Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Investor Presentation (May 2014)
45 slides from Cvb Financial's investor presentation, May 29, 2014
Slide 1: CVB Financial Corp. May/June 2014
CVB Financial Corp. May/June 2014
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: $6.9 Billion ? Gross Loans: $3.4 Billion ? Total Deposits (Including Repos): $5.7 Billion ? Total Equity: $809 Million ? Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974 ? Locations in 39 cities
Slide 4: Experienced Leadership
Experienced Leadership Name Position Banking Experience CVBF Service Christopher D. Myers President & CEO 30 Years 8 Years Richard C. Thomas Executive Vice President Chief Financial Officer 4 Years 3 Years James F. Dowd ECxheiecfu tCivree dViitc Oe fPfirceesirdent 37 Years 6 Years David C. Harvey Ex
Slide 5: Board of Directors
Board of Directors As of May 23rd, 2014 Name CVB Experience Age Linn Wiley—Chairman 22 Years 75 George Borba Jr.—Vice Chairman 1 Year 46 Ray O’Brien—Vice Chairman 2 Years 57 Steve Del Guercio 2 Years 52 Robert Jacoby 8 Years 72 Hal Oswalt NEW 66 San Vaccaro 14 Years 81 Chris Myers CEO 8 Years 52 1Q
Slide 6: Who is CVB Financial Corp.?
Who is CVB Financial Corp.? 1Q Results 2014 | cbbank.com
Slide 7: Largest Banks Headquartered in California
Largest Banks Headquartered in California Rank Name Asset Size (3/31/14) Wells Fargo $1,546,707 Union Bank $107,237 In millions Bank of the West $67,725 First Republic Bank $44,346 City National Bank $29,718 SVB Financial $29,711 East West Bank $27,401 OneWest Bank $21,799 9 Cathay Bank $11,291 10 C
Slide 8: Bank Accomplishments & Ratings
Bank Accomplishments & Ratings ? 148 Consecutive Quarters of Profitability ? 98 Consecutive Quarters of Cash Dividends ? #8 Rated Bank: BankDirectorMagazine ? Bank Performance Scorecard (August 2013) ? BauerFinancial Report ? Five Star Rating (December 2013) ? Fitch Rating BBB (S t b 1Q Results 2014
Slide 9: Our Markets
CVB Financial Corp. Our Markets
Slide 10: Existing Locations Business Financial Centers
Existing Locations* 42 Business Financial Centers Commercial Banking Centers CitizensTrust Locations Corporate Office Business Financial Centers Commercial Banking Centers 1Q Results 2014 | cbbank.com 10 g CitizensTrust San Diego Opening June 2nd 2014 American Security Bank *Locations as of May 15th
Slide 11: Deposits
Deposits* (000’s) # of Center Locations Total Deposits (3/31/13) Total Deposits (3/31/14) Los Angeles County 17 $1,818,916 $1,959,624 Inland Empire (Riverside & San Bernardino Counties) 9 $1,698,844 $1,948,785 Central Valley 9 $834,170 $870,202 Orange County 8 $572,867 $705,761 Other 0 $261,479 $253
Slide 12: Non-Interest Bearing Deposits
Non-Interest Bearing Deposits $2 400 000 $2,600,000 $2,200,000 2,400,000 $1,800,000 $2,000,000 $1,400,000 $1,600,000 $1,000,000 $1,200,000 Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 2007 2008 2009 2010 2011 2012 2013 2014 (000’s)
Slide 13: Deposit Cost Comparison
Deposit Cost Comparison Source: Q1 2014 earnings release & other company g py filings, SNL Financial—peers represent public CA , AZ, HI, NV, OR & WA banks with assets $2—$25 billion. | Peer Data as of 12/31/2013 3.00% CVBF Peers 2.00% 2.50% 1.50% 0 50% 1.00% 0.00% 0.50% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 14: Total Loans
Total Loans* as of 03/31/2014 Non- Covered (000’s) Covered Loans* Loans* Total Loans* % Los Angeles County $1,286,219 $9,989 $1,296,208 37.87% Central Valley $649,941 $137,660 $787,601 23.01% Inland Empire ( Riverside & San Bernardino Counties) $579,455 $640 $580,095 16.95% ) Orange County $496,791
Slide 15: Total Loans
Total Loans* $3 800 000 $4,000,000 $4,200,000 $4,400,000 $3 200 000 $3,400,000 $3,600,000 3,800,000 $2 600 000 $2,800,000 $3,000,000 3,200,000 $2 000 000 $2,200,000 $2,400,000 2,600,000 2,000,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2011 2012 2013 2014 ( 000’s) Total Non Covered L
Slide 16: Loan Portfolio Composition
Loan Portfolio Composition Total Loans by Type Municipal Lease Finance Receivables, 2.4% Dairy, Livestock & Agribusiness, 6.2% SFR Mortgage, 6% Other, 1.7% Commercial & Industrial, 14.9% Multi-Family, 5.6% 5.6% Construction RE, Commercial RE- 1.3% Non-Owner, 39 3% Commercial RE - Owner Occupied, 23.
