| Exhibit 99.1
|
CVB Financial Corp.
November 2016
|
|
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 plans and expectations regarding the Company’s future financial position and operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance and/or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, CVBF’s ability to realize cost savings within expected time frames or at all; whether governmental approvals for the proposed transaction will be obtained within expected time frames or ever; whether the conditions to the closing of the proposed transaction, including approval by VCBP shareholders, are satisfied; local, regional, national and international economic and market conditions and events and the impact they may have on CVBF, CVBF’s customers, assets, and liabilities; our ability to attract deposits and other sources of funding or liquidity; supply and demand for real property inventory and periodic deterioration in values of California real estate, both residential and commercial; a prolonged slowdown or decline in construction or sales activity; changes in the financial performance and/or condition of our borrowers or certain key vendors or counterparties; changes in the level of nonperforming assets and any accompanying reserves and/or charge-offs; the cost or effect of acquisitions we may make; the effect of changes in laws, regulations and relevant judicial decisions (including laws, regulations and judicial decisions concerning financial reforms, taxes, bank capital levels, securities and securities trading and hedging, employment, executive compensation, insurance, vendor management and information security) with which we and our subsidiaries must or believe we should comply; changes in estimates of future reserve requirements and minimum capital requirements based upon the periodic review thereof under relevant regulatory and accounting requirements, including changes in the Basel Committee framework establishing capital standards for credit, operations and market risk; inflation, interest rate, securities market and monetary fluctuations; changes in government interest rates or monetary policies; changes in the amount and availability of deposit insurance; cyber-security threats, including loss of system functionality or theft or loss of Company or customer data or money; political instability; acts of war or terrorism, or natural disasters, such as earthquakes, or the effects of pandemic diseases; the timely development and acceptance of new banking products and services and the perceived overall value of these products and services by customers and potential customers; the Company’s relationships with and reliance upon vendors with respect to the operation of certain of the Company key internal and external systems and applications; changes in consumer spending, borrowing and savings preferences or habits; technological changes and the expanding use of technology in banking (including the adoption of mobile banking applications); the ability to retain and increase market share, retain and grow customers and control expenses; changes in the competitive environment among financial and bank holding companies, banks and other financial service providers; continued volatility in the credit and equity markets and its effect on the general economy or local or regional business conditions; fluctuations in the price of the Company’s stock; the effect of changes in accounting policies and practices, as may be adopted from time-to-time by the regulatory agencies, as well as by 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, and our ability to retain or expand our management team and/or our board of directors; the costs and effects of legal, compliance and regulatory changes and developments, including pending or threatened litigation, the resolution of legal proceedings or regulatory or other governmental inquiries or investigations, and the results of regulatory examinations or reviews; our success at managing the risks involved in the foregoing items and all other factors set forth in the Company’s public reports including its Annual Report on Form 10-K for the year ended December 31, 2015, 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.
cbbank.com 2
|
|
CVB Financial Corp. (CVBF)
Total Assets: $8.0 Billion Gross Loans: $4.3 Billion Total Deposits (Including Repos): $6.9 Billion Total Equity: $1.0 billion
Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974
Source: Q3 2016 earnings release & company filings cbbank.com 3
|
|
Experienced Leadership
Name Position Banking ExperienceCVBF Service
Christopher D. Myers President & CEO 32 Years10 Years
E. Allen Nicholson Executive Vice President 21 YearsNew
Chief Financial Officer
Dave F. Farnsworth Executive Vice President 32 YearsNew
Chief Credit Officer
David C. Harvey Executive Vice President 26 Years7 Years
Chief Operations Officer
David A. Brager Executive Vice President 28 Years14 Years
Sales Division
R. Daniel Banis Executive Vice President 34 Years4 Years
CitizensTrust
Yamynn DeAngelis Executive Vice President 37 Years29 Years
Chief Risk Officer
Eileen Lyon Executive Vice President 29 YearsNew
General Counsel
cbbank.com 4
|
|
Board of Directors
Name CVBF Experience Age
Ray O’Brien—Chairman 4 Years 59
George Borba Jr.—Vice Chairman 3 Years 49
Steve Del Guercio 4 Years 55
Robert Jacoby 11 Years 75
Kristina Leslie 1 Year 51
Hal Oswalt 2 Years 68
Anna Kan New 43
Chris Myers—CEO 10 Years 54
cbbank.com 5
|
|
CVB Financial Corp.
