Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Q2 2022 Earnings Presentation
38 slides from Cvb Financial's earnings presentation, Jul 21, 2022
Slide 1: July 2022
Exhibit 99.1 July 2022 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: $16.8 Billion § Gross Loans: $ 8.7 Billion § Total Deposits (Including Repos): $14.6 Billion § Total Equity: $ 2.0 Billion Ø 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 Ø 181 Consecutive Quarters of Profitability Ø 131 Consecutive Quarters of Cash Dividends Ø Ranked #4 Forbes, 2022 Best Banks in America (January 2022) Ø Ranked #1 Forbes, 2021 Best Banks in America (January 2021) Ø Ranked #1 Forbes, 2020 Best Banks in America (January
Slide 5: Business Financial Centers and CitizensTrust Locations
63 Business Financial Centers 4 CitizensTrust Locations Corporate Office Business Financial Centers CitizensTrust cbbank.com
Slide 6: Our Vision
Our Vision Citizens Citizens Business Business Bank Bank will will strive strive to to become become the the p premier remier financial financial s services ervices c company ompany operating operating throughout throughout the the s state tate of of California, California, servicing servicing the t
Slide 7: Target Customer
Target Customer The best The best privately-held and/or family-owned privately-held and/or family-owned businesses throughout businesses throughout California California §§ Annual revenues Annual revenues of $1-300 of $1-300 million million §§ Top Top 25% in their respective industry 25% in their re
Slide 8: Three Areas of Growth
Three Areas of Growth De Novo De Novo Acquisitions Acquisitions San Di San Diego ego (2014) (2014) Ameri Americ can Securi an Securit ty y Bank (2014) Bank (2014) Oxnard (2015) Oxnard (2015) Count County y Commerce Bank (2016) Commerce Bank (2016) Sant Santa Barbara (2015) a Barbara (2015) V Va alle
Slide 9: Acquisition Strategy
Acquisition Strategy Banks: Ø Target size: $1 billion to $10 billion in assets Ø Financial & Strategic Ø In-market and/or adjacent geographic market (California) Banking Teams: Ø In-market Ø New markets cbbank.com 9
Slide 10: Q2 2022 Financial Highlights
Q2 2022 Financial Highlights • ROATCE = 18.67% • ROAA = 1.39% Profitability • NIM = 3.16% • Efficiency Ratio = 37.24% • Q2 Net Income = $59.1 million • $3.6 million provision for credit losses Income Statement • Q2 Diluted EPS =$0.42 • ~ 8% loan growth • ~ 10% noninterest bearing deposit growth Bala
Slide 11: Selected Ratios
Selected Ratios 2019 2020 2021 Q2’21 Q1’22 Q2’22 ROATCE 17.56% 14.25% 15.93% 15.60% 13.08% 18.67% NIM 4.36% 3.59% 2.97% 3.06% 2.90% 3.16% Cost of Funds 0.24% 0.13% 0.05% 0.05% 0.03% 0.04% Performance Performance Efficiency Ratio 40.16% 41.40% 41.09% 40.05% 46.93% 37.24% NIE % Avg. Assets 1.76% 1.49%
Slide 12: Pretax-Pre Provision Income
Pretax-Pre Provision Income ($ in Millions) 2.02% 1.84% 1.66% 1.66% 1.54% $85.7 $69.7 $66.8 $65.7 $65.9 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 PTPP income (Non -GAAP*) PTPP ROAA (Non-GAAP*) cbbank.com * We use certain non-GAAP financial measures to provide supplemental information regarding our per
Slide 13: Quality Loan Growth
Quality Loan Growth Balances as of period-end ($ in Millions) $8,692 $8,592 $27 $82 $8,071 $7,888 $7,850 $658 $187 $331 $ 7,669 $ 7,494 $ 7,349 $ 7,277 $ 7,193 $775 $775 $352 $220 $242 $242 $221 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 D&L Suncrest Acquired Loans Core Loans PPP Loans (incl. PPP) cbbank.com * E
