Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Q4 2014 Earnings Presentation
45 slides from Cvb Financial's earnings presentation, Mar 6, 2015
Slide 1: 4Q Results 2014
Exhibit 99.1 March 2015 4Q Results 2014 | cbbank.com
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: $7.4 Billion Gross Loans: $3.8 Billion Total Deposits (Including Repos): $6.2 Billion Total Equity: $878 Million Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974 Locations in 42 cities with 40 bus
Slide 4: Experienced Leadership
Experienced Leadership Name Position Banking Experience CVBF Service Christopher D. Myers President & CEO 31 Years 9 Years Richard C. Thomas Executive Vice President 5 Years 4 Years Chief Financial Officer James F. Dowd Executive Vice President 38 Years 7 Years Chief Credit Officer David C. Harvey E
Slide 5: Board of Directors
Board of Directors Name CVB Experience Age Ray O’Brien—Chairman 2 Years 58 George Borba Jr.—Vice Chairman 2 Years 47 Steve Del Guercio 2 Years 53 Robert Jacoby 9 Years 73 Hal Oswalt 1 Year 66 San Vaccaro 15 Years 82 Chris Myers—CEO 9 Years 52 4Q Results 2014 | cbbank.com 5
Slide 6: Who is CVB Financial Corp.?
Who is CVB Financial Corp.? 4Q Results 2014 | cbbank.com
Slide 7: Largest Banks Headquartered in California
Largest Banks Headquartered in California Rank Name Asset Size (12/31/14) In millions 1 Wells Fargo $1,687,155 2 Union Bank $113,120 3 Bank of the West $71,682 4 First Republic Bank $48,353 5 SVB Financial $39,345 6 City National Bank $32,610 7 East West Bank $28,738 8 OneWest Bank $21,805 9 Pacific
Slide 8: Bank Accomplishments & Ratings
Bank Accomplishments & Ratings Consecutive Quarters of Profitability 101 Consecutive Quarters of Cash Dividends #4 Rated Bank: BankDirector Magazine Bank Performance Scorecard (August 2014) BauerFinancial Report Five Star Rating (September 2014) 78 Consecutive Quarters Fitch Rating BBB (September 20
Slide 9: Our Markets
Our Markets 4Q Results 2014 | cbbank.com
Slide 10: Existing Locations
Existing Locations 40 Business Financial Centers 6 Commercial Banking Centers 3 CitizensTrust Locations Corporate Office Business Financial Centers Commercial Banking Centers itizensTrust San Diego – NEW Opened 06/02/2014
Slide 11: Deposits
Deposits* # of Center Total Deposits Total Deposits (000’s) Locations (12/31/13) (12/31/14) Los Angeles County 18 $1,921,122 $2,154,938 Inland Empire 9 $1,842,239 $1,913,988 (Riverside & San Bernardino Counties) Central Valley 9 $866,085 $920,951 Orange County 9 $651,139 $878,466 Other 1 $253,297 $2
Slide 12: Total Deposits
Total Deposits* $7,500,000 $6,500,000 $5,500,000 $4,500,000 $3,500,000 $2,500,000 $1,500,000 $500,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (000’s) 2010 2011 2012 2013 2014 Non-Int Bearing Dep Interest Bearing Deposits* *Interest Bearing Deposits includes REPOs 4Q Results 2014
Slide 13: Deposit Cost Comparison
Deposit Cost Comparison Source: Q4 2014 earnings release & other company filings, SNL Financial—peers represent public CA , AZ, HI, NV, OR & WA banks with assets $2—$25 billion. 1.00% 0.90% CVBF Peers 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 14: Total Loans
Total Loans* Average # of Center Total Loans* Loans per Locations (12/31/2014) (000’s) Location Los Angeles County 18 $82,290 $1,481,226 Central Valley 9 $91,317 $821,854 Inland Empire (Riverside & San Bernardino Counties) 9 $75,014 $675,128 Orange County 9 $60,410 $543,689 Other 1 $310,866 $310,866
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 Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014 Total Loans* *Starting in the 4th quarter of 2014,
Slide 16: Loan Portfolio Composition
Loan Portfolio Composition Total Loans by Type Municipal Lease Finance Other, 1.9% Receivables, 2.0% Dairy, Livestock & SFR Mortgage, Agribusiness, 5.4% 7.4% Multi-Family, 5.6% Commercial & Industrial, 14.1% Construction RE, 1.4% Commercial RE- Non-Owner, 40.0% Commercial RE—Owner Occupied, 22.2% So
Slide 17: Credit Quality
Credit Quality 4Q Results 2014 | cbbank.com
Slide 18: Non-Performing Assets
Non-Performing Assets* $200,000 $180,000 $160,000 $140,000 $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 (000’s) 2009 2010 2011 2012 2013 2014 Non-Performing Loans OREO *Non-Covered assets | Starting in the 4th quarter of
Slide 19: Classified Loans
Classified Loans* $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (000’s) 2009 2010 2011 2012 2013 2014 *Non-Covered loans| Starting in the 4th quarter of 2014, covered and non-covered loans are combin
Slide 20: Loans: Net Charge-Offs
Loans: Net Charge-Offs* $0 2009 2010 2011 2012 2013 2014 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 (000’s) Net Charge-Offs (by year) *Non-Covered | Starting in the 4th quarter of 2014, covered and non-covered loans are combined 4Q Results 2014 | cbbank.com 20
