Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Investor Presentation (February 2014)
49 slides from Cvb Financial's investor presentation, Feb 26, 2014
Slide 1: CVB Financial Corp. February 2014
CVB Financial Corp. February 2014
Slide 2: Safe Harbor
Safe Harbor Certain matters set forth herein (including the exhibits hereto) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company’s current business plans and expectations regard
Slide 3: CVB Financial Corp. (CVBF)
CVB Financial Corp. (CVBF) Total Assets: $6.7 Billion Gross Loans: $3.5 Billion Total Deposits (Including Repos): $5.5 Billion Total Equity: $772 Million Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974 Locations in 40 cities with 38 bus
Slide 4: Experienced Leadership
Experienced Leadership Name Christopher D. Myers Richard C. Thomas James F. Dowd David C. Harvey David A. Brager R. Daniel Banis Yamynn DeAngelis Richard Wohl Position President & CEO Executive Vice President Chief Financial Officer Executive Vice President Chief Credit Officer Executive Vice Presid
Slide 5: Board of Directors
Board of Directors Name Ronald Kruse - Chairman Linn Wiley - Vice Chairman George Borba Jr. Steve Del Guercio Robert Jacoby Ray O’Brien Hal Oswalt San Vaccaro Chris Myers - CEO CVB Experience 39 Years 22 Years 1 Year 1 Year 8 Years 1 Year NEW 14 Years 7 Years Age
Slide 6: Who is CVB Financial Corp.?
CVB Financial Corp. Who is CVB Financial Corp.?
Slide 7: Largest Banks Headquartered in California
Largest Banks Headquartered in California Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Name Wells Fargo Union Bank Bank of the West First Republic Bank City National Bank SVB Financial East West Bank OneWest Bank Cathay Bank CapitalSource Inc. CVB Financial Corp. Pacific Western Bank BBCN Farmers & Merc
Slide 8: Bank Accomplishments & Ratings
Bank Accomplishments & Ratings Consecutive Quarters of Profitability 97 Consecutive Quarters of Cash Dividends #8 Rated Bank: BankDirector Magazine Bank Performance Scorecard (August 2013) BauerFinancial Report Five Star Rating (July 2013) Fitch Rating BBB (September 2013)
Slide 9: Our Markets
CVB Financial Corp. Our Markets
Slide 10: Existing Locations
Existing Locations 38 Business Financial Centers 6 Commercial Banking Centers 3 CitizensTrust Locations San Joaquin Stanislaus Merced Madera Fresno Tulare Kern Los Angeles San Bernardino Orange Riverside San Diego Corporate Office Business Financial Centers Commercial Banking Centers CitizensTrust S
Slide 11: Deposits
Deposits* (000’s) Los Angeles County Inland Empire (Riverside & San Bernardino Counties) Central Valley Orange County Other Total # of Center Locations Total Deposits (12/31/12) $1,894,958 $1,668,906 $856,155 $582,616 $244,596 $5,247,231 Total Deposits (12/31/13) $1,921,122 $1,842,239 $866,085 $651,
Slide 12: Non-Interest Bearing Deposits
Non-Interest Bearing Deposits $2,600,000 $2,400,000 $2,200,000 $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 (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 2007 2008 2009 2010 2011 2012 2013
Slide 13: Deposit Cost Comparison
Deposit Cost Comparison Source: Q4 2013 earnings release & other company filings, SNL Financial—peers represent public CA , AZ, HI, NV, OR & WA banks with assets $2 - $25 billion. 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% CVBF Peers Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2008 2009 2010
Slide 14: Total Loans
Total Loans* as of 12/31/2013 (000’s) Los Angeles County Central Valley Inland Empire (Riverside & San Bernardino Counties) Orange County Other Total Non- Covered Loans* $1,294,510 $705,521 $604,437 $518,664 $272,018 $3,395,150 Covered Loans* $10,215 $153,730 $926 $0 $8,233 $173,104 Total Loans* $1,
Slide 15: Total Loans
Total Loans* $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 (000’s) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 2013 Total Non-Covered Loans Total Covered Loans *Before deferred loan fe
