EX-99.1 2 a39992exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1
Press Release
For Immediate Release
  Contact:   Christopher D. Myers
President and CEO
(909) 980-4030
CVB Financial Corp. Reports First Quarter Earnings
Ontario, CA, April 17, 2008- CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (“the Company”), announced the results for the first quarter of 2008.
Net Income
CVB Financial Corp. reported net income of $16.2 million for the first quarter ending March 31, 2008. This represents an increase of $1.1 million, or 6.88%, when compared with net earnings of $15.1 million for the first quarter of 2007. Diluted earnings per share were $0.19 for the first quarter of 2008. This was up $0.01, or 7.71%, from diluted earnings per share of $0.18 for the same period last year. The net income for the first quarter of 2008 includes a provision of $1.7 million for credit losses. There was no such provision in the first quarter of 2007. Had we not made a provision in the first quarter of 2008, our net income would have been $17.4 million, an increase of $2.3 million or 15.08%.
Net income for the first quarter of 2008 produced a return on beginning equity of 15.32%, a return on average equity of 14.91% and a return on average assets of 1.05%. The efficiency ratio for the first quarter was 56.16%, and operating expenses as a percentage of average assets were 1.83%.
Net Interest Income and Net Interest Margin
Net interest income, after provision for credit losses, totaled $42.4 million for the first quarter of 2008. This represents an increase of $2.6 million, or 6.70%, from the $39.8 million for the same period of 2007. This increase resulted from a $5.3 million decrease in interest expense, offset by a $1.0 million decrease in interest income and a $1.7 million increase in the provision for credit losses. The decrease in interest income was primarily due to the decrease in interest rates, partially offset by the growth in average earning assets. The decrease in interest expense was due to the decrease in the cost of interest

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bearing deposits and borrowed funds, partially offset by the increase in average borrowed funds.
Net interest margin (tax equivalent) increased from 3.02% for the first quarter of 2007 to 3.25% for the first quarter of 2008. Total average earning asset yields decreased from 6.18% for the first quarter of 2007 to 5.91% for the first quarter of 2008. The cost of funds decreased from 4.15% for the first quarter of 2007 to 3.45% for the first quarter of 2008. The increase in net interest margin is due to the cost of interest-bearing liabilities decreasing faster than the decrease in yields on earning assets.
Balance Sheet
The Company reported total assets of $6.37 billion at March 31, 2008. This represented an increase of $382.5 million, or 6.38%, over total assets of $5.99 billion as of March 31, 2007. Earning assets totaled $6.00 billion and were up $363.3 million, or 6.45%, when compared with earning assets of $5.63 billion as of March 31, 2007. Total deposits and customer repurchase agreements were $3.63 billion as of March 31, 2008. This represents an increase of $29.5 million, or 0.82%, when compared with total deposits and customer repurchase agreements of $3.60 billion at March 31, 2007. Gross loans and leases totaled $3.39 billion at March 31, 2008. This represents an increase of $295.6 million, or 9.55%, when compared with gross loans and leases of $3.10 billion at March 31, 2007.
Investment Securities
Investment securities totaled $2.55 billion at March 31, 2008. This represents an increase of $69.3 million, or 2.79%, when compared with $2.48 billion in investment securities at March 31, 2007.
CitizensTrust
CitizensTrust has approximately $2.5 billion in assets under administration. They provide trust, investment and brokerage related services, as well as financial, estate and business succession planning. Income from CitizensTrust was $1.9 million in the current quarter, down $100,000 from the $2.0 million in the first quarter of 2007.
Loan and Lease Quality
The credit quality of the loan portfolio is good. The allowance for credit losses increased from $27.6 million as of March 31, 2007 to $34.7 million as of March 31, 2008. The increase was primarily due to the provision for credit losses of $4.0 million in the fourth quarter of 2007 and $1.7 million in the first quarter of 2008. During the first quarter of 2008, we had loan charge-offs totaling $246,000 and recoveries on previously charged off loans of $208,000. This resulted in net charge-offs of $38,000. By comparison, during the first three months of 2007, the Company had net charge-offs of $105,000, and no provision for credit losses. The allowance for credit losses was 1.02% and 0.89% of total loans and leases outstanding as of March 31, 2008 and 2007, respectively.
At December 31, 2007, we had $1.4 million in non-performing loans. As of March 31, 2008, we had $2.7 million in non-performing loans and $1.1 million in Other Real Estate Owned. The OREO represents a foreclosed condominium project, a portion of which

