Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Merger or Acquisition (November 2016)
49 slides from Cvb Financial's merger presentation, Nov 2, 2016
Slide 1: CVB Financial Corp.
CVB Financial Corp. November 2016
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 regarding the Company’s future financi
Slide 3: CVB Financial Corp. (CVBF)
CVB Financial Corp. (CVBF) Total Assets: $8.0 Billion Gross Loans: $4.3 Billion Total Deposits (Including Repos): $6.9 Billion Total Equity: $1.0 billion Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974 Source: Q3 2016 earnings release &
Slide 4: Experienced Leadership
Experienced Leadership Name Position Banking ExperienceCVBF Service Christopher D. Myers President & CEO 32 Years10 Years E. Allen Nicholson Executive Vice President 21 YearsNew Chief Financial Officer Dave F. Farnsworth Executive Vice President 32 YearsNew Chief Credit Officer David C. Harvey Execu
Slide 5: Board of Directors
Board of Directors Name CVBF Experience Age Ray O’Brien—Chairman 4 Years 59 George Borba Jr.—Vice Chairman 3 Years 49 Steve Del Guercio 4 Years 55 Robert Jacoby 11 Years 75 Kristina Leslie 1 Year 51 Hal Oswalt 2 Years 68 Anna Kan New 43 Chris Myers—CEO 10 Years 54
Slide 6: Who is CVB Financial Corp.?
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 (9/30/16) 1 Wells Fargo & Company $1,942,124 2 First Republic Bank* $67,994 3 SVB Financial Group $43,274 4 East West Bancorp $33,255 5 Pacwest Bancorp $21,315 6 Cathay General Bancorp $14,099 7 Hope Bancorp, Inc. $13,50
Slide 8: Ranked #1
RANKED # 1 CVB Financial Corp. Ranked #1, Holding company for Citizens business Bank
Slide 9: Other Bank Accomplishments & Ratings
Other Bank Accomplishments & Ratings Consecutive Quarters of Profitability 108 Consecutive Quarters of Cash Dividends Ranked Top 5 Bank in US three consecutive years* Bank Director, 2016 Bank Performance Scorecard (July 12, 2016) BauerFinancial Report Five Star Rating (December 2015) 83 Consecutive
Slide 10: Our Markets
CVB Financial Corp. Our Markets
Slide 11: 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 cbbank 11
Slide 12: New Acquisition: Valley Commerce Bancorp
New Acquisition Valley Commerce Bancorp ‘VCBP’ cbbank.com
Slide 13: Transaction Highlights
Transaction Highlights $23.4 million in cash(1) 1,942,673 shares of CVBF stock issued Transaction Aggregate merger consideration of $70.3 million(2), including a Structure special dividend(3) paid to VCBP shareholders Implied consideration mix of approximately 59% stock and 41% cash(1)(2) Pro Forma
Slide 14: Pro Forma Branch Footprint
Pro Forma Branch Footprint • CVBF (50) • VCBP (4) Source: SNL Financial.
Slide 15: Financial Impact
Financial Impact Deal value/ tangible book value of 1.19x Deal value / adjusted tangible book value(1) of 1.55x Valuation Multiples Deal value/ last twelve months earnings of 11.7x Deal value (with special dividend(1))/ last twelve months earnings of 14.3x Earnings accretion in 2017(2) Financial Tan
Slide 16: De Novo Expansion
De Novo Expansion cbbank.com
Slide 17: New Banking Teams (2015/2016)
New Banking Teams (2015/2016) Location # of New Hires Los Angeles 2 Oxnard 2 Santa Barbara 3 Newport Beach 3 Total 10
Slide 18: Financial Performance
Financial Performance cbbank.com
Slide 19: Deposits
Deposits* # of Center Total Deposits Total Deposits (000’s) Locations (9/30/15) (9/30/16) Los Angeles County 18 $2,448,973 $2,611,770 Inland Empire 9 $2,030,689 $1,995,620 (Riverside & San Bernardino Counties) Orange County 9 $936,291 $1,018,814 Central Valley 8 $868,210 $952,308 Ventura & Santa Bar
Slide 20: 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) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 2010 2011 20122013201420152016 Non-Int Bearing Dep Interest Bearing Deposits* *Interest Bearing Deposits includes REPOs
Slide 21: 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 Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 2010 2011 20122013201420152016 Source: Q2 2016 earnings release & other company filings, SNL Financial—peers represent public
Slide 22: Total Loans
Total Loans* Average # of Center Total Loans* Loans per (000’s) Location Los Angeles County 18 $92,116 $1,658,080 Central Valley 8 $96,484 $771,872 Inland Empire 9 $76,346 $687,111 (Riverside & San Bernardino Counties) Orange County 9 $64,066 $576,590 Ventura/Santa Barbara Counties 6 $44,495 $266,96
Slide 23: 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 Q4 Q1 Q2Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (000’s) 2010 201120122013201420152016 To
Slide 24: Loan Portfolio Composition
Loan Portfolio Composition Total Loans by Type Municipal Lease Finance Other, 1.9% Receivables, Dairy, Livestock & 1.6% Agribusiness, SFR Mortgage, 5.6% 5.6% Commercial & Multi-Family, 6.5% Industrial, 12.0% Construction RE, 2.1% Commercial RE- Non-Owner, 40.0% Commercial RE - Owner Occupied, 24.7%
