Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Investor Presentation (January 2024)
56 slides from Cvb Financial's investor presentation, Jan 25, 2024
Slide 1: CVB Financial Corp. January 2024
CVB Financial Corp. January 2024
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. at a glance
Total Assets: $16.0 Billion Gross Loans: $ 8.9 Billion Total Deposits (Including Repos):$11.7 Billion Total Equity: $ 2.1 Billion CVB Financial Corp. (CVBF) Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974.
Slide 4: Citizens Business Bank accomplishments and ratings
As of 1/16/2024 CVB Financial Corp. is the holding company for Citizens Business Bank SNL Financial ranking of largest bank holding companies in CA, as of 12/31/2023 Bank Accomplishments & Ratings 187 Consecutive Quarters of Profitability 137 Consecutive Quarters of Cash Dividends Ranked #1 Forbes,
Slide 5: Business Financial Centers and CitizensTrust locations
62 Business Financial Centers 3 CitizensTrust Locations Corporate Office Business Financial Centers 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 long-term relationships
Slide 8: Three Areas of Growth
Three Areas of Growth DeNovo 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) Suncrest Bank (2022)
Slide 9: Relationship Banking Model
Relationship Banking Model Relationship Manager (Bank) Real Estate International Services Treasury Management Specialty Banking Construction Lending CitizensTrust/ Wealth Management Bankcard/ Processing SBA Citizens Home Lending Marketing Citizens Equipment Financing Government Services Customer Cre
Slide 10: Acquisition Strategy
Acquisition Strategy Target size: $1 billion to $10 billion in assets Financial & Strategic In-market and/or adjacent geographic market (California) Banks: Banking Teams: In-market New markets
Slide 11: CVBF Balance Sheet Profile
CVBF Balance Sheet Profile TCE Tier 1 Leverage CET1 Tier 1 RBC Total RBC 8.5% 10.3% 14.6% 14.6% 15.5% Assets $16.0B Securities $5.4B Loans $8.9B Deposits & Repos $11.7B Wholesale Funding $2.1B December 31, 2023 Capital Ratios as of December 31, 2023 100% Core Customer Deposits
Slide 12: Q4 2023 Financial Highlights
Q4 2023 Financial Highlights Profitability ROATCE = 16.21% ROAA = 1.19% Efficiency Ratio = 47.6% Efficiency Ratio (excl. FDIC special assessment) = 41.0% Income Statement Q4’23 Net Income = $48.5 million / EPS = $0.35 FDIC special assessment= $9.2 million or ($.04) EPS Cost of funds increased sequen
Slide 13: YTD 2023 Financial Highlights
YTD 2023 Financial Highlights Profitability ROATCE = 18.48% ROAA = 1.35% Efficiency Ratio = 42.0% Efficiency Ratio (excl. FDIC special assessment) = 40.3% Income Statement 2023 Net Income = $221.4 million / EPS = $1.59 NIM = 3.31% $610 million decrease in average earning assets ~ 6% net income decli
Slide 14: Selected Ratios
Selected Ratios 2021 2022 2023 Q4’22 Q3’23 Q4’23 ROATCE 15.93% 18.85% 18.48% 23.65% 18.82% 16.21% NIM 2.97% 3.30% 3.31% 3.69% 3.31% 3.26% Cost of Deposits 0.04% 0.05% 0.41% 0.08% 0.52% 0.62% Cost of Funds 0.05% 0.06% 0.83% 0.13% 0.92% 1.09% Efficiency Ratio* 41.09% 38.98% 42.00% 36.31% 39.99% 47.60%
Slide 15: Selected Highlights: Income Statement
Selected Highlights ($ in Thousands) Q4’22 Q3’23 Q4’23 Net Interest Income $ 137,395 $ 123,371 $ 119,356 Noninterest Income 12,465 14,309 19,163 Noninterest Expense, excluding Regulatory Assessments 53,078 52,877 54,637 Regulatory Assessments 1,341 2,181 11,293 Total Noninterest Expense 54,419 55,05
Slide 16: Selected Highlights: Average Balance Sheet
Selected Highlights ($ in Thousands) Q4’22 Q3’23 Q4’23 Average Cash & Cash Equivalents $ 306,011 $ 644,006 $ 593,110 Average Loans 8,868,673 8,862,462 8,856,654 Average Total Securities 5,842,283 5,542,590 5,328,208 Average Noninterest-bearing Deposits 8,702,899 7,813,120 7,450,856 Average Total Dep
Slide 17: Pretax-Pre Provision Income
Pretax-Pre Provision Income PTPP income (Non -GAAP*) PTPP ROAA (Non-GAAP*) We use certain non-GAAP financial measures to provide supplemental information regarding our performance. Excluding $9.2 million FDIC special assessment, Q4’23 PTPP income of $81.8mm and PTPP ROAA of 2.01%. ($ in Millions)
Slide 18: Dividends – Consecutive Quarters
Dividends – 137 Consecutive Quarters 137 Consecutive Quarters More than 30 years of cash dividends since 1989 Dividend payout ratio calculated on per share basis.