Who is CVB Financial Corp.?
cbbank.com
|
|
Largest Bank Holding Companies
Headquartered in California
Rank Name Asset Size (9/30/16)
1 Wells Fargo & Company $1,942,124
2 First Republic Bank* $67,994
3 SVB Financial Group $43,274
4 East West Bancorp $33,255
5 Pacwest Bancorp $21,315
6 Cathay General Bancorp $14,099
7 Hope Bancorp, Inc. $13,508
8 Banc of California, Inc. $11,216
9 CVB Financial Corp. $8,044
10 Opus Bank* $7,709
* Bank only, no holding company
Source: SNL Financial In millions
cbbank.com 7
|
|
8
RANKED # 1
CVB Financial Corp. Ranked #1, Holding company for Citizens business Bank
|
|
Other Bank Accomplishments & Ratings
158 Consecutive Quarters of Profitability 108 Consecutive Quarters of Cash Dividends Ranked Top 5 Bank in US three consecutive years*
Bank Director, 2016 Bank Performance Scorecard (July 12, 2016)
BauerFinancial Report
Five Star Rating (December 2015)
83 Consecutive Quarters
Fitch Rating
BBB (September 2016)
*As ranked among domestic banks with $5 to $50 billion in assets cbbank.com 9
|
|
Our Markets
cbbank.com
|
|
Existing Locations
42 Business Financial Centers
8 Commercial Banking Centers
3 CitizensTrust Locations
Santa Barbara
Ventura
Corporate Office
Business Financial Centers Commercial Banking Centers CitizensTrust
cbbank 11
|
|
New Acquisition
Valley Commerce Bancorp ‘VCBP’
cbbank.com
|
|
Transaction Highlights
$23.4 million in cash(1)
1,942,673 shares of CVBF stock issued
Transaction Aggregate merger consideration of $70.3 million(2), including a Structure special dividend(3) paid to VCBP shareholders Implied consideration mix of approximately 59% stock and 41%
cash(1)(2)
Pro Forma 98.2% CVBF / 1.8% VCBP
Ownership
Approvals Customary regulatory approvals VCBP shareholder approval
Expected First quarter of 2017
Closing
(1) Does not include special dividend.
(2) Stock consideration based on CVBF’s closing stock price of $17.56 as of 9/22/2016.
(3) Assumes VCBP’s equity exceeding the minimum equity target is paid to VCBP shareholders through a special dividend prior to close. Estimated special dividend assumes the exercise of all outstanding stock options and is based on VCBP common equity as of 6/30/2016.
cbbank.com 13
|
|
Pro Forma Branch Footprint
• CVBF (50)
• VCBP (4)
Source: SNL Financial.
cbbank.com 14
|
|
Financial Impact
Deal value/ tangible book value of 1.19x
Deal value / adjusted tangible book value(1) of 1.55x
Valuation
Multiples Deal value/ last twelve months earnings of 11.7x
Deal value (with special dividend(1))/ last twelve months earnings of 14.3x
Earnings accretion in 2017(2)
Financial Tangible book value dilution of approximately 1% Results Tangible book value earnback period of less than 3 years Internal rate of return in excess of 15%
(1) Assumes VCBP’s equity exceeding the minimum equity target is paid to VCBP shareholders through a special dividend prior to close. Estimated special dividend assumes the exercise of all outstanding stock options and is based on VCBP common equity as of 6/30/2016.
(2) Excludes one-time transaction costs.
cbbank.com 15
|
|
De Novo Expansion
cbbank.com
|
|
New Banking Teams (2015/2016)
Location # of New Hires
Los Angeles 2 Oxnard 2 Santa Barbara 3 Newport Beach 3
Total 10
cbbank.com 17
|
|
Financial Performance
cbbank.com
|
|
Deposits*
# of Center Total Deposits Total Deposits (000’s) Locations (9/30/15) (9/30/16)
Los Angeles County 18 $2,448,973 $2,611,770 Inland Empire
9 $2,030,689 $1,995,620
(Riverside & San Bernardino Counties)
Orange County 9 $936,291 $1,018,814 Central Valley 8 $868,210 $952,308 Ventura & Santa Barbara Counties 5 $4,089 $256,448 Other 1 $281,394 $64,025
Total 50 $6,569,646 $6,898,985
Average Cost of Deposits (Year-to-Date) 0.10% 0.11%
*Includes Customer Repurchase Agreements cbbank.com 19
|
|
Total Deposits*
$8,500,000
$7,500,000
$6,500,000
$5,500,000
$4,500,000
$3,500,000
$2,500,000
$1,500,000
$500,000
(000’s) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3
2010 2011 20122013201420152016
Non-Int Bearing Dep Interest Bearing Deposits*
*Interest Bearing Deposits includes REPOs
cbbank.com 20
|
|
Deposit Cost Comparison
1.00%
CVBFPeers
0.90%
0.80%
0.70%
0.60%
0.50%
0.40%
0.30%
0.20%
0.10%
0.00%
Q1Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1Q2 Q3
2010 2011 20122013201420152016
Source: Q2 2016 earnings release & other company filings, SNL Financial—peers represent public CA , AZ, HI, NV, OR & WA
banks with assets $2—$25 billion.
