweep Manager, sells our investment securities overnight to our customers under an agreement to repurchase them the next day. These repurchase agreements are with customers who have other banking relationships with us. As of June 30, 2010 and December 31, 2009, total customer repurchases were $595.7 million and $485.1 million, respectively, with weighted average annual interest rates of 0.77% and 0.95%. As of June 30, 2010 and December 31, 2009, total funds borrowed under these repurchase agreements were $745.7 million and $735.1 million, respectively.

We also entered into long-term borrowing agreements (borrowings with original maturities of one year or longer) with the FHLB. We had outstanding balances of $650.0 million and $750.0 million under these agreements at June 30, 2010 and December 31, 2009, respectively. The weighted average annual interest rate was 3.63% and 3.81% at June 30, 2010 and December 31, 2009, respectively. The FHLB holds certain investment securities and loans of the Bank as collateral for these borrowings.

48

The Bank has an agreement, known as the Treasury Tax & Loan (“TT&L”) Note Option Program, with the Federal Reserve Bank and the U.S. Department of Treasury in which federal tax deposits made by depositors can be held by the bank until called (withdrawn) by the U.S. Department of Treasury. The maximum amount of accumulated federal tax deposits allowable to be held by the Bank, as set forth in the agreement, is $15.0 million. On June 30, 2010 and December 31, 2009 the amounts held by the Bank in the TT&L Note Option Program were $2.6 million and $2.4 million, collateralized by securities, respectively. Amounts are payable on demand.

At June 30, 2010, borrowed funds totaled $1.40 billion, representing a decrease of $89.1 million, or 5.98%, from total borrowed funds of $1.49 billion at December 31, 2009.

Aggregate Contractual Obligations

The following table summarizes our contractual commitments as of June 30, 2010:

			Maturity by Period
			Less Than		One Year		Four Year		After
			One		to Three		to Five		Five
	Total		Year		Years		Years		Years
			(amounts in thousands)
Deposits	$	4,601,490	$	4,584,362	$	10,750	$	3,148	$	3,230
Repurchase Agreements		745,661		595,661		150,000		—		—
FHLB and Other Borrowings		655,865		865		200,000		100,000		355,000
Junior Subordinated Debentures		115,055		—		—		—		115,055
Deferred Compensation		9,281		829		1,607		1,539		5,306
Operating Leases		24,377		2,770		9,764		5,379		6,464
Total	$	6,151,729	$	5,184,487	$	372,121	$	110,066	$	485,055

Deposits represent non-interest bearing, money market, savings, NOW, certificates of deposits, brokered and all other deposits held by the Company.

Repurchase agreements represent amounts due to customers, in addition to, the repurchase agreement with J.P. Morgan.

FHLB borrowings represent the amounts that are due to the Federal Home Loan Bank. These borrowings have fixed maturity dates. Other borrowings represent the amounts on FCB subordinated debt and TT&L.

Junior subordinated debentures represent the amounts that are due from the Company to CVB Statutory Trust I, CVB Statutory Trust II & CVB Statutory Trust III. The debentures have the same maturity as the Trust Preferred Securities. CVB Statutory Trust I, which matures in 2033, became callable in whole or in part in December 2008. CVB Statutory Trust II, which matures in 2034, became callable in whole or in part in January 2009. CVB Statutory Trust III, which matures in 2036, will become callable in whole or in part in 2011. It also represents FCB Capital Trust II which matures in 2033 and became callable in 2008. We have not called any of our debentures as of June 30, 2010.

Deferred compensation primarily represents the amounts that are due to former employees’ salary continuation agreements as a result of acquisitions.

Operating leases represent the total minimum lease payments under noncancelable operating leases.

49

Off-Balance Sheet Arrangements

At June 30, 2010, we had commitments to extend credit of approximately $573.3 million and obligations under letters of credit of $68.3 million and available lines of credit totaling $1.00 billion from certain institutions. Commitments to extend credit are agreements to lend to customers, provided there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Commitments are generally variable rate, and many of these commitments are expected to expire without being drawn upon. As such, the total commitment amounts do not necessarily represent future cash requirements. The Bank uses the same credit underwriting policies in granting or accepting such commitments or contingent obligations as it does for on-balance-sheet instruments, which consist of evaluating customers’ creditworthiness individually. The Company has a reserve for undisbursed commitments of $9.6 million as of June 30, 2010 and $7.9 million as of December 31, 2009.

Standby letters of credit written are conditional commitments issued by the Bank to guarantee the financial performance of a customer to a third party. Those guarantees are primarily issued to support private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. When deemed necessary, the Bank holds appropriate collateral supporting those commitments.

The following table summarizes the off-balance sheet arrangements at June 30, 2010:

			Maturity by Period
			Less Than		One Year		Four Year		After
			One		to Three		to Five		Five
2010	Total		Year		Years		Years		Years
	(Amounts in thousands)
Commitment to extend credit		573,343		461,222		56,853		7,220		48,048
Obligations under letters of credit		68,296		40,583		21,827		5,886		—
Total	$	641,639	$	219,121	$	90,396	$	57,552	$	274,570

Liquidity and Cash Flow

Since the primary sources and uses of funds for the Bank are deposits and loans, the relationship between gross loans and total deposits provides a useful measure of the Bank’s liquidity. Typically, the closer the ratio of loans to deposits is to 100%, the more reliant the Bank is on its loan portfolio to provide for short-term liquidity needs. Since repayment of loans tends to be less predictable than the maturity of investments and other liquid resources, the higher the loan to deposit ratio the less liquid are the Bank’s assets. For the first six months of 2010, the Bank’s loan to deposit ratio averaged 88.08%, compared to an average ratio of 97.98% for the same period in 2009. The Bank’s ratio of loans to deposits and customer repurchases averaged 78.15% for the first six months of 2010 and 88.31% for the same period in 2009.

CVB is a company separate and apart from the Bank that must provide for its own liquidity and must service its own obligations. Substantially all of CVB’s revenues are obtained from dividends declared and paid by the Bank. The remaining cash flow is from rents paid by third parties on office space in the Company’s corporate headquarters. There are statutory and regulatory provisions that could limit the ability of the Bank to pay dividends to CVB. In addition, our regulators could limit the ability of the Bank or the Company to pay dividends or make other distributions. At June 30, 2010, approximately $108.7 million of the Bank’s equity was unrestricted and available to be paid as dividends to CVB. Management of CVB believes that such restrictions will not have an impact on the ability of CVB to meet its ongoing cash obligations.

50

For the Bank, sources of funds normally include principal payments on loans and investments, other borrowed funds, and growth in deposits. Uses of funds include withdrawal of deposits, interest paid on deposits, increased loan balances, purchases, and other operating expenses.

Net cash provided by operating activities totaled $64.5 million for the first six months of 2010, compared to $41.1 million for the same period last year. The increase in cash provided by operating activities is primarily attributed to a decrease in interest paid on deposits and decrease in income taxes paid.

Net cash provided by investing activities totaled $275.7 million for the first six months of 2010, compared to net cash provided by investing activities of $337.6 million for the same period in 2009. The cash provided by investing activities was primarily the result of a decrease in loans during the first six months of 2010, offset by purchases, repayments and maturities of investment securities.

Net cash provided by financing activities totaled $56.8 million for the first six months of 2010, compared to net cash used in financing activities of $252.7 million for the same period last year. The cash provided by financing activities during the first six months of 2010 was primarily due to an increase in deposits and customer repurchases, offset by repayment of advances from FHLB. The increase in cash used during the first six months of 2009 was primarily due to repayment of FHLB advances, offset by increases in deposits.

At June 30, 2010, cash and cash equivalents totaled $501.5 million. This represented an increase of $280.3 million, or 126.7%, over a total of $221.2 million at June 30, 2009 and an increase of $397.0 million, or 380.01%, over a total of $104.5 million at December 31, 2009.

Capital Resources

Historically, our primary source of capital has been the retention of operating earnings. In order to ensure adequate levels of capital, we conduct an ongoing assessment of projected sources, needs and uses of capital in conjunction with projected increases in assets and the level of risk. As part of this ongoing assessment, the Board of Directors reviews the various components of capital. Based on the Board of Directors analysis of our capital needs (including any capital needs arising out of our financial condition and results of operations or from any acquisitions we may make) and the input of our regulators, we could determine or, our regulators could require us, to raise additional capital.

The Bank and the Company are required to meet risk-based capital standards set by their respective regulatory authorities. The risk-based capital standards require the achievement of a minimum ratio of total capital to risk-weighted assets of 8.0% (of which at least 4.0% must be Tier 1 capital). In addition, the regulatory authorities require the highest rated institutions to maintain a minimum leverage ratio of 4.0%. To be considered “well-capitalized” for bank regulatory purposes, the Bank and the Company are required to have a Tier 1 risk-based capital ratio equal to or greater than 6%, a total risk-based capital ratio equal to or greater than 10% and a Tier 1 leverage ratio equal to or greater than 5%. At June 30, 2010, the Bank and the Company exceeded the minimum risk-based capital ratios and leverage ratios required to be considered “well-capitalized” for regulatory purposes.

The Company’s equity capital was $674.0 million at June 30, 2010. This represented an increase of $35.8 million, or 5.60%, over equity capital of $638.2 million at December 31, 2009. The Company’s 2009 Annual Report on Form 10-K (Management’s Discussion and Analysis and Note 17 of the accompanying financial statements) describes the regulatory capital requirements of the Company and the Bank.

51

During the first six months of 2010, the Board of Directors of the Company declared quarterly common stock cash dividends that totaled $0.17 per share. Dividends are payable at the discretion of the Board of Directors and there can be no assurance that the Board of Directors will continue to pay dividends at the same rate, or at all, in the future. CVB’s ability to pay cash dividends to its shareholders is subject to restrictions under federal and California law, including restrictions imposed by the FRB and covenants set forth in various agreements we are a party to including covenants set forth in our junior subordinated debentures.

The table below presents the Company’s and the Bank’s risk-based and leverage capital ratios as of June 30, 2010, and December 31, 2009.

	Required
	Minimum			June 30, 2010						December 31, 2009
Capital Ratios	Ratios			Company			Bank			Company			Bank
Risk-based capital ratios:
Tier I		4.00	%		16.0	%		15.8	%		14.9	%		14.9	%
Total		8.00	%		17.4	%		17.1	%		16.3	%		16.2	%
Leverage ratio		4.00	%		10.0	%		9.9	%		9.6	%		9.6	%
Tangible Capital Ratio					9.0	%		10.5	%		8.4	%		10.0	%

RISK MANAGEMENT

We have adopted a Risk Management Plan to ensure the proper control and management of all risk factors inherent in the operation of the Company and the Bank. Specifically, credit risk, interest rate risk, liquidity risk, transaction risk, compliance risk, strategic risk, reputation risk, price risk and foreign exchange risk, can all affect the market risk exposure of the Company. These specific risk factors are not mutually exclusive. It is recognized that any product or service offered by us may expose the Bank to one or more of these risks. Our Risk Management Committee and Risk Management Department monitors these risks to minimize exposure to the Company.

Credit Risk

Credit risk is defined as the risk to earnings or capital arising from an obligor’s failure to meet the terms of any contract or otherwise fail to perform as agreed. Credit risk is found in all activities where success depends on counter party, issuer, or borrower performance. Credit risk arises through the extension of loans and leases, certain securities, and letters of credit.

Credit risk in the investment portfolio and correspondent bank accounts is addressed through defined limits in the Bank’s policy statements. In addition, certain securities carry insurance to enhance credit quality of the bond. Limitations on industry concentration, aggregate customer borrowings, geographic boundaries and standards on loan quality also are designed to reduce loan credit risk. Senior Management, Directors’ Committees, and the Board of Directors are provided with information to appropriately identify, measure, control and monitor the credit risk of the Bank.

Implicit in lending activities is the risk that losses will occur and that the amount of such losses will vary over time. Consequently, we maintain an allowance for credit losses by charging a provision for credit losses to earnings. Loans determined to be losses are charged against the allowance for credit losses. Our allowance for credit losses is maintained at a level considered by us to be adequate to provide for estimated probable losses inherent in the existing portfolio.

The allowance for credit losses is based upon estimates of probable losses inherent in the loan and lease portfolio. The nature of the process by which we determine the appropriate allowance for credit losses requires the exercise of considerable judgment. The amount actually observed in respect of these losses can vary significantly from the estimated amounts. We employ a systematic methodology that is intended to reduce the differences between estimated and actual losses.

52

Our methodology for assessing the appropriateness of the allowance is conducted on a regular basis and considers all loans. The systematic methodology consists of two major elements.

The first major element includes a detailed analysis of the loan portfolio in two phases. In the first phase, individual loans are reviewed to identify loans for impairment. A loan is impaired when principal and interest are deemed uncollectible in accordance with the original contractual terms of the loan. Impairment is measured as either the expected future cash flows discounted at each loan’s effective interest rate, the fair value of the loan’s collateral if the loan is collateral dependent, or an observable market price of the loan (if one exists). Upon measuring the impairment, we will ensure an appropriate level of allowance is present or established.

Central to the first phase of our credit risk management is its loan risk rating system. The originating credit officer assigns borrowers an initial risk rating, which is reviewed and possibly changed by Credit Management. The risk rating is based primarily on a thorough analysis of each borrower’s financial capacity in conjunction with industry and economic trends. Credit approvals are made based upon the amount of inherent credit risk specific to the transaction and are reviewed for appropriateness by senior line and Credit Management personnel. Credits are monitored by line and Credit Management personnel for deterioration in a borrower’s financial condition, which would impact the ability of the borrower to perform under the contract. Risk ratings are adjusted as necessary.

Loans are risk rated into the following categories: Pass, Special Mention, Substandard, Doubtful, and Loss. Each of these groups is assessed and appropriate amounts used in determining the adequacy of our allowance for losses. The Impaired and Doubtful loans are analyzed on an individual basis for allowance amounts. The other categories have formulae used to determine the needed allowance amount.

The Bank obtains a quarterly independent credit review by engaging an outside party to review our loans. The primary purpose of this review is to evaluate our existing loan ratings and provide an assessment as to the effectiveness of our allowance process.

Based on the risk rating system, specific allowances are established in cases where we have identified significant conditions or circumstances related to a credit that we believe indicates the probability that a loss has been incurred. We perform a detailed analysis of these loans, including, but not limited to, cash flows, appraisals of the collateral, conditions of the marketplace for liquidating the collateral and assessment of the guarantors. We then determine the inherent loss potential and allocate a portion of the allowance for losses as a specific allowance for each of these credits.