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was charged-off in December 2007. While the economy shows signs of weakness our loan portfolio continues to perform well. Nevertheless, we are closely monitoring our loan portfolio based on economic conditions. We have just completed the annual examination by our bank regulators.
Our construction loan portfolio was $315.8 million as of March 31, 2008. This represents 9.32% of our total loans outstanding at the end of the quarter. Of the $315.8 million, $135.2 million is for residential construction and residential land loans. This represents 42.80% of the construction loans outstanding, or 3.99% of our total loan portfolio. Of note, 31.12% of our construction loan portfolio is based in the Inland Empire.
Corporate Overview
CVB Financial Corp. is the holding company for Citizens Business Bank. The Bank is the largest financial institution headquartered in the Inland Empire region of Southern California. It serves 40 cities with 45 business financial centers in the Inland Empire, Los Angeles County, Orange County and the Central Valley areas of California. Its leasing division, Citizens Financial Services, provides vehicle leasing, equipment leasing and real estate loan services.
Shares of CVB Financial Corp. common stock are listed on the NASDAQ under the ticker symbol of CVBF. For investor information on CVB Financial Corp., visit our Citizens Business Bank website at www.cbbank.com and click on the CVB Investor tab.
Safe Harbor
Certain matters set forth herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company’s current business plan and expectations regarding future operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, the impact of changes in interest rates, a decline in economic conditions, adverse changes resulting from natural and manmade disasters, effects of government regulation and increased competition among financial services providers and other factors set forth in the Company’s public reports including its Annual Report on Form 10-K for the year ended December 31, 2007, and particularly the discussion of risk factors within that document. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by law.
###

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CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(unaudited)
dollars in thousands
                         
    March 31,   December 31,  
    2008     2007     2007  
Assets:
                        
Cash and due from banks
   $ 110,102     $ 117,981     $ 89,486  
 
                        
Investment Securities available-for-sale
     2,546,367       2,484,664       2,390,566  
Investment Securities held-to-maturity
     7,638       —       —  
Federal funds sold and Interest-bearing balances due from depository institutions
     475       —       475  
Investment in stock of Federal Home Loan Bank (FHLB)
     85,852       80,826       79,983  
Loans and lease finance receivables
     3,392,192       3,096,609       3,495,144  
Less allowance for credit losses
     (34,711 )     (27,632 )     (33,049 )
 
                  
Net loans and lease finance receivables
     3,357,481       3,068,977       3,462,095  
 
                  
Total earning assets
     5,997,813       5,634,467       5,933,119  
Premises and equipment, net
     46,585       45,597       46,855  
Intangibles
     13,713       9,533       14,611  
Goodwill
     55,097       31,531       55,167  
Cash value of life insurance
     104,499       100,758       103,400  
Other assets
     46,993       52,420       51,325  
 
                  
TOTAL
   $ 6,374,802     $ 5,992,287     $ 6,293,963  
 
                  
 
                        
Liabilities and Stockholders’ Equity
                        
Liabilities:
                        
Deposits:
                        
Demand Deposits (noninterest-bearing)
   $ 1,218,660     $ 1,264,243     $ 1,295,959  
Investment Checking
     351,692       334,229       409,912  
Savings/MMDA
     952,601       957,538       868,123  
Time Deposits
     737,715       833,602       790,355  
 
                  
Total Deposits
     3,260,668       3,389,612       3,364,349  
 
                        
Demand Note to U.S. Treasury
     3,622       468       540  
Customer Repurchase Agreements
     366,502       208,023       336,309  
Repurchase Agreements
     250,000       250,000       250,000  
Borrowings
     1,745,851       1,597,500       1,753,500  
Junior Subordinated Debentures
     115,055       108,250       115,055  
Other liabilities
     181,315       46,643       49,262  
 
                  
Total Liabilities
     5,923,013       5,600,496       5,869,015  
Stockholders’ equity:
                        
Stockholders’ equity
     429,017       399,581       420,818  
Accumulated other comprehensive income (loss), net of tax
     22,772       (7,790 )     4,130  
 
                  
 
     451,789       391,791       424,948  
 
                  
TOTAL
   $ 6,374,802     $ 5,992,287     $ 6,293,963  
 
                  

 

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEET
(unaudited)
dollars in thousands
                 
    Three months ended March 31,  
    2008     2007  
 
            
Assets:
                
Cash and due from banks
   $ 107,878     $ 124,427  
Investment securities available-for-sale
     2,386,918       2,512,260  
Investment securities held-to-maturity
     6,117       —  
Federal funds sold and Interest-bearing balances due from depository institutions
     1,296       444  
Investment in stock of Federal Home Loan Bank (FHLB)
     84,719       80,039  
Loans and lease finance receivables
     3,383,772       3,059,186  
Less allowance for credit losses
     (33,906 )     (27,720 )
 
