Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Investor Presentation (April 2023)
46 slides from Cvb Financial's investor presentation, Apr 27, 2023
Slide 1: April 2023 Investor Presentation
Exhibit 99.1 April 2023 cbbank.com
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of the manageme
Slide 3: CVB Financial Corp. (CVBF)
CVB Financial Corp. (CVBF) ▪ Total Assets: $16.3 Billion ▪ Gross Loans: $ 8.9 Billion ▪ Total Deposits (Including Repos): $12.8 Billion ▪ Total Equity: $ 2.0 Billion ➢ Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974. 3 cbbank.com
Slide 4: Bank Accomplishments & Ratings
Bank Accomplishments & Ratings ➢ 184 Consecutive Quarters of Profitability ➢ 134 Consecutive Quarters of Cash Dividends ➢ Ranked #1 Forbes, 2023 Best Banks in America (February 2023) ➢ Ranked #4 Forbes, 2022 Best Banks in America (January 2022) ➢ Ranked #1 Forbes, 2021 Best Banks in America (January
Slide 5: Business Financial Centers and CitizensTrust Locations
62 Business Financial Centers 3 CitizensTrust Locations Corporate Office Business Financial Centers CitizensTrust cbbank.com
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. cbbank.com 6
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 long-term relationships cbbank.com 7
Slide 8: Three Areas of Growth
Three Areas of Growth De Novo Acquisitions San Diego (2014) American Security Bank (2014) Oxnard (2015) County Commerce Bank (2016) Santa Barbara (2015) Valley Business Bank (2017) San Diego (2017) Community Bank (2018) Stockton (2018) Suncrest Bank (2022) Modesto (2020) cbbank.com 8
Slide 9: Acquisition Strategy
Acquisition Strategy Banks: ➢ Target size: $1 billion to $10 billion in assets ➢ Financial & Strategic ➢ In-market and/or adjacent geographic market (California) Banking Teams: ➢ In-market ➢ New markets cbbank.com 9
Slide 10: Relationship Banking Model
Relationship Banking Model Customer Credit Relationship Marketing Management Manager Division (Bank) Citizens Home Agribusiness Lending Dairy & Asset Based Construction Livestock Lending Lending Real Estate Treasury SBA Government Management Services International Services CitizensTrust/ Specialty W
Slide 11: CVBF Balance Sheet Profile
CVBF Balance Sheet Profile March 31, 2023 Deposits & Wholesale Securities Assets Loans Repos Funding Cash D&L & Repos 1% Agri Other 4% Others Muni 3% 9% 9% 9% Agency Interest- C&I 9% bearing 10% 35% Securities $1.4B Loans $5.7B 35% $8.9B $12.8B $16.3B MBS CMO 55% 60% 22% Noninterest- CRE bearing FHL
Slide 12: Q1 2023 Financial Highlights
Q1 2023 Financial Highlights • ROATCE = 20.59% • ROAA = 1.47% Profitability • NIM = 3.45% • Efficiency Ratio = 39.50% • Q1’23 Net Income = $59.3 million / EPS = $0.42 • 30% increase in Net Income vs. Q1’22 Income Statement • 10% decrease in Net Income vs. Q4’22 • Q1‘23 Cost of deposits = 0.17% • Loa
Slide 13: Selected Ratios
Selected Ratios 2020 2021 2022 Q1’22 Q4’22 Q1’23 ROATCE 14.25% 15.93% 18.85% 13.08% 23.65% 20.59% NIM 3.59% 2.97% 3.30% 2.90% 3.69% 3.45% Cost of Deposits 0.12% 0.04% 0.05% 0.03% 0.08% 0.17% Performance Cost of Funds 0.13% 0.05% 0.06% 0.03% 0.13% 0.49% Efficiency Ratio 41.40% 41.09% 38.98% 46.93% 36
Slide 14: Selected Highlights (Income Statement)