Slide 17: New/Enhanced Lending Initiatives
New/Enhanced Lending Initiatives • Residential Real Estate • Multi-Family • Asset Based Lending • Residential and Commercial Construction 1Q Results 2014 | cbbank.com 17
Slide 18: Total Covered Loans
Total Covered Loans $700,000 $800,000 $184 million $500,000 $600,000 $300,000 $400,000 $100,000 $200,000 $11.2 million $- Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 (000’s) 2009 2011 2012 2013 2014 1Q Results 2014 | cbbank.com 000 2010 Includes Loans Held for Sale Net of Discount
Slide 19: Non-Performing Assets
Non-Performing Assets Non-Covered $180,000 $200,000 $120,000 $140,000 $160,000 $80,000 $100,000 $20,000 $40,000 $60,000 $- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2011 2012 2013 2014 (000’s) 009 0 0 0 0 0 3 0 Non-Performing Loans OREO
Slide 20: Classified Loans
Classified Loans Non-Covered $700,000 $800,000 $500 000 $600,000 $400,000 500,000 $200,000 $300,000 $- $100,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2011 2012 2013 2014 (000’s)
Slide 21: Profits
CVB Financial Corp. Profits
Slide 22: Net Income
Net Income $27,500 $30,000 $32,500 $20,000 $22,500 $25,000 $12,500 $15,000 $17,500 $2 500 $5,000 $7,500 $10,000 $- 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 Q1 Q2 Q3 Q4 Q1 2007 2008 2009 2010 2011 2012 2013 2014 (000’s) Net Income After Taxes $20.4 million FHLB pr
Slide 23: Earnings
Earnings (000’s) 2010 2011 2012 2013 3 Months to 3/31/2014 Net Interest Income $259,317 $234,681 $236,950 $216,266 $56,942 Provision for Loan Losses ($61,200) ($7,068) $0 $16,750 $7,500 Other Operating Income/Expenses (Net) ($111,378) ($106,809) ($122,257) ($88,741) ($19,659) Income Taxes ($23,804)
Slide 24: Net Interest Margin
Net Interest Margin 75% 4.00% 4.25% 00% 3.25% 3.50% 3.75% 2.50% 2.75% 3.00% 1.75% 2.00% 2.25% 1.50% Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 2007 2008 2009 2010 2011 2012 2013 2014 1Q Results 2014 | cbbank.com 24 *Normalized excludes accelerated accretion on covered loans Normalize
Slide 25: Expenses
CVB Financial Corp. Expenses
Slide 26: Expenses
Expenses (000’s) 2011 2012 2013 3 Months to 3/31/2014 Salaries & Employee Benefits $69,993 $68,496 $71,015 $19,417 Promotion & Entertainment $4,977 $4,869 $4,681 $1,266 Stationery & Supplies** $3,645 $3,582 $3,535 $924 Software Licenses & Maintenance $3,669 $4,279 $4,671 $1,065 Professional Services
Slide 27: Capital
CVB Financial Corp. Capital
Slide 28: Capital Ratios
Capital Ratios Regulatory Minimum Ratio Regulatory Well-Capitalized Ratio March 31, 2014* Tier 1 Risk-based Capital Ratio 4.0% 6.0% 18.98% Total Risk-based Capital Ratio 8.0% 10.0% 20.24% Tier 1 Leverage Ratio 4.0% 5.0% 11.48% Tangible Capital Ratio 10.98% Core Tier 1 Capital Ratio 18.36% 1Q Results
Slide 29: Recent 'CVBF' Share Repurchases
Recent ‘CVBF’ Share Repurchases • 7,420,678= remaining shares authorized for repurchase as of May 19th, 2014 • 344,493 = shares repurchased in April/May of 2014 at an average price of $14.15 per share 1Q Results 2014 | cbbank.com 29
Slide 30: Securities & Investments
Securities & Investments 1Q Results 2014 | cbbank.com
Slide 31: Securities Portfolio
