Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Investor Presentation (March 2014)
49 slides from Cvb Financial's investor presentation, Mar 7, 2014
Slide 1: CVB Financial Corp.
CVB Financial Corp. March 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) n Total Assets: $ 6.7 Billion n Gross Loans: $ 3.5 Billion n Total Deposits(Including Repos): $ 5.5 Billion n Total Equity: $ 772 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 29 Years 7 Years Executive Vice President Richard C. Thomas 4 Years 3 Years Chief Financial Officer Executive Vice President James F. Dowd 37 Years 6 Years Chief Credit Officer Executive Vice Pr
Slide 5: Board of Directors
Board of Directors Name CVB Experience Age Ronald Kruse—Chairman 39 Years 75 Linn Wiley—Vice Chairman 22 Years 75 George Borba Jr. 1 Year 46 Steve Del Guercio 1 Year 52 Robert Jacoby 8 Years 72 Ray O’Brien 1 Year 57 Hal Oswalt NEW 65 San Vaccaro 14 Years 81 Chris Myers—CEO 7 Years 51 4Q Results 2013
Slide 6: Who is CVB Financial Corp.
Who is CVB Financial Corp. 4Q Results 2013 | cbbank.com
Slide 7: Largest Banks Headquartered in California
Largest Banks Headquartered in California Rank Name Asset Size (12/31/13) In millions 1 Wells Fargo $1,527,015 2 Union Bank $105,894 3 Bank of the West $66,468 4 First Republic Bank $42,113 5 City National Bank $29,718 6 SVB Financial $26,417 7 East West Bank $24,730 8 OneWest Bank $23,468 9 Cathay
Slide 8: Bank Accomplishments & Ratings
Bank Accomplishments & Ratings Consecutive Quarters of Profitability 97 Consecutive Quarters of Cash Dividends #8 Rated Bank: BankDirector Magazine Bank Performance Scorecard (August 2013) BauerFinancial Report Five Star Rating (July 2013) Fitch Rating BBB (September 2013)
Slide 9: Our Markets
CVB Financial Corp. Our Markets
Slide 10: Existing Locations
Existing Locations* 37 Business Financial Centers 6 Commercial Banking Centers 3 CitizensTrust Locations Corporate Office Business Financial Centers Commercial Banking Centers CitizensTrust San Diego Opening 2014 *As of 02/28/2014
Slide 11: Deposits
Deposits* # of Center Total Deposits Total Deposits (000’s) Locations (12/31/12) (12/31/13) Los Angeles County $1,894,958 $1,921,122 Inland Empire (Riverside & San Bernardino Counties) $1,668,906 $1,842,239 Central Valley $856,155 $866,085 Orange County $582,616 $651,139 Other $244,596 $253,297 Tota
Slide 12: Non-Interest Bearing Deposits
Non-Interest Bearing Deposits $2,600,000 $2,400,000 $2,200,000 $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 Q1 Q2Q3Q4Q1 Q2Q3Q4Q1 Q2Q3Q4Q1 Q2Q3Q4Q1 Q2Q3Q4Q1 Q2Q3Q4Q1 Q2Q3Q4 (000’s) 2007 2008 2009 2010 2011 2012 2013 4Q Results 2013 | cbbank.com
Slide 13: Deposit Cost Comparison
Deposit Cost Comparison Source: Q4 2013 earnings release & other company filings, SNL Financial—peers represent public CA , AZ, HI, NV, OR & WA banks with assets $2—$25 billion. 3.00% CVBF Peers 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 200720082009 2010 201
Slide 14: Total Loans
Total Loans* as of 12/31/2013 Non- Covered Covered Total Loans*% (000’s) Loans* Loans* Los Angeles County $1,294,510 $10,215 $1,304,725 36.56% Central Valley $705,521 $153,730 $859,251 24.08% Inland Empire $604,437 $926 $605,363 16.97% (Riverside & San Bernardino Counties) Orange County $518,664 $0
Slide 15: Total Loans
Total Loans* $4,400,000 $4,200,000 $4,000,000 $3,800,000 $3,600,000 $3,400,000 $3,200,000 $3,000,000 $2,800,000 $2,600,000 $2,400,000 $2,200,000 $2,000,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 2013 (000’s) Total Non-Covered Loans Total Covered Loans *Before deferred loan fe
