Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — KBW 8th Annual Community Bank Investor Conference 2007
55 slides from Cvb Financial's conference presentation, Jul 31, 2007
Slide 1: KBW 8th Annual Community Bank Investor Conference
KBW 8th Annual Community Bank Investor Conference July 31 – Aug. 1, 2007
Slide 2: Safe Harbor
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. Th
Slide 3: Chino Valley Bank formed
Chino Valley Bank formed CVB Financial Corp. (holding company formed) Chino Valley Bank becomes Citizens Business Bank
Slide 4: Headquarters
Headquarters Origin Business Financial Centers Assets Deposits Loans Market Capitalization Ontario, California August 9, 1974 $6.137 Billion $3.509 Billion $3.303 Billion $940.80 Million
Slide 5: Name
Name Christopher D. Myers Edward J. Biebrich Jr. Jay W. Coleman Edward J. Mylett Jr. Chris A. Walters Yamynn De Angelis Elsa Zavala David M. Krebs Position President Chief Executive Officer Executive Vice President Finance Division Executive Vice President Sales Division Executive Vice President Cre
Slide 6: Name
Name Nancy A. Sinclair Stephen Tidland James E. Mead Vince L. Gottuso Mark Richardson John H. Tait Ted Dondanville Larry Zivelonghi Average: 28 Years 12 Years Position Senior Vice President The Marketing Group Senior Vice President President – Golden West Financial Senior Vice President Regional Man
Slide 7: Vision of CVB Financial Corp.
“The vision of CVB Financial Corp. is to be recognized as the premier relationship financial institution for businesses and professionals in California with $8.0 billion in assets by December 31, 2008 and $12.0 billion in assets by December 31, 2012, with earnings growth of 15.0% a year, a return on
Slide 8: Mission of CVB Financial Corp.
“The Mission of CVB Financial Corp. is to achieve superior performance and rank in the top 10% of all financial institutions in the nation in return on equity and return on assets. This will be achieved by delivering the finest in financial products and services through relationship banking commitme
Slide 9: usBanker 2007 All-Star
usBanker “2007 ALL-STAR TE.
Slide 10: U.S. Banker Magazine
U.S. Banker Magazine Top Business Bank in the Nation 15 th Ranked Bank in the Nation America’s Finest Companies investment directory One of 318 out of 19,000 U.S. public companies. Bank Director Magazine (December 2006) 14 th Ranked Bank in the Nation The Findley Report 27 Consecutive Years – Premie
Slide 11: Rising Short-term Interest Rates
Rising Short-term Interest Rates Slowing Housing Market Economic Volatility (Oil prices, etc.)
Slide 12: Total Deposits
Total Deposits Total Loans Total Capital Total Assets Net Earnings
Slide 13: Change 12/31/05 to 12/31/06
(000s) 12/31/05 12/31/06 Change % Demand Deposits $1,490,613 $1,363,411 ($127,202) (8.53) Total Deposits (including REPOs) 3,424,045 3,501,208 77,163 2.25 Total Loans 2,663,864 3,070,196 406,332 15.25 Capital 342,877 389,339 46,462 13.55 Assets 5,422,971 6,094,262 671,291 12.38
Slide 14: Change 12/31/01 to 12/31/06
(000s) 12/31/01 12/31/06 Change Demand Deposits $766,329 $1,363,411 $597,082 Total Deposits (including REPOs) 1,876,959 3,501,208 1,624,249 Total Loans 1,187,540 3,070,196 1,882,656 Capital 220,748 389,339 168,591 Assets 2,514,102 6,094,262 3,580,160
Slide 15: Earnings 2005 to 2006
*Earnings before securities gains & losses, OREO gains & losses, provisions for OREO & loan losses, and income taxes. (000s) Change % Operating Earnings* $109,280 $105,573 ($3,707) (3.39) Earnings Before Taxes 106,964 103,630 (3,334) (3.12) Taxes 36,346 31,724 (4,622) (12.72) Net Earnings After Taxe
Slide 16: Earnings 2001 to 2006
