Cvb Financial Corporation · NASDAQ:CVBF
Cvb Financial — Investor Presentation (September 2010)
46 slides from Cvb Financial's investor presentation, Sep 10, 2010
Slide 1: CVB Financial Corp.
CVB FINANCIAL CORP. 1 Chris Myers
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 plan and expectations regardi
Slide 3: CVBF Snapshot
3 Total Assets: $6.9 BillionGross Loans: $3.9 BillionTotal Deposits (Including Repos): $5.2 BillionTang. Common Equity: $608 Million Source: Q2 2010 earnings release & company filings. *non-covered loans Operating Highlights Financial Highlights 6/30/10 Largest financial institution headquartered in
Slide 4: Experienced Leadership
4 Significant equity ownership among executive management and board of directors Total Board: 16.0%, Total Board plus 'retired' directors: 24.1% Edward J. Biebrich Jr. Executive Vice President 28 Years 12 Years Chief Financial Officer Todd E. Hollander Executive Vice President 19 Years 2 Years Sales
Slide 5: 2nd Quarter Update
2nd Quarter Update Completed FDIC and Department of Financial Institutions Safety and Soundness ExaminationSold $162.8 million in securities and achieved a gain of $8.8 millionPrepaid $100 million of our JP Morgan Repurchase Agreement (cost of debt = 4.95%); one-time charge of $5.7 millionRecord ear
Slide 6: Who is CVB Financial?
Who is CVB Financial? 6
Slide 7: Largest Banks Headquartered in California
Largest Banks Headquartered in California Headquartered in California Headquartered in California 7 In millions
Slide 8: Forbes 2010 America's Best Banks
Forbes 2010 America's Best Banks ($5 Billion ) 8 Rank Company Total Assets ($BIL) NPLS/ Loans % Reserves/NPLS% Tier 1 Ratio% 1 Bank of Hawaii 12 1.2 209 13.4 2 UMB Financial 10 .07 210 13.5 3 Commerce Bancshares 18 1.6 114 12.8 4 Prosperity Bancshares 9 0.3 537 11.9 5 SVB Financial 13 1.6 120 14.6 6
Slide 9: Bank Ratings & Awards
Bank Ratings & Awards Bank Director Magazine (2010)Ranked #9 in the Nation...profitability, capital adequacy & asset qualityForbes Magazine (2010)Ranked #6 in the NationBauerFinancial Report (2009)'5' Star RatingThe Findley Report19 Years - Super Premier Performing Bank11 Years - Premier Performing
Slide 10: What are our Markets?
What are our Markets? 10
Slide 11: Existing Locations
Existing Locations 11 Commercial Banking CentersBusiness Financial CentersNew Business Financial Centers (SJB) 44 Business Financial Centers6 Commercial Banking Centers
Slide 12: Deposits
Deposits* 12 12 *Includes Customer Repurchase Agreements
Slide 13: Deposit Franchise
Deposit Franchise Total Deposits Including Repos: $5.2 Billion As of 6/30/2010 13 Source: Q2 2010 earnings release & company filings; core deposits defined as total deposits less jumbo CD's, total deposits does include customer repos The average cost of deposits stands at .43%. This low cost of depo
Slide 14: Loans
Loans as of 6/30/2010 as of 6/30/2010 as of 6/30/2010 14 *Prior to MTM discount
Slide 15: Total Non-Covered Loans
Total Non-Covered Loans Total Non-Covered Loans 15 (000's)
Slide 16: Loan Portfolio Composition
16 Geographic diversification, a focus on relationship banking, and a strong credit culture have allowed CVB to mitigate loan losses through this economic downturnCVB has a strong CRE banking team, lending to projects involving apartment buildings, commercial office space and industrial centersProfi
Slide 17: CRE & Construction Lending
(CHART) (CHART) 17 As of 6/30/2010 CRE loans totaled $2.0 billion, while construction stood at $185.2 million, or 5.3% of total loans. Construction loans totaled $265.4 million at 12/31/09Of the CRE loans on the balance sheet, 36.3% are owner-occupied$20.6 million of the construction portfolio is re
Slide 18: Non-Performing Assets
As of 6/30/2010 non-performing assets totaled $98 million, of which $82.9 million and $15.0 million were from non-performing loans and OREO, respectivelyAs of 6/30/2010 over 30 to 89 days past due loans totaled 0.41% 18 Non-Performing Assets* *Non-Covered Loans Source: Q2 2010 earnings release & oth
Slide 19: Superior Credit Quality
19 CVBF's strong loan underwriting culture has limited its exposure to problem creditsContinued profitability has allowed CVB to build its capital base and reserves for loan losses. Superior Credit Quality Texas Ratio NPA's/Loans & OREO (CHART) (CHART) Source: Q2 2010 earnings release & other compan
Slide 20: Profits
Profits 20
Slide 21: Net Income
(CHART) Net Income 21 (000's) Net Income After Taxes
Slide 22: Adjusted Net Income After Tax
Adjusted Net Income After Tax (Excluding L/L Provision & Non-Recurring Items*) (Excluding L/L Provision & Non-Recurring Items*) (Excluding L/L Provision & Non-Recurring Items*) 22 *Gains (Loss) on Securities, FHLB Prepay Fees, Gain on SJB, Provision For Unfunded Commitments & Provision for Loan Loss
Slide 23: Net Interest Margin
Net Interest Margin Net Interest Margin 23 *Normalized excludes accelerated accretion on covered loans
Slide 24: Peer Profitability Metrics
24 Peer Profitability Metrics Return on Average Assets Return on Average Tangible Equity Net Interest Margin (CHART) (CHART) (CHART) Source: Q2 2010 earnings release & other company filings, SNL Financial-peers represent select public CA , HI, NV, OR & WA banks with assets $2 - $22 billion.