Slide 16: Loan Portfolio Composition
Loan Portfolio Composition Total Loans by Type Municipal Lease Other, 1.7% Finance Receivables, 2.5% Dairy, Livestock & SFR Mortgage, Agribusiness, 5.3% 8.4% Multi-Family, 5.3% Commercial & Industrial, 14.9% Commercial Construction RE, RE- Non- 1.4% Owner, 37.9% Commercial RE - Owner Occupied, 22.6%
Slide 17: New/Enhanced Lending Initiatives
New/Enhanced Lending Initiatives Residential Real Estate Multi-Family Asset Based Lending Residential and Commercial Construction
Slide 18: Total Covered Loans
Total Covered Loans $ 800,000 $ 700,000 $ 184 million $ 600,000 $ 500,000 $ 400,000 $ 300,000 $ 12.8 million $ 200,000 $ 100,000 $- Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (000’s) 2009 2010 2011 2012 2013 Includes Loans Held for Sale Net of Discount 4Q Results 2013 | cbbank.com
Slide 19: Non-Performing Assets
Non-Performing Assets Non-Covered $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (000’s) 2009 2010 2011 2012 2013 Non-Performing Loans OREO 4Q Results 2013 | cbbank.com 19
Slide 20: Classified Loans
Classified Loans Non-Covered $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (000’s) 2009 2010 2011 2012 2013 4Q Results 2013 | cbbank.com 20
Slide 21: Profits
CVB Financial Corp. Profits
Slide 22: Net Income
Net Income $27,500 $25,000 $22,500 $20,000 $17,500 $15,000 $12,500 $10,000 $7,500 $5,000 $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 (000’s) 2007 2008 2009 2010 2011 2012 2013 Net Income After Taxes $20.4 million FHLB prepayment charge
Slide 23: Earnings
Earnings (000’s) 2009 2010 2011 2012 12 Months to 12/31/2013 Net Interest Income $222,264 $259,317 $234,681 $236,950 $216,266 Provision for Loan Losses($80,500)($61,200)($7,068) $0 $16,750 Other Operating Income/Expenses (Net)($52,515)($111,378)($106,809)($122,257)($88,741) Income Taxes($23,830)($23
Slide 24: Net Interest Margin
Net Interest Margin 4.25% 4.00% 3.75% 3.50% 3.25% 3.00% 2.75% 2.50% 2.25% 2.00% 1.75% 1.50% 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 2007 2008 2009 2010 2011 2012 2013 Normalized* *Normalized excludes accelerated accretion on covered loans 4Q Results 2013 |
Slide 25: Expenses
CVB Financial Corp. Expenses
Slide 26: Expenses
Expenses (000’s) 2010 2011 2012 12 Months to 12/31/2013 Salaries & Employee $69,419 $69,993 $68,496 $71,015 Benefits Promotion & $6,084 $4,977 $4,869 $4,681 Entertainment Stationary & Supplies** $4,965 $3,645 $3,582 $3,535 Software Licenses & $5,031 $3,669 $4,279 $4,671 Maintenance Professional Serv
Slide 27: Bank Borrowings
CVB Financial Corp. Bank Borrowings
Slide 28: Outstanding Debt
Outstanding Debt as of 12/31/2013 Balance at Type of Debt Interest Rate 12/31/2013 FHLB Advance* $199,206 4.52% Fixed Other Borrowings (overnight) $0 Subordinated Debentures CVB Statutory Trust III $25,774 3-Month LIBOR + 1.38% (000’s) Total $224,980 *FHLB Advance maturity is November, 28 2016. As o
Slide 29: Capital
CVB Financial Corp. Capital
Slide 30: Capital Ratios
Capital Ratios Regulatory Regulatory December 31, 2013* Minimum Ratio Well-Capitalized Ratio Tier 1 Risk-based Capital Ratio 4.0% 6.0% 17.83% Total Risk-based Capital Ratio 8.0% 10.0% 19.09% Tier 1 Leverage Ratio 4.0% 5.0% 11.30% Tangible Capital Ratio 10.81% Core Tier 1 Capital Ratio 17.23% * CVB F
Slide 31: Securities & Investments
Securities & Investments 4Q Results 2013 | cbbank.com
Slide 32: Securities Portfolio