*Earnings before securities gains & losses, OREO gains & losses, provisions for OREO & loan losses, and income taxes. (000s) Change Annual % Increase Operating Expenses* $64,922 $105,573 40,651 10.21 Earnings Before Taxes 63,358 103,630 40,272 10.34 Taxes 23,300 31,724 8,424 6.37 Net Earnings After
Slide 17: CVB vs California and U.S. Banks Growth
Source: Federal Deposit Insurance Corporation CVB California Banks U.S. Banks Deposits 82% 35% 66% Loans 159% 51% 73% Capital 76% 49% 106% Assets 142% 53% 72%
Slide 18: Return on Average Equity and Assets
Source: Federal Deposit Insurance Corporation CVB California Banks U.S. Banks Return on Average Equity 19.75% 13.03% 12.65% Return on Average Assets 1.25% 1.53% 1.35%
Slide 19: Zero Non Performing Loans
Zero Non Performing Loans Zero Over 90 Days Past Due
Slide 20: CVB Financial Corp. vs NASDAQ Market Index
CVB Financial Corp. NASDAQ Market Index 01/01/2002 $100.00 $100.00 12/31/2006 185.42 128.12
Slide 21: One dollar invested February 11, 1975
One dollar invested on February 11, 1975, with dividends reinvested, would be valued at $554.35 as of December 31, 2006.
Slide 22: Rank Bank Assets
Rank Bank Assets* Wells Fargo Bank $482,000 Bank of the West 56,400 Union Bank of California 52,600 City National Bank California Bank & Trust 14,715 10,834 East-West Bank 10,800 7 United Commercial Bank 10,346 Greater Bay Bank 7,400 Pacific Capital Bank 7,000 Cathay Bank 6,400 Silicon Valley Bank 6
Slide 23: June 30, 2007 vs 2006 Results
(21.47) (257,209) 940,795 1,198,004 Market Capitalization (16.19) (3,063) 15,854 18,917 Earnings 3.10 184,624 6,137,043 5,952,419 Assets 17.32 58,580 396,834 338,254 Capital 16.35 464,128 3,303,273 2,839,145 Gross Loans 4.82 173,103 3,765,956 3,592,853 Total Deposits (including Customer REPOs) (1.92
Slide 24: Net Income
Net income Net Earnings $20,000 “Net Earnings $2,000 POPPPO LOSS
Slide 25: Net Interest Margin
Net Interest Margin 2.25% i) 2.00% 4, PPPEPPPEPPR ES
Slide 26: Margin Pressures
Flat or inverted yield curve Increasing cost of borrowings Fixed-Rate Composition of our loan portfolio Lack of demand deposit growth
Slide 27: California Peer Banks vs CVBF Balance Sheet
California Peer Banks % CVBF % Assets Loans 2,749,452 70.5 3,070,196 50.4 Investments 788,469 20.2 2,582,902 42.4 Other Assets 359,360 9.2 441,164 7.2 Total Assets 3,897,281 100.0 6,094,262 100.0 Liabilities & Equity Total Deposits 2,897,433 74.3 3,406,808 55.9 Borrowings 439,257 11.3 2,146,495 35.2
Slide 28: Yields and Costs Spread
Q2 2007 Yield on Investments 4.38% 4.64% 5.06% 5.24% Cost of Borrowings 2.85% 3.39% 4.40% 5.01% Spread 1.53% 1.25% .66% .23% Yield on Loans 6.01% 6.52% 6.92% 6.85% Cost of Deposits .56% .94% 1.91% 2.12% Spread 5.45% 5.58% 5.01% 4.73%
Slide 29: Loan Rate Composition
Amount % Fixed Rate Loans $1,487,422 48.3 Fixed with Reset 716,887 23.3 Variable Rate Loans 874,556 28.4 $3,078,865 100.0%
Slide 30: Demand Deposits
6/30/06 6/30/07 Demand Deposits $1,367,015 $1,340,768 Total Deposits (including REPOs) 3,592,853 3,765,956
Slide 31: The Game Plan 2007 and 2008
The Game Plan 2007 and 2008
Slide 32: Intelligent
Intelligent Balance Sheet Sensitive Interest Rate Sensitive Strategic Sustainable Achievable
Slide 33: Relationship Banking Credit Quality Outstanding Customer Service
Relationship Banking Credit Quality Outstanding Customer Service
Slide 34: Demand deposit growth
Demand deposit growth Business loan growth Lower cost time deposit growth Fee income growth Cost effective operation
Slide 35: DeNovo
DeNovo Acquisition of business & community banks 44 business financial centers growing to over 50 by the end of 2008
Slide 36: Existing Business Financial Centers
44 Existing Business Financial Centers
Slide 37: Assets $238 million
Assets $238 million Loans $157 million Deposits $190 million Locations in Manhattan Beach, Marina del Rey, El Segundo and Gardena.