Slide 25: Capital
Capital 25
Slide 26: Peer Capital Metrics
(CHART) 26 Source: Q2 2010 earnings release & other company filings, SNL Financial-peers represent select public CA , HI, NV, OR & WA banks with assets $2 - $22 billion Peer Capital Metrics Tier 1 Capital Ratio Total Risk - Based Capital Ratio Tangible Common Equity/Tangible Assets (CHART) (CHART)
Slide 27: Securities/Investments
Securities/Investments 27
Slide 28: Securities Available For Sale
(CHART) 28 Source: Q2 2010 earnings release. As of 6/30/2010 securities held-to-maturity were valued at approximately $3.2 millionYield on securities represents the fully taxable equivalent Securities Available For Sale Securities portfolio totaled $2.0 billion at 6/30/2010. The portfolio represents
Slide 29: Investment Portfolio Mark to Market
Investment Portfolio: $2.0 Billion - --Mark to Market- (Pre-Tax) (CHART) (000's)
Slide 30: 3rd Quarter Events
3rd Quarter Events 30
Slide 31: Security Sales
Security Sales Sold approximately $537 million in mortgage-backed securities and collateralized mortgage obligationsTotal gains: approximately $28 millionThree primary reasonsStrengthen our balance sheet & capital positionPayoff $150 million in Repo debt ($7.6 million pre-pay charge)Add $9.3 million
Slide 32: Security Gains After $537 Million Sale
Security Gains - --After $537 Million Sale-- Assuming no material change in interest rates over the next 20 days, we anticipate approximately $50 million in unrealized pre- tax security gains on our balance sheet for the quarter ending September 30, 2010. 32
Slide 33: Repurchase Agreement: Prepayment Penalty
Repurchase Agreement: Prepayment Penalty Prepaid the remaining $150 million in Repurchase Agreement debt. Current rate = 4.95%Scheduled maturity: September 2011Cost of prepayment: $7.6 millionAnticipated savings: $1.8 million per quarter in interest expense through September 2011 33
Slide 34: Largest Borrowing Relationship
Largest Borrowing Relationship Comprised of 7 loans totaling approximately $82 million in total debt.Charged off $34 million after being notified by Borrower in August that payments will not be able to be made as scheduled.Placed the remaining $48 million on non-accrual status as of September 2, 201
Slide 35: Largest Borrowing Relationship
Largest Borrowing Relationship June 30, 2010 loan loss reserves were 30% of the total loan amount, approximately $24.7 million 35
Slide 36: Loan Loss Allowance
Loan Loss Allowance 36 Allowance for credit losses was $118.5 million as of 6/30/2010Anticipated charge-offs for 3rd quarter: $38 millionAdditional provisions: $25.3 million$9.3 million (related to the charge-off of largest borrower)$16 millionProjected decline in loan loss allowance to around $106
Slide 37: Capital Ratios
Capital Ratios Capital Ratios 38 We anticipate that the above listed ratios will be the same or higher at the end of the third quarter of 2010
Slide 38: Our Growth Strategy
Our Growth Strategy Transitioning from a Community Bank to a Regional Bank 39
Slide 39: Citizens Business Bank: Our Vision
Citizens Business Bank: Our 10 Year 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. 40
Slide 40: Target Customer
Target Customer 41 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 41: "Same Store Sales"
"Same Store Sales" 43 43 Relationship Manager (Bank) Property Management Real Estate Banking International Treasury Services Specialty Banking Construction Lending CitizensTrust Bankcard SBA Citizens Home Loans Mortgage Brokerage Title Escrow Marketing Citizens Financial Services Government Services
Slide 42: "DeNovo" Team Acquisitions
"DeNovo" - --Team Acquisitions-- - --Team Acquisitions-- - --Team Acquisitions-- 44 As of 6/30/10
Slide 43: 2007-2009 Bank Acquisitions
Bank Name Date Acquired Geographic Market # of Locations Total Assets (6/30/10) First Coastal Bank June 2007 South Bay 4 /3 $133,692 San Joaquin Bank October 2009 Kern County 5/4 $441,981 (000's) Total: $575,673 2007-2009 Bank Acquisitions * *Net of MTM Discount
Slide 44: CVBF Deposit Growth
CVBF Deposit Growth Non-Interest Bearing Demand Checking Time Deposi TotalDeposits $3,406,808 $4,601,490 Customer Repurchase Agreements 350 $595,661 Total Deposits & custarieanectirenarse $3,501,158 $5,197,151
Slide 45: CVBF Balance Sheet
CVBF Balance Sheet 47 (in millions) 12/31/06 6/30/10 Total Assets $6,092 $6,860 Total Depositsincludes REPO's $3,501 $5,197 Total Loans* $3,070 $3,932 Securities $2,583 $2,015 Borrowings $2,045 $803 Loan Loss Reserves/Loans .90% 3.38% Tangible Capital Ratio 5.8% 9.0% Tier 1 Leverage Ratio 7.8% 10.0%
Slide 46: Our Strategic Focus
Our Strategic Focus 48 Strong Capital position Strong, disciplined credit underwriting/credit culture Drive low-cost deposits Multiple forms of growth (don't depend on one) Same Store Sales DeNovo Acquisitions Cross-sell: capture the whole wallet Build new Fee Income opportunities Long-term outlook
CVB Financial — Investor Presentation (September 2010) on 6ix