Selected Highlights Q1’22 Q4’22 Q1’23 ($ in Thousands) Net Interest Income $ 112,840 $137,395 $ 125,728 Noninterest Income 11,264 12,465 13,202 Noninterest Expense (excl. Acq. exp.) 52,600 54,419 54,881 Acquisition Expense 5,638 - - Income Statement PTPP 65,866 95,441 84,049 Provision for (Recapture
Slide 15: Selected Highlights (Average Balance Sheet)
Selected Highlights Q1’22 Q4’22 Q1’23 ($ in Thousands) Average Loans $ 8,500,436 $ 8,868,673 $ 8,963,323 Average PPP Loans 158,928 12,114 8,238 Average Total Securities 5,776,440 5,842,283 5,762,728 Average Balance Average Noninterest-bearing Deposits 8,720,728 8,702,899 8,092,704 Sheet Average Tota
Slide 16: Pretax-Pre Provision Income
Pretax-Pre Provision Income ($ in Millions) 2.31% 2.16% 2.09% 2.02% 1.54% $84.0 $95.4 $91.9 $85.7 $65.9 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 PTPP income (Non -GAAP*) PTPP ROAA (Non-GAAP*) * We use certain non-GAAP financial measures to provide supplemental information regarding our performance. c
Slide 17: Net Interest Income and NIM
Net Interest Income and NIM ($ in Millions) $137.4 $133.3 $2.0 $3.4 $125.7 $121.9 $1.2 $3.2 3.91% $112.8 3.82% $4.7 3.51% 3.69% 3.20% 3.46% 3.45% 2.93% 3.16% $135.4 $129.9 $124.6 $118.7 2.90% 0.49% $108.1 0.13% 0.05% 0.04% 0.03% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Earning Asset Yield Net Interest Margin Q
Slide 18: Dividends – Consecutive Quarters
Dividends – 134 Consecutive Quarters $0.80 100% $0.77 134 Consecutive Quarters $0.72 $0.72 $0.72 More than 30 years of cash 90% dividends since 1989 80% $0.56 $0.54 70% $0.48 $0.48 60% 47.25% 50% 40% 30% 20% 10% 0% 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/20
Slide 19: Strong Capital Ratios
Strong Capital Ratios CVBF CET1 % KRX Avg CET1 % Regulatory Min. 14.9% 13.8% 13.6% 13.6% 13.4% 13.5% 12.5% 12.2% 11.9% 11.8% 11.8% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Capital Ratios 14.6% As of Q1 2023 13.8% 13.8% 4.1% $463MM 9.7% 5.3% $758MM $591MM 6.8% 5.7
Slide 20: CET1 Ratio Trend
CET1 Ratio Trend CVBF KRX 17.1 16.9 15.1 Community 14.9 Suncrest 14.9 14.9 14.8 14.8 14.6 14.6 Bank Q3’18 Q1’22 14.5 14.3 14.1 13.8 13.8 13.6 13.6 13.5 13.4 13.0 12.9 12.8 12.8 12.8 12.5 12.5 12.2 12.1 12.1 12.0 12.0 12.0 12.0 12.0 12.0 12.0 11.9 11.8 11.8 11.7 11.7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 21: Credit Quality
Credit Quality NPA % Total Assets Classified Loans % Total Loans 0.94% 0.12% 0.87% 0.75% 0.71% 0.04% 0.04% 0.03% 2020 2021 2022 Q1'23 2020 2021 2022 Q1'23 Allowance for Credit Losses Net Charge-Offs (Recoveries) to Average Loans 1.12% 0.82% 0.94% 0.97% 0.04% $93.7 $86.5 $85.1 0.00% 0.00% $65.0 (0.01
Slide 22: Net Charge-Offs % Average Loans
Net Charge-Offs % Average Loans CVBF KRX 0.08% 0.06% 0.06% 0.05% 0.05% 0.05% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% 0.03% 0.03% 0.03% 0.03% 0.02% 0.02% 0.02% 0.01% 0.01% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% -0.01% -0.01% -0.01% -0.03% * Source:
Slide 23: NPA / Average Assets %
NPA / Average Assets % CVBF KRX 0.63% 0.61% 0.56% 0.51% 0.51% 0.51% 0.49% 0.49% 0.47% 0.47% 0.45% 0.45% 0.42% 0.37% 0.33% 0.30% 0.30% 0.28% 0.28% 0.27% 0.18% 0.17% 0.17% 0.14% 0.13% 0.12% 0.12% 0.12% 0.12% 0.10% 0.10% 0.09% 0.09% 0.08% 0.08% 0.06% 0.06% 0.05% 0.04% 0.04% 0.03% * Source: S&P Capital