Slide 19: Earnings Per Share
Earnings Per Share 187 Consecutive Quarters of Profitability since 1977
Slide 20: Strong Capital Ratios
Strong Capital Ratios $993mm $849mm $683mm $555mm * Source: S&P Capital IQ. Unweighted Average NASDAQ Regional Banking Index KRX (50 Banks)
Slide 21: CET1 Ratio Trend
CET1 Ratio Trend (%) * Source: S&P Capital IQ. Unweighted Average NASDAQ Regional Banking Index KRX Community Bank Q3’18
Slide 22: TCE Ratio Trend
TCE Ratio Trend (%) * Source: S&P Capital IQ. Unweighted Average NASDAQ Regional Banking Index KRX
Slide 23: Credit Quality
Credit Quality NPA % Total Assets 2020 2021 2022 Allowance for Credit Losses ACL (Sin Millions) 2020 2021 2022 mEEACL ——ACL% Total Loans 2023 2023 llowance % Total Loans Classified Loans % Total Loans 2020 2021 2022 2023 Net Charge-Offs (Recoveries) fo Average Loans 0.00% 0.00% (0.01%) 2020 2021 202
Slide 24: Net Charge-Offs / Average Loans
Net Charge-Offs / Average Loans (%) * Source: S&P Capital IQ. Unweighted Average NASDAQ Regional Banking Index KRX
Slide 25: NPA / Average Assets
NPA / Average Assets (%) * Source: S&P Capital IQ. Unweighted Average NASDAQ Regional Banking Index KRX
Slide 26: Classified Loans / Total Loans
Classified Loans / Total Loans (%) * Source: S&P Capital IQ. Unweighted Average NASDAQ Regional Banking Index KRX
Slide 27: Classified Loan Trend
Classified Loan Trend ($ in Millions)
Slide 28: Loans by Type
Loans by Type CRE $6.78B C&I $0.97B Other $1.15B
Slide 29: Loan Trends
Loan Trends *Other includes other loan segments that are not listed above, such as Construction, SFR Mortgage. Q4 2023 vs Q4 2022 Total ($174) 2% decline C&I +$21 D&L and Agribus. ($21) CRE ($100) 1% decline Other($54) SBA($20) ($ in Millions)
Slide 30: Owner/Non-Owner Occupied Commercial Real Estate Loans
Owner/Non-Owner Occupied Commercial Real Estate Loans Collateral Type
Slide 31: CRE by Collateral Origination Year
CRE by Collateral Origination Year Collateral Type Balance ($ in Millions) % of Owner Occupied LTV at Origination Avg. Size ($ in Millions) Classified ($ in Millions) 2023 2022 2021 2020 2019 2018 or earlier Industrial $ 2,286 49% 50% $ 1.63 $ 13.16 8% 21% 19% 11% 7% 34% Office 1,115 24% 55% 1.69 -
Slide 32: C&I by Industry
C&I by Industry Industry Balance ($ in Millions) % of C&I Total Real Estate Rental and Leasing $ 222 23% Manufacturing 118 12% Construction 84 9% Wholesale Trade 81 8% Arts, Entertainment, and Recreation 75 8% Administrative and Support and Waste Management and Remediation Services 63 6% Professiona
Slide 33: Line Utilization Trends
Line Utilization Trends Total D&L C&I
Slide 34: Relationship-Centered Deposit Base
Relationship-Centered Deposit Base 100% Core Deposits - 0% Brokered Deposits Cost of Interest-Bearing Deposits and Repos December 2023 1.60% December 2022 0.24%
Slide 35: Diverse Deposit Base
Diverse Deposit Base as Other Real Estate Rental and Leasin Other Industries Construction 1% T% Transportation and \ Warehousing 2% Agriculture, Forestry, Public Administration 6% Fishing and Hunting Educational Services. 3% Property Management 5% Retail Trade. 3% Finance and Insurance Wholesale Tra
Slide 36: Business vs Consumer Deposits
Business vs Consumer Deposits Q4 2023 Q1 2022
Slide 37: Deposit Relationship Tenure
Deposit Relationship Tenure Q1 2022 Q4 2022 Q4 2023 77% of our customer deposit relationships have banked with CBB for 3 years or more
Slide 38: Brokered Deposits / Total Deposits
Brokered Deposits / Total Deposits (%) * Source: S&P Capital IQ. Unweighted Average NASDAQ Regional Banking Index KRX
Slide 39: Cost of Deposits
Cost of Deposits For the Last 5 Years CVBF Ranked Among the 5 Lowest Cost of Deposits of the 50 Banks in the KRX Index Source: S&P Capital IQ. Unweighted Average NASDAQ Regional Banking Index KRX (50 Banks) Current rate cycle to date*: CVBF deposit beta =11.2% *Measured as the growth in deposits cos