            
Net loans and lease finance receivables
     3,349,866       3,031,466  
 
            
Total earning assets
     5,828,916       5,624,209  
Premises and equipment, net
     46,773       45,471  
Intangibles
     14,061       9,763  
Goodwill
     55,131       31,531  
Cash value of life insurance
     103,787       100,202  
Other assets
     69,967       85,989  
 
            
TOTAL
   $ 6,226,513     $ 6,021,592  
 
            
 
                
Liabilities and Stockholders’ Equity
                
Liabilities:
                
Deposits:
                
Noninterest-bearing
   $ 1,225,327     $ 1,283,749  
Interest-bearing
     2,050,628       2,114,142  
 
            
Total Deposits
     3,275,955       3,397,891  
 
Other borrowings
     2,339,159       2,078,177  
Junior Subordinated Debentures
     115,055       108,250  
Other liabilities
     59,744       39,264  
 
            
Total Liabilities
     5,789,913       5,623,582  
Stockholders’ equity:
                
Stockholders’ equity
     432,265       411,110  
Accumulated other comprehensive income (loss), net of tax
     4,335       (13,100 )
 
            
 
     436,600       398,010  
 
            
TOTAL
   $ 6,226,513     $ 6,021,592  
 
            

 

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
dollar amounts in thousands, except per share
                 
    For the Three Months  
    Ended March 31,  
    2008     2007  
Interest Income:
                
Loans and leases, including fees
   $ 54,046     $ 52,714  
Investment securities:
                
Taxable
     20,877       23,093  
Tax-advantaged
     7,188       7,231  
 
            
Total investment income
     28,065       30,324  
Dividends from FHLB Stock
     1,093       1,138  
Federal funds sold & Interest-bearing CDs with other institutions
     15       6  
 
            
Total interest income
     83,219       84,182  
Interest Expense:
                
Deposits
     12,278       17,158  
Borrowings and junior subordinated debentures
     26,811       27,260  
 
            
Total interest expense
     39,089       44,418  
 
            
Net interest income before provision for credit losses
     44,130       39,764  
Provision for credit losses
     1,700       —  
 
            
Net interest income after provision for credit losses
     42,430       39,764  
Other Operating Income:
                
Service charges on deposit accounts
     3,745       3,276  
Trust and investment services
     1,913       1,951  
Gain on sale of investment securities
     —       —  
Other
     2,482       2,671  
 
            
Total other operating income
     8,140       7,898  
Other operating expenses:
                
Salaries and employee benefits
     15,543       14,072  
Occupancy
     2,871       2,405  
Equipment
     1,649       1,735  
Professional services
     1,541       1,103  
Amortization of intangible assets
     898       588  
Other
     5,897       5,997  
 
            
Total other operating expenses
     28,399       25,900  
 
            
Earnings before income taxes
     22,171       21,762  
Income taxes
     5,987       6,620  
 
            
Net earnings
   $ 16,184     $ 15,142  
 
            
 
Basic earnings per common share
   $ 0.19     $ 0.18  
 
            
Diluted earnings per common share
   $ 0.19     $ 0.18  
 
            
 
Cash dividends per common share
   $ 0.085     $ 0.085  
 
            

 

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
                 
    Three months ended March 31,  
    2008     2007  
Interest income — (Tax-Effected) (te)
   $ 86,133     $ 86,612  
Interest Expense
     39,089       44,418  
Net Interest income — (te)
   $ 47,044     $ 42,194  
 
            
 
                
Return on average assets
     1.05 %     1.02 %
Return on average equity
     14.91 %     15.43 %
Efficiency ratio
     56.16 %     54.34 %
Net interest margin (te)
     3.25 %     3.02 %
 
                
Weighted average shares outstanding
                
Basic
     83,151,328       83,482,208  
Diluted
     83,521,594       84,175,313  
Dividends declared
   $ 7,093     $ 7,109  
Dividend payout ratio
     43.83 %     46.95 %
 
                
Number of shares outstanding-EOP
     83,095,678       83,537,214  
Book value per share
   $ 5.44     $ 4.69  
                 
    March 31,  
    2008     2007  
Non-performing Assets (dollar amount in thousands):
                
Non-accrual loans
   $ 2,707     $ 0  
Loans past due 90 days or more and still accruing interest
     —       —  
Restructured loans
     —       —  
Other real estate owned (OREO), net
     1,137       —  
 
            
Total non-performing assets
   $ 3,844     $ 0  
 
            
Percentage of non-performing assets to total loans outstanding and OREO
     0.11 %     0.00 %
 