Slide 25: Credit Quality
CVB Financial Corp. Credit Quality
Slide 26: Non-Performing Assets
Non-Performing Assets* $200,000 $180,000 $160,000 , $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 Q4 Q1 Q2 Q3 (000’s) 2009 2010 20112012201320142015 2016 Non-Performing LoansOREO *Non-Covered assets | Starting in
Slide 27: 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 2009 2010 201120122013201420152016 *Non-Covered loans| Starting in the 4th quarter of 2014, covered and no
Slide 28: Loans: Net Charge-Offs
Loans: Net Charge-Offs* -$10,000 $0 2009 2010 2011 2012 2013 2014 2015 YTD $10,000 9/30/16 $20,000 $30,000 January 2012—September 2016 = $7,487 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-covere
Slide 29: Profits
CVB Financial Corp. Profits
Slide 30: 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 2008 20092010 2011 2012201320142015 Net Income After Taxes $20.4 million FHLB prepayment charge $13.9 million FHLB prepayment charge
Slide 31: Earnings
Earnings (000’s) 2012 2013201420159 Months to 9/30/2016 Net Interest Income $236,950 $216,266$236,514$252,942$191,633 Recapture of Provision for Loan Losses $0 $16,750$16,100$5,600$2,000 Other Operating Income/Expenses (Net) ($122,257) ($88,741)($89,817)($107,176)($74,668) Income Taxes ($37,413) ($4
Slide 32: 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% Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 2007 2008 20092010201120122013201420152016 Normalized* *Normalized tax equivalent excludes accretion on covered loans (Purchase C
Slide 33: Efficiency & Expenses
Efficiency & Expenses cbbank.com
Slide 34: Efficiency Ratio
Efficiency Ratio 90.00% 80.00% 70.00% 60.00% 50.00% 45.62% 40.00% 30.00% 20.00% 10.00% 0.00% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2011 20122013201420152016 Efficiency Ratio $ 20.4 million FHLB prepayment charge $ 13.9 million FHLB prepayment charge
Slide 35: Non-Interest Expense as a % of Average Assets
Non-Interest Expense as a % of Average Assets 3.50% 3.00% 2.50% 2.00% 1.59% 1.50% 1.00% 0.50% 0.00% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2011 20122013201420152016 Non-Interest Expense as a % of Average Assets $ 20.4 million FHLB prepayment charge $ 13.9 million FHLB prepaym
Slide 36: Capital
CVB Financial Corp. Capital
Slide 37: Capital Ratios
Capital Ratios Adequately Well-CapitalizedSeptember 30, Capitalized Ratio Ratio2016* Tier 1 Risk-based Capital Ratio 6.0% 8.0%17.1% Total Risk-based Capital Ratio 8.0% 10.0%18.3% Common Equity Tier 1 Capital Ratio 4.5% 6.5%16.6% Tier 1 Leverage Ratio 4.0% 5.0%11.1% * CVB Financial Corp. – Consolidat
Slide 38: Securities & Investments
Securities & Investments cbbank.com
Slide 39: Securities Portfolio
Securities Portfolio* --$3.0 Billion-- Yield on securities portfolio = 2.38% for the 3rd Quarter 2016 $2.23 Billion $879.0 Million *Available For Sale *Held to Maturity Municipal Municipal CMO’s / Bonds, CMO’s / Bonds 4.40% REMIC’s, 34.10% Government 21.90% REMIC’s 17.20% Agency/GSEs and other 0.40%
Slide 40: Securities Portfolio
Securities Portfolio* $2.23 Billion Mark-to-Market (Pre-tax) $100,000 $80,000 $62,000 $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 Q4 Q1 Q2 Q3 2011 2012 2013201420152016 (000’s) *Available For Sale
Slide 41: CVBF Assets & Liabilities
‘CVBF’ Assets & Liabilities 9/30/16 $8.0 Billion 9/30/16 $7.0 Billion Borrowings Other0.0%Junior Liabilitiessubordinated Securities 1.6%Debentures Loans, 38.6% 0.4% net 52.6% Fed Balance* Goodwill & . Intangibles Other 4.8% 1.2% Total DepositsDeposits**** 98.0% *Includes overnight funds held at the
Slide 42: Yield on Securities vs. Yield on Loans
Yield on Securities vs. Yield on Loans 6.00% 5.46% 5.00% 5.17% 4.41% 4.00% 3.00% 2.38% 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 2009 2010 20112012201320142015 2016 Yield on Loans* Yield on Securities** *Excluding Discount Accretio
Slide 43: Our Growth Strategy
Our Growth Strategy cbbank.com
Slide 44: 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 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 San Diego Oxnard (2014) (2015) Santa Barbara (2015) American Acquisitions County Security Bank Commerce Bank (2014) (2016) Valley Business Bank (deal announced Sept. 2016)
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) —Trust/Investment— Target size: AUM of $200 million to $1 billion In California —Banking Teams— In-market & ‘new’ markets
Slide 48: 2016 'Critical Few'
2016 ‘Critical Few’ Quality Loan Growth Expand Our Footprint DeNovo Growth Acquisition Relationship Banking Cyber Security Recruit, Retain & Train Key People
Slide 49: Copy of presentation at www.cbbank.com
Copy of presentation at www.cbbank.com cbbank.com
CVB Financial — Merger or Acquisition (November 2016) on 6ix