Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Investor Presentation (February 2017)
48 slides from Cvb Financial's investor presentation, Feb 1, 2017
Slide 1: CVB Financial Corp.
CVB Financial Corp. February 2017
Slide 2: Safe Harbor
Safe Harbor Certain matters set forth herein 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 and our future financial position and
Slide 3: CVB Financial Corp. (CVBF)
CVB Financial Corp. (CVBF) Total Assets: $8.1Billion Gross Loans: $4.4Billion Total Deposits (Including Repos): $6.9Billion Total Equity: $1.0Billion Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974 Source: Q4 2016 earnings release & com
Slide 4: Experienced Leadership
Experienced Leadership Name Position Banking ExperienceCVBF Service Christopher D. Myers President & CEO 32Years10Years E. Allen Nicholson Executive Vice President 21YearsNew Chief Financial Officer Dave F. Farnsworth Executive Vice President 32YearsNew Chief Credit Officer David C. Harvey Executive
Slide 5: Board of Directors
Board of Directors Name CVBF Experience Age Ray O’Brien—Chairman 4 Years60 George Borba Jr.—Vice Chairman 3 Years49 Steve Del Guercio 4 Years55 Robert Jacoby 11 Years75 Kristina Leslie 1 Year 51 Hal Oswalt 2 Years68 Anna Kan New43 Chris Myers—CEO 10 Years54 cbbank.com 5
Slide 6: Who is CVB Financial Corp.?
Who is CVB Financial Corp.? cbbank.com
Slide 7: Largest Bank Holding Companies Headquartered in California
Largest Bank Holding Companies Headquartered in California Rank Name Asset Size (12/31/16) 1 Wells Fargo & Company $1,930,115 2 First Republic Bank* $73,278 3 SVB Financial Group $44,684 4 East West Bancorp $34,789 5 Pacwest Bancorp $21,870 , 7 Hope Bancorp, Inc. $13,442 8 Banc of California, Inc. $
Slide 8: Other Bank Accomplishments & Ratings
Other Bank Accomplishments & Ratings Consecutive Quarters of Profitability 109 Consecutive Quarters of Cash Dividends Ranked #1 Forbes, 2016 Best Banks in America (January 2016) Ranked Top 5 Bank in US three consecutive years* Bank Director, 2016 Bank Performance Scorecard (July 12, 2016) BauerFinan
Slide 9: Our Markets
CVB Financial Corp. Our Markets
Slide 10: Existing Locations
Existing Locations 42 Business Financial Centers 8 Commercial Banking Centers 3 CitizensTrust Locations Santa Barbara Ventura Corporate Office Business Financial Centers Commercial Banking Centers CitizensTrust
Slide 11: New Acquisition: Valley Commerce Bancorp
New Acquisition Valley Commerce Bancorp ‘VCBP’ cbbank.com
Slide 12: Transaction Highlights
Transaction Highlights $23.4 million in cash(1) 1,942,673 shares of CVBF stock issued (2) Transaction Aggregate merger consideration of $76.3 million(3), including a Structure special dividend(4) paid to VCBP shareholders Implied consideration mix of approximately 62% stock and 38% cash(1)(2) Pro Fo
Slide 13: Pro Forma Branch Footprint
Pro Forma Branch Footprint CVBF (50) VCBP (4) Source: SNL Financial. cbbank.com 13
Slide 14: Financial Impact
Financial Impact Deal value/ tangible book value (1) of 1.22x Deal value / adjusted tangible book value(2) of 1.68x Valuation Multiples Deal value/ last twelve months earnings of 14.9x Deal value (with special dividend(2))/ last twelve months earnings of 18.3x Earnings accretion in 2017(3) Tangible
Slide 15: Financial Performance
Financial Performance cbbank.com
Slide 16: Deposits
Deposits* # of Center Total DepositsTotal Deposits (000’s) Locations (12/31/15)(12/31/16) Los Angeles County 18 $2,423,655$2,517,252 Inland Empire 9 $1,989,432$2,090,209 (Riverside & San Bernardino Counties) Orange County 9 $964,868$1,075,402 Central Valley 8 $912,532$927,572 Ventura & Santa Barbara