Slide 14: Line Utilization Trends
Line Utilization Trends 81% 71% 69% 69% 66% 53% 53% 52% 52% 50% 49% 49% 48% 47% 47% 46% 45% 43% 41% 41% 39% 32% 31% 31% 29% 29% 28% 27% 27% 26% Total D&L C&I cbbank.com 14 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Slide 15: Credit Quality
Credit Quality NPA % Total Assets Classified Loans % Total Loans 0.18% 0.97% 0.94% 0.88% 0.12% 0.71% 0.66% 0.09% 0.08% 0.04% 2018 2019 2020 2021 Q2'22 2018 2019 2020 2021 Q2'22 CVBF CVBF Allowance for Credit Losses Remaining loan fair value credit discounts — Net Charge-Offs (Recoveries) to Average
Slide 16: Asset Sensitive Balance Sheet
Asset Sensitive Balance Sheet 44% of earning assets combined > 60% of Banks funding from At June 30, 2022 between Federal Reserve Noninterest-bearing deposits Noninterest-bearing balance and investment portfolio Deposits $8.9B > Loans $8.7B Q2 2022 Q2 2022 Average Total Deposits & Customer Repos Ave
Slide 17: Net Interest Income and NIM
Net Interest Income and NIM ($ in Millions) $121.9 $1.4 $1.9 $112.8 3.20% $2.9 $105.4 $1.8 $103.3 $102.4 3.11% $8.1 $4.2 $7.9 $2.1 3.16% $3.5 $2.7 2.93% 2.92% 3.06% 2.82% 2.90% 2.89% 2.79% $118.7 $108.1 $93.8 $92.7 $96.1 0.05% 0.04% 0.04% 0.03% 0.03% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2'21 Q3'21 Q4'21 Q
Slide 18: Earning Assets
Earning Assets ($ in Millions) Average Earning Assets Yields $15,962 $15,561 $14,742 $1,653 $797 $14,402 $13,931 $2,019 $2,329 $1,712 4.46% 4.43% $8,635 4.31% 4.29% 4.27% $8,500 $7,834 3.20% 3.11% $8,249 $7,916 2.92% 2.93% 2.82% 1.93% 1.70% 1.55% 1.54% 1.52% $6,104 $5,776 $4,845 $4,112 $3,925 Q2'21
Slide 19: Cost of Deposits
Cost of Deposits 3.00% CVBF Peers Fed Funds Rate 2.50% Cost of Funds = 4 bps 2.00% 1.50% 1.00% 0.61% 0.50% 0.12% 0.17% 0.04% 0.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 2018 2019 2020 2021 2022 * Source: S&P Capital IQ. Regulated depositories with assets $2 - $35
Slide 20: 2022 Share Repurchase Program
2022 Share Repurchase Program Ø Repurchase Program up to 10 Million Shares Ø YTD 2022 – 4.7 million shares repurchased Ø ASR $70 million (2,994K shares retired) Ø 10b5-1 Stock Repurchases (1,682K shares) Ø Impact of Suncrest Acquisition and Share Repurchase Program on CVBF Common Stock Common Shares
Slide 21: Dividends – Consecutive Quarters
Dividends – 131 Consecutive Quarters 100% $0.75 131 Consecutive 131 Consecutive Quarters Quarters $0.72 $0.72 $0.72 90% More More than 30 years of than 30 years of cash cash 80% dividends since dividends since 1989 1989 $0.56 $0.54 70% $0.48 $0.48 60% 55.13% 49.9% $0.40 $0.39 50% $0.34 $0.34 $0.34 $
Slide 22: Strong Capital Ratios
Strong Capital Ratios CVBF CET1 % Peer Avg CET1 % Regulatory Min. 15.1% 14.9% 14.9% 13.6% 13.4% 12.9% 12.6% 12.6% 12.4% 7.0% 7.0% 7.0% 7.0% 7.0% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Capital Ratios As of Q2 2022 14.2% 13.4% 13.4% 3.7% $400MM 4.9% $690MM $528MM 8.8% 6.4% $793MM 4.8% 10.5% 8.5% 7.0%
Slide 23: Suncrest Bank Merger/Integration Timeline
Suncrest Bank Merger/Integration Timeline Merger Consideration: ($ in Millions) • 8.6MM Shares issued $197 Merger January 7, 2022• Cash 40 Completed • Aggregate Consideration $237 • Loans Acquired (Fair Value) $ 766 • Deposits assumed $1,183 February 18, 2022 Systems Conversion Loans Acquired (Fair
Slide 24: CECL Update Highlights