The second phase is conducted by evaluating or segmenting the remainder of the loan portfolio into groups or pools of loans with similar characteristics in accordance with SFAS No. 5, “Accounting for Contingencies.” In this second phase, groups or pools of homogeneous loans are reviewed to determine a portfolio formula allowance. In the case of the portfolio formula allowance, homogeneous portfolios, such as small business loans, consumer loans, agricultural loans, and real estate loans, are aggregated or pooled in determining the appropriate allowance. The risk assessment process in this case emphasizes trends in the different portfolios for delinquency, loss, and other-behavioral characteristics of the subject portfolios.

The second major element in our methodology for assessing the appropriateness of the allowance consists of our considerations of all known relevant internal and external factors that may affect a loan’s collectability. This includes our estimates of the amounts necessary for concentrations, economic uncertainties, the volatility of the market value of collateral, and other relevant factors. The relationship of the two major elements of the allowance to the total allowance may fluctuate from period to period.

53

In the second major element of the analysis which considers all known relevant internal and external factors that may affect a loan’s collectability, we perform an evaluation of various conditions, the effects of which are not directly measured in the determination of the formula and specific allowances. The evaluation of the inherent loss with respect to these conditions is subject to a higher degree of uncertainty because they are not identified with specific problem credits or portfolio segments. The conditions evaluated in connection with the second element of the analysis of the allowance include, but are not limited to the following conditions that existed as of the balance sheet date:

• then-existing general economic and business conditions affecting the key lending areas of the Company,

• then-existing economic and business conditions of areas outside the lending areas, such as other sections of the United States, Asia and Latin America,

• credit quality trends (including trends in non-performing loans expected to result from existing conditions),

• collateral values

• loan volumes and concentrations,

• seasoning of the loan portfolio,

• specific industry conditions within portfolio segments,

• recent loss experience in particular segments of the portfolio,

• duration of the current business cycle,

• bank regulatory examination results and

• findings of the Company’s external credit examiners.

We review these conditions in discussion with our senior credit officers. To the extent that any of these conditions is evidenced by a specifically identifiable problem credit or portfolio segment as of the evaluation date, our estimate of the effect of such condition may be reflected as a specific allowance applicable to such credit or portfolio segment. Where any of these conditions is not evidenced by a specifically identifiable problem credit or portfolio segment as of the evaluation date, our evaluation of the inherent loss related to such condition is reflected in the second major element of the allowance. Although we have allocated a portion of the allowance to specific loan categories, the adequacy of the allowance must be considered in its entirety.

Table 7 presents a comparison of net credit losses, the provision for credit losses (including adjustments incidental to mergers), and the resulting allowance for credit losses for the six months ended June 30, 2010 and 2009.

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TABLE 7 — Summary of Credit Loss Experience
(Non-Covered Loans)

	Six months ended June 30,
	2010		2009
	(amounts in thousands)
Amount of Total Loans at End of Period (1)	$	3,510,779	$	3,614,756
Average Total Loans Outstanding (1)	$	3,543,009	$	3,667,152
Allowance for Credit Losses:
Beginning of Period	$	108,924	$	53,960
Loans Charged-Off:
Construction Loans		6,918		18,769
Real Estate Loans		2,964		495
Commercial and Industrial		3,741		2,264
Lease Financing Receivables		—		170
Consumer Loans		148		152
Total Loans Charged-Off		13,771		21,850
Recoveries:
Real Estate Loans		2		468
Commercial and Industrial		147		17
Lease Financing Receivables		—		147
Consumer Loans		46		13
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

(1) Net of deferred loan fees

Net Loans Charged-Off to Average Total Loans	0.38	%	0.58	%
Net Loans Charged-Off to Total Loans at End of Period	0.39	%	0.59	%
Allowance for Credit Losses to Average Total Loans	3.35	%	2.04	%
Allowance for Credit Losses to Total Loans at End of Period	3.38	%	2.07	%
Net Loans Charged-Off to Allowance for Credit Losses	11.45	%	28.37	%
Net Loans Charged-Off to Provision for Credit Losses	58.52	%	50.49	%

While we believe that the allowance at June 30, 2010, was adequate to absorb losses from any known or inherent risks in the portfolio, no assurance can be given that economic conditions, conditions of our borrowers, or natural disasters which adversely affect the Company’s service areas or other circumstances or conditions, including those identified above, will not be reflected in increased provisions or credit losses in the future.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

In the normal course of our business activities, we are exposed to market risks, including price and liquidity risk. Market risk is the potential of loss from adverse changes in market rates and prices, such as interest rates (interest rate risk). Liquidity risk arises from the possibility that we may not be able to satisfy current or future commitments or that we may be more reliant on alternative funding sources such as long-term debt. Financial products that expose us to market risk include securities, loans, deposits, debts and derivative financial instruments.

Counterparty Risk

Recent developments in the financial markets have placed an increased awareness of Counterparty Risks. These risks occur when a financial institution has an indebtedness or potential for indebtedness to another financial institution. We have assessed our Counterparty Risk at the end of the second quarter with the following results:

• We have $150 million in a repurchase agreement with an embedded double cap. This transaction was conducted in September 2006 to protect against rising interest rates. The repurchase agreement is with JP Morgan. The Moody’s public debt rating for this institution is Aa3.

• We do not have any investments in the preferred stock of any other company.

• We do not have in our investment portfolio any trust preferred securities of any other company.

• Most of our investments securities are either municipal securities or securities backed by mortgages, FNMA, FHLMC or FHLB.

• All of our commercial line insurance policies are with companies with the highest AM Best ratings of AXII or above.

• We have no significant Counterparty exposure related to derivatives such as interest rate swaps.

• We have no significant exposure to our Cash Surrender Value of Life insurance since all of the insurance companies carry an AM Best rating of A or greater.

• We have $295.0 million in Fed Funds lines of credit with other banks. All of these banks are major U.S. banks, with over $20.0 billion in assets. We rely on these funds for overnight borrowings. We currently have no outstanding Fed Funds balance.

Interest Rate Risk

During periods of changing interest rates, the ability to reprice interest-earning assets and interest-bearing liabilities can influence net interest income, the net interest margin, and consequently, our earnings. Interest rate risk is managed by attempting to control the spread between rates earned on interest-earning assets and the rates paid on interest-bearing liabilities within the constraints imposed by market competition in the Bank’s service area. Short-term repricing risk is minimized by controlling the level of floating rate loans and maintaining a downward sloping ladder of bond payments and maturities. Basis risk is managed by the timing and magnitude of changes to interest-bearing deposit rates. Yield curve risk is reduced by keeping the duration of the loan and bond portfolios balanced to attempt to minimize the risks of rising or falling yields. Options risk in the bond portfolio is monitored monthly and actions are recommended when appropriate.

We monitor the interest rate “sensitivity” risk to earnings from potential changes in interest rates using various methods, including a maturity/repricing gap analysis. This analysis measures, at specific time intervals, the differences between earning assets and interest-bearing liabilities for which repricing opportunities will occur. A positive difference, or gap, indicates that earning assets will reprice faster than interest-bearing liabilities. This will generally produce a greater net interest margin during periods of rising interest rates, and a lower net interest margin during periods of declining interest rates. Conversely, a negative gap indicates that interest-bearing liabilities will reprice faster than earning assets. This will generally produce a lower net interest margin during periods of rising interest rates and a greater net interest margin during periods of decreasing interest rates.

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The interest rates paid on deposit accounts do not always move in unison with the rates charged on loans. In addition, the magnitude of changes in the rates charged on loans is not always proportionate to the magnitude of changes in the rates paid for deposits. Consequently, changes in interest rates do not necessarily result in an increase or decrease in the net interest margin solely as a result of the differences between repricing opportunities of earning assets or interest-bearing liabilities. In general, whether we report a positive gap in the short-term period or negative gap in the long-term period does not necessarily indicate that, if interest rates decreased, net interest income would increase, or if interest rates increased, net interest income would decrease.

Approximately $1.1 billion, or 56%, of the total investment portfolio at June 30, 2010 consisted of securities backed by mortgages. The final maturity of these securities can be affected by the speed at which the underlying mortgages repay. Mortgages tend to repay faster as interest rates fall, and slower as interest rates rise. As a result, we may be subject to a “prepayment risk” resulting from greater funds available for reinvestment at a time when available yields are lower. Conversely, we may be subject to “extension risk” resulting from lesser amounts available for reinvestment at a time when available yields are higher. Prepayment risk includes the risk associated with the payment of an investment’s principal faster than originally intended. Extension risk is the risk associated with the payment of an investment’s principal over a longer time period than originally anticipated. In addition, there can be greater risk of price volatility for mortgage-backed securities as a result of anticipated prepayment or extension risk.

We also utilize the results of a dynamic simulation model to quantify the estimated exposure of net interest income to sustained interest rate changes. The sensitivity of our net interest income is measured over a rolling two-year horizon.

The simulation model estimates the impact of changing interest rates on the interest income from all interest-earning assets and the interest expense paid on all interest-bearing liabilities reflected on the Company’s balance sheet. This sensitivity analysis is compared to policy limits, which specify a maximum tolerance level for net interest income exposure over a one-year horizon assuming no balance sheet growth, given a 200 basis point upward and 100 basis point downward shift in interest rates. A parallel and pro rata shift in rates over a 12-month period is assumed.

The following depicts the Company’s net interest income sensitivity analysis as of June 30, 2010:

	Estimated Net
Simulated	Interest Income
Rate Changes	Sensitivity
+ 200 basis points		(4.09%)
- 100 basis points		0.80%

The Company is currently more liability sensitive. The estimated sensitivity does not necessarily represent our forecast and the results may not be indicative of actual changes to our net interest income. These estimates are based upon a number of assumptions including: the nature and timing of interest rate levels including yield curve shape, prepayments on loans and securities, pricing strategies on loans and deposits, and replacement of asset and liability cash flows. While the assumptions used are based on current economic and local market conditions, there is no assurance as to the predictive nature of these conditions including how customer preferences or competitor influences might change.

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Liquidity Risk

Liquidity risk is the risk to earnings or capital resulting from our inability to meet our obligations when they come due without incurring unacceptable losses. It includes the ability to manage unplanned decreases or changes in funding sources and to recognize or address changes in market conditions that affect our ability to liquidate assets quickly and with minimum loss of value. Factors considered in liquidity risk management are stability of the deposit base; marketability, maturity, and pledging of investments; and the demand for credit.

In general, liquidity risk is managed daily by controlling the level of fed funds and the use of funds provided by the cash flow from the investment portfolio. To meet unexpected demands, lines of credit are maintained with correspondent banks, the Federal Home Loan Bank and the Federal Reserve Bank. The sale of bonds maturing in the near future can also serve as a contingent source of funds. Increases in deposit rates are considered a last resort as a means of raising funds to increase liquidity.

Transaction Risk

Transaction risk is the risk to earnings or capital arising from problems in service or product delivery. This risk is significant within any bank and is interconnected with other risk categories in most activities throughout the Bank. Transaction risk is a function of internal controls, information systems, associate integrity, and operating processes. It arises daily throughout the Bank as transactions are processed. It pervades all divisions, departments and branches and is inherent in all products and services we offer.

In general, transaction risk is defined as high, medium or low by the internal auditors during the audit process. The audit plan ensures that high-risk areas are reviewed at least annually. We utilize a third party audit firm to provide internal audit services.

The key to monitoring transaction risk is in the design, documentation and implementation of well-defined procedures. All transaction related procedures include steps to report events that might increase transaction risk. Dual controls are also a form of monitoring.

Compliance Risk

Compliance risk is the risk to earnings or capital arising from violations of, or non-conformance with, laws, rules, regulations, prescribed practices, or ethical standards. Compliance risk also arises in situations where the laws or rules governing certain Bank products or activities of the Bank’s customers may be ambiguous or untested. Compliance risk exposes us to fines, civil money penalties, payment of damages, and the voiding of contracts. Compliance risk can also lead to a diminished reputation, reduced business value, limited business opportunities, lessened expansion potential, and lack of contract enforceability.

There is no single or primary source of compliance risk. It is inherent in every Bank activity. Frequently, it blends into operational risk and transaction processing. A portion of this risk is sometimes referred to as legal risk. This is not limited solely to risk from failure to comply with consumer protection laws; it encompasses all laws, as well as prudent ethical standards and contractual obligations. It also includes the exposure to litigation from all aspects of banking, traditional and non-traditional.

Our Risk Management Policy and Program and the Code of Ethical Conduct are the cornerstone for controlling compliance risk. An integral part of controlling this risk is the proper training of associates. The Chief Risk Officer is responsible for developing and executing a comprehensive compliance training program. The Chief Risk Officer will ensure that each associate receives adequate training with regard to their position to ensure that laws and regulations are not violated. All associates who deal in compliance high risk areas are trained to be knowledgeable about the level and severity of exposure in those areas and the policies and procedures in place to control such exposure.

Our Risk Management Policy and Program includes an audit program aimed at identifying problems and ensuring that problems are corrected. The audit program includes two levels of review. One is in-depth audits performed by an independent external firm and the other is periodic monitoring performed by the Risk Management Division.

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The Bank utilizes an independent external firm to conduct compliance audits as a means of identifying weaknesses in the compliance program itself. The independent external firm’s audit plan includes a periodic review of each branch and department of the Bank.

The branch or department that is the subject of an audit is required to respond to the audit and correct any violations noted. The Chief Risk Officer will review audit findings and the response provided by the branch or department to identify areas which pose a significant compliance risk.

The Risk Management Division conducts periodic monitoring of our compliance efforts with a special focus on those areas that expose us to compliance risk. The purpose of the periodic monitoring is to ensure that our associates are adhering to established policies and procedures adopted by the Bank. The Chief Risk Officer will notify the appropriate department head and the Management Compliance Committee, the Audit Committee and the Risk Management Committee of any violations noted. The branch or department that is the subject of the review will be required to respond to the findings and correct any noted violations.

The Bank recognizes that customer complaints can often identify weaknesses in our compliance program which could expose the Bank to risk. Therefore, all complaints are given prompt attention. Our Risk Management Policy and Program includes provisions on how customer complaints are to be addressed. The Chief Risk Officer reviews all complaints to determine if a significant compliance risk exists and communicates those findings to the Risk Management Committee.

Strategic Risk

Strategic risk is the risk to earnings or capital arising from adverse decisions or improper implementation of strategic decisions. This risk is a function of the compatibility between an organization’s goals, the resources deployed against those goals and the quality of implementation.

Strategic risks are identified as part of the strategic planning process. Offsite strategic planning sessions are held annually. The strategic review consists of an economic assessment, competitive analysis, industry outlook and legislative and regulatory review.