Slide 24: Classified Loans / Total Loans %
Classified Loans / Total Loans % CVBF KRX 2.1% 2.1% 2.0% 1.9% 1.8% 1.8% 1.7% 1.6% 1.6% 1.6% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.4% 1.4% 1.3% 1.2% 1.1% 1.0% 1.0% 0.9% 0.9% 0.9% 0.9% 0.8% 0.8% 0.8% 0.8% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.6% 0.6% 0.6% * Source: S&P Capital IQ. Unweighted Average NASDAQ R
Slide 25: Classified Loan Trend
Classified Loan Trend ($ in Thousands) $78,658 $76,170 $1,737 $9,334 $66,977 $9,968 $64,108 $63,651 Other* $1,770 $12,262 $6,866 $5,085 $12,047 SFR mortgage $10,625 $10,372 $11,566 $7,636 SBA $12,167 $20,753 $2,316 $9,005 Dairy & livestock and $16,576 agribusiness $1,530 $10,030 Commercial and $3,65
Slide 26: CECL Update Highlights
CECL Update Highlights Allowance for Credit Losses – by Loan Type 12/31/2022 3/31/2023 Variance ($ in Millions) ✓ Provision for credit loss of $1.5mm in Q1 2023 ACL % of ACL % of ACL % of ✓ Lifetime historical loss models - Macroeconomic Segmentation Balance Loans Balance Loans Balance Loans variabl
Slide 27: Relationship-Centered Deposit Base
Relationship-Centered Deposit Base 100% Core Deposits - 0% Brokered Deposits March 31, 2023 March 31, 2022 Total Deposits & Customer Repos Total Deposits & Customer Repos Repos Repos 4% 4% Interest-bearing Interest-bearing 36% 35% Noninterest-bearing 61% Noninterest-bearing 60% Cost of Interest-Bear
Slide 28: Business vs Consumer Deposits
Business vs Consumer Deposits Q1 2022 Q1 2023 Non- Non- Analyzed Analyzed Business Business Accounts Accounts Consumer 35% Consumer 37% 23% 25% Analyzed Analyzed Business Business Accounts Accounts 40% 40% cbbank.com 28
Slide 29: Diverse Deposit Base
Diverse Deposit Base Consumer 23% Manufacturing 9% Construction 7% Other Real Estate Other Industries* Rental and Leasing 12% 7% Public Administration 6% Agriculture, Forestry, Fishing and Hunting 2% Professional, Scientific, and Educational Services Technical Services 2% 5% Retail Trade Transportat
Slide 30: Deposit Relationship Tenure
Deposit Relationship Tenure Q1 2023 Q1 2022 Q4 2022 Over 10 Over 10 Over 10 Years Years Years 41% 42% 40% 3 to 10 3 to 10 3 to 10 Years Years Years 36% 36% 34% Less than 3 Less than 3 Less than 3 Years Years Years 23% 24% 24% > 75% of our customer deposit relationships have banked with CBB for 3 yea
Slide 31: Cost of Deposits
Cost of Deposits 6.00% CVBF KRX Fed Funds Rate 5.00% 5.00% For the Last 5 Years CVBF Ranked Among the 5 Lowest Cost of Deposits 4.00% of the 50 Banks in the KRX Index 3.00% 2.50% 1.75% 2.00% 0.72% 0.82% 1.00% 0.35% 0.15% 0.17% 0.25% 0.08% 0.21% 0.05% 0.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 32: Deposits by Region
Deposits by Region Average # of Center Total Deposits Total Deposits Deposits per Locations (12/31/22) (3/31/23) Center (3/31/23) ($ in Thousands) (3/31/23) Los Angeles County 21 $5,177,824 $4,989,500 $237,595 Inland Empire 9 3,552,798 3,459,104 384,345 (Riverside & San Bernardino Counties) Central
Slide 33: Brokered Deposits / Total Deposits %
Brokered Deposits / Total Deposits % CVBF KRX 4.94% 4.64% 4.63% 4.58% 4.47% 4.43% 4.38% 4.31% 4.10% 3.98% 3.73% 3.43% 3.37% 2.89% 2.76% 2.34% 2.21% 2.20% 2.11% 1.96% 1.94% 1.09% 0.76% 0.76% 0.75% 0.74% 0.74% 0.72% 0.60% 0.59% 0.27% 0.27% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% * Source