Slide 21: Profits
Profits 4Q Results 2014 | cbbank.com
Slide 22: Net Income
Net Income $32,500 $30,000 $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 (000’s) 2009 2010 2011 2012 2013 2014 Net Income After Taxes $20.4 million FHLB prepayment charge 4Q Results 2014
Slide 23: Earnings
Earnings (000’s) 2010 2011 2012 2013 2014 Net Interest Income $259,317 $234,681 $236,950 $216,266 $236,514 Provision for Loan Losses ($61,200) ($7,068) $0 $16,750 $16,100 Other Operating Income/Expenses (Net) ($111,378) ($106,809) ($122,257) ($88,741) ($89,817) Income Taxes ($23,804) ($39,071) ($37,
Slide 24: Net Interest Margin
Net Interest Margin 4.25% 3.92% 8 Year Average: 3.55% 4.00% 3.75% 3.50% 3.50% 3.25% 2.92% 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 Q1 Q2 Q3 Q4 2007 2008 2009 2010 2011 2012 2013 2014 Normalized* *Normalized tax-equi
Slide 25: Efficiency & Expenses
Efficiency & Expenses 4Q Results 2014 | cbbank.com
Slide 26: Efficiency Ratio
Efficiency Ratio 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2014 Efficiency Ratio $20.4 million FHLB prepayment charge 4Q Results 2014 | cbbank.com 26
Slide 27: Non-Interest Expense as a % of Average Assets
Non-Interest Expense as a % of Average Assets 3.50% 3.00% 2.50% 2.00% 1.50% 1.67% 1.00% 0.50% 0.00% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2014 Non-Interest Expense as a % of Average Assets $20.4 million FHLB prepayment charge 4Q Results 2014 | cbbank.com 27
Slide 28: Capital
Capital 4Q Results 2014 | cbbank.com
Slide 29: Capital Ratios
Capital Ratios Regulatory Regulatory December 31, 2014* Minimum Ratio Well-Capitalized Ratio Tier 1 Risk-based Capital Ratio 4.0% 6.0% 16.99% Total Risk-based Capital Ratio 8.0% 10.0% 18.24% Tier 1 Leverage Ratio 4.0% 5.0% 10.86% Tangible Capital Ratio 10.97% Core Tier 1 Capital Ratio 16.46% * CVB F
Slide 30: Securities & Investments
Securities & Investments 4Q Results 2014 | cbbank.com
Slide 31: Securities Portfolio
Securities Portfolio* —$3.1 Billion— Trust Preferred Yield on securities 0.16% Municipal portfolio = 2.58% CMO’s / Bonds 18.48% for the 4th Quarter 2014 REMIC’s 9.69% Government Agency & GSEs 10.55% MBS 61.12% Securities portfolio totaled $3.14 billion at 12/31/2014. The portfolio represents 42.54%
Slide 32: Securities Portfolio
Securities Portfolio* $3.1 Billion Mark-to-Market (Pre-tax) $100,000 $80,000 $53,578 $60,000 $40,000 $20,000 $0 -$20,000 -$40,000 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sept Dec Mar Jun Sept Dec 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 (000’s)
Slide 33: CVBF Assets
CVBF Assets 12/31/06 $6.1 Billion Loans, Securities net 42.4% 49.9% Goodwill & Fed Intangibles Balance* 0.7% Other 4.6% 2.4% 12/31/14 $7.4 Billion Securities Loans, 42.5% net 50.9% Fed Balance* Goodwill & 0.5% Intangibles Other 5.0% 1.1% *Includes overnight funds held at the Federal Reserve, Interes
Slide 34: 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 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 Yield on Loans* Yield on Securities 4Q Results 2014 | cbbank.com *Excluding Discount Accretion
Slide 35: CVBF Liabilities
CVBF Liabilities 12/31/06 $5.7 Billion Junior subordinated Debentures 1.9% 12/31/14 $6.5 Billion Borrowings Other 3.8% Junior Borrowings Liabilities subordinated 36.0% Total 0.9% Debentures Deposits* 0.4% 61.4% Other Liabilities 0.7% Total Deposits* 94.9% *Includes Customer Repurchase Agreements 4Q
Slide 36: Recent Announcement
Recent Announcement 4Q Results 2014 | cbbank.com
Slide 37: Federal Home Loan Bank Debt
Federal Home Loan Bank Debt $200 Million repaid on February 23, 2015 Maturity: November 2016 Interest Rate: 4.52% Prepayment Penalty: $13.4 Million 4Q Results 2014 | cbbank.com 37
Slide 38: 'CVBF' Cost of Funds
‘CVBF’ Cost of Funds 12/31/2014 Estimated Proforma* Cost of Deposits 0.11% 0.11% (Includes REPO’s) FHLB Debt 4.52% N/A ($200 Million) Trust Preferred 1.61% 1.61% Total Cost of Funds 0.26% 0.12% *Proforma based off 12/31/2014 year to date average balances 4Q Results 2014 | cbbank.com 38
Slide 39: Our Growth Strategy
Our Growth Strategy 4Q Results 2014 | cbbank.com
Slide 40: 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. 4Q Results 2014 | cbbank.com 40
Slide 41: 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 2014 | cbbank.com 41
Slide 42: Three Areas of Growth
Three Areas of Growth 4Q Results 2014 | cbbank.com 42
Slide 43: 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 4Q Results 201
Slide 44: 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 4Q Results 2014 | cbbank.com
Slide 45: Copy of presentation at www.
Copy of presentation at www.cbbank.com 4Q Results 2014 | cbbank.com