Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Q2 2020 Earnings Presentation
37 slides from Cvb Financial's earnings presentation, Jul 23, 2020
Slide 1: CVB Financial Corp. July 2020
Exhibit 99.1 CVB Financial Corp. July 2020
Slide 2: Forward Looking Statements
Forward Looking Statements 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 expe
Slide 3: CVB Financial Corp. (CVBF) at a glance
Total Assets: $ 13.8 Billion Gross Loans: $ 8.4 Billion Total Deposits (Including Repos):$ 11.5 Billion Total Equity: $ 1.96 Billion CVB Financial Corp. (CVBF) Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974.
Slide 4: Bank Accomplishments & Ratings
As of 6/30/2020 S&P Global Market Intelligence ranked CVB Financial Corp. the #2 Best-Performing Regional Bank of 2018 with $10 billion to $50 billion in assets CVB Financial Corp. is the holding company for Citizens Business Bank SNL Financial ranking of largest bank holding companies in CA, as of
Slide 5: Business Financial Centers and locations
58 Business Financial Centers 1 Loan Production Office 3 CitizensTrust Locations Corporate Office Business Financial Centers Loan Production Office CitizensTrust
Slide 6: Our Vision
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.
Slide 7: Target Customer
Target Customer The best privately-held and/or family-owned businesses throughout California Annual revenues of $1-300 million Top 25% in their respective industry Full relationship banking Build 20-year relationships
Slide 8: Citizens Business Bank services
Citizens Business Bank Relationship Manager (Bank) Property Management Real Estate Banking International Treasury Management Specialty Banking Construction Lending CitizensTrust Merchant Bankcard SBA Citizens Home Lending Loan Brokerage Title Escrow Marketing Citizens Equipment Financing Government
Slide 9: Three Areas of Growth
Three Areas of Growth De Novo San Diego (2014) Oxnard (2015) Santa Barbara (2015) San Diego (2017) Stockton (2018) Modesto (2020) Acquisitions American Security Bank (2014) County Commerce Bank (2016) Valley Business Bank (2017) Community Bank (2018)
Slide 10: Acquisition Strategy
Acquisition Strategy Target size: $1 billion to $8 billion in assets Financial & Strategic In-market and/or adjacent geographic market (California) Banks: Banking Teams: In-market New markets
Slide 11: 2020 Critical Few
2020 Critical Few Grow Quality Loans Grow Core Deposits Strengthen Relationships through Cross-Sell Execute on Infrastructure Initiatives Cyber Fraud Awareness & Education
Slide 12: Q2 2020 Financial Highlights
Q2 2020 Financial Highlights Profitability $11.5MM provision for credit losses due to COVID-19 / CECL ROATCE = 13.8% ROAA = 1.33% Efficiency Ratio = 39.8% Income Statement Net Income = $41.6 million Diluted EPS = $.31 Pretax / Pre-Provision Income = $70.3 million Balance Sheet/ Liquidity $1.1 billio
Slide 13: Selected Ratios
Selected Ratios 2017 2018 2019 Q2’19 Q1’20 Q2’20 ROATCE 11.17% 15.18% 17.56% 18.81% 12.27% 13.80% NIM 3.63% 4.03% 4.36% 4.49% 4.08% 3.70% Cost of Funds 0.12% 0.16% 0.24% 0.25% 0.21% 0.13% Efficiency Ratio 43.84% 45.83% 40.16% 39.09% 42.69% 39.75% NIE % Avg. Assets 1.70% 1.89% 1.76% 1.81% 1.72% 1.48%
Slide 14: SBA Paycheck Protection Program
Summary Originated and funded 4,086 PPP loans for ~$1.10B as of June 30, 2020 99.4% of the PPP portfolio originated with 24 month term Total Fees ~$35 million Q2'20 Fees recognized in Net Interest Income = $6.8 million Stopped accepting applications on June 5, 2020 PPP Loans at June 30, 2020 SBA Pay
Slide 15: Net income & Pretax-pre provision income
Net income & Pretax-pre provision income PTPP income (Non -GAAP*) Net income PTPP ROAA (Non-GAAP*) ROAA * We use certain non-GAAP financial measures to provide supplemental information regarding our performance. Annually Quarterly ($ in Millions)
Slide 16: Net Interest Income and NIM
Net Interest Income and NIM ($ in Millions)
Slide 17: Earning Asset Mix Q2 2020
Earning Asset Mix 1 Q2 2020 Average Earning Assets $9.96 billion Average Earning Assets $11.39 billion Cash 0.4% —_ Investments 24% Investments 20% cbbank.com 17
Slide 18: Dividends – Consecutive Quarters
Dividends – 123 Consecutive Quarters 123 Consecutive Quarters More than 30 years of cash dividends since 1989 ANNUALIZED YTD * Dividend payout ratio calculated on per share basis.