Securities Portfolio* —$2.67 Billion— Trust Preferred Yield on securities CMO’s / 0.18% portfolio = 2.54% REMIC’s Municipal for the 4th Quarter 2013 13.75% Bonds 22.00% Government Agency & GSEs 12.26% MBS 51.81% Securities portfolio totaled $2.67 billion at 12/31/2013. The portfolio represents 40% o
Slide 33: Securities Portfolio
Securities Portfolio* $2.67 Billion Mark-to-Market (Pre-tax) $100,000 $80,000 $60,000 $40,000 $20,000 $0 -$20,000 ($16,085) -$40,000 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sept Dec 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 (000’s) *Securities Available For
Slide 34: CVBF Assets
CVBF Assets 12/31/06 $6.1 Billion 12/31/13 $6.7 Billion Loans, Securities net, 42.4% 49.9% Loans, Securities, net, 40.0% Goodwill & 52.1% Intangibles Other, Fed 0.7% 4.6% Balance*, 2.4% Fed Balance*, Goodwill & 0.1% Intangibles Other, 6.9% 0.9% *Includes overnight funds held at the Federal Reserve,
Slide 35: Yield on Securities vs. Yield on Loans
Yield on Securities vs. Yield on Loans 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 Yield on Loans* Yield on Securities 4Q Results 2013 | cbbank.com *Excluding Discount Accretion
Slide 36: CVBF Liabilities
CVBF Liabilities 12/31/06 $5.7 Billion Junior subordinated Debentures, 1.9% 12/31/13 $5.9 Billion Borrowings, Other 4.6% Junior Borrowings, Liabilities, subordinated 36.0% Total 1.1% Debentures, 0.4% Deposits*, 61.4% Other Liabilities, 0.7% Total Deposits*, 93.9% *Includes Customer Repurchase Agreem
Slide 37: New Acquisition
CVB Financial Corp. New Acquisition
Slide 38: Overview of American Security Bank
Overview of American Security Bank Overview Profitability Metrics (LTM as of 12/31/13) Headquarters Newport Beach, CA Net Income (S-Corp, $000s) $2,939 Establishment Date 1990 Net Interest Margin 3.71% Total Branches 5 Efficiency Ratio 83.63% ROAA (S-Corp,%) 0.71% ROATE (S-Corp,%) 6.85% Loan Composi
Slide 39: Pro Forma Branch Map
Pro Forma Branch Map Citizens Business Bank American Security Bank
Slide 40: Transaction Highlights
Transaction Highlights Enhances CVBF Shareholder Value Strong Geographic & Strategic Fit Low Risk Profile Immediately accretive to EPS Modest dilution to tangible book value recouped in under four years Valuable cost savings opportunities Pro forma company well positioned for additional acquisition
Slide 41: Transaction Summary & Pro Forma Assumptions
Transaction Summary & Pro Forma Assumptions Valuation Consideration Anticipated Closing Selected Closing Conditions Estimated Cost Savings One-time Expenses Summary Fair Market Value & Accounting Adjustments $57.0 million 133% Tangible Equity 4.3% Core Deposit Premium 100% cash Mid-year 2014 Approva
Slide 42: Estimated Financial Impact
Estimated Financial Impact 2015e EPS TBVPS Impact Internal Rate of Return Capital Ratios at Closing (assumed 6/30/14) 5% EPS Accretion (estimated) ~3.5% dilutive to tangible book value per share at closing (assumed 6/30/14) Earn back in under four years (pro forma basis) Earn back in under 6 months
Slide 43: Our Growth Strategy
CVB Financial Corp. Our Growth Strategy
Slide 44: 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.
Slide 45: 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
Slide 46: Three Areas of Growth
Three Areas of Growth Same Store DeNovo Sales Acquisitions —Banks— —Trust—
Slide 47: Acquisition Strategy
Acquisition Strategy —Banks— Target size: 200 million to $2 billion in assets 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— In- market & ‘new’ markets 4Q Results 2013
Slide 48: 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 49: Copy of presentation at www.cbbank.com
Copy of presentation at www.cbbank.com 4Q Results 2013 | cbbank.com