Securities Portfolio* —$2.75 Billion— Municipal Bonds 20.53% CMO’s / REMIC’s 12.78% Trust Preferred Yield on securities 0.18% portfolio = 2.67% for the 1st Quarter 2014 Government Agency & GSEs 11.52% MBS 54.99% ? Securities portfolio totaled $2.75 billion at 3/31/2014. The portfolio represents 39.9
Slide 32: Securities Portfolio
Securities Portfolio* $2.75 Billion M kt M k t $100,000 Mark-to-Market (Pre-tax) $60,000 $80,000 $20,000 $40,000 $8 696 $20 000 $0 8,696 -$40,000 -$20,000 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sept Dec Mar 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 (000
Slide 33: CVBF Assets
CVBF Assets 12/31/06 $6.1 Billion 3/31/14 $6.9 Billion L Securities Securities 39 9% Loans, 42.4% Loans, net 49.9% net 48.3% 39.9% Fed Balance* Other 4.6% 2.4% Goodwill & Intangibles 0.7% Fed Balance* 5.3% Other 5.7% Goodwill & Intangibles 0.8% 1Q Results 2014 | cbbank.com 33 *Includes overnight fun
Slide 34: Yield on Securities vs. Yield on Loans
Yield on Securities vs. Yield on Loans 5.00% 6.00% 4.00% 00% 3.00% 1.00% 2.00% 0.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2011 2012 2013 2014 Yield on Loans* Yield on Securities *Excluding Discount Accretion
Slide 35: CVBF Liabilities
CVBF Liabilities 12/31/06 $5 7 Junior subordinated Debentures 1.9% 5.7 Billion 3/31/14 $6.1 Billion Total Deposits* 61 4% Borrowings 36.0% Other Liabilities 2.1% Borrowings 3.3% Junior subordinated Debentures 0.4% 61.4% Other Liabilities 0.7% Total Deposits* 94 2% 94.2% *Includes Customer Repurchase
Slide 36: New Acquisition: American Security Bank
New Acquisition “American Security Bank” 1Q Results 2014 | cbbank.com 36
Slide 37: Overview of American Security Bank
Overview of American Security Bank Overview Profitability Metrics (LTM as of 12/31/13) Balance Sheet (12/31/13) Headquarters Newport Beach, CA Establishment Date 1990 Net Income (S-Corp, $000s) $2,939 Net Interest Margin 3 71% Total Assets ($000s) $412,295 Total Loans ($000s) $252 605 Total Branches
Slide 38: Pro Forma Branch Map
Pro Forma Branch Map Citizens Business Bank American Security Bank
Slide 39: Transaction Summary & Pro Forma Assumptions
Transaction Summary & Pro Forma Assumptions • $57.0 million • 133% Tangible Equity Valuation g q y • 4.3% Core Deposit Premium Consideration • 100% cash Acquisition Date • May 15th, 2014 P F A ti Estimated Cost Savings • 40%+ of American Security noninterest Pro Forma Assumptions expense base 2015e
Slide 40: Our Vision
Our Vision Citizens Business Bank will strive to become the dominant financial services company operating throughout the state of California, servicing the comprehensive financial needs of successful small to medium sized businesses and their owners. Te Resuls 2014 | chba
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 1Q Results 2014 | cbbank.com 42
Slide 42: Three Areas of Growth
Three Areas of Growth Same Store DeNovo Sales Acquisitions —Banks— —Trust— 1Q Results 2014 | cbbank.com 43
Slide 43: Acquisition Strategy
Acquisition Strategy • Target size: $200 million to $2 billion in assets q gy —Banks— • 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— I k t & ‘ ’ k t • In- mark
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
Slide 45: Copy of presentation at www.cbbank.com
Copy of presentation at www.cbbank.com