Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Investor Presentation (May 2014)
46 slides from Cvb Financial's investor presentation, May 12, 2014
Slide 1: CVB Financial Corp.
CVB Financial Corp. May 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 Ø Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974 Ø 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 Executive Vice President Chief Credit Officer 37 Years 6 Years David C. Harvey E
Slide 5: Board of Directors
Board of Directors 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 Ronald Kruse (Retiring May 2014) 39 Years 75 Hal Oswalt NEW 66 San Vaccaro 14 Years 81
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) 1 Wells Fargo $1,546,707 2 Union Bank $107,237 3 Bank of the West $67,725 4 First Republic Bank $44,346 5 City National Bank $29,718 6 SVB Financial $29,711 7 East West Bank $27,401 8 OneWest Bank $21,799 9 Cathay Bank $11,291
Slide 8: Bank Accomplishments & Ratings
Bank Accomplishments & Ratings § 148 Consecutive Quarters of Profitability § 98 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
Our Markets CVB Financial Corp.
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
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 Column1 Non-Int Bearing Dep 2007 Q1 $ 1,264,243 Q2 $ 1,340,495 Q3 $ 1,292,825 Q4 $ 1,295,959 2008 Q1 $ 1,218,660 Q2 $ 1,281,838 Q3 $ 1,302,205 Q4 $ 1,334,248 2009 Q1 $ 1,396,087 Q2 $ 1,420,535 Q3 $ 1,416,558 Q4 $ 1,561,981 2010 Q1 $ 1,598,022 Q2 $ 1,646,717 Q3 $ 1,699,0
Slide 13: Deposit Cost Comparison
Deposit Cost Comparison Column1 CVBF Peers 2007 2.03% 2.70% 2008 1.09% 1.99% 2009 0.63% 1.33% 2010 Q1 0.48% 0.92% Q2 0.43% 0.83% Q3 0.37% 0.74% Q4 0.33% 0.63% 2011 Q1 0.25% 0.60% Q2 0.20% 0.54% Q3 0.17% 0.50% Q4 0.15% 0.49% 2012 Q1 0.14% 0.47% Q2 0.13% 0.40% Q3 0.12% 0.38% Q4 0.11% 0.41% 2013 Q1 0.1
Slide 14: Total Loans
Total Loans* as of 03/31/2014 (000’s) Non-Covered Loans* Covered 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 $0 $
Slide 15: Total Loans
Total Loans* Column1 Column2 Total Non-Covered Loans Total Covered Loans 2010 Q1 $ 3,508,590 $ 602,381 Q2 $ 3,507,197 $ 583,770 Q3 $ 3,427,592 $ 547,573 Q4 $ 3,382,165 $ 488,776 2011 Q1 $ 3,258,833 $ 446,876 Q2 $ 3,205,097 $ 407,674 Q3 $ 3,174,604 $ 354,558 Q4 $ 3,220,076 $ 330,412 2012 Q1 $ 3,186,6
Slide 16: Loan Portfolio Composition
Loan Portfolio Composition Total Loans by Type Total Loans Municipal Lease Finance Receivables 2.4% Dairy, Livestock & Agribusiness 6.2% Commercial & Industrial 14.9% Construction RE 1.3% Commercial RE - Owner Occupied 23.0% Commercial RE- Non-Owner 39.3% Multi-Family 5.6% SFR Mortgage 5.6% Other 1.
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
Slide 18: Total Covered Loans
Total Covered Loans Column1 Net of Discount Discount 2009 Q4 $ 470,634 $ 184,419 2010 Q1 $ 438,539 $ 163,842 Q2 $ 424,377 $ 159,393 Q3 $ 403,821 $ 143,752 Q4 $ 374,013 $ 114,763 2011 Q1 $ 348,759 $ 98,117 Q2 $ 334,225 $ 73,449 Q3 $ 286,063 $ 68,495 Q4 $ 262,533 $ 67,879 2012 Q1 $ 245,714 $ 59,330 Q2
Slide 19: Non-Performing Assets Non-Covered
Non-Performing Assets Non-Covered Column1 Non-Performing Loans OREO 2009 Q1 $ 48,037 $ 8,666 Q2 $ 51,265 $ 4,035 Q3 $ 58,134 $ 1,137 Q4 $ 69,779 $ 3,936 2010 Q1 $ 76,840 $ 15,178 Q2 $ 82,850 $ 15,001 Q3 $ 158,871 $ 17,387 Q4 $ 157,020 $ 5,290 2011 Q1 $ 108,150 $ 6,240 Q2 $ 75,050 $ 13,718 Q3 $ 65,21
Slide 20: Classified Loans Non-Covered
Classified Loans Non-Covered Column1 Classified Loans (non Covered) 2009 Q1 $ 339,242 Q2 $ 392,128 Q3 $ 492,175 Q4 $ 590,595 2010 Q1 $ 658,766 Q2 $ 683,959 Q3 $ 644,301 Q4 $ 654,149 2011 Q1 $ 588,673 Q2 $ 445,253 Q3 $ 357,239 Q4 $359,179 2012 Q1 $334,117 Q2 $ 289,150 Q3 $ 302,526 Q4 $ 314,008 2013 Q
Slide 21: Profits
Profits CVB Financial Corp.