Slide 16: Loan Portfolio Composition
Loan Portfolio Composition Total Loans by Type Municipal Lease Finance Receivables, 2.5% Dairy, Livestock & Agribusiness, 8.4% Commercial & Industrial, 14.9% Construction RE, 1.4% Commercial RE - Owner Occupied, 22.6% Other, 1.7% SFR Mortgage, 5.3% Multi-Family, 5.3% Commercial RE- Non-Owner, 37.9%
Slide 17: New/Enhanced Lending Initiatives
New/Enhanced Lending Initiatives Residential Real Estate Multi-Family Asset Based Lending Residential and Commercial Construction
Slide 18: Total Covered Loans
Total Covered Loans $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $- (000’s) $184 million $12.8 million Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 Net of Discount Includes Loans Held for Sale
Slide 19: Non-Performing Assets Non-Covered
Non-Performing Assets Non-Covered $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- (000’s) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 Non-Performing Loans OREO
Slide 20: Classified Loans
Classified Loans Non-Covered $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 2009 2010 2011 2012 2013
Slide 21: Profits
CVB Financial Corp. Profits
Slide 22: Net Income
Net Income $27,500 $25,000 $22,500 $20,000 $17,500 $15,000 $12,500 $10,000 $7,500 $5,000 $2,500 $- 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 (000’s) 2007 2008 2009 2010 2011 2012 2013 Net Income After Taxes $20.4 million FHLB prepayment charge 4Q Results 201
Slide 23: Earnings
Earnings (000’s) 2009 2010 2011 2012 12 Months to 12/31/2013 Net Interest Income $222,264 $259,317 $234,681 $236,950 $216,266 Provision for Loan Losses ($80,500) ($61,200) ($7,068) $0 $16,750 Other Operating Income/Expenses (Net) ($52,515) ($111,378) ($106,809) ($122,257) ($88,741) Income Taxes ($23
Slide 24: Net Interest Margin
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% 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 2007 2008 2009 2010 2011 2012 2013 Normalized* *Normalized excludes accelerated accretion on covered loans 4Q Results 2013 |
Slide 25: Expenses
Exhibit A CVB Financial Corp. Expenses
Slide 26: Expenses
Expenses (000’s) 2010 2011 2012 12 Months to 12/31/2013 Salaries & Employee Benefits $69,419 $69,993 $68,496 $71,015 Promotion & Entertainment $6,084 $4,977 $4,869 $4,681 Stationary & Supplies** $4,965 $3,645 $3,582 $3,535 Software Licenses & Maintenance $5,031 $3,669 $4,279 $4,671 Professional Serv
Slide 27: Bank Borrowings
CVB Financial Corp. Bank Borrowings
Slide 28: Outstanding Debt as of 12/31/2013
Outstanding Debt as of 12/31/2013 Type of Debt Balance at 12/31/2013 Interest Rate FHLB Advance* $199,206 4.52% Fixed Other Borrowings (overnight) $0 Subordinated Debentures CVB Statutory Trust III $25,774 3-Month LIBOR + 1.38% (000’s) Total $224,980 *FHLB Advance maturity is November, 28 2016. As o
Slide 29: Capital
CVB Financial Corp. Capital
Slide 30: Capital Ratios
Capital Ratios Regulatory Minimum Ratio Regulatory Well-Capitalized Ratio December 31, 2013* Tier 1 Risk-based Capital Ratio 4.0% 6.0% 17.83% Total Risk-based Capital Ratio 8.0% 10.0% 19.09% Tier 1 Leverage Ratio 4.0% 5.0% 11.30% Tangible Capital Ratio 10.81% Core Tier 1 Capital Ratio 17.23% * CVB F
Slide 31: Securities & Investments
CVB Financial Corp. Securities & Investments
Slide 32: Securities Portfolio
Securities Portfolio* --$2.67 Billion-- CMO’s REMIC’s 13.75% Trust Preferred 0.18% Municipal Bonds 22.00% MBS 51.81% Government Agency & GSEs 12.26% Yield on securities portfolio = 2.54% for the 4th Quarter 2013 Securities portfolio totaled $2.67 billion at 12/31/2013. The portfolio represents 40% o
Slide 33: Securities Portfolio
Securities Portfolio* $2.67 Billion Mark-to-Market (Pre-tax) $100,000 $80,000 $40,000 $20,000 $0 -$20,000 -$40,000 ($16,085) Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 (000’s) *Securities Available For Sale 4Q
Slide 34: CVBF Assets