Slide 34: Deposit Characteristics - Uninsured
Deposit Characteristics - Uninsured ($ in Billions) Estimated Uninsured Deposit & Repo Analysis 3/31/23 (1) Total Deposits & Customer Repos $12.8 Less: Insured Deposits (4.3) Less: Collateralized Deposits (0.9) Less: Collateralized Repos (0.5) (2) Est. Uninsured Deposits , excluding items above $7.1
Slide 35: Sources of Liquidity
Sources of Liquidity ➢ 100% Core Customer Deposits (no brokered deposits) ➢ Borrowing Capacity: ✓ FHLB: $4.9 billion (secured) ✓ FRB Discount Window: > $800 million (secured) ✓ Other: > $300 million (unsecured) As of March 31, 2023: $1.4 billion FHLB Short-Term Advances ➢ Unpledged AFS Securities -
Slide 36: Loan Trends Q1 2022 vs Q1 2023
Loan Trends Q1 2022 vs Q1 2023 $9,079 Total +$351 $8,774 $8,692 $8,592 $8,942 4% growth CRE +$479 7% growth $6,950 $6,885 $6,685 $6,644 $6,471 $952 $949 $942 $925 $898 C&I ($27) $592 $536 $521 $517 $503 Other($89) $323 $434 $274 D&L and $308 $293 Agribus. +$15 $311 $297 $297 $291 $283 SBA($28) Q1 20
Slide 37: Line Utilization Trends
Line Utilization Trends 81% 78% 71% 69% 69% 68% 67% 66% 53% 53% 52% 52% 51% 50% 49% 49% 48% 47% 47% 47% 46% 46% 45% 43% 41% 41% 39% 33% 32%32% 31% 31% 29% 29% 28% 28% 27% 27% 26% Total D&L C&I cbbank.com 37 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 20
Slide 38: Loans by Type
Loans by Type C&I CRE Owner $0.90B 28.0% Commercial and industrial 10.1% Dairy & livestock and agribusiness 3.4% CRE $6.95B SBA 3.2% SFR mortgage 2.9% Construction 0.9% Municipal lease CRE Non-Owner finance receivable 49.7% SBA - PPP 0.9% 0.1% Consumer and other Other loans 0.8% $1.09B cbbank.com 38
Slide 39: Commercial Real Estate Loans
Commercial Real Estate Loans Collateral Type Owner/Non-Owner Occupied Hospitality Non- Medical Farmland 1% Owner 5% 7% 64% Industrial Other 33% 11% Multi- Family 12% Owner Retail Office 36% 14% 17% cbbank.com 39
Slide 40: CRE by Collateral Type
CRE by Collateral Origination Year % of Avg. Size Classified Balance Collateral LTV at 2017 or ($ in Owner ($ in 2023 2022 2021 2020 2019 2018 ($ in Type Origination earlier Millions) Occupied Thousands) Millions) Industrial 2,292 49% 50% 1,606 4 3% 21% 20% 12% 7% 7% 30% Office 1,172 25% 55% 1,715 0
Slide 41: C&I by Industry
C&I by Industry % of Balance C&I Industry ($ in Millions) Manufacturing: 15% Total Real Estate Rental and Leasing 208 23% Wholesale Trade: 11% Manufacturing 137 15% Real Estate Rental and Leasing: 23% Wholesale Trade 95 11% Construction 74 8% Arts, Entertainment, and Recreation 53 6% Construction: 8
Slide 42: Loans by Region
Loans by Region # of Average Center Total Loans Loans per % Locations (3/31/23) Location ($ in Thousands) (3/31/23) Los Angeles County 21 $161,994 $ 3,401,875 38.0% Central Valley and Sacramento 15 139,279 2,089,192 23.4% Orange County 10 120,127 1,201,271 13.4% Inland Empire 9 103,703 933,323 10.4%
Slide 43: Appendix Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation cbbank.com
Slide 44: 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 45: 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 a
Slide 46: Copy of presentation at www.cbbank.com
Copy of presentation at www.cbbank.com cbbank.com