Slide 22: Net Income
Net Income Column1 Net Income 2007 Q1 $ 15,142 Q2 $ 15,954 Q3 $ 16,121 Q4 $ 13,367 2008 Q1 $ 16,184 Q2 $ 17,152 Q3 $ 17,460 Q4 $ 12,277 2009 Q1 $ 13,168 Q2 $ 15,861 Q3 $ 19,322 Q4 $ 17,068 2010 Q1 $ 16,119 Q2 $19,015 Q3 $ 17,927 Q4 $ 9,874 2011 Q1 $ 16,600 Q2 $ 21,038 Q3 $ 22,383 Q4 $ 21,712 2012 Q1
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 Column1 Normalized 2007 Q1 3.02% Q2 2.92% Q3 3.11% Q4 3.06% 2008 Q1 3.25% Q2 3.43% Q3 3.43% Q4 3.62% 2009 Q1 3.74% Q2 3.76% Q3 3.72% Q4 3.73% 2010 Q1 3.86% Q2 3.80% Q3 3.73% Q4 3.66% 2011 Q1 3.78% Q2 3.92% Q3 3.81% Q4 3.62% 2012 Q1 3.69% Q2 3.77% Q3 3.60% Q4 3.60% 2013 Q1 3.54% Q
Slide 25: Expenses
Expenses CVB Financial Corp.
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 Stationary & Supplies** $3,645 $3,582 $3,535 $924 Software Licenses & Maintenance $3,669 $4,279 $4,671 $1,065 Professional Services
Slide 27: Capital
Capital CVB Financial Corp.
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% * CVB Fina
Slide 29: Recent 'CVBF' Share Repurchases
Recent ‘CVBF’ Share Repurchases • 7,642,160 = remaining shares authorized for repurchase as of May 1st, 2014 123,011 = shares repurchased in April 2014 at an average price of $14.12 per share
Slide 30: Securities & Investments
Securities & Investments CVB Financial Corp.
Slide 31: Securities Portfolio $2.75 Billion
Securities Portfolio* --$2.75 Billion-2- Yield on securities portfolio = 2.67% for the 1st Quarter 2014 Sales Municipal Bonds 20.53% Government Agency & GSEs 11.52% MBS 54.99% CMO’s / REMIC’s 12.78% Trust Preferred 0.18% Ø Securities portfolio totaled $2.75 billion at 3/31/2014. The portfolio repres
Slide 32: Securities Portfolio Mark-to-Market (Pre-tax)
Securities Portfolio* $2.75 Billion Mark-to-Market (Pre-tax) Column3 Mark to Market Column1 Jun 09 $ 42,197 Sep 09 $ 82,480 Dec 09 $ 47,154 Mar 10 $ 58,178 Jun 10 $ 75,117 Sep 10 $ 49,022 Dec 10 $ 10,664 Mar 11 $ 15,068 Jun 11 $ 43,390 Sep 11 $ 67,648 Dec 11 $ 71,498 Mar 12 $ 71,425 Jun 12 $ 75,145
Slide 33: CVBF Assets
CVBF Assets 12/31/06 $6.1 Billion Sales Securities 42.4% Fed Balance* 2.4% Other 4.6% Goodwill & Intangibles 0.7% Loans, net 49.9% 3/31/14 $6.9 Billion Column1 Securities 39.9% Fed Balance* 5.3% Other 5.7% Goodwill & Intangibles 0.8% Loans, net 48.3%
Slide 34: Yield on Securities vs. Yield on Loans
Yield on Securities vs. Yield on Loans Column1 Yield on Loans* Yield on Securities 2009 Q1 5.46% 5.17% Q2 5.46% 5.04% Q3 5.56% 4.86% Q4 5.58% 4.81% 2010 Q1 5.25% 4.85% Q2 5.35% 4.63% Q3 5.26% 4.21% Q4 5.17% 3.62% 2011 Q1 5.28% 3.72% Q2 5.38% 3.79% Q3 5.45% 3.65% Q4 5.37% 3.24% 2012 Q1 5.32% 3.03% Q2
Slide 35: CVBF Liabilities
CVBF Liabilities 12/31/06 $5.7 Billion Sales Total Deposits* 61.4% Other Liabilities 0.7% Borrowings 36.0% Junior subordinated Debentures 1.9% 3/31/14 $6.1 Billion Sales Total Deposits* 94.2% Other Liabilities 2.1% Borrowings 3.3% Junior subordinated Debentures 0.4%
Slide 36: New Acquisition "American Security Bank"
New Acquisition “American Security Bank” CVB Financial Corp.
Slide 37: Overview of American Security Bank
Overview of American Security Bank Overview Headquarters Newport Beach, CA Establishment Date 1990 Total Branches 5 Profitability Metrics (LTM as of 12/31/13) Net Income (S-Corp, $000s) $2,939 Net Interest Margin 3.71% Efficiency Ratio 83.63% ROAA (S-Corp,%) 0.71% ROATE (S-Corp,%) 6.85% Balance Shee
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 Valuation • $57.0 million • 133% Tangible Equity 4.3% Core Deposit Premium Consideration 100% cash Anticipated Closing May 15th, 2014 Pro Forma Assumptions Estimated Cost Savings • 40%+ of American Security noninterest expense base 2015e EPS 5% EPS Accreti
Slide 40: Our Growth Strategy
Our Growth Strategy CVB Financial Corp.
Slide 41: 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 42: Target Customer
List Paragraph;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
Slide 43: Three Areas of Growth
Three Areas of Growth Sales Same Store Sales 3 De Novo 3 Acquisitions 3
Slide 44: Acquisition Strategy
List Paragraph;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 &
Slide 45: 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 1Q Results 2014 | cbbank.com
Slide 46: CVB Financial Corp.
CVB Financial Corp. Copy of presentation at www.cbbank.com