CECL Update Highlights Allowance for Credit Losses – by Loan Type 3/31/2022 6/30/2022 Variance ($ in Millions) ü Provision for credit loss of $3.6M in Q2 2022 ACL % of ACL % of ACL % of ü Lifetime historical loss models - Macroeconomic Segmentation Balance Loans Balance Loans Balance Loans variables
Slide 25: Loans by Type
Loans by Type C&I CRE Owner $0.94B 28.4% Commercial and industrial 10.8% SBA 3.4% CRE $6.64B Dairy & livestock and agribusiness 3.1% SFR mortgage 3.0% Consumer and other loans 1.0% Municipal lease finance receivable CRE Non-Owner SBA - PPP 0.7% 48.0% 0.8% Construction Other 0.7% $1.11B cbbank.com 25
Slide 26: Loans by Region
Loans by Region # of Average Center Total Loans Loans per % Locations (6/30/22) Location (000s) (6/30/22) Los Angeles County 21 $155,773 $ 3,271,236 37.6% Central Valley and Sacramento 15 138,304 2,074,554 23.9% Orange County 10 106,244 1,062,439 12.2% Inland Empire 10 98,407 984,068 11.3% (Riversid
Slide 27: Commercial Real Estate Loans
Commercial Real Estate Loans Collateral Type Owner/Non-Owner Occupied Hospitality Medical Non- Farmland 1% 5% Owner 7% 63% Industrial Other 34% 11% Multi- Family 11% Owner Retail 37% 14% Office 17% cbbank.com 27
Slide 28: CRE by Collateral Origination Year
CRE by Collateral Origination Year Balance % of Avg. Size Collateral LTV at ($ in Owner ($ in 2022 2021 2020 2019 2018 2017 2016 or Type Origination Millions) Occupied Thousands) earlier Industrial $ 2,240 50% 51% $ 1,554 13% 21% 13% 9% 9% 10% 25% Office 1,121 25% 56% 1,654 11% 16% 19% 12% 7% 8% 27%
Slide 29: C&I by Industry
C&I by Industry % of Balance C&I Industry ($ in Millions) Manufacturing: 15% Total Wholesale Trade: 11% Real Estate Rental and Leasing $ 203 22% Manufacturing 146 15% Real Estate Rental and Wholesale Trade 101 11% Leasing: 22% Construction 92 10% Construction: 10% Health Care and Social Assistance 5
Slide 30: Loan Interest Income
Loan Interest Income ($ in Millions) cbbank.com 30
Slide 31: Relationship-Centered Deposit Base
Relationship-Centered Deposit Base At June 30, 2022 Noninterest-bearing Deposits $8.9B > Loans $8.7B June 30, 2022 December 31, 2021 Total Deposits & Customer Repos Total Deposits & Customer Repos $14.6 Billion $13.6 Billion Repos Repos 3% 5% Interest-bearing 36% Interest-bearing Noninterest-bearing
Slide 32: Deposits by Region
Deposits by Region Average # of Center Total Deposits Total Deposits Deposits per Locations (3/31/22) (6/30/22) Center (6/30/22) (000s) (6/30/22) Los Angeles County 21 $ 5,785,682 $ 5,572,164 $ 265,341 Inland Empire (Riverside & San Bernardino 10 4,118,552 3,873,394 387,339 Counties) Central Valley
Slide 33: 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 Treasury Real Estate SBA Government Management Services International Services CitizensTrust/ Specialty W
Slide 34: Digital and Technology Solutions
Digital and Technology Solutions Leveraging technology, digital transformation and data to better serve our clients and associates Recently Completed Ongoing Technology Solutions § Powerful personal and business online banking and § Online Banking enhanced reporting and third party Fin Tech develope
Slide 35: Appendix Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation cbbank.com
Slide 36: 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 37: 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 38: Copy of presentation at www.cbbank.com
Copy of presentation at www.cbbank.com cbbank.com