ONTARIO, Calif.--(BUSINESS WIRE)--April 20, 2006--In BW5784 issued April 20, 2006: Add after the last graph of the release: CVB Financial Corp.'s Financial Tables.
The corrected release reads:
CVB FINANCIAL CORP. REPORTS FIRST QUARTER EARNINGS
CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank ("the Company"), announced record results for the first quarter of 2006. This included record deposits, record loans, record assets and record earnings. It was the strongest first quarter in the history of the Company.
Net Income
CVB Financial Corp. reported net income of $18.2 million for the first quarter ending March 31, 2006. This represents an increase of $539,000, or 3.05%, when compared with the $17.7 million in net earnings reported for the first quarter of 2005. Diluted earnings per share were $0.24 for the first quarter of 2006. This was up $0.01, or 4.35%, when compared with earnings per share of $0.23 for the first quarter of 2005.
Net income for the first quarter of 2006 produced a return on beginning equity of 21.57%, a return on average equity of 20.82% and a return on average assets of 1.35%. The efficiency ratio for the first quarter was 45.75%, and operating expenses as a percentage of average assets were 1.74%.
As previously reported, the Company recorded income of $2.6 million from the settlement of a robbery loss in the first quarter of 2005. This added $1.7 million to net income after taxes for the period. Without this item, the net income for the first quarter of 2005 would have been $16.0 million. The first quarter 2006 net earnings of $18.2 million represents an increase of $2.2 million, or 13.89%, when compared to the $16.0 million for the same period in 2005.
Net Interest Income and Net Interest Margin
Net interest income totaled $43.6 million for the first quarter of 2006. This represented an increase of $3.0 million, or 7.26%, over net interest income of $40.6 million for the first quarter of 2005. This increase resulted from a $16.4 million increase in interest income, partially offset by a $13.2 million increase in interest expense and a $250,000 increase in the provision for credit losses. The increases in interest income were primarily due to the growth in average earning assets and an increase in interest rates. The increases in interest expense were due to the increases in deposits and borrowed funds and the increase in interest rates on these funding instruments.
Net interest margin (tax equivalent) declined from 3.96% for the first quarter of 2005 to 3.62% for the first quarter of 2006. Total average earning asset yields have increased from 5.37% for the first quarter of 2005 to 5.86%, or 49 basis points, for the first quarter of 2006. The cost of funds has increased from 2.11% for the first quarter of 2005 to 3.10%, or 99 basis points, for the first quarter of 2006. The higher increase in cost of funds is due to the short-term liability sensitivity of the Company. This decline in net interest margin has been mitigated by the strong growth in the balance sheet, which has allowed the Company's net interest income to increase as mentioned above. The Company has approximately $1.36 billion, or 39.18%, of its deposits in interest-free demand deposits.
The credit quality of the loan portfolio continues to be strong. The allowance for credit losses decreased slightly from $23.9 million at the end of the first quarter 2005 to $23.6 million at the end of the first quarter 2006. During the first quarter of 2006, the Company experienced net recoveries of $130,000, and we made a provision for credit losses of $250,000. During the first quarter of 2005, we had net recoveries of $682,000, and we added $756,000 to the allowance from the acquisition of Granite State Bank. The allowance for credit losses is 0.87% of the total loans outstanding. Although the allowance for credit losses is justified by the strong credit quality of the loan portfolio, it is relatively low when compared with peer banks. We believe that making appropriate levels of provisions to compensate for the growth of the loan portfolio is justified.
Balance Sheet
The Company reported total assets of $5.53 billion at March 31, 2006. This represented an increase of $695.9 million, or 14.40%, over total assets of $4.83 billion on March 31, 2005. Earning assets totaling $5.17 billion were up $670.3 million, or 14.88%, when compared with earning assets of $4.50 billion as of March 31, 2005. Deposits of $3.48 billion grew $458.9 million, or 15.21%, from $3.02 billion for the same period of the prior year. Gross loans and leases of $2.72 billion on March 31, 2006, rose $533.1 million, or 24.41%, from $2.18 billion on March 31, 2005.