Slide 38: New Business Financial Center Locations
Stockton Modesto Merced Santa Clarita Encino Century City Santa Fe Springs Anaheim Torrance Newport Beach Temecula
Slide 39: Demand Deposits Lower cost time/interest bearing deposits
Demand Deposits Lower cost time/interest bearing deposits
Slide 40: Marketing Focus Business Expertise
Marketing Focus Business Expertise
Slide 41: Medical/Healthcare
Medical/Healthcare Property Management/ Homeowner’s Associations Professional Services (Law firms, Insurance brokers, CPA firms) Title/Escrow Non-Profit Corporations Government Services
Slide 42: Citizens Sweep Manager
Citizens Sweep Manager Preferred Choice Banking Citizens Automated Deposit
Slide 43: Target: business
Target: business clients with medium six figure deposit balances or higher.
Slide 44: Target: individuals and businesses
Target: individuals and businesses with deposit balances of $25,000 or greater.
Slide 45: Target: premium business clients
Target: “premium” business clients and prospects.
Slide 46: Citizens Automated Deposit and Sweep Manager
CITIZENS AUTOMATED DEPosIT CITIZENS SWEEP MANAGER 1ZENS 8 BANK
Slide 47: Real Estate Secured Loans vs. Other Loans
Real Estate Secured Loans vs. Other Loans 2,500,000 2,000,000 1,500,000 1,000,000 500,000 -
Slide 48: Commercial and Industrial Lending
Commercial and Industrial Lending (C&I) Real Estate Lending Small Business Lending (credit scoring up to $250,000) Home/Business Equity Lines of Credit Asset Based Lending SBA Lending Dairy and Livestock Industries Group Municipal Leasing Golden West Financial Services Equipment & Vehicle Leasing
Slide 49: Trust, Asset Management & Brokerage
Trust, Asset Management & Brokerage Real Estate Loan Brokering
Slide 50: Efficiency Ratio
Non-Interest Expense Net Interest Income + Non-Interest Income Efficiency Ratio = 70.00 65.00 60.00 55.00 50.00 45.00 40.00
Slide 51: Increase Demand Deposits
Increase Demand Deposits • Deposit Rich Industries • Technology/Treasury Management Products • Deposit Sales Incentives Increase Variable Rate Lending • Commercial & Industrial • Construction/ABL/Dairy & Livestock, etc… • Utilization of interest rate swaps
Slide 52: De-Leverage, Fee Income, Geographic Expansion
De-Leverage • $50 million per month available to pay debt or fund loans Fee Income •Trust, Asset Management & Brokerage • Real Estate Loan Brokering Geographic Expansion
Slide 53: Share price and outlook
• Share price as of June 19, 2007 for CVBF is $10.13, 34% below its high of $15.34. • Excellent asset quality. • CVBF will greatly benefit from a decline in short-term interest rates. • Acquisition of First Coastal is accretive to earnings.
Slide 54: Dominant community bank in its markets
• The dominant community bank in its markets • The fastest growing markets in California & Nation • Strong capital position • Excellent credit quality • Consistent superior returns - well above those of its peers • Attractive dividends • Recognized locally and nationally for superior business and fi
Slide 55: CVB Financial Corp.
CVB Financial Corp.
CVB Financial — KBW 8th Annual Community Bank Investor Conference 2007 on 6ix