Slide 17: Total Deposits
Total Deposits* $8,500,000 $7,500,000 $6,500,000 $5,500,000 $4,500,000 $3,500,000 $2,500,000 $1,500,000 $500,000 (000’s) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 2010 2011 20122013201420152016 Non-Int Bearing Dep Interest Bearing Deposits* *Interest Bearing Deposits includes REPOs cb
Slide 18: Deposit Cost Comparison
Deposit Cost Comparison 1.00% CVBFPeers 0.90% 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% Q1Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 Q4Q1Q2 Q3 Q4Q1Q2 Q3 Q4Q1Q2 Q3 Q4Q1Q2 Q3 Q4 2010 2011 20122013201420152016 Source: Q2 2016 earnings release & other company filings, SNL Financial—peers represent public C
Slide 19: Total Loans
Total Loans* # of Center Total Loans* Loans per Locations (12/31/2016) (000’s) Location Los Angeles County 18 $90,397$1,627,137 Central Valley 8 $105,964$847,713 Inland Empire (Riverside & San Bernardino Counties) 9 $78,181$703,627 Orange County 9 $65,545$589,905 Ventura/Santa Barbara Counties 6 $44
Slide 20: Total Loans
Total Loans* $4,600,000 $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 Q2Q3 Q4Q1 Q2Q3 Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 (000’s) 2010 201120122013201420152016 TotalLoans* *Starting in the 4th q
Slide 21: Loan Portfolio Composition
Loan Portfolio Composition Total Loans by Type Municipal Lease Finance Other, 1.8% Receivables, 1.5% Dairy, Livestock & SFR Mortgage, Agribusiness, 5.7% 7.7% Multi-Family, 6.3% Commercial & Industrial, 11.5% Construction RE, 1.9% Commercial RE- Non-Owner, 39.3% Commercial RE - Owner Occupied, 24.3%
Slide 22: Credit Quality
CVB Financial Corp. Credit Quality
Slide 23: Non-Performing Assets
Non-Performing Assets* $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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4 (000’s) 2009 2010 2011 2012 2013201420152016 Non-Performing Loans OREO *Non-Covered assets |
Slide 24: Classified Loans
Classified Loans* $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $- (000’s) 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 Q2 Q3 Q4 2009 201020112012 2013201420152016 *Non-Covered loans| Starting in the 4th quarter of 2014, covered and
Slide 25: Loans: Net Charge-Offs
Loans: Net Charge-Offs* -$10,000 $0 2009 2010201120122013201420152016 $10,000 $20,000 $30,000 January 2012 – December2016 = $12,426 Net Recoveries $40,000 $50,000 $60,000 $70,000 (000’s) Net Charge-Offs/Recoveries *Non-Covered | Starting in the 4th quarter of 2014, covered and non-covered loans are
Slide 26: Profits
CVB Financial Corp. Profits
Slide 27: Net Income
Net Income $110,000 $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- (000’s) 2007 200820092010201120122013201420152016 Net Income After Taxes $20.4 million FHLB prepayment charge $13.9 million FHLB prepayment charge cbbank.com 27
Slide 28: Earnings
Earnings (000’s) 2012 2013201420152016 Net Interest Income $236,950 $216,266$236,514$252,942$257,074 Recapture of Provision for Loan Losses ,,,, Other Operating Income/Expenses (Net) ($122,257) ($88,741)($89,817)($107,176)($101,188) Income Taxes ($37,413) ($48,667)($58,776)($52,221)($60,857) Net Pro
Slide 29: 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% Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 2007 2008 20092010201120122013201420152016 Normalized* *Normalized tax equivalent excludes accretion on covered loans (Purchase
Slide 30: Efficiency & Expenses
Efficiency & Expenses cbbank.com
Slide 31: Efficiency Ratio
Efficiency Ratio 90.00% 80.00% . 60.00% 50.00% 47.30% 40.00% 30.00% 20.00% 10.00% 0.00% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 20122013201420152016 Efficiency Ratio $ 20.4 million FHLB prepayment charge $ 13.9 million FHLB prepayment charge cbbank.com 31