Total assets of $5.53 billion as of March 31, 2006, reflect an increase of $104.9 million, or 1.94%, over total assets of $5.42 billion on Dec. 31, 2005. Earning assets of $5.17 billion were up $91.5 million, or 1.80%, over the total earning assets of $5.08 billion on Dec. 31, 2005. Deposits of $3.48 billion on March 31, 2006, grew $52.0 million, or 1.52%, from $3.42 billion as of Dec. 31, 2005. Gross loans and leases of $2.71 billion increased $53.3 million, or 2.00%, from $2.66 billion on Dec. 31, 2005. Total equity of $339.6 million on March 31, 2006, was down by $3.3 million, or 0.97%, from $342.9 million as of Dec. 31, 2005. This decline was the result of a $15.2 million increase in the unrealized loss in the investment portfolio.
Investment Securities
Investment securities totaled $2.41 billion as of March 31, 2006. This represents an increase of $136.5 million, or 6.01%, when compared with the $2.27 billion as of March 31, 2005. It represents an increase of $37.1 million, or 1.57%, when compared with $2.37 billion in investment securities as of Dec. 31, 2005.
Financial Advisory Services
The Financial Advisory Services Group has over $2.9 billion in assets under administration. They provide trust, investment and brokerage-related services.
Loan and Lease Quality
CVB Financial Corp. reported no non-performing assets as of March 31, 2006, and Dec. 31, 2005. The allowance for credit losses was $23.5 million as of March 31, 2006. This represents 0.87% of gross loans and leases. It compares with an allowance for credit losses of $23.2 million, or 0.87% of gross loans and leases on Dec. 31, 2005. The increase was primarily due to a provision for credit losses of $250,000 recorded in first quarter of 2006 and recoveries of $150,000 during the first quarter of 2006, offset by loan losses of $20,000.
Other Items in 2006
Corporate Overview
CVB Financial Corp. is the holding company for Citizens Business Bank. The Bank is the largest financial institution with headquarters in the Inland Empire region of Southern California. It serves 33 cities with 40 business financial centers in the Inland Empire, Los Angeles County, Orange County and the Central Valley areas of California. Its leasing division, Golden West Financial Services, provides vehicle leasing, equipment leasing and real estate loan services.
For the third consecutive year, CVB Financial Corp. received the KBW Honor Roll award at the Annual Community Bank Investor Conference hosted by Keefe, Bruyette & Woods Inc. in New York on July 25, 26, and 27, 2005. The Company was also recognized as a SmAll-Star by Sandler O'Neill and named on the FPK Honor Roll by Fox-Pitt, Kelton.
Shares of CVB Financial Corp. common stock are listed on the NASDAQ under the ticker symbol of CVBF. For investor information on CVB Financial Corp., visit our Citizens Business Bank Web site at www.cbbank.com and click on the CVB Investor tab.
Safe Harbor
This document contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from the projected. In addition, these forward-looking statements relate to the Company's current expectations regarding future operating results. Such issues and uncertainties include impact of changes in interest rates, a decline in economic conditions and increased competition among financial services providers. For a discussion of other factors that could cause actual results to differ, please see the publicly available Securities and Exchange Commission filings of CVB Financial Corp., including its Annual Report on Form 10-K for the year ended Dec. 31, 2005, and particularly the discussion on risk factors within that document. The Company does not undertake any, and specifically, disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.
CVB FINANCIAL CORP.