Slide 19: Strong Capital Ratios
Strong Capital Ratios * Source: SNL Financial—peers represent public CA, AZ, HI, NV, OR & WA banks with assets $2 - $25 billion $664mm $679mm $576mm $509mm
Slide 20: Liquidity
Liquidity Investment Portfolio $2.3 Billion as of Q2 2020 ‘Agency CMO 30% Municipal 10% Other 5% ‘Agency MBS 55% Funding Availability $4.2 Billion as of Q2 2020 Correspondant Bank: 9% FHLB - securities pledged: 7% Loan to Deposit & Repo Ratio < 85% past 5 quarters 32019 Q42019 Q1 2020. Q22020 Fundin
Slide 21: Credit Quality
Credit Quality * Source: SNL Financial—peers represent public CA, AZ, HI, NV, OR & WA banks with assets $2 - $25 billion $39mm in remaining loan fair value discounts
Slide 22: COVID-Related Deferments
COVID-Related Deferments * Through July 10th
Slide 23: COVID-Related Deferments (Cont.)
COVID-Related Deferments (Cont.) SEC Segment Amount ($ in Thousands) C&I 142,130 CRE 1,091,761 Consumer 3,732 Dairy & Livestock 391 SBA (504) 30,815 SFR Mortgage 1,335 Total $ 1,270,164 CRE by Property Type Amount ($ in Thousands) Farmland 34,909 Industrial 301,404 Medical 48,466 Multi-Family 46,984
Slide 24: COVID Impacted Industries
COVID Impacted Industries ($ in Millions) Balances by Risk Rating Deferrals Areas Pass Classified1 Total % Classified $ Balance % of Total % of Classified Deferred CRE Retail $ 773.0 $ 11.1 $ 784.1 1.4% $ 241.1 31% 49% C&I 63.2 1.7 64.9 2.7% 17.6 27% 56% Arts, Entertainment, and Recreation 29.7 0.2
Slide 25: Q2 2020 Allowance by Portfolio CECL Update
Q2 2020 Allowance by Portfolio CECL Update Highlights $11.5 million credit provision in Q2 Lifetime historical loss models - Macroeconomic variables include GDP, Unemployment Rate, & CRE price index Weighting of multiple forecasts – increased weighting on downside scenario Allowance for Credit Losse
Slide 26: Loans by Region
(000’s) # of Center Locations (6/30/20) Average Loans per Location Total Loans* (6/30/20) % Los Angeles County 22 $165,198 3,634,362 43.3% Central Valley 9 $141,308 1,271,770 15.1% Orange County 10 $112,079 1,120,793 13.3% Inland Empire (Riverside & San Bernardino Counties) 10 $118,813 1,188,132 14.
Slide 27: Loans by Type
Loans by Type CRE $5.37B C&I $0.84B Other $2.20B
Slide 28: Commercial Real Estate Loans by Owner and Collateral Type
Owner Type Commercial Real Estate Loans Collateral Type
Slide 29: CRE by Collateral Origination Year
CRE by Collateral Origination Year Collateral Type Balance ($ in Millions) % of Total LTV at Origination Avg. Size ($ in Thousands) 2020 2019 2018 2017 2016 or earlier Industrial $ 1,845 34% 52% $ 1,367 5% 15% 15% 17% 48% Office 944 18% 55% 1,504 11% 15% 12% 15% 47% Retail 784 15% 50% 1,651 9% 8% 14
Slide 30: C&I by Industry
C&I by Industry 30 Industry Balance ($ in Millions) % of Total Manufacturing $ 151 18% Wholesale Trade 135 16% Real Estate Rental and Leasing 117 14% Finance and Insurance 62 7% Health Care and Social Assistance 55 7% Construction 48 6% Professional, Scientific, and Technical Services 45 5% Transpor
Slide 31: Loan Interest Income
Loan Interest Income 31 ($ in Millions)
Slide 32: Deposits by Region
Deposits by Region (000’s) # of Center Locations (3/31/20) Total Deposits (3/31/20) Total Deposits (6/30/20) Los Angeles County 22 $3,799,075 $4,537,092 Inland Empire (Riverside & San Bernardino Counties) 10 $2,761,738 $3,383,986 Orange County 10 $1,459,027 $1,728,467 Central Valley 9 $1,041,163 $1,
Slide 33: Cost of Deposits
Cost of Deposits Source: SNL Financial—peers represent public CA , AZ, HI, NV, OR & WA banks with assets $2 - $25 billion
Slide 34: Appendix Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation
Slide 35: Reconciliation of Return on Average Tangible Common Equity (Non-GAAP)
Reconciliation of Return on Average Tangible Common Equity (Non-GAAP) The return on average tangible common equity is a non-GAAP disclosure. We use certain non-GAAP financial measures to provide supplemental information regarding our performance. We believe that presenting the return on average tang
Slide 36: Reconciliation of PTPP Return on Average Assets (Non-GAAP)
Reconciliation of PTPP Return on Average Assets (Non-GAAP) The Pretax-pre provision income (“PTPP”) return on average assets is a non-GAAP disclosure. We use certain non-GAAP financial measures to provide supplemental information regarding our performance. We believe that presenting the return on av
Slide 37: Copy of presentation at www.cbbank.com
Copy of presentation at www.cbbank.com