cbbank.com 21
|
|
Total Loans*
Average
# of Center Total Loans* Loans per (000’s) Location
Los Angeles County 18 $92,116 $1,658,080 Central Valley 8 $96,484 $771,872 Inland Empire
9 $76,346 $687,111 (Riverside & San Bernardino Counties) Orange County 9 $64,066 $576,590 Ventura/Santa Barbara Counties 6 $44,495 $266,967 Other $344,015
Total $4,304,635
*Prior to MTM discount, loan fees, loan loss reserve and loans held-for-sale cbbank.com 22
|
|
Total Loans*
$ 4,600,000
$ 4,400,000
$ 4,200,000
$ 4,000,000
$ 3,800,000
$ 3,600,000
$ 3,400,000
$ 3,200,000
$ 3,000,000
$ 2,800,000
$ 2,600,000
$ 2,400,000
$ 2,200,000
$ 2,000,000
Q1 Q2Q3 Q4 Q1 Q2Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
(000’s)
2010 201120122013201420152016
Total Loans*
*Starting in the 4th quarter of 2014, covered and non-covered loans are combined (Purchase Credit Impaired or PCI)
Before deferred loan fees, discount on PCI loans, and loans held-for-sale
Includes covered and non-covered loans for all periods presented
cbbank.com 23
|
|
Loan Portfolio Composition
Total Loans by Type
Municipal Lease
Finance
Other, 1.9% Receivables, Dairy, Livestock &
1.6% Agribusiness,
SFR Mortgage,
5.6% 5.6%
Commercial &
Multi-Family, 6.5% Industrial, 12.0%
Construction RE,
2.1%
Commercial RE-
Non-Owner,
40.0% Commercial RE -
Owner
Occupied, 24.7%
Source: Q3 2016 earnings release & company reports
cbbank.com 24
|
|
Credit Quality
cbbank.com
|
|
Non-Performing Assets*
$200,000
$180,000
$160,000
,
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$-
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
(000’s) 2009 2010 20112012201320142015 2016
Non-Performing LoansOREO
*Non-Covered assets | Starting in the 4th quarter of 2014, covered and non-covered assets are combined
cbbank.com 26
|
|
Classified Loans*
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$-
(000’s) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2009 2010 201120122013201420152016
*Non-Covered loans| Starting in the 4th quarter of 2014, covered and non-covered loans are combined
cbbank.com 27
|
|
Loans: Net Charge-Offs*
-$10,000
$0
2009 2010 2011 2012 2013 2014 2015 YTD
$10,000 9/30/16
$20,000
$30,000
January 2012—September 2016 = $7,487 Net Recoveries
$40,000
$50,000
$60,000
$70,000
(000’s) Net Charge-Offs/Recoveries
*Non-Covered | Starting in the 4th quarter of 2014, covered and non-covered loans are combined
cbbank.com 28
|
|
Profits
cbbank.com
|
|
Net Income
$110,000
$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$-
(000’s) 2007 2008 20092010 2011 2012201320142015
Net Income After Taxes
$20.4 million FHLB prepayment charge
$13.9 million FHLB prepayment charge
cbbank.com 30
|
|
Earnings
(000’s) 2012 2013201420159 Months to
9/30/2016
Net Interest Income $236,950 $216,266$236,514$252,942$191,633
Recapture of Provision
for Loan Losses $0 $16,750$16,100$5,600$2,000
Other Operating
Income/Expenses (Net) ($122,257) ($88,741)($89,817)($107,176)($74,668)
Income Taxes ($37,413) ($48,667)($58,776)($52,221)($44,612)
Net Profit After Tax $77,280 $95,608$104,021$99,145$74,353
$ 20.4 million FHLB prepayment charge
$ 13.9 million FHLB prepayment charge
cbbank.com 31
|
|
Net Interest Margin
4.25%
4.00%
3.75%
3.50%
3.25%
3.00%
2.75%
2.50%
2.25%
2.00%
1.75%
1.50%
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3
2007 2008 20092010201120122013201420152016
Normalized*
*Normalized tax equivalent excludes accretion on covered loans (Purchase Credit Impaired)
cbbank.com 32
|
|
Efficiency & Expenses
cbbank.com
|
|
Efficiency Ratio
90.00%
80.00%
70.00%
60.00%
50.00% 45.62%
40.00%
30.00%
20.00%
10.00%
0.00%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2011 20122013201420152016