CONSOLIDATED BALANCE SHEET
(unaudited)
dollars in thousands
March 31, Dec. 31,
----------------------- -----------
2006 2005 2005
----------- ----------- -----------
Assets:
Investment Securities available-
for-sale $2,406,986 $2,270,450 $2,369,892
Interest-bearing balances due from
depository institutions 1,784 15,737 1,883
Investment in stock of Federal
Home Loan Bank (FHLB) 72,362 58,092 70,770
Loans and lease finance
receivables 2,717,127 2,184,021 2,663,863
Less allowance for credit
losses (23,584) (23,932) (23,204)
----------- ----------- -----------
Net loans and lease finance
receivables 2,693,543 2,160,089 2,640,659
----------- ----------- -----------
Total earning assets 5,174,675 4,504,368 5,083,204
Cash and due from banks 131,453 127,113 130,141
Premises and equipment, net 41,258 35,755 40,020
Intangibles 11,886 14,817 12,474
Goodwill 31,531 28,755 32,357
Cash value of life insurance 72,633 70,512 71,811
Other assets 64,478 50,673 52,964
----------- ----------- -----------
TOTAL $5,527,914 $4,831,993 $5,422,971
=========== =========== ===========
Liabilities and Stockholders'
Equity
Liabilities:
Deposits:
Demand Deposits
(noninterest-bearing) $1,362,022 $1,388,942 $1,490,613
Investment Checking 298,278 274,312 298,067
Savings/MMDA 924,402 843,553 852,189
Time Deposits 891,379 510,387 783,177
----------- ----------- -----------
Total Deposits 3,476,081 3,017,194 3,424,046
Demand Note to U.S. Treasury 936 2,136 6,433
Borrowings 1,550,000 1,361,000 1,496,000
Junior Subordinated Debentures 108,250 82,476 82,476
Other liabilities 53,082 44,956 71,139
----------- ----------- -----------
Total Liabilities 5,188,349 4,507,762 5,080,094
Stockholders' equity:
Stockholders' equity 368,152 334,378 356,263
Accumulated other comprehensive
income (loss), net of tax (28,587) (10,147) (13,386)
----------- ----------- -----------
339,565 324,231 342,877
----------- ----------- -----------
TOTAL $5,527,914 $4,831,993 $5,422,971
=========== =========== ===========
CVB FINANCIAL CORP.
CONSOLIDATED AVERAGE BALANCE SHEET
(unaudited)
dollars in thousands
Three months ended March 31,
2006 2005
------------- -------------
Assets:
Investment securities available-for-sale $2,390,040 $2,126,851
Interest-bearing balances due from
depository institution 4,667 5,614
Investment in stock of Federal Home Loan
Bank (FHLB) 71,299 55,245
Loans and lease finance receivables 2,652,493 2,099,312
Less allowance for credit losses (23,299) (23,154)
------------- -------------
Net loans and lease finance
receivables 2,629,194 2,076,158
------------- -------------
Total earning assets 5,095,200 4,263,868
Cash and due from banks 130,321 118,011
Premises and equipment, net 40,657 34,392
Intangibles 12,116 5,961
Goodwill 31,816 19,580
Cash value of life insurance 72,037 69,014
Other assets 84,965 38,878
------------- -------------
TOTAL $5,467,112 $4,549,704
============= =============
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing $1,386,972 $1,336,937
Interest-bearing 2,060,971 1,591,087
------------- -------------
Total Deposits 3,447,943 2,928,024
Other borrowings 1,510,960 1,197,290
Junior Subordinated Debentures 99,659 82,476
Other liabilities 53,179 13,495
------------- -------------
Total Liabilities 5,111,741 4,221,285
Stockholders' equity:
Stockholders' equity 368,926 319,739
Accumulated other comprehensive income
(loss), net of tax (13,555) 8,680
------------- -------------
355,371 328,419
------------- -------------
TOTAL $5,467,112 $4,549,704
============= =============
CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
dollar amounts in thousands, except per share
For the Three Months
Ended March 31,
2006 2005
---------- ----------
Interest Income:
Loans, including fees $44,292 $32,380
Investment securities:
Taxable 20,737 18,703
Tax-advantaged 6,245 4,087
---------- ----------
Total investment income 26,982 22,790
Dividends from FHLB Stock 800 475
Federal funds sold 32 4
Interest-bearing CDs with other institutions 26 34
---------- ----------
Total interest income 72,132 55,683
Interest Expense:
Deposits 13,201 5,061
Borrowings and junior subordinated debentures 15,106 9,998
---------- ----------
Total interest expense 28,307 15,059
---------- ----------
Net interest income before provision for
credit losses 43,825 40,624
Provision for credit losses 250 -
---------- ----------
Net interest income after provision for
credit losses 43,575 40,624
Other Operating Income:
Service charges on deposit accounts 3,291 3,042
Financial Advisory Services 1,845 1,678
Other 2,593 2,359
---------- ----------
Total other operating income 7,729 7,079
Other operating expenses:
Salaries and employee benefits 12,720 12,833
Occupancy 2,029 1,998
Equipment 1,745 1,744
Professional services 1,273 1,025
Amortization of intangible assets 588 296
Other 5,