Slide 32: Non-Interest Expense as a % of Average Assets
Non-Interest Expense as a % of Average Assets 3.50% 3.00% 2.50% 2.00% 1.72% 1.50% 1.00% 0.50% . Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 20122013201420152016 Non-Interest Expense as a % of Average Assets $ 20.4 million FHLB prepayment charge $ 13.9 million FHLB prepayment
Slide 33: Capital
CVB Financial Corp. Capital
Slide 34: Capital Ratios
Capital Ratios Tier 1 Risk-based Capital Ratio Total Risk-based Capital Ratio Common Equity Tier 1 Capital Ratio Tier 1 Leverage Ratio * CVB Financial Corp. – Consolidated Adequately Well-Capitalized December 31, Capitalized Ratio Ratio 2016* 6.0% 8.0% 16.9% 8.0% 10.0% 18.2% 4.5% 6.5% 16.5% 4.0% 5.0
Slide 35: Securities & Investments
Securities & Investments cbbank.com
Slide 36: Securities Portfolio
Securities Portfolio* —$3.2 Billion— Yield on securities portfolio = 2.31% for the 4th Quarter 2016 $2.27 Billion $911.7 Million *Available For Sale *Held to Maturity Municipal Municipal Bonds, CMO’s / Bonds 3.5% CMO’s /31.9% REMIC’s 15.3% Government REMIC’s, Agency/GSEs 26.8% and other 0.4% Governm
Slide 37: Securities Portfolio
Securities Portfolio* $2.27 Billion Mark-to-Market (Pre-tax) $100,000 $80,000 $14,592 $60,000 $40,000 $20,000 $0 -$20,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4 2011 2012 2013201420152016 (000’s) *Available For Sale cbbank.com
Slide 38: CVBF Assets & Liabilities
‘CVBF’ Assets & Liabilities 12/31/16 $8.1 Billion 12/31/16 $7.1 Billion Borrowings Other0.7%Subordinated Junior LiabilitiesDebentures Securities 1.3%0.4% 39.4% Loans, net 53.7% Fed Balance* Goodwill & 0.6% Total Intangibles Other Deposits** 1.2% 5.1% 97.6% *Includes overnight funds held at the Feder
Slide 39: Yield on Securities vs. Yield on Loans
Yield on Securities vs. Yield on Loans 6.00% 5.46% 5.00% 5.17% 4.49% 4.00% 3.00% 2.31% 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 201120122013201420152016 Yield on Loans* Yield onSecurities** *Excluding Discount Accreti
Slide 40: Our Growth Strategy
Our Growth Strategy cbbank.com
Slide 41: 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. cbbank.com 41
Slide 42: 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 cbbank.com 42
Slide 43: Three Areas of Growth
Three Areas of Growth Same StoreDeNovo SalesSan DiegoOxnard (2014)(2015) Santa Barbara (2015) Acquisitions AmericanCounty Security BankCommerce Bank (2014)Valley(2016) Business Bank (deal anticipated to close Feb 2017) cbbank.com 43
Slide 44: Acquisition Strategy
Acquisition Strategy —Banks— Target size: $200 million to $2 billion in assets Financial & Strategic In-market and/or adjacent geographic market (California) —Banking Teams— In-market & ‘new’ markets cbbank.com 44
Slide 45: 2017 De Novo
2017 De Novo San Diego (Downtown) Loan Production Office cbbank.com 45
Slide 46: 2016/2017 'Critical Few'
2016/2017 ‘Critical Few’ Quality Loan Growth Expand Our Footprint DeNovo Growth Acquisition Relationship Banking Cyber Security Recruit, Retain & Train Key People cbbank.com 46
Slide 47: Copy of presentation at www.cbbank.com
Copy of presentation at www.cbbank.com cbbank.com
Slide 48: Additional Information About the Proposed Transaction and Where to Find It
Additional Information About the Proposed Transaction and Where to Find It In connection with the proposed acquisition of Valley Commerce Bancorp (VCBP) by CVB, CVB has filed with the SEC a Registration Statement on Form S-4 (File No. 333-214576) that includes a Proxy Statement of VCBP and a Prospec
CVB Financial — Investor Presentation (February 2017) on 6ix