Efficiency Ratio
$ 20.4 million FHLB prepayment charge
$ 13.9 million FHLB prepayment charge
cbbank.com 34
|
|
Non-Interest Expense as a % of Average
Assets
3.50%
3.00%
2.50%
2.00% 1.59%
1.50%
1.00%
0.50%
0.00%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2011 20122013201420152016
Non-Interest Expense as a % of Average Assets
$ 20.4 million FHLB prepayment charge
$ 13.9 million FHLB prepayment charge
cbbank.com 35
|
|
Capital
cbbank.com
|
|
Capital Ratios
Adequately Well-CapitalizedSeptember 30,
Capitalized Ratio Ratio2016*
Tier 1 Risk-based Capital Ratio 6.0% 8.0%17.1%
Total Risk-based Capital Ratio 8.0% 10.0%18.3%
Common Equity Tier 1 Capital Ratio 4.5% 6.5%16.6%
Tier 1 Leverage Ratio 4.0% 5.0%11.1%
* CVB Financial Corp. – Consolidated
cbbank.com 37
|
|
Securities & Investments
cbbank.com
|
|
Securities Portfolio*
--$3.0 Billion--
Yield on securities portfolio = 2.38% for the 3rd Quarter 2016
$2.23 Billion $879.0 Million
*Available For Sale *Held to Maturity
Municipal
Municipal CMO’s / Bonds, CMO’s / Bonds 4.40% REMIC’s, 34.10% Government 21.90% REMIC’s 17.20% Agency/GSEs and other
0.40%
MBS 78.00% MBS, Government
Agency & 23.30% GSEs, 20.70%
Source: Q3 2016 earnings release | Yield on securities represents the fully taxable equivalent cbbank.com 39
|
|
Securities Portfolio*
$2.23 Billion
Mark-to-Market (Pre-tax)
$100,000
$80,000
$62,000
$60,000
$40,000
$20,000
$0
-$20,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2011 2012 2013201420152016
(000’s)
*Available For Sale
cbbank.com 40
|
|
‘CVBF’ Assets & Liabilities
9/30/16
$8.0 Billion 9/30/16
$7.0 Billion
Borrowings
Other0.0%Junior
Liabilitiessubordinated
Securities 1.6%Debentures
Loans, 38.6% 0.4%
net 52.6%
Fed
Balance*
Goodwill & .
Intangibles Other 4.8%
1.2% Total
DepositsDeposits****
98.0%
*Includes overnight funds held at the Federal Reserve, Interest earning—due from Correspondent Banks, other short-term money
market accounts or certificates of deposit
**Includes Customer Repurchase Agreements
cbbank.com 41
|
|
Yield on Securities vs. Yield on Loans
6.00%
5.46%
5.00%
5.17% 4.41%
4.00%
3.00%
2.38%
2.00%
1.00%
0.00%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2009 2010 20112012201320142015 2016
Yield on Loans* Yield on Securities**
*Excluding Discount Accretion on PCI loans
**Includes Available for Sale and Held to Maturity, TE
cbbank.com 42
|
|
Our Growth Strategy
cbbank.com
|
|
Our Vision
Citizens Business Bank will strive to become the premier financial services company operating throughout the state of California, servicing the comprehensive financial needs of successful small to medium sized businesses and their owners.
cbbank.com 44
|
|
Target Customer
The best privately-held and/or family-owned businesses throughout California
Annual revenues of $1-200 million? Top 25% in their respective industry? Full relationship banking? Build 20-year relationships
cbbank.com 45
|
|
Three Areas of Growth
Same Store DeNovo
Sales San Diego Oxnard (2014) (2015) Santa Barbara (2015)
American Acquisitions County Security Bank Commerce Bank (2014) (2016) Valley Business Bank (deal announced Sept.
2016)
cbbank.com 46
|
|
Acquisition Strategy
—Banks—
Target size: $200 million to $2 billion in assets Financial & Strategic In-market and/or adjacent geographic market (California)
—Trust/Investment—
Target size: AUM of $200 million to $1 billion In California
—Banking Teams—
In-market & ‘new’ markets
cbbank.com 47
|
|
2016 ‘Critical Few’
Quality Loan Growth Expand Our Footprint
DeNovo Growth
Acquisition
Relationship Banking Cyber Security
Recruit, Retain & Train Key People
cbbank.com 48
|
|
Copy of presentation at www.cbbank.com
cbbank.com