Slide 40: Cost of Deposits: Monthly Trends
Cost of Deposits: Monthly Trends * Source: S&P Capital IQ. Unweighted Average NASDAQ Regional Banking Index KRX MoM Growth in Cost of Deposit vs. Effective Federal Funds Rate
Slide 41: Net Interest Income and NIM
Net Interest Income and NIM ($ in Millions)
Slide 42: Net Interest Margin Trend
Net Interest Margin Trend * Source: S&P Capital IQ. Unweighted Average NASDAQ Regional Banking Index KRX
Slide 43: Appendix Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation
Slide 44: Economic Forecast - GDP
Economic Forecast - GDP Note: The weighted economic forecast is based on Moody’s December forecast with a weighting of 60%BL / 20%S3 / 20%S6
Slide 45: Economic Forecast – Unemployment
Economic Forecast – Unemployment Note: The weighted economic forecast is based on Moody’s December forecast with a weighting of 60%BL / 20%S3 / 20%S6
Slide 46: Economic Forecast – CRE Price
Economic Forecast – CRE Price Note: The weighted economic forecast is based on Moody’s December forecast with a weighting of 60%BL / 20%S3 / 20%S6
Slide 47: CRE Office by Loan Amount
CRE Office by Loan Amount Loan Amount Balance ($ in Millions) % of Owner Occupied Avg. Balance ($ in Millions) Classified ($ in Millions) Balance Maturing Next 24 months ($ in Millions) Rate Resets Next 24 Months ($ in Millions) Greater than $20M $ 23 0% $ 23 $ 0 $ 0 $ 0 $10M to $20M 115 27% 14 0 12
Slide 48: CRE Office Loans by Major MSA
CRE Office Loans by Major MSA Los Angeles County Total Balance of $409mm (200 loans) San Francisco County Total Balance of $375,000 (1 loan) San Diego County Total Balance of $93mm (25 loans) Note: Only shows the office loans that are in the major MSA.
Slide 49: Greater LA Business Density Distribution
Greater LA Business Density Distribution Note: Darker Shaded areas represent higher density of businesses within each submarket (HBD) West LA includes Santa Monica and Century City Central LA includes Downtown LA North LA includes Pasadena and Burbank Other LA (includes remaining areas of LA) Market
Slide 50: Greater SD Business Density Distribution
Greater SD Business Density Distribution Area ($ in thousands) $ Loan Balance % of Owner Occupied LTV at Origination Avg. Size Classified Downtown SD (HBD) $ 3,807 41% 54% $ 1,269 $ 0 Other SD 88,702 0% 51% 4,032 0 Total $ 92,509 2% 52% $ 3,700 $ 0 Darker shaded areas represent Higher Business Densi
Slide 51: Greater SF Business Density Distribution
Greater SF Business Density Distribution Area ($ in thousands) $ Loan Balance % of Owner Occupied LTV at Origination Avg. Size Classified Downtown SF (HBD) $ 375 0% 3% $ 375 $ 0 Other SF 0 0% 0% 0 0 Total $ 375 0% 3% $ 375 $ 0 Darker shaded areas represent Higher Business Density (HBD)
Slide 52: Loans by Region
($ in Thousands) # of Center Locations (12/31/23) Average Loans per Location Total Loans (12/31/23) % Los Angeles County 21 $ 155,700 $ 3,269,705 36.7% Central Valley and Sacramento 15 143,380 2,150,700 24.2% Orange County 10 112,790 1,127,896 12.7% Inland Empire (Riverside & San Bernardino Counties
Slide 53: Deposits by Region
Deposits by Region ($ in Thousands) # of Center Locations (9/30/23) Total Deposits (9/30/23) Total Deposits (12/31/23) Average Deposits per Center (12/31/23) Los Angeles County 21 $ 5,169,528 $ 4,526,390 $ 215,542 Inland Empire (Riverside & San Bernardino Counties) 9 3,268,711 3,217,378 357,486 Cent
Slide 54: 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 55: 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 56: Copy of presentation at www.cbbank.com
Copy of presentation at www.cbbank.com