                
Percentage of non-performing assets to total assets
     0.06 %     0.00 %
 
                
Non-performing assets to allowance for loan losses
     11.07 %     0.00 %
 
                
Net Charge-off (Recovered) to Average loans
     0.00 %     0.00 %
 
                
Allowance for Credit Losses:
                
Beginning Balance
   $ 33,049     $ 27,737  
Total Loans Charged-Off
     (246 )     (129 )
Total Loans Recovered
     208       24  
 
            
Net Loans Recovered
     (38 )     (105 )
Provision Charged to Operating Expense
     1,700       —  
 
            
Allowance for Credit Losses at End of period
   $ 34,711     $ 27,632  
 
            

 

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(unaudited)
Quarterly Common Stock Price
                                                 
    2008   2007   2006
Quarter End   High   Low   High   Low   High   Low
March 31,
   $ 11.20     $ 8.45     $ 13.38     $ 11.42     $ 15.60     $ 14.71  
June 30,
                   $ 12.40     $ 10.63     $ 15.59     $ 13.25  
September 30,
                   $ 12.71     $ 9.51     $ 14.24     $ 12.83  
December 31,
                   $ 11.97     $ 9.98     $ 14.13     $ 12.83  
Quarterly Consolidated Statements of Earnings
                                         
    1Q     4Q     3Q     2Q     1Q  
    2008     2007     2007     2007     2007  
Interest income
                                        
Loans, including fees
   $ 54,046     $ 56,692     $ 58,677     $ 53,726     $ 52,714  
Investment securities and federal funds sold
     29,173       28,794       29,203       30,003       31,468  
 
                              
 
     83,219       85,486       87,880       83,729       84,182  
Interest expense
                                        
Deposits
     12,278       15,766       18,445       17,928       17,158  
Other borrowings
     26,811       28,333       27,727       27,518       27,260  
 
                              
 
     39,089       44,099       46,172       45,446       44,418  
Net interest income before provision for credit losses
     44,130       41,387       41,708       38,283       39,764  
Provision for credit losses
     1,700       4,000       —       —       —  
 
                              
Net interest income after provision for credit losses
     42,430       37,387       41,708       38,283       39,764  
 
                                        
Non-interest income
     8,140       7,968       7,863       7,596       7,898  
Non-interest expenses
     28,399       27,441       27,218       24,845       25,900  
 
                              
Earnings before income taxes
     22,171       17,914       22,353       21,034       21,762  
Income taxes
     5,987       4,547       6,232       5,080       6,620  
 
                              
Net earnings
   $ 16,184     $ 13,367     $ 16,121     $ 15,954     $ 15,142  
 
                              
 
                                        
Basic earning per common share
   $ 0.19     $ 0.16     $ 0.19     $ 0.19     $ 0.18  
Diluted earnings per common share
   $ 0.19     $ 0.16     $ 0.19     $ 0.19     $ 0.18  
 
                                        
Cash dividends per common share
   $ 0.085     $ 0.085     $ 0.085     $ 0.085     $ 0.085  
 
                                        
Dividends Declared
   $ 7,093     $ 7,069     $ 7,067     $ 7,234     $ 7,109  

 

 

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
Distribution of Loan Portfolio
                                         
    3/31/2008     12/31/2007     9/30/2007     6/30/2007     3/31/2007  
Commercial and Industrial
   $ 349,099     $ 365,214     $ 345,697     $ 334,968     $ 294,265  
Real Estate:
                                        
Construction
     318,549       308,354       307,506       310,390       289,013  
Commercial Real Estate
     1,859,785       1,805,946       1,775,812       1,768,539       1,675,964  
SFR Mortgage
     356,415       365,849       363,765       358,347       316,661  
Consumer
     57,554       58,999       62,979       64,083       54,379  
Municipal lease finance receivables
     153,270       156,646       143,399       143,316       131,073  
Auto and equipment leases
     54,795       58,505       58,958       55,151       52,321  
Dairy and Livestock
     254,156       387,488       265,806       280,114       293,781  
                               
Gross Loans
     3,403,623       3,507,001       3,323,922       3,314,908       3,107,457  
Less:
                                        
Deferred net loan fees
     (11,431 )     (11,857 )     (12,173 )     (11,635 )     (10,848 )
Allowance for credit losses
     (34,711 )     (33,049 )     (30,428 )     (30,244 )     (27,632 )
                               
Net Loans
   $ 3,357,481     $ 3,462,095     $ 3,281,321     $ 3,273,029     $ 3,068,977