CVBF Assets 12/31/06 $6.1 Billion Loans, net, 49.9% Securities 42.4% Goodwill and intangibles 0.7% Other, 4.6% Fed Balance*, 2.4% 12/31/13 $6.7 Billion Loans, net, 52.1% Securities, 40.0% Goodwill and intangibles 0.9% Other, 6.9% Fed Balance*, 0.1% *Includes overnight funds held at the Federal Reser
Slide 35: Yield on Securities vs. Yield on Loans
Yield on Securities vs. Yield on Loans 6.00% 5.00% 4.00% 3.00% 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 2009 2010 2011 2012 2013 Yield on Loans* Yield on Securities 4Q Results 2013 | cbbank.com *Excluding Discount Accretion
Slide 36: CVBF Liabilities
CVBF Liabilities 12/31/06 $5.7 Billion Junior subordinated Debentures, 1.9% Borrowings, 36.0% Total Deposits*, 61.4% Other Liabilities, 0.7% 12/31/13 $5.9 Billion Other Liabilities, 1.1% Junior subordinated Debentures, 0.4% Borrowings, 4.6% Total Deposits*, 93.9% *Includes Customer Repurchase Agreem
Slide 37: New Acquisition
CVB Financial Corp. New Acquisition 4Q Results 2013 | cbbank.com 37
Slide 38: Overview of American Security Bank
Overview of American Security Bank Overview Headquarters Newport Beach, CA Establishment Date 1990 Total Branches Loan Composition (12/31/2013) Profitability Metrics (LTM as of 12/31/2013) Net Income (S-Corp, $000s) $2,939 Net Interest Margin 3.71% Efficiency Ratio 83.63% ROAA (S-Corp,%) 0.71% ROATE
Slide 39: Pro Forma Branch Map
Pro Forma Branch Map Lancaster Palmdale Santa Clarita Vincent Simi Valley San Fernando Burbank La Canada Flintridge Wrightwood Adelanto Apple Valley Victorville Hesperia Angeles National Forest San Gabriel Wildernes Crestline San Bernardino San Gabriel Mountains Glendale Glendora Rancho Cucamonga Sa
Slide 40: Transaction Highlights
Transaction Highlights Enhances CVBF Shareholder Value Strong Geographic & Strategic Fit Low Risk Profile Immediately accretive to EPS Modest dilution to tangible book value recouped in under four years Valuable cost savings opportunities Pro forma company well positioned for additional acquisition
Slide 41: Transaction Summary & Pro Forma Assumptions
Transaction Summary & Pro Forma Assumptions Valuation $57.0 million 133% Tangible Equity 4.3% Core Deposit Premium Consideration 100% cash Anticipated Closing Mid-year 2014 Selected Closing Conditions Approval of Federal and State Regulators Minimum financial thresholds for American Security Bank Pr
Slide 42: Estimated Financial Impact
Estimated Financial Impact 2015e EPS 5% EPS Accretion (estimated) TBVPS Impact ~3.5% dilutive to tangible book value per share at closing (assumed 6/30/14) Earn back in under four years (pro forma basis) Earn back in under 6 months (spot basis) Internal Rate of Return >15% Capital Ratios at Closing
Slide 43: Our Growth Strategy
CVB Financial Corp. Our Growth Strategy
Slide 44: Our Vision
Our Vision Citizens Business Bank will strive to become the dominant financial services company operating throughout the state of California, servicing the comprehensive financial needs of successful small to medium sized businesses and their owners. 4Q Results 2013 | cbbank.com 44
Slide 45: Target Customer
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 4Q Results 2013 | cbbank.com 45
Slide 46: Three Areas of Growth
Three Areas of Growth Same Store Sales DeNovo Acquisitions Banks Trust 4Q Results 2013 | cbbank.com 46
Slide 47: Acquisition Strategy
Acquisition Strategy --Banks-- Target size: $200 million to $2 billion in assets Financial & Strategic In-market and/or adjacent geographic market (California only) --Trust/Investment-- Target size: AUM of $200 million to $1 billion In California --Banking Teams-- In- market & ‘new’ markets CVB Fina
Slide 48: Our 'Critical Few'
Our ‘Critical Few’ Execute on DeNovo Growth Initiatives Pursue Strategic Acquisitions Quality Loan Growth Provide Customer Solutions Through Technology Expand Market Share Through Same Store Sales
Slide 49: CVB Financial Corp.
CVB Financial Corp. Copy of presentation at www.cbbank.com
CVB Financial — Investor Presentation (February 2014) on 6ix