A primary measurement of strategic risk is peer group analysis. Key performance ratios are compared to three separate peer groups to identify any sign of weakness and potential opportunities. The peer group consists of:

1.	All banks of comparable size
2.	High performing banks
3.	A list of specific banks

Another measure is the comparison of the actual results of previous strategic initiatives against the expected results established prior to implementation of each strategy.

The corporate strategic plan is formally presented to all branch managers and department managers at an annual leadership conference.

Reputation Risk

Reputation risk is the risk to capital and earnings arising from negative public opinion. This affects our ability to establish new relationships or services, or continue servicing existing relationships. It can expose us to litigation and, in some instances, financial loss.

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Price and Foreign Exchange Risk

Price risk arises from changes in market factors that affect the value of traded instruments. Foreign exchange risk is the risk to earnings or capital arising from movements in foreign exchange rates.

Our current exposure to price risk is nominal. We do not have trading accounts. Consequently, the level of price risk within the investment portfolio is limited to the need to sell securities for reasons other than trading. The section of this policy pertaining to liquidity risk addresses this risk.

We maintain deposit accounts with various foreign banks. Our Interbank Liability Policy limits the balance in any of these accounts to an amount that does not present a significant risk to our earnings from changes in the value of foreign currencies.

Our asset liability model calculates the market value of the Bank’s equity. In addition, management prepares on a monthly basis a Capital Volatility report that compares changes in the market value of the investment portfolio.

The Balance Sheet Management Policy requires the submission of a Fair Value Matrix Report to the Balance Sheet Management Committee on a quarterly basis. The report calculates the economic value of equity under different interest rate scenarios, revealing the level or price risk of the Bank’s interest sensitive asset and liability portfolios.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures under the supervision and with the participation of the Chief Executive Officer, the Chief Financial Officer and other senior management of the Company. Based on the foregoing, the Company’s Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

During our most recent fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On July 26, 2010, we received a subpoena from the Los Angeles office of the Securities and Exchange Commission.  The subpoena and the SEC’s corresponding investigation are non-public, which means that the information we provide to the SEC will not be publicized.  We are, however, required to publicly disclose the fact that we received a subpoena from the SEC.  The subpoena requests information regarding our loan underwriting guidelines, our allowance for credit losses and our allowance for loan loss calculation methodology, our methodology for grading loans and the process for making provisions for loan losses, and our provision for credit losses.  In addition, the subpoena requests information regarding presentations we have given or conferences we have attended with analysts, brokers, investors or prospective investors.

We do not know the events that caused the SEC to request information on these subjects, and the SEC does not make this information known.  According to the correspondence that accompanied the subpoena, “[t]he investigation does not mean the [SEC has] concluded that you or anyone else has broken the law. Also, the investigation does not mean that we have a negative opinion of any person, entity or security.” 

CVB is fully complying with the SEC’s requests, and we look forward to a speedy resolution.

ITEM 1A. RISK FACTORS

Except as described below, there are no material changes to the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2009. The materialization of any risks and uncertainties identified in our Forward Looking Statements contained in this report together with those previously disclosed in the Form 10-K and any subsequent Form 10-Q or those that are presently unforeseen could result in significant adverse effects on our financial condition, results of operations and cash flows. See Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – General” in this Quarterly Report on Form 10-Q.

We are subject to a pending investigation by the Securities and Exchange Commission which could adversely affect us.

We are subject to an investigation by the SEC. We are unable, at this time, to estimate our potential liability in this matter, but may be required to pay judgments, settlements or other penalties and incur other costs and expenses in connection with this investigation which could have a material adverse effect on our business, results of operations and financial condition. In addition, responding to requests for information in this investigation may divert internal resources away from managing our business.

Implementation of the various provisions of the Dodd-Frank Act may increase our operating costs or otherwise have a material affect on our business, financial condition or results of operations.

On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act financial reform legislation. This landmark legislation includes, among other things, (i) the creation of a Financial Services Oversight Counsel to identify emerging systemic risks and improve interagency cooperation; (ii) the elimination of the Office of Thrift Supervision and the transfer of oversight of federally chartered thrift institutions and their holding companies to the Office of the Comptroller of the Currency and the Federal Reserve; (iii) the creation of a Consumer Financial Protection Agency authorized to promulgate and enforce consumer protection regulations relating to financial products that would affect banks and non-bank finance companies; (iv) the establishment of new capital and prudential standards for banks and bank holding companies, including the elimination of the ability to treat trust preferred securities as Tier 1 capital; (v) the termination of investments by the Treasury under the Troubled Assets Relief Program (“TARP”); (vi) enhanced regulation of financial markets, including the derivatives, securitization and mortgage origination markets; (vii) the elimination of certain proprietary trading and private equity investment activities by banks; (viii) the elimination of barriers to de novo interstate branching by banks; (ix) a permanent increase of the previously implemented temporary increase of FDIC deposit insurance to $250,000; (x) the authorization of interest-bearing transaction accounts and (xi) changes in the calculation of FDIC deposit insurance assessments will be calculated and an increase in the minimum designated reserve ratio for the Deposit Insurance Fund.

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Certain provisions of the legislation are not immediately effective or are subject to required studies and implementing regulations. Further, community banks with less than $10 billion in assets (less than $15 billion with respect to trust preferred securities) are exempt from certain provisions of the legislation. We cannot predict the how this significant new legislation may be interpreted and enforced or how implementing regulations and supervisory policies may affect us. There can be no assurance that these or future reforms will not significantly increase our compliance or operating costs or otherwise have a significant impact on our business, financial condition and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We did not repurchase any common stock during the six months ended June 30, 2010. Our Board of Directors has authorized the repurchase of up to 10,000,000 shares of our common stock, all of which remain to be repurchased at June 30, 2010.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

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ITEM 6. EXHIBITS

Exhibit No.		Description of Exhibits
	3.1	Articles of Incorporation of the Company, as amended to date.
	10.1	Summary CVB Financial Corp. Discretionary Performance Compensation Plan (1)
	10.2	Executive Incentive Plan (2)
	31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)	Incorporated by reference from Exhibit 10.1 to the Form 8-K filed by the Company on April 2, 2010.
(2)	Incorporated by reference from Annex A to the Definitive Proxy Statement filed by the Company on April 9, 2010.

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(3) SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CVB FINANCIAL CORP. (Registrant)
Date: August 9, 2010	/s/ Edward J. Biebrich Jr.
	Edward J. Biebrich Jr.
	Duly Authorized Officer and Chief Financial Officer

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EX-3.1

Exhibit 3.1

ARTICLES OF INCORPORATION
OF
CVB FINANCIAL CORP.

The undersigned Incorporator hereby executes, acknowledges and files the following Articles of Incorporation for the purpose of forming a corporation under the General Corporation Law of the State of California:

One: The name of the Corporation shall be:

CVB FINANCIAL CORP.

Two: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.

Three: The name and address in this state of the Corporation’s initial agent for service of process in accordance with subdivision (b) of Section 1502 of the General Corporation Law is:

BARNET REITNER
Manatt, Phelps, Rothenberg & Tunney
1888 Century Park East, 21st Floor
Los Angeles, California 90067

Four: The Corporation is authorized to issue only one class of shares, and the total number of shares which the Corporation is authorized to issue is 20,000,000.

In WITNESS WHEREOF, the undersigned Incorporator has executed the foregoing Articles of Incorporation on April 24, 1981.

/S/ Barnet Reitner

Barnet Reitner, Incorporator

The undersigned declares that he is the person who executed the foregoing Articles of Incorporation and that such instrument is the act and deed of the undersigned.

/S/ Barnet Reitner

Barnet Reitner

CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
CVB FINANCIAL CORP.

John Cavallucci and Christina Schaefer certify:

1. That they are the President/Chief Executive Officer and Secretary, respectively, of CVB Financial Corp., a California corporation.

2. That Article Four of the Corporation’s Articles of Incorporation is amended to read as follows:

“Four: The Corporation is authorized to issue only one class of shares, and the total number of shares which the Corporation is authorized to issue is 25,000,000. Upon the amendment of this Article to read as herein set forth each four outstanding shares are split up and converted into five shares.”

3. That the foregoing amendment of the Corporation’s Articles of Incorporation has been duly approved by the Board of Directors.

4. That the foregoing amendment was one which the Board of Directors alone may adopt without approval of the outstanding shares pursuant to Section 902(c) of the California Corporations Code, since only one class of shares is outstanding.

/S/ John Cavallucci

John Cavallucci

President and Chief Executive Officer

/S/ Christina Schaefer

Christina Schaefer

Secretary

Each of the undersigned declares, under penalty of perjury that the matters set forth in the foregoing Certificate are true of their own knowledge. Executed at Chino, California on January 21, 1986.

/S/ John Cavallucci

John Cavallucci

/S/ Christina Schaefer

Christina Schaefer

Page 2

CERTIFICATE OF AMENDMENT
OF ARTICLES OF INCORPORATION OF
CVB FINANCIAL CORP.

The undersigned, John Cavallucci and Christina Schaefer, do hereby certify:

1. That they are and have been, at all times mentioned herein, respectively, the duly acting President, the Chief Executive Officer and Secretary of CVB Financial Corp. (the “Company”), a California corporation; and

2. That the following is a true and correct copy of a resolution of the Company adopted by the holders of the majority of the outstanding shares of the Company’s Common Stock entitled to vote pursuant to a Written Consent of Shareholders.

BE IT HEREBY RESOLVED, that Article Four of the Company’s Articles of Incorporation, which currently provides as follows:

“Four. The Corporation is authorized to issue only one class of shares, and the total number of shares which the Corporation is authorized to issue is 25,000,000. Upon the amendment of this Article to read as herein set forth each four outstanding shares are split up and converted into five shares.”

be, and it hereby is amended in full to read as follows:

“Four. This Corporation is authorized to issue two (2) classes of shares of stock: one class of shares to be called “Common Stock”; the second class of shares to be called “Serial Preferred Stock.” The total number of shares of stock which the Corporation shall have authority to issue is Forty-five million (45,000,000), of which Twenty-Five Million (25,000,000) shall be Common Stock and Twenty Million (20,000,000) shall be Serial Preferred Stock. At the time the amendment to this Article to read as herein set forth becomes effective, each outstanding share of capital stock of this Corporation shall be reclassified as one share of Common Stock of the Corporation.

The designations and the powers, preferences and rights and the qualifications, limitations or restrictions thereof, of each class of stock of the Corporation shall be as follows:

(a) Serial Preferred Stock.

The Serial Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized to fix or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of preferred shares, and the number of shares constituting any such series and a designation thereof, or any of them; and to increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but not below the number of such series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.

(b) Common Stock

(1) After the requirements with respect to preferential dividends upon all classes and series of stock entitled thereto shall have been paid or declared and set apart for payment and after the Corporation shall have complied with all requirements, if any, with respect to the setting aside of sums as a sinking fund or for a redemption account on any class of stock, then and not otherwise, the holders of Common Stock shall be entitled to receive, subject to the applicable provisions of the Corporations Code of the State of California, such dividends as may be declared from time to time by the Board of Directors.

Page 3

(2) After distribution in full of the preferential amounts to be distributed to the holders of all classes and series of stock entitled thereto in the event of a voluntary or involuntary liquidation, dissolution, or winding up of the Corporation, as provided for in the Corporations Code of the State of California, the holders of the Common Stock shall be entitled to receive all the remaining assets of the Corporation.

(3) Each holder of Common Stock shall have one (1) vote in respect of each share of stock held by him, subject, however, to such special voting rights by class as are or may be granted to holders of Serial Preferred Stock.

3. That the foregoing Amendment of Articles of Incorporation has been duly approved by the required vote of shareholders in accordance with Section 902 of the California Corporations Code. The total number of outstanding shares of the Corporation is 1,216,573. The number of shares voting in favor of the Amendment equaled or exceeded the vote required. The percentage vote required was more than fifty percent (50%).

4. That the foregoing Amendment of Articles of Incorporation has been duly approved and adopted with the necessary quorum present at a duly held meeting of the Board of Directors of the Company held on June 18, 1986.

IN WITNESS WHEREOF, the undersigned have executed this Certificate on September 30, 1986.

/S/ John Cavallucci

John Cavallucci, President and

Chief Executive Officer

/S/ Christina Schaefer

Christina Schaefer, Secretary

Each of the undersigned declares under penalty of perjury that the matters set forth in the foregoing Certificate are true and correct.

Executed this 30th day of September, 1986, in Chino, California.

/S/ John Cavallucci

John Cavallucci, President and

Chief Executive Officer

/S/ Christina Schaefer

Christina Schaefer, Secretary

Page 4

CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION

John Cavallucci and Tina Schaefer certify that:

1. They are the President/Chief Executive Officer and the Secretary, respectively, of CVB Financial Corp., a California corporation.

2. The Articles of Incorporation of this corporation are amended to include an Article Five that reads as follows:

“Five: Section 1. Elimination of Directors’ Liability. The liability of the directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California law.

Section 2. Indemnification of Corporate Agents. This corporation is authorized to provide indemnification of agents (as defined in Section 317 of the California Corporations Code) through bylaw provisions, agreements with agents, vote of shareholders or disinterested directors or otherwise, in excess of the indemnification otherwise permitted by Section 317 of the California Corporations Code, subject only to the applicable limits set forth in Section 204 of the California Corporations Code with respect to actions for breach of duty to the corporation and its shareholders.

Section 3. Insurance from a Subsidiary. This corporation is authorized to purchase and maintain insurance on behalf of its agents against any liability asserted against or incurred by the agent in such capacity or arising out of the agent’s status as such from a company, the shares of which are owned in whole or in part by this corporation, provided that any policy issued by such company is limited to the extent required by applicable law.

Section 4. Repeal or Modification. Any repeal or modification of the foregoing provisions of this Article Five by the shareholders of this corporation shall not adversely affect any right or protection of an agent of this corporation existing at the time of that repeal or modification.”

3. The foregoing Amendment of Articles of Incorporation was duly approved by the Board of Directors at its meeting held on February 22, 1988, at which a quorum was present and acting throughout.

4. The foregoing Amendment of Articles of Incorporation has been duly approved by the required vote of shareholders in accordance with Section 902 of the California General Corporation Law, at a meeting held on May 18, 1988. The corporation has no shares of preferred stock outstanding. The total number of shares of Common Stock outstanding at the record date for determining shareholders entitled to vote was 2,281,068. The number of shares of Common Stock voting in favor of the amendment equaled or exceeded the vote required, which was more than 50 percent of the Common Stock.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in the foregoing Certificate are true and correct of our own knowledge.

Dated 5-20-88

/S/ John Cavallucci

John Cavallucci, President

and Chief Executive Officer

/S/ Tina Schaefer

Tina Schaefer, Secretary

Page 5

CERTIFICATE OF AMENDMENT
OF ARTICLES OF INCORPORATION OF
CVB FINANCIAL CORP.

John Cavallucci and Tina Schaefer certify:

1. That they are the President and Secretary, respectively, of CVB Financial Corp., a California corporation.

2. That Article FOUR of the Corporation’s Articles of Incorporation is amended to read as follows:

“Four. This Corporation is authorized to issue two (2) classes of shares of stock: one class of shares to be called “Common Stock”; the second class of shares to be called “Serial Preferred Stock.” The total numbers of shares of stock which the Corporation shall have authority to issue is Seventy Million (70,000,000), of which Fifty Million (50,000,000) shall be Common Stock and Twenty Million (20,000,000) shall be Serial Preferred Stock. Upon the amendment of this Article to read as herein set forth each one outstanding share of Common Stock is split up and converted into two shares of Common Stock.

The designation and powers, preferences and rights and the qualifications, limitations or restrictions thereof, of each class of stock of the Corporation shall be as follows:

(a) Serial Preferred Stock.

The Serial Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized to fix or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of preferred shares, and the number of shares constituting any such series and a designation thereof, or any of them; and to increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but not below the number of such series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.

(b) Common Stock

(1) After the requirements with respect to preferential dividends upon all classes and series of stock entitled thereto shall have been paid or declared and set apart for payment and after the Corporation shall have complied with all requirements, if any, with respect to the setting aside of sums as a sinking fund or for a redemption account on any class of stock, then and not otherwise, the holders of Common Stock shall be entitled to receive, subject to the applicable provisions of the Corporations Code of the State of California, such dividends as may be declared from time to time by the Board of Directors.

(2) After distribution in full of the preferential amounts to be distributed to the holders of all classes and series of stock entitled thereto in the event of a voluntary or involuntary liquidation, dissolution, or winding up of the Corporation, as provided for in the Corporations Code of the State of California, the holders of the Common Stock shall be entitled to receive all the remaining assets of the Corporation.

(3) Each holder of Common Stock shall have one (1) vote in respect of each share of stock held by him, subject, however, to such special voting rights by class as are or may be granted to holders of Serial Preferred Stock.

3. That the foregoing amendment of the Corporation’s Articles of Incorporation has been duly approved by the Board of Directors at their regular meeting held on September 20, 1989.

Page 6

4. That the foregoing amendment was one which the Board of Directors alone may adopt without approval of the outstanding shares pursuant to Section 902(c) of the California Corporations Code, since only one class of shares are outstanding.

/S/ John Cavallucci

John Cavallucci, President

/S/ Tina Schaefer

Tina Schaefer, Secretary

Each of the undersigned declares, under penalty of perjury that the matters set forth in the foregoing Certificate are true of their own knowledge. Executed at Ontario, California on September 20, 1989

/S/ John Cavallucci

John Cavallucci

/S/ Tina Schaefer

Tina Schaefer

Page 7

CERTIFICATE OF AMENDMENT
OF ARTICLES OF INCORPORATION OF
CVB FINANCIAL CORP.

The undersigned, D. Linn Wiley and Donna Marchesi, do hereby certify:

1. That they are and have been at all times herein mentioned the duly elected and acting President and the Secretary, respectively, of CVB Financial Corp., a California corporation (the “Company”).

2. That the Board of Directors of the Company adopted the following resolutions on December 17, 1997:

NOW, THEREFORE, BE IT RESOLVED that the first paragraph of article Four of the Company’s Articles of Incorporation is amended to read as follows:

“Four. This Corporation is authorized to issue two (2) classes of shares of stock: one class of shares to be called “Common Stock”; the second class of shares to be called “Serial Preferred Stock.” The total number of shares of stock which the corporation shall have authority to issue is Seventy Million (70,000,000), of which Fifty Million (50,000,000) shall be Common Stock and Twenty Million (20,000,000) shall be Serial Preferred Stock. Upon the amendment of this Article to read as herein set forth each two (2) outstanding shares of Common Stock are split up and converted into three (3) shares of Common Stock.

3. Approval of the foregoing Amendment of the Articles of Incorporation (“Amendment”) by the shareholders is not required pursuant to 902(c) of the California Corporations Code.

4. This Amendment shall become effective on January 2, 1998.

IN WITNESS WHEREOF, the undersigned have executed the Certificate on December 23, 1997.

/S/ D. Linn Wiley

D. Linn Wiley, President

/S/ Donna Marchesi

Donna Marchesi, Secretary

Each if the undersigned declares under penalty of perjury that the matters set forth in the foregoing Certificate are true and correct of our own knowledge.

Executed this 23rd day of December, 1997 in Ontario, California.

/S/ D. Linn Wiley

D. Linn Wiley, President

/S/ Donna Marchesi

Donna Marchesi, Secretary

Page 8

AGREEMENT OF MERGER

THIS AGREEMENT OF MERGER (the “Merger Agreement”) is made and entered into this 16^th day of September, 1999, by and between Orange National Bancorp (“ONB”), a California corporation, and CVB Financial Corp. (“CVB”), a California corporation, in connection with the transactions described in that Agreement and Plan of Reorganization, dated as of May 18, 1999 (the “Reorganization Agreement”) by and between CVB and ONB. Terms not otherwise defined herein shall have the meaning given them in the Reorganization Agreement.

RECITALS

1. ONB is a corporation duly organized, validly existing and in good standing under the laws of the State of California, with authorized capital of 20,000,000 shares of common stock, no par value (“ONB Stock”), of which, on the date hereof, 2,000,171 shares are outstanding.

2. CVB is a corporation duly organized, validly existing and in good standing under the laws of the State of California, with authorized capital of 50,000,000 shares of common stock, no par value (“CVB Stock”), of which, on the date hereof, 16,568,121 shares are outstanding and 20,000,000 shares of Preferred Stock, no par value, of which, on the date hereof, no shares are outstanding.

3. The respective Boards of Directors of ONB and CVB, each acting pursuant to a duly authorized resolution, adopted by the vote of a majority of its directors, deem it desirable and in the best interests of their respective corporations and shareholders that ONB be merged with and into CVB (the “Merger”) as provided in this Merger Agreement pursuant to the laws of the State of California, and that CVB be the surviving corporation (the “Surviving Corporation”).

4. CVB and ONB entered into the Reorganization Agreement, which provides for the Merger of ONB with and into CVB in accordance with this Merger Agreement.

NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein set forth and for the purpose of prescribing the terms and conditions of the Merger, the parties hereto agree as follows:

1

ARTICLE I
THE MERGER

Upon consummation of the Merger at the Effective Time of the Merger (as defined in Article VII hereof), ONB shall be merged with and into CVB which shall thereupon be the Surviving Corporation, and the separate corporate existence of ONB shall cease.

ARTICLE II
NAME

The name of the Surviving Corporation shall be “CVB Financial Corp.”

ARTICLE III
ARTICLES OF INCORPORATION

The Articles of Incorporation of CVB as in effect immediately prior to the Effective Time of the Merger shall, at and after the Effective Time of the Merger, continue to be the Articles of Incorporation of the Surviving Corporation.

ARTICLE IV
BYLAWS

The Bylaws of CVB as in effect immediately prior to the Effective Time of the Merger shall, at and after the Effective Time of the Merger, continue to be the Bylaws of the Surviving Corporation.

ARTICLE V
RIGHTS AND DUTIES OF SURVIVING CORPORATION

At and after the Effective Time of the Merger, all rights, privileges, powers and franchises and all property and assets of every kind and description of ONB shall be vested in and be held and enjoyed by the Surviving Corporation, without further act or deed, and all the estates and interests of every kind of ONB, including all debts due to it, shall be as effectively the property of the Surviving Corporation as they were of ONB, and the title to any real estate vested by deed or otherwise in ONB shall not revert or be in any way impaired by reason of the Merger; and all rights of creditors and liens upon any property of ONB shall be preserved unimpaired and all debts, liabilities and duties of ONB shall be debts, liabilities and duties of the Surviving Corporation and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by it.

2

ARTICLE VI
CONVERSION OF SHARES

In and by virtue of the Merger and at the Effective Time of the Merger, pursuant to this Merger Agreement, the shares of ONB Stock outstanding immediately prior to the Effective Time of the Merger shall be converted without any action on the part of the holders thereof as follows:

(a) Effect on ONB Stock. Each share of ONB Stock issued and outstanding immediately prior to the Effective Time of the Merger excluding any ONB Perfected Dissenting Shares or shares of ONB Stock held by CVB or Citizens Business Bank (“CBB”) (other than those held in a fiduciary capacity or as a result of debts previously contracted) shall, without any action on the part of the holder hereof, cease to be outstanding and be converted into the right to receive on and after the Effective Time of the Merger, one and one-half (1.5) shares of CVB Stock.

(b) Fractional Shares. No fractional shares of CVB Stock shall be issued in the Merger. In lieu thereof, each holder of ONB Stock who would otherwise be entitled to receive a fractional share shall receive an amount in cash equal to the product (calculated to the nearest hundredth) obtained by multiplying (i) the Average Closing Price times (ii) the fraction of the share of CVB Stock to which such holder would otherwise be entitled. No such holder shall be entitled to dividends or other rights in respect of any such fraction.

(c) Shares Held By CVB. CBB or Orange National Bank. Shares of ONB Stock held by CVB, CBB or Orange National Bank (other than those held in a fiduciary capacity or as a result of debts previously contracted) shall be canceled and no consideration shall be issued in exchange therefor.

(d) Effect on CVB Stock. Each share of CVB Stock issued and outstanding immediately prior to the Effective Time shall, on and after the Effective Time, remain outstanding and shall automatically and for all purposes be deemed to represent one share of common stock of the Surviving Corporation.

ARTICLE VII
FURTHER ACTION

The parties hereto shall execute and deliver, or cause to be executed and delivered, all such deeds and other instruments, and will take or cause to be taken all further or other action as they may deem necessary or desirable, in order to vest in and confirm to the Surviving Corporation title to and possession of all of ONB’s property, rights, privileges, powers and franchises hereunder, and otherwise to carry out the intent and purposes of this Merger Agreement.

3

ARTICLE VIII
EFFECTIVE TIME OF THE MERGER

The Merger shall be effective (the “Effective Time of the Merger”) at 4:00 a.m. pacific time, on the day of filing of this Merger Agreement and the appropriate certificates of its approval with the Secretary of State of the State of California in accordance with Section 1103 of the California General Corporation Law.

ARTICLE IX
TERMINATION

This Merger Agreement may, by the mutual consent and action of the Boards of Directors of CVB and ONB, be abandoned at any time before or after approval thereof by the shareholders of ONB, but not later than the Effective Time of the Merger. This Merger Agreement shall automatically be terminated and of no further force and effect if, prior to the Effective Time of the Merger, the Reorganization Agreement is terminated in accordance with the terms thereof.

ARTICLE X
SATISFACTION OF CONDITION AND OBLIGATIONS

(a) The obligations of CVB to proceed with the Closing are subject to the satisfaction at or prior to the Closing of all of the conditions to the obligations of CVB under the Reorganization Agreement, any one or more of which, to the extent it is or they are waivable, may be waived, in whole or in part, by ONB.

(b) The obligations of ONB to proceed with the Closing are subject to the satisfaction at or prior to the Closing of all of the conditions to the obligations of ONB under the Reorganization Agreement, any one or more of which, to the extent it is or they are waivable, may be waived, in whole or in part, by CVB.

ARTICLE XI
GOVERNING LAW

This Merger Agreement has been executed in the State of California, and the laws of the State of California shall govern the validity and interpretation hereof and the performance by the parties hereto.

4

IN WITNESS WHEREOF, ONB and CVB, pursuant to the approval and authority duly given by resolution of their respective Board of Directors, have caused this Merger Agreement to be signed by their respective Presidents and Secretaries on the day and year first above written.

ORANGE NATIONAL BANCORP
By:	/s/ Kenneth J. Cosgrove
	Kenneth J. Cosgrove, President
By:	/s/ Robert W. Creighton
	Robert W. Creighton, Secretary
CVB FINANCIAL CORP.
By:
	D. Linn Wiley, President
By:
	Donna Marchesi, Secretary

5

IN WITNESS WHEREOF, ONB and CVB, pursuant to the approval and authority duly given by resolution of their respective Board of Directors, have caused this Merger Agreement to be signed by their respective Presidents and Secretaries on the day and year first above written.

ORANGE NATIONAL BANCORP
By:
	Kenneth J. Cosgrove, President
By:
	Robert W. Creighton, Secretary
CVB FINANCIAL CORP.
By:	/s/ D. Linn Wiley
	D. Linn Wiley, President
By:	/s/ Donna Marchesi
	Donna Marchesi, Secretary

5

CERTIFICATE OF AMENDMENT
OF ARTICLES OF INCORPORATION OF
CVB FINANCIAL CORP.

The undersigned, D. Linn Wiley and Donna Marchesi, do hereby certify:

1. That they are and have been at all times herein mentioned the duly elected and acting President and the Secretary, respectively, of CVB Financial Corp., a California corporation (the “Company”).

2. That the Board of Directors of the Company adopted the following resolutions on December 15, 1999:

NOW, THEREFORE, BE IT RESOLVED that the first paragraph of article Four of the Company’s Articles of Incorporation is amended to read as follows:

“Four. This Corporation is authorized to issue two (2) classes of shares of stock: one class of shares to be called “Common Stock”; the second class of shares to be called “Serial Preferred Stock.” The total number of shares of stock which the corporation shall have authority to issue is Seventy Million (70,000,000), of which Fifty Million (50,000,000) shall be Common Stock and Twenty Million (20,000,000) shall be Serial Preferred Stock. Upon the amendment of this Article to read as herein set forth each four (4) outstanding shares of Common Stock are split up and converted into five (5) shares of Common Stock.

3. Approval of the foregoing Amendment of the Articles of Incorporation (“Amendment”) by the shareholders is not required pursuant to 902(c) of the California Corporations Code.

4. This Amendment shall become effective at 5:00 p.m. California time on January 14, 2000.

IN WITNESS WHEREOF, the undersigned have executed the Certificate on December 31, 1999.

/S/ D. Linn Wiley

D. Linn Wiley, President

/S/ Donna Marchesi

Donna Marchesi, Secretary

Each if the undersigned declares under penalty of perjury that the matters set forth in the foregoing Certificate are true and correct of our own knowledge.

Executed this 31st day of December, 1999 in Ontario, California.

/S/ D. Linn Wiley

D. Linn Wiley, President

/S/ Donna Marchesi

Donna Marchesi, Secretary

Page 9

CERTIFICATE OF DETERMINATION
OF CVB FINANCIAL CORP.

The undersigned, D. Linn Wiley and Donna Marchesi do hereby certify:

1. That they are the duly elected and acting President and Secretary, respectively, of CVB Financial Corp., a California corporation (the “CORPORATION”).

2. That, pursuant to the resolutions set forth in Paragraph 4 hereof, the Board of Directors of the Corporation has authorized the issuance of, and designated the rights, preferences, privileges and restrictions of one million (1,000,000) shares of Series A Participating Preferred Stock. The Corporation’s Articles of Incorporation, as amended, authorize the issuance of up to twenty million (20,000,000) shares of Preferred Stock.

3. That none of the shares of Series A Participating Preferred Stock have been issued by the Corporation.

4. That pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation of the said Corporation, the said Board of Directors on June 21, 2000 adopted the following resolution creating a series of one million (1,000,000) shares of Preferred Stock designated as Series A Participating Preferred Stock:

“RESOLVED, that pursuant to the authority vested in the Board of Directors of the Corporation by its Articles of Incorporation, the Board of Directors does hereby provide for the issue of a series of Preferred Stock of the Corporation and does hereby fix and herein state and express the designations, powers, preferences and relative and other special rights and the qualifications, limitations and restrictions of such series of Preferred Stock as follows:

Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be designated as “SERIES A PARTICIPATING PREFERRED STOCK.” The number of shares constituting such series shall be one million (1,000,000) shares. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A Participating Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Participating Preferred Stock.

Section 2. DIVIDENDS AND DISTRIBUTIONS.

(a) Subject to the prior and superior right of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the shares of Series A Participating Preferred Stock with respect to dividends, the holders of shares of Series A Participating Preferred Stock, in preference to the holders of Common Stock of the Company, and of any other junior stock, shall be entitled to receive when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day

Page 10

of March, June, September and December in each year (each such date being referred to herein as a “QUARTERLY DIVIDEND PAYMENT DATE”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Participating Preferred Stock. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(b) The Corporation shall declare a dividend or distribution on the Series A Participating Preferred Stock as provided in paragraph (a) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per shares on the Series A Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

(c) Dividends shall begin to accrue on outstanding shares of Series A Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not less than ten (10) nor more than sixty (60) days prior to the date fixed for the payment thereof.

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Section 3. VOTING RIGHTS. The holders of shares of Series A Participating Preferred Stock shall have the following voting rights:

(a) Each share of Series A Participating Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the shareholders of the Corporation.

(b) Except as otherwise provided herein, in any other Certificate of Determination, or by law, the holders of shares of Series A Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of shareholders of the Corporation.

(c) Except as required by law, holders of Series A Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

Section 4. CERTAIN RESTRICTIONS.

(a) Whenever quarterly dividends or other dividends or distributions payable on the Series A Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Participating Preferred Stock;

(ii) declare or pay dividends on, make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with Series A Participating Preferred Stock, except dividends paid ratably on the Series A Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Participating Preferred Stock;

(iv) purchase or otherwise acquire for consideration any shares of Series A Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

Page 12

(b) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (a) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

Section 5. REACQUIRED SHARES. Any shares of Series A Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein and in the Articles of Incorporation, as then amended.

Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Participating Preferred Stock shall have received an amount per share equal to $1,000.00, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A Participating Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to the aggregate amount to be distributed per share to holder of shares of Common Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Participating Preferred Stock and all such parity stock in proportion to the total amount to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Participating Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock outstanding immediately prior to such event.

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Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share, subject to the provision for adjustment hereinafter set forth, equal to one thousand (1,000) times the aggregate amount of stock, securities, cash and/or any other property (payable in kind) as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

Section 8. NO REDEMPTION. The shares of Series A Participating Preferred Stock shall not be redeemable.

Section 9. RANKING. The Series A Participating Preferred Stock shall rank junior to all other series of the Corporation’s Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.

Section 10. AMENDMENT. The Articles of Incorporation of the Corporation shall not be further amended in any manner which would materially alter or change the powers, preference or special rights of the Series A Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority of the outstanding shares of Series A Participating Preferred Stock, voting separately as a class.

Section 11. FRACTIONAL SHARES. Series A Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Participating Preferred Stock.

RESOLVED FURTHER, that the President or any Vice President and the Secretary or any Assistant Secretary of this corporation be, and they hereby are, authorized and directed to prepare and file a Certificate of Determination in accordance with the foregoing resolution and the provisions of California law and to take such actions as they may deem necessary or appropriate to carry out the intent of the foregoing resolution.”

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We further declare under penalty of perjury that the matters set forth in the foregoing Certificate of Determination are true and correct of our own knowledge and that the foregoing Certificate of Determination has been duly approved by the Board of Directors of the Corporation.

Executed at Ontario, California, on June 21, 2000.

/S/ D. Linn Wiley

D. Linn Wiley, President

/S/ Donna Marchesi

Donna Marchesi, Secretary

Page 15

CERTIFICATE OF AMENDMENT
OF ARTICLES OF INCORPORATION OF
CVB FINANCIAL CORP.

The undersigned, D. Linn Wiley and Donna Marchesi, do hereby certify:

1. That they are and have been at all times herein mentioned the duly elected and acting President and the Secretary, respectively, of CVB Financial Corp., a California corporation (the “Company”).

2. That the Board of Directors of the Company adopted the following resolutions on December 19, 2001:

NOW, THEREFORE, BE IT RESOLVED that the first paragraph of article Four of the Company’s Articles of Incorporation is amended to read as follows:

“Four. This Corporation is authorized to issue two (2) classes of shares of stock: one class of shares to be called “Common Stock”; the second class of shares to be called “Serial Preferred Stock.” The total number of shares of stock which the corporation shall have authority to issue is Eighty Two Million Five Hundred Thousand (82,500,000), of which Sixty Two Million Five Hundred Thousand (62,500,000) shall be Common Stock and Twenty Million (20,000,000) shall be Serial Preferred Stock. Upon the amendment of this Article to read as herein set forth each four (4) outstanding shares of Common Stock are split up and converted into five (5) shares of Common Stock.

3. Approval of the foregoing Amendment of the Articles of Incorporation (“Amendment”) by the shareholders is not required pursuant to 902(c) of the California Corporations Code. There are no shares of Serial Preferred Stock outstanding.

4. This Amendment shall become effective at 5:00 p.m. California time on January 4, 2002.

IN WITNESS WHEREOF, the undersigned have executed the Certificate on December 26, 2001.

/S/ D. Linn Wiley

D. Linn Wiley, President

/S/ Donna Marchesi

Donna Marchesi, Secretary

Each if the undersigned declares under penalty of perjury that the matters set forth in the foregoing Certificate are true and correct of our own knowledge.

Executed this 26th day of December, 2001 in Ontario, California.

/S/ D. Linn Wiley

D. Linn Wiley, President

/S/ Donna Marchesi

Donna Marchesi, Secretary

Page 16

CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
CVB FINANCIAL CORP.

The undersigned, D. Linn Wiley and Donna Marchesi, do hereby certify:

1. That they are and have been at all times herein mentioned the duly elected and acting President and the Secretary, respectively, of CVB Financial Corp., a California corporation (the “Company”).

2. That the Board of Directors of the Company adopted the following resolutions on December 18, 2002:

NOW, THEREFORE, BE IT RESOLVED that the first paragraph of Article Four of the Company’s Articles of Incorporation is amended to read as follows:

“Four. This Corporation is authorized to issue two (2) classes of shares of stock: one class of shares to be called “Common Stock”; the second class of shares to be called “Serial Preferred Stock.” The total numbers of shares of stock which the Corporation shall have authority to issue is Ninety Eight Million One Hundred Twenty Five Thousand (98,125,000), of which Seventy Eight Million One Hundred Twenty Five Thousand (78,125,000) shall be Common Stock and Twenty Million (20,000,000) shall be Serial Preferred Stock. Upon the amendment of this Article to read as herein set forth each four (4) outstanding shares of Common Stock are split up and converted into five (5) shares of Common Stock.”

3. Approval of the foregoing Amendment of the Articles of Incorporation (“Amendment”) by the shareholders is not required pursuant to Section 902(c) of the California Corporations Code. This Amendment only provides for a stock split and an increase in the authorized shares of Common Stock in proportion thereto. There are no shares of Serial Preferred Stock outstanding.

4. This Amendment shall become effective at 5:00 p.m. California time on January 3, 2003.

Page 17

IN WITNESS WHEREOF, the undersigned have executed the Certificate on December 24, 2002.

/S/ D. Linn Wiley

D. Linn Wiley, President

/S/ Donna Marchesi

Donna Marchesi, Secretary

Each of the undersigned declares under penalty of perjury that the matters set forth in the foregoing Certificate are true and correct of our own knowledge.

Executed this 24th day of December, 2002 in Ontario, California.

/S/ D. Linn Wiley

D. Linn Wiley, President

/S/ Donna Marchesi

Donna Marchesi, Secretary

Page 18

CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
CVB FINANCIAL CORP.

The undersigned, D. Linn Wiley and Donna Marchesi, do hereby certify:

1. That they are and have been at all times herein mentioned the duly elected and acting President and the Secretary, respectively, of CVB Financial Corp., a California corporation (the “Company”).

2. That the Board of Directors of the Company adopted the following resolutions on December 15, 2004:

NOW, THEREFORE, BE IT RESOLVED that the first paragraph of Article Four of the Company’s Articles of Incorporation is amended to read as follows:

“Four. This Corporation is authorized to issue two (2) classes of shares of stock: one class of shares to be called “Common Stock”; the second class of shares to be called “Serial Preferred Stock.” The total numbers of shares of stock which the Corporation shall have authority to issue is One Hundred Seventeen Million Six Hundred Fifty Six Thousand Two Hundred Fifty (117,656,250), of which Ninety Seven Million Six Hundred Fifty Six Thousand Two Hundred Fifty (97,656,250) shall be Common Stock and Twenty Million (20,000,000) shall be Serial Preferred Stock. Upon the amendment of this Article to read as herein set forth each four (4) outstanding shares of Common Stock are split up and converted into five (5) shares of Common Stock.”

3. Approval of the foregoing Amendment of the Articles of Incorporation (“Amendment”) by the shareholders is not required pursuant to Section 902(c) of the California Corporations Code. This Amendment only provides for a stock split and an increase in the authorized shares of Common Stock in proportion thereto. There are no shares of Serial Preferred Stock outstanding.

4. This Amendment shall become effective at 5:00 p.m. California time on December 29, 2004.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

DATE: December 21, 2004.

By:	/S/ D. Linn Wiley
	D. Linn Wiley, President
By:	/S/ Donna Marchesi
	Donna Marchesi, Secretary

Page 19

CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
CVB FINANCIAL CORP.

The undersigned, D. Linn Wiley and Donna Marchesi, do hereby certify:

1. That they are, and have been at all times herein mentioned, the duly elected and acting President and the Secretary, respectively, of CVB Financial Corp., a California corporation (the “Company”).

2. That the Board of Directors of the Company adopted the following resolutions on December 21, 2005:

NOW, THEREFORE, BE IT RESOLVED that the first paragraph of Article Four of the Company’s Articles of Incorporation is amended to read as follows:

“Four. This Corporation is authorized to issue two (2) classes of shares of stock: one class of shares to be called “Common Stock”; the second class of shares to be called “Serial Preferred Stock.” The total numbers of shares of stock which the Corporation shall have authority to issue is One Hundred Forty Two Million Seventy Thousand Three Hundred Twelve (142,070,312), of which One Hundred Twenty Two Million Seventy Thousand Three Hundred Twelve (122,070,312) shall be Common Stock and Twenty Million (20,000,000) shall be Serial Preferred Stock. Upon the amendment of this Article to read as herein set forth each four (4) outstanding shares of Common Stock are split up and converted into five (5) shares of Common Stock.”

3. Approval of the foregoing Amendment of the Articles of Incorporation (“Amendment”) by the shareholders is not required pursuant to Section 902(c) of the California Corporations Code. This Amendment only provides for a stock split and an increase in the authorized shares of Common Stock in proportion thereto. There are no shares of Serial Preferred Stock outstanding.

4. This Amendment shall become effective at 5:00 p.m. California time on January 10, 2006.

Page 20

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

DATE: January 3, 2006.

/S/ D. Linn Wiley

D. Linn Wiley, President

/S/ Donna Marchesi

Donna Marchesi, Secretary

Page 21

AGREEMENT OF MERGER

THIS AGREEMENT OF MERGER (the “Holding Company Merger Agreement”) is made and entered into this 18th day of June, 2007, by and between CVB Financial Corp., a California corporation (“CVB”), and First Coastal Bancshares, a California corporation (“FCBS”), in connection with the transactions described in that Agreement and Plan of Merger and Reorganization, dated as of February 8, 2007 (the “Reorganization Agreement”) by and between CVB and FCBS.

RECITALS

1. CVB is a corporation duly organized, validly existing and in good standing under the laws of the State of California, with authorized capital of 122,070,312 shares of common stock, no par value (“CVB Stock”), and 20,000,000 shares of preferred stock, no par value.

2. FCBS is a corporation duly organized, validly existing and in good standing under the laws of the State of California, with authorized capital of 10,000,000 shares of common stock, no par value (“FCBS Stock”), and 5,000,000 shares of preferred stock, no par value.

3. The respective Boards of Directors of CVB and FCBS, each acting pursuant to a duly authorized resolution, adopted by the vote of a majority of its directors, deem it desirable and in the best interests of their respective corporations and shareholders that FCBS be merged with and into CVB (the “Holding Company Merger”) as provided in this Holding Company Merger Agreement pursuant to the laws of the State of California, and that CVB be the surviving corporation (the “Surviving Corporation”).

4. CVB and FCBS entered into the Reorganization Agreement, which provides for, among other transactions, the merger of FCBS with and into CVB in accordance with this Holding Company Merger Agreement.

NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein set forth and for the purpose of prescribing the terms and conditions of the Holding Company Merger, the parties hereto agree as follows:

ARTICLE I
THE MERGER

Upon consummation of the Holding Company Merger at the Effective Date of the Holding Company Merger (as defined in Article VIII hereof), FCBS shall be merged with and into CVB, which shall thereupon be the Surviving Corporation, and the separate corporate existence of FCBS shall cease.

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ARTICLE II
NAME

The name of the Surviving Corporation shall be “CVB Financial Corp.”

ARTICLE III
ARTICLES OF INCORPORATION

The Articles of Incorporation of CVB as in effect immediately prior to the Effective Date of the Holding Company Merger shall, at and after the Effective Date of the Holding Company Merger, continue to be the Articles of Incorporation of the Surviving Corporation.

ARTICLE IV
BYLAWS

The Bylaws of CVB as in effect immediately prior to the Effective Date of the Holding Company Merger shall, at and after the Effective Date of the Holding Company Merger, continue to be the Bylaws of the Surviving Corporation.

ARTICLE V
RIGHTS AND DUTIES OF SURVIVING CORPORATION

At and after the Effective Date of the Holding Company Merger, all rights, privileges, powers and franchises and all property and assets of every kind and description of FCBS shall be vested in and be held and enjoyed by the Surviving Corporation, without further act or deed, and all the estates and interests of every kind of FCBS, including all debts due to it, shall be as effectively the property of the Surviving Corporation as they were of FCBS, and the title to any real estate vested by deed or otherwise in FCBS shall not revert or be in any way impaired by reason of the Holding Company Merger; and all rights of creditors and liens upon any property of FCBS shall be preserved unimpaired and all debts, liabilities and duties of FCBS shall be debts, liabilities and duties of the Surviving Corporation and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by it.

ARTICLE VI
CONVERSION OF SHARES

In and by virtue of the Holding Company Merger and at the Effective Time, pursuant to this Holding Company Merger Agreement, the shares of CVB Stock and FCBS Stock outstanding at the Effective Time shall be converted as follows:

(a) Effect on FCBS Stock. Each share of FCBS Stock issued and outstanding immediately prior to the Effective Time, excluding any shares of FCBS Stock, which have taken all requisite action to be treated as dissenting shares pursuant to Section 1300 et seq of the California General Corporation Law, or shares of FCBS Stock held by CVB or Citizens Business Bank, a wholly-owned subsidiary of CVB, (“CBB”) (other than those held in a fiduciary capacity or as a result of debts previously contracted), shall, without any action on the part of the holder thereof, cease to be outstanding and be converted into

(i) a number of shares of CVB Stock equal to the Per Share Stock Consideration; or

(ii) cash in the amount of the Per Share Cash Consideration.

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“Per Share Cash Consideration” means $276.73.

“Per Share Stock Consideration” means 24.6201 shares of CVB Stock.

Such conversion of FCBS Stock shall be subject to the election and proration procedures set forth in Exhibit A attached hereto and incorporated herein by reference.

(b) Fractional Shares. No fractional shares of CVB Stock shall be issued in the Holding Company Merger. In lieu thereof, each holder of FCBS Stock who would otherwise be entitled to receive a fractional share shall receive an amount in cash equal to the product (calculated to the nearest hundredth) obtained by multiplying (i) $11.24 times (ii) the fraction of the share of CVB Stock to which such holder would otherwise be entitled. No such holder shall be entitled to dividends or other rights in respect of any such fraction.

(c) Perfected Dissenting Shares. Perfected Dissenting Shares shall not be converted into the Per Share Cash Consideration or Per Share Stock Consideration, but shall, after the Effective Time of the Holding Company Merger, be entitled only to such rights as are granted them by Chapter 13 of the California General Corporation Law. Each dissenting shareholder who is entitled to payment for his shares of FCBS Stock shall receive such payment in an amount as determined pursuant to Chapter 13 of the California General Corporation Law.

(d) Shares of FCBS Stock Held by CVB or CBB. Shares of FCBS Stock held by CVB or CBB, if any (other than those held in a fiduciary capacity or as a result of debts previously contracted), shall be canceled and no consideration shall be issued in exchange therefor.

(e) Effect on CVB Stock. At the Effective Date, each outstanding share of CVB Stock shall remain an outstanding share of CVB Stock and shall not be converted or otherwise affected by the Holding Company Merger.

ARTICLE VII
FURTHER ACTION

The parties hereto shall execute and deliver, or cause to be executed and delivered, all such deeds and other instruments, and will take or cause to be taken all further or other action as they may deem necessary or desirable, in order to vest in and confirm to the Surviving Corporation title to and possession of all of FCBS’ property, rights, privileges, powers and franchises hereunder, and otherwise to carry out the intent and purposes of this Holding Company Merger Agreement.

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ARTICLE VIII
EFFECTIVE DATE OF THE MERGER

The Holding Company Merger shall be effective (the “Effective Date of the Holding Company Merger”) upon the filing of this Holding Company Merger Agreement and the appropriate certificates of its approval and adoption with the Secretary of State of the State of California in accordance with Section 1103 of the California General Corporation Law.

ARTICLE IX
TERMINATION

This Holding Company Merger Agreement may, by the mutual consent and action of the Boards of Directors of CVB and FCBS, be abandoned at any time before or after approval thereof by the shareholders of FCBS, but not later than the Effective Date of the Holding Company Merger. This Holding Company Merger Agreement shall automatically be terminated and of no further force and effect if, prior to the Effective Date of the Holding Company Merger, the Reorganization Agreement is terminated in accordance with the terms thereof.

ARTICLE X
SATISFACTION OF CONDITION AND OBLIGATIONS

(a) The obligations of CVB to proceed with the Closing are subject to the satisfaction at or prior to the Closing of all of the conditions to the obligations of CVB under the Reorganization Agreement, any one or more of which, to the extent it is or they are waivable, may be waived, in whole or in part, by FCBS.

(b) The obligations of FCBS to proceed with the Closing are subject to the satisfaction at or prior to the Closing of all of the conditions to the obligations of FCBS under the Reorganization Agreement, any one or more of which, to the extent it is or they are waivable, may be waived, in whole or in part, by CVB.

ARTICLE XI
GOVERNING LAW

This Holding Company Merger Agreement has been executed in the State of California, and the laws of the State of California shall govern the validity and interpretation hereof and the performance by the parties hereto.

[The remainder of this page was intentionally left blank]

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IN WITNESS WHEREOF, CVB and FCBS, pursuant to the approval and authority duly given by resolution of their respective Board of Directors, have caused this Holding Company Merger Agreement to be signed by their respective Presidents and Secretaries on the day and year first above written.

CVB FINANCIAL CORP.
By:	/s/ Christopher D. Myers
	Name:	Christopher D. Myers
	Title:	President and Chief Executive Officer
By:	/s/ Myrna DiSanto
	Name:	Myrna DiSanto
	Title:	Secretary
FIRST COASTAL BANCSHARES
By:
	Name:	Don M. Griffith
	Title:	President and Chief Executive Officer
By:
	Name:	Deborah A. Marsten
	Title:	Secretary

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IN WITNESS WHEREOF, CVB and FCBS, pursuant to the approval and authority duly given by resolution of their respective Board of Directors, have caused this Holding Company Merger Agreement to be signed by their respective Presidents and Secretaries on the day and year first above written.

CVB FINANCIAL CORP.
By:
	Name:	Christopher D. Myers
	Title:	President and Chief Executive Officer
By:
	Name:	Myrna DiSanto
	Title:	Secretary
FIRST COASTAL BANCSHARES
By:	/s/ Don M. Griffith
	Name:	Don M. Griffith
	Title:	President and Chief Executive Officer
By:	/s/ Deborah A. Marsten
	Name:	Deborah A. Marsten
	Title:	Secretary

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CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER

Christopher D. Myers and Edward J. Biebrich, Jr. certify that:

1. They are the President and the Chief Financial Officer, respectively, of CVB FINANCIAL CORP., a California corporation.

2. The Agreement of Merger in the form attached was duly approved by the board of directors of the corporation.

3. Shareholder approval was not required pursuant to Section 1201 of the California General Corporation Law.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

Dated this 18 day of June, 2007 at Ontario, California.

/s/ Christopher D. Myers  

Christopher D. Myers, President 

/s/ Edward J. Biebrich  

Edward J. Biebrich, Jr., Chief Financial Officer 

CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER

Don M. Griffith and Deborah A. Marsten certify that:

1. They are the Chairman of the Board and Chief Executive Officer and the Chief Financial Officer, respectively, of FIRST COASTAL BANCSHARES, a California corporation (the “Corporation”).

2. The Agreement of Merger in the form attached was duly approved by the board of directors and the shareholders of the Corporation.

3. There are two (2) classes of shares and only one class of shares outstanding. The total number of shares outstanding on the date the merger was approved was 130,425.

4. The principal terms of the Agreement of Merger were approved by a vote which equaled or exceeded the vote required. The percentage vote required was a majority of the shares outstanding.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

Dated this 18 day of June, 2007 at Manhattan Beach, California.

/s/ Don M. Griffith  

Don M. Griffith, Chairman of the Board and 

Chief Executive Officer 

/s/ Deborah A. Marsten  

Deborah A. Marsten, Chief Financial Officer 

EXHIBIT A

Election and Proration Procedures

Section 2.2.1 Election Forms and Types of Elections. An election form and other appropriate and customary transmittal materials (which shall specify that delivery shall be effected, and risk of loss and title to the certificates theretofore representing shares of common stock of FCBS (the “FCBS Stock”) shall pass, only upon proper delivery of such certificates to the exchange agent in such form as CVB and FCBS shall mutually agree (“Election Form”)) shall be mailed concurrently with or within five (5) business days of, the mailing of the Proxy Statement by FCBS, or on such other date as FCBS and CVB shall mutually agree (“Mailing Date”) to each holder of record of FCBS Stock as of the date for determining shareholders entitled to vote at the FCBS shareholder meeting or on such other date as CVB and FCBS shall mutually agree (“Election Form Record Date”). CVB shall make available one or more Election Forms as may be reasonably requested by all persons who become holders (or beneficial owners) of FCBS Stock after the Election Form Record Date and prior to the Election Deadline (as defined herein), and FCBS shall provide to the exchange agent all information reasonably necessary for it to perform its obligations as specified herein. Each Election Form shall permit the holder (or the beneficial owner through appropriate and customary documentation and instructions) to elect (an “Election”) either (i) to receive CVB Common Stock (a “Stock Election”) with respect to all of such holder’s FCBS Stock, or (ii) to receive cash (a “Cash Election”) with respect to all of such holder’s FCBS Stock, or (iii) to receive the common stock of CVB (the “CVB Common Stock”) with respect to a specified number of shares of FCBS Stock (a “Combination Stock Election”) and to receive cash with respect to a specified number of shares of FCBS Stock (a “Combination Cash Election”). Any FCBS Stock (other than shares of FCBS Stock, which have taken all requisite action to be treated as dissenting shares pursuant to Section 1300 et seq of the California General Corporation Law (the “Perfected Dissenting Shares”)) with respect to which the holder (or the beneficial owner, as the case may be) shall not have submitted to the exchange agent, an effective, properly completed Election Form received prior to the Election Deadline shall be deemed to be “Undesignated Shares” hereunder.

Section 2.2.2 Proper and Timely Election. Any Election shall have been properly made and effective only if the exchange agent shall have actually received a properly completed Election Form by 5:00 p.m. on the business day prior to the date of the FCBS Shareholder Meeting or such other time and date as CVB and FCBS may mutually agree (the “Election Deadline”). An Election Form shall be deemed properly completed only if an Election is indicated for each share of FCBS Stock covered by such Election Form and if accompanied by one or more certificates (or customary affidavits and indemnification regarding the loss or destruction of such certificates or the guaranteed delivery of such certificates) representing all shares of FCBS Stock covered by such Election Form, together with duly executed transmittal materials included in or required by the Election Form. Any Election Form may be revoked or changed by the person submitting such Election Form at or prior to the Election Deadline. In the event an Election Form is revoked prior to the Election Deadline, the shares of FCBS Stock represented by such Election Form shall automatically become Undesignated Shares unless and until a new Election is properly made with respect to such shares on or before the Election Deadline, and CVB shall cause the certificates representing such shares of FCBS Stock to be promptly returned without charge to the person submitting the revoked Election Form upon written request to that effect from the holder who submitted such Election Form. Subject to the terms of this Agreement and of the Election Form, the exchange agent shall have reasonable discretion to determine whether any election, revocation or change has been properly or timely made and to disregard immaterial defects in the Election Forms, and any decisions of CVB and FCBS required by the exchange agent and made in good faith in determining such matters shall be binding and conclusive. Neither CVB nor the exchange agent shall be under any obligation to notify any person of any defect in an Election Form.

Section 2.2.3 Payment and Proration. As promptly as practicable but no later than five (5) business days after the date and time that the Agreement of Merger and officers’ certificates have been duly filed with the Secretary of State of California, or if another date and time is specified in such filing, such specified date and time, being the “Effective Time”, CVB shall cause the exchange agent to effect the allocation among the holders of FCBS Stock of rights to receive CVB Common Stock or cash in the merger of FCBS into CVB (the “Holding Company Merger”) in accordance with the Election Forms as follows:

(a) if the aggregate number of shares of FCBS Stock as to which Stock Elections and Combination Stock Elections shall have effectively been made results in the issuance of CVB Common Stock pursuant to the Holding Company Merger that would have an aggregate value which exceeds, and is not approximately equal to, the Stock Amount based on the number of shares of CVB Common Stock equal to the Per Share Stock Consideration (the “Exchange Ratio”) (assuming all other shares of FCBS Stock receive the Per Share Cash Consideration), then:

(i) Each holder of FCBS Stock who made an effective Cash Election or Combination Cash Election shall receive the Per Share Cash Consideration;

(ii) All Undesignated Shares shall be deemed to have made Cash Elections; and

(iii) A stock proration factor (the “Stock Proration Factor”) shall be determined by dividing (1) the maximum number of shares of FCBS Stock which can make a Stock Election and Combination Stock Election to equal the Stock Amount based on the Exchange Ratio by (2) the number of shares of FCBS Stock with respect to which effective Stock Elections and Combination Stock Elections were made. Each holder of FCBS Stock who made an effective Stock Election or Combination Stock Election shall be entitled to:

the number of shares of CVB Common Stock equal to the product of (x) the Exchange Ratio, multiplied by (y) the number of shares of FCBS Stock covered by such Stock Election or Combination Stock Election, multiplied by (z) the Stock Proration Factor, and

cash in an amount equal to the product of (x) the Per Share Cash Consideration, multiplied by (y) the number of shares of FCBS Stock covered by such Stock Election or Combination Stock Election, multiplied by (z) one minus the Stock Proration Factor.

(b) if the aggregate number of shares of FCBS Stock as to which Stock Elections and Combination Stock Elections shall have effectively been made results in the issuance of CVB Common Stock pursuant to the Holding Company Merger that would have an aggregate value which is less than, and not approximately equal to, the Stock Amount based on the Exchange Ratio (assuming all other shares of FCBS Stock other than shares of FCBS Stock held by CVB or CVB Bank receive the Per Share Cash Consideration), then:

(i) Each holder of FCBS Stock who made an effective Stock Election or Combination Stock Election shall receive the number of shares of CVB Common Stock equal to the product of the Exchange Ratio multiplied by the number of shares of FCBS Stock covered by such Stock Election or Combination Stock Election;

(ii) The exchange agent shall select by lot such number of holders of Undesignated Shares (other than holders of Undesignated Shares who voted against the Holding Company Merger or gave notice in writing that the holder dissents as required by Chapter 13 of the California General Corporation Law prior to the meeting of shareholders to vote upon the Holding Company Merger) to receive CVB Common Stock as shall be necessary so that the shares of CVB Common Stock to be received by those holders, when combined with the number of shares for which a Stock Election or Combination Stock Election has been made shall be approximately equal to the Stock Amount. If all of said Undesignated Shares plus all shares as to which Stock Elections and Combination Stock Elections have been made together would result in the issuance of CVB Common Stock with a value which is less than, and not approximately equal to, the Stock Amount, then:

(iii) A cash proration factor (the “Cash Proration Factor”) shall be determined by dividing (1) the maximum number of shares of FCBS Stock which can make a Stock Election and Combination Stock Election to equal the Stock Amount based on the Exchange Ratio by (2) the number of shares of FCBS Stock with respect to which effective Cash Elections and Combination Cash Elections were made. Each holder of FCBS Stock who made an effective Cash Election or Combination Cash Election shall be entitled to:

(1) cash equal to the product of (x) the Per Share Cash Consideration, multiplied by (y) the number of shares of FCBS Stock covered by such Cash Election or Combination Cash Election, multiplied by (z) the Cash Proration Factor, and

the number of shares of CVB Common Stock equal to the product of (x) the Exchange Ratio, multiplied by (y) the number of shares of FCBS Stock covered by such Cash Election or Combination Cash Election, multiplied by (z) one minus the Cash Proration Factor.

EXHIBIT 3.1, 4.1

CERTIFICATE OF DETERMINATION

OF PREFERENCES OF

SERIES B FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK

OF

CVB FINANCIAL CORP.,
a California Corporation

The undersigned, Christopher D. Myers and Edward J. Biebrich Jr., hereby certify that:

     A. They are the duly elected President and Chief Executive Officer and the Chief Financial Officer and Assistant Secretary, respectively, of CVB Financial Corp., a California corporation (the “Corporation”) organized and existing under the laws of the State of California.

     B. The authorized number of shares of Preferred Stock is 20,000,000, none of which have been issued. The authorized number of shares of Series B Fixed Rate Cumulative Perpetual Preferred Stock is 130,000, none of which have been issued.

     C. Pursuant to authority given by said Corporation’s articles of incorporation, the Board of Directors of the Corporation duly has adopted the following recitals and resolutions in accordance with the relevant provisions of the California Corporations Code:

     “WHEREAS, the articles of incorporation of the Corporation authorize a class of Preferred Stock comprising 20,000,000 shares issuable from time to time in one or more series; and

     WHEREAS, the Board of Directors of the Corporation is authorized to fix or alter the rights, preferences, privileges, and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock including but not limited to the dividend rights, dividend rates, conversion rights, voting rights, and the liquidation preferences, and the number of shares constituting any such series and the designation thereof, or any of them; and

     WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to Series B Fixed Rate Cumulative Perpetual Preferred Stock and the number of shares constituting such series;

     NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors, in accordance with the articles of incorporation and bylaws of the Corporation and applicable law, hereby does create and provide for the issue of a series of Preferred Stock consisting of 130,000 shares designated as “Series B Fixed Rate Cumulative Perpetual

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Preferred Stock”, and does hereby fix the voting and other powers, preferences, and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, and other matters relating to the Designated Preferred Stock (as defined below) are as follows:

     1. Designation and Number of Shares. There is hereby created out of the authorized and unissued shares of preferred stock of the Corporation a series of preferred stock designated as the “Series B Fixed Rate Cumulative Perpetual Preferred Stock” (the “Designated Preferred Stock”). The authorized number of shares of Preferred Stock is 20,000,000, none of which have been issued, and the authorized number of shares of Designated Preferred Stock is 130,000, none of which has been issued.

     2. Standard Provisions. The Standard Provisions contained in Exhibit A attached hereto are incorporated by reference as if fully set forth herein and shall be deemed to be a part of this resolution and the Certificate of Determination.

     3. Definitions. The following terms are used in this resolution and the Certificate of Determination (including the Standard Provisions in Exhibit A hereto) as defined below:

     (a) “Common Stock” means the common stock, no par value per share, of the Corporation.

     (b) “Dividend Payment Date” means February 15, May 15, August 15 and November 15 of each year.

     (c) “Junior Stock” means the Common Stock, the Series A Preferred Stock and any other class or series of stock of the Corporation the terms of which expressly provide that it ranks junior to Designated Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Corporation.

     (d) “Liquidation Amount” means $1,000 per share of Designated Preferred Stock.

     (e) “Minimum Amount” means $32,500,000.

     (f) “Parity Stock” means any class or series of stock of the Corporation (other than Designated Preferred Stock) the terms of which do not expressly provide that such class or series will rank senior or junior to Designated Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Corporation (in each case without regard to whether dividends accrue cumulatively or non-cumulatively).

     (g) “Signing Date” means the Original Issue Date.

     (h) “Series A Preferred Stock” means the Series A Participating Preferred Stock, no par value, of the Corporation.

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     4. Certain Voting Matters. Holders of shares of Designated Preferred Stock will be entitled to one vote for each such share on any matter on which holders of Designated Preferred Stock are entitled to vote, including any action by written consent.

     RESOLVED FURTHER, that any one of the Chairman of the Board, the President or any Vice President, acting together with any one of the Secretary, the Chief Financial Officer, the Treasurer, or any Assistant Secretary or Assistant Treasurer of this Corporation are authorized to execute, verify, and file a Certificate of Determination of Preferences of Series B Fixed Rate Cumulative Perpetual Preferred Stock of CVB Financial Corp. in accordance with the foregoing resolutions and provisions of California law.”

     D. The Standard Provisions contained in Exhibit A attached hereto are incorporated by reference as if fully set forth herein and shall be deemed to be a part of this Certificate of Determination.

[Remainder of Page Intentionally Left Blank]

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     The undersigned declare under penalty of perjury under the laws of the State of California that the matters set forth in the foregoing Certificate of Determination are true and correct to their own knowledge.

Date: December 3, 2008

By:	/s/ Christopher D. Myers
Name:	Christopher D. Myers
Title:	President and Chief Executive Officer
By:	/s/ Edward J. Biebrich, Jr.
Name:	Edward J. Biebrich, Jr.
Title:	Executive Vice President, Chief
	Financial Officer and Assistant
	Secretary

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EXHIBIT A

STANDARD PROVISIONS

     Section 1. General Matters. Each share of Designated Preferred Stock shall be identical in all respects to every other share of Designated Preferred Stock. The Designated Preferred Stock shall be perpetual, subject to the provisions of Section 5 of these Standard Provisions that form a part of the Certificate of Determination. The Designated Preferred Stock shall rank equally with Parity Stock and shall rank senior to Junior Stock with respect to the payment of dividends and the distribution of assets in the event of any dissolution, liquidation or winding up of the Corporation.

     Section 2. Standard Definitions. As used herein with respect to Designated Preferred Stock:

     (a) “Applicable Dividend Rate” means (i) during the period from the Original Issue Date to, but excluding, the first day of the first Dividend Period commencing on or after the fifth anniversary of the Original Issue Date, 5% per annum and (ii) from and after the first day of the first Dividend Period commencing on or after the fifth anniversary of the Original Issue Date, 9% per annum.

     (b) “Appropriate Federal Banking Agency” means the “appropriate Federal banking agency” with respect to the Corporation as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor provision.

     (c) “Business Combination” means a merger, consolidation, statutory share exchange or similar transaction that requires the approval of the Corporation’s stockholders.

     (d) “Business Day” means any day except Saturday, Sunday and any day on which banking institutions in the State of New York generally are authorized or required by law or other governmental actions to close.

     (e) “Bylaws” means the bylaws of the Corporation, as they may be amended from time to time.

     (f) “Certificate of Determination” means the Certificate of Determination of Preferences of Series B Fixed Rate Cumulative Perpetual Preferred Stock of CVB Financial Corp. or comparable instrument relating to the Designated Preferred Stock, of which these Standard Provisions form a part, as it may be amended from time to time.

     (g) “Charter” means the Corporation’s certificate or articles of incorporation, articles of association, or similar organizational document.

     (h) “Dividend Period” has the meaning set forth in Section 3(a).

     (i) “Dividend Record Date” has the meaning set forth in Section 3(a).

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     (j) “Liquidation Preference” has the meaning set forth in Section 4(a).

     (k) “Original Issue Date” means the date on which shares of Designated Preferred Stock are first issued.

     (l) “Preferred Director” has the meaning set forth in Section 7(b).

     (m) “Preferred Stock” means any and all series of preferred stock of the Corporation, including the Designated Preferred Stock.

     (n) “Qualified Equity Offering” means the sale and issuance for cash by the Corporation to persons other than the Corporation or any of its subsidiaries after the Original Issue Date of shares of perpetual Preferred Stock, Common Stock or any combination of such stock, that, in each case, qualify as and may be included in Tier 1 capital of the Corporation at the time of issuance under the applicable risk-based capital guidelines of the Corporation’s Appropriate Federal Banking Agency (other than any such sales and issuances made pursuant to agreements or arrangements entered into, or pursuant to financing plans which were publicly announced, on or prior to October 13, 2008).

     (o) “Share Dilution Amount” has the meaning set forth in Section 3(b).

     (p) “Standard Provisions” mean these Standard Provisions that form a part of the Certificate of Determination relating to the Designated Preferred Stock.

     (q) “Successor Preferred Stock” has the meaning set forth in Section 5(a).

     (r) “Voting Parity Stock” means, with regard to any matter as to which the holders of Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these Standard Provisions that form a part of the Certificate of Determination, any and all series of Parity Stock upon which like voting rights have been conferred and are exercisable with respect to such matter.

     Section 3. Dividends.

     (a) Rate. Holders of Designated Preferred Stock shall be entitled to receive, on each share of Designated Preferred Stock if, as and when declared by the Board of Directors or any duly authorized committee of the Board of Directors, but only out of assets legally available therefor, cumulative cash dividends with respect to each Dividend Period (as defined below) at a rate per annum equal to the Applicable Dividend Rate on (i) the Liquidation Amount per share of Designated Preferred Stock and (ii) the amount of accrued and unpaid dividends for any prior Dividend Period on such share of Designated Preferred Stock, if any. Such dividends shall begin to accrue and be cumulative from the Original Issue Date, shall compound on each subsequent Dividend Payment Date (i.e., no dividends shall accrue on other dividends unless and until the first Dividend Payment Date for such other dividends has passed without such other dividends having been paid on such

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date) and shall be payable quarterly in arrears on each Dividend Payment Date, commencing with the first such Dividend Payment Date to occur at least 20 calendar days after the Original Issue Date. In the event that any Dividend Payment Date would otherwise fall on a day that is not a Business Day, the dividend payment due on that date will be postponed to the next day that is a Business Day and no additional dividends will accrue as a result of that postponement. The period from and including any Dividend Payment Date to, but excluding, the next Dividend Payment Date is a “Dividend Period”, provided that the initial Dividend Period shall be the period from and including the Original Issue Date to, but excluding, the next Dividend Payment Date.

     Dividends that are payable on Designated Preferred Stock in respect of any Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of dividends payable on Designated Preferred Stock on any date prior to the end of a Dividend Period, and for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of twelve 30-day months, and actual days elapsed over a 30-day month.

     Dividends that are payable on Designated Preferred Stock on any Dividend Payment Date will be payable to holders of record of Designated Preferred Stock as they appear on the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day immediately preceding such Dividend Payment Date or such other record date fixed by the Board of Directors or any duly authorized committee of the Board of Directors that is not more than 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a Business Day.

     Holders of Designated Preferred Stock shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (if any) declared and payable on Designated Preferred Stock as specified in this Section 3 (subject to the other provisions of the Certificate of Determination).

     (b) Priority of Dividends. So long as any share of Designated Preferred Stock remains outstanding, no dividend or distribution shall be declared or paid on the Common Stock or any other shares of Junior Stock (other than dividends payable solely in shares of Common Stock) or Parity Stock, subject to the immediately following paragraph in the case of Parity Stock, and no Common Stock, Junior Stock or Parity Stock shall be, directly or indirectly, purchased, redeemed or otherwise acquired for consideration by the Corporation or any of its subsidiaries unless all accrued and unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period (including, if applicable as provided in Section 3(a) above, dividends on such amount), on all outstanding shares of Designated Preferred Stock have been or are contemporaneously declared and paid in full (or have been declared and a sum sufficient for the payment thereof has been set aside for the benefit of the holders of shares of Designated Preferred Stock on the applicable record date). The foregoing limitation shall not apply to (i) redemptions, purchases or other acquisitions of shares of Common Stock or other Junior Stock in connection with the administration of any employee benefit plan in the ordinary course of business (including

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purchases to offset the Share Dilution Amount (as defined below) pursuant to a publicly announced repurchase plan) and consistent with past practice, provided that any purchases to offset the Share Dilution Amount shall in no event exceed the Share Dilution Amount; (ii) purchases or other acquisitions by a broker-dealer subsidiary of the Corporation solely for the purpose of market-making, stabilization or customer facilitation transactions in Junior Stock or Parity Stock in the ordinary course of its business; (iii) purchases by a broker-dealer subsidiary of the Corporation of capital stock of the Corporation for resale pursuant to an offering by the Corporation of such capital stock underwritten by such broker-dealer subsidiary; (iv) any dividends or distributions of rights or Junior Stock in connection with a stockholders’ rights plan or any redemption or repurchase of rights pursuant to any stockholders’ rights plan; (v) the acquisition by the Corporation or any of its subsidiaries of record ownership in Junior Stock or Parity Stock for the beneficial ownership of any other persons (other than the Corporation or any of its subsidiaries), including as trustees or custodians; and (vi) the exchange or conversion of Junior Stock for or into other Junior Stock or of Parity Stock for or into other Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock, in each case, solely to the extent required pursuant to binding contractual agreements entered into prior to the Signing Date or any subsequent agreement for the accelerated exercise, settlement or exchange thereof for Common Stock. “Share Dilution Amount” means the increase in the number of diluted shares outstanding (determined in accordance with generally accepted accounting principles in the United States, and as measured from the date of the Corporation’s consolidated financial statements most recently filed with the Securities and Exchange Commission prior to the Original Issue Date) resulting from the grant, vesting or exercise of equity-based compensation to employees and equitably adjusted for any stock split, stock dividend, reverse stock split, reclassification or similar transaction.

     When dividends are not paid (or declared and a sum sufficient for payment thereof set aside for the benefit of the holders thereof on the applicable record date) on any Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend Period related to such Dividend Payment Date) in full upon Designated Preferred Stock and any shares of Parity Stock, all dividends declared on Designated Preferred Stock and all such Parity Stock and payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts of such dividends declared shall bear the same ratio to each other as all accrued and unpaid dividends per share on the shares of Designated Preferred Stock (including, if applicable as provided in Section 3(a) above, dividends on such amount) and all Parity Stock payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to such Dividend Payment Date) (subject to their having been declared by the Board of Directors or a duly authorized committee of the Board of Directors out of legally available funds and including, in the case of Parity Stock that bears cumulative dividends, all accrued but unpaid dividends) bear to each other. If the Board of Directors or a duly authorized

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committee of the Board of Directors determines not to pay any dividend or a full dividend on a Dividend Payment Date, the Corporation will provide written notice to the holders of Designated Preferred Stock prior to such Dividend Payment Date.

     Subject to the foregoing, and not otherwise, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or any duly authorized committee of the Board of Directors may be declared and paid on any securities, including Common Stock and other Junior Stock, from time to time out of any funds legally available for such payment, and holders of Designated Preferred Stock shall not be entitled to participate in any such dividends.

     Section 4. Liquidation Rights.

     (a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, holders of Designated Preferred Stock shall be entitled to receive for each share of Designated Preferred Stock, out of the assets of the Corporation or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the Corporation, subject to the rights of any creditors of the Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the Corporation ranking junior to Designated Preferred Stock as to such distribution, payment in full in an amount equal to the sum of (i) the Liquidation Amount per share and (ii) the amount of any accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount), whether or not declared, to the date of payment (such amounts collectively, the “Liquidation Preference”).

     (b) Partial Payment. If in any distribution described in Section 4(a) above the assets of the Corporation or proceeds thereof are not sufficient to pay in full the amounts payable with respect to all outstanding shares of Designated Preferred Stock and the corresponding amounts payable with respect of any other stock of the Corporation ranking equally with Designated Preferred Stock as to such distribution, holders of Designated Preferred Stock and the holders of such other stock shall share ratably in any such distribution in proportion to the full respective distributions to which they are entitled.

     (c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Designated Preferred Stock and the corresponding amounts payable with respect of any other stock of the Corporation ranking equally with Designated Preferred Stock as to such distribution has been paid in full, the holders of other stock of the Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.

     (d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 4, the merger or consolidation of the Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of

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Designated Preferred Stock receive cash, securities or other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.

     Section 5. Redemption.

     (a) Optional Redemption. Except as provided below, the Designated Preferred Stock may not be redeemed prior to the first Dividend Payment Date falling on or after the third anniversary of the Original Issue Date. On or after the first Dividend Payment Date falling on or after the third anniversary of the Original Issue Date, the Corporation, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time to time, out of funds legally available therefor, the shares of Designated Preferred Stock at the time outstanding, upon notice given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount) (regardless of whether any dividends are actually declared) to, but excluding, the date fixed for redemption.

     Notwithstanding the foregoing, prior to the first Dividend Payment Date falling on or after the third anniversary of the Original Issue Date, the Corporation, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time to time, the shares of Designated Preferred Stock at the time outstanding, upon notice given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount) (regardless of whether any dividends are actually declared) to, but excluding, the date fixed for redemption; provided that (x) the Corporation (or any successor by Business Combination) has received aggregate gross proceeds of not less than the Minimum Amount (plus the “Minimum Amount” as defined in the relevant certificate of determination for each other outstanding series of preferred stock of such successor that was originally issued to the United States Department of the Treasury (the “Successor Preferred Stock”) in connection with the Troubled Asset Relief Program Capital Purchase Program) from one or more Qualified Equity Offerings (including Qualified Equity Offerings of such successor), and (y) the aggregate redemption price of the Designated Preferred Stock (and any Successor Preferred Stock) redeemed pursuant to this paragraph may not exceed the aggregate net cash proceeds received by the Corporation (or any successor by Business Combination) from such Qualified Equity Offerings (including Qualified Equity Offerings of such successor).

     The redemption price for any shares of Designated Preferred Stock shall be payable on the redemption date to the holder of such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent. Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the Dividend

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Record Date for a Dividend Period shall not be paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on such Dividend Record Date relating to the Dividend Payment Date as provided in Section 3 above.

     (b) No Sinking Fund. The Designated Preferred Stock will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders of Designated Preferred Stock will have no right to require redemption or repurchase of any shares of Designated Preferred Stock.

     (c) Notice of Redemption. Notice of every redemption of shares of Designated Preferred Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Designated Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Designated Preferred Stock. Notwithstanding the foregoing, if shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust Corporation or any other similar facility, notice of redemption may be given to the holders of Designated Preferred Stock at such time and in any manner permitted by such facility. Each notice of redemption given to a holder shall state: (1) the redemption date; (2) the number of shares of Designated Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of the redemption price.

     (d) Partial Redemption. In case of any redemption of part of the shares of Designated Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro rata or in such other manner as the Board of Directors or a duly authorized committee thereof may determine to be fair and equitable. Subject to the provisions hereof, the Board of Directors or a duly authorized committee thereof shall have full power and authority to prescribe the terms and conditions upon which shares of Designated Preferred Stock shall be redeemed from time to time. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.

     (e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption have been deposited by the Corporation, in trust for the pro rata benefit of the holders of the shares called for redemption, with a bank or trust company doing business in the Borough of Manhattan, The City of New York, and having a capital and surplus of at least $500 million and selected by the Board of Directors, so as to be and

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continue to be available solely therefor, then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption from such bank or trust company, without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption price of such shares.

     (f) Status of Redeemed Shares. Shares of Designated Preferred Stock that are redeemed, repurchased or otherwise acquired by the Corporation shall revert to authorized but unissued shares of Preferred Stock (provided that any such cancelled shares of Designated Preferred Stock may be reissued only as shares of any series of Preferred Stock other than Designated Preferred Stock).

     Section 6. Conversion. Holders of Designated Preferred Stock shares shall have no right to exchange or convert such shares into any other securities.

     Section 7. Voting Rights.

     (a) General. The holders of Designated Preferred Stock shall not have any voting rights except as set forth below or as otherwise from time to time required by law.

     (b) Preferred Stock Directors. Whenever, at any time or times, dividends payable on the shares of Designated Preferred Stock have not been paid for an aggregate of six quarterly Dividend Periods or more, whether or not consecutive, the holders of the Designated Preferred Stock shall have the right, with holders of shares of any one or more other classes or series of Voting Parity Stock outstanding at the time, voting together as a class, to elect two directors (hereinafter the “Preferred Directors” and each a “Preferred Director”) at the Corporation’s next annual meeting of stockholders (or at a special meeting called for that purpose prior to such next annual meeting) and at each subsequent annual meeting of stockholders until all accrued and unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period (including, if applicable as provided in Section 3(a) above, dividends on such amount), on all outstanding shares of Designated Preferred Stock have been declared and paid in full at which time such right shall terminate with respect to the Designated Preferred Stock, except as herein or by law expressly provided, subject to revesting in the event of each and every subsequent default of the character above mentioned; provided that it shall be a qualification for election for any Preferred Director that the election of such Preferred Director shall not cause the Corporation to violate any corporate governance requirements of any securities exchange or other trading facility on which securities of the Corporation may then be listed or traded that listed or traded companies must have a majority of independent directors. Upon any termination of the right of the holders of

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shares of Designated Preferred Stock and Voting Parity Stock as a class to vote for directors as provided above, the Preferred Directors shall cease to be qualified as directors, the term of office of all Preferred Directors then in office shall terminate immediately and the authorized number of directors shall be reduced by the number of Preferred Directors elected pursuant hereto. Any Preferred Director may be removed at any time, with or without cause, and any vacancy created thereby may be filled, only by the affirmative vote of the holders a majority of the shares of Designated Preferred Stock at the time outstanding voting separately as a class together with the holders of shares of Voting Parity Stock, to the extent the voting rights of such holders described above are then exercisable. If the office of any Preferred Director becomes vacant for any reason other than removal from office as aforesaid, the remaining Preferred Director may choose a successor who shall hold office for the unexpired term in respect of which such vacancy occurred.

     (c) Class Voting Rights as to Particular Matters. So long as any shares of Designated Preferred Stock are outstanding, in addition to any other vote or written consent of stockholders required by law or by the Charter, the vote or written consent of the holders of at least 66 2/3% of the shares of Designated Preferred Stock at the time outstanding, voting as a separate class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:

     (i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Determination for the Designated Preferred Stock or the Charter to authorize or create or increase the authorized amount of, or any issuance of, any shares of, or any securities convertible into or exchangeable or exercisable for shares of, any class or series of capital stock of the Corporation ranking senior to Designated Preferred Stock with respect to either or both the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;

     (ii) Amendment of Designated Preferred Stock. Any amendment, alteration or repeal of any provision of the Certificate of Determination for the Designated Preferred Stock or the Charter (including, unless no vote on such merger or consolidation is required by Section 7(c)(iii) below, any amendment, alteration or repeal by means of a merger, consolidation or otherwise) so as to adversely affect the rights, preferences, privileges or voting powers of the Designated Preferred Stock; or

     (iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange or reclassification involving the Designated Preferred Stock, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in each case (x) the shares of Designated Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is not the surviving or resulting entity, are converted into or exchanged for preference securities of the

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surviving or resulting entity or its ultimate parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, and limitations and restrictions thereof, of Designated Preferred Stock immediately prior to such consummation, taken as a whole;

provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized Preferred Stock, including any increase in the authorized amount of Designated Preferred Stock necessary to satisfy preemptive or similar rights granted by the Corporation to other persons prior to the Signing Date, or the creation and issuance, or an increase in the authorized or issued amount, whether pursuant to preemptive or similar rights or otherwise, of any other series of Preferred Stock, or any securities convertible into or exchangeable or exercisable for any other series of Preferred Stock, ranking equally with and/or junior to Designated Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and the distribution of assets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting powers, and shall not require the affirmative vote or consent of, the holders of outstanding shares of the Designated Preferred Stock.

     (d) Changes after Provision for Redemption. No vote or consent of the holders of Designated Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares of the Designated Preferred Stock shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been deposited in trust for such redemption, in each case pursuant to Section 5 above.

     (e) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Designated Preferred Stock (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a meeting or such consents shall conform to the requirements of the Charter, the Bylaws, and applicable law and the rules of any national securities exchange or other trading facility on which Designated Preferred Stock is listed or traded at the time.

     Section 8. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for Designated Preferred Stock may deem and treat the record holder of any share of Designated Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor such transfer agent shall be affected by any notice to the contrary.

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     Section 9. Notices. All notices or communications in respect of Designated Preferred Stock shall be sufficiently given if given in writing and delivered in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Determination, in the Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust Corporation or any similar facility, such notices may be given to the holders of Designated Preferred Stock in any manner permitted by such facility.

     Section 10. No Preemptive Rights. No share of Designated Preferred Stock shall have any rights of preemption whatsoever as to any securities of the Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or options, may be designated, issued or granted.

     Section 11. Replacement Certificates. The Corporation shall replace any mutilated certificate at the holder’s expense upon surrender of that certificate to the Corporation. The Corporation shall replace certificates that become destroyed, stolen or lost at the holder’s expense upon delivery to the Corporation of reasonably satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be reasonably required by the Corporation.

     Section 12. Other Rights. The shares of Designated Preferred Stock shall not have any rights, preferences, privileges or voting powers or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Charter or as provided by applicable law.

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A0704066

State of California
Secretary of State

I, DEBRA BOWEN, Secretary of State of the State of California, hereby certify:

That the attached transcript of 1 page(s) is a full, true and correct copy of the original record in the custody of this office.

	IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of California this day of
	JUN 10 2010
	/s/ DEBRA BOWEN
	DEBRA BOWEN
	Secretary of State

Sec/State Form CE-109 (REV 01/2009) OSP 09 113643

A0704066

	ENDORSED — FILED in the office of the Secretary of state of the State of California May 20 2010
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
CVB FINANCIAL CORP.

The undersigned, Christopher D. Myers and Myrna L. DiSanto, do hereby certify that:

1. They are the duly elected and acting President and Chief Executive Officer and the Secretary, respectively, of CVB Financial Corp., a California corporation (the “Corporation”).

2. The first paragraph of Article Four of the Articles of Incorporation of the Corporation is hereby deleted in its entirety and restated to read as follows:

“Four. This Corporation is authorized to issue two (2) classes of shares of stock: one class of shares to be called “Common Stock”; the second class of shares to be called “Serial Preferred Stock.” The total number of shares of stock which the Corporation shall have authority to issue is Two Hundred Forty-Five Million (245,000,000), of which Two Hundred Twenty-Five Million (225,000,000) shall be Common Stock and Twenty Million (20,000,000) shall be Serial Preferred Stock.”

3. The foregoing Amendment of the Articles of Incorporation has been duly approved by the Board of Directors.

4. The foregoing Amendment of the Articles of Incorporation of the Corporation has been duly approved by the required vote of the shareholders in accordance with Section 903(a) of the California Corporations Code. The total number of outstanding shares of common stock of the Corporation is 106,298,217. The number of shares voting in favor of the amendment equaled or exceeded the vote required. The percentage vote required was more than 50% of the outstanding shares of common stock. There are no shares of Serial Preferred Stock outstanding.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

Dated: May 19, 2010		/s/ Christopher D. Myers
		Christopher D. Myers, President and Chief Executive Officer
		/s/ Myrna L. DiSanto
		Myrna L. DiSanto, Secretary

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Christopher D. Myers, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CVB Financial Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2010	/s/ Christopher D. Myers
	Christopher D. Myers
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Edward J. Biebrich, Jr, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CVB Financial Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2010	/s/ Edward J. Biebrich, Jr.
	Edward J. Biebrich, Jr.
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CVB Financial Corp. (the “Company”) on Form 10-Q for the period ended June 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher D. Myers, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2010	/s/ Christopher D. Myers
	Christopher D. Myers
	Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CVB Financial Corp. (the “Company”) on Form 10-Q for the period ended June 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edward J. Biebrich, Jr., Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2010	/s/ Edward J. Biebrich Jr.
	Edward J. Biebrich Jr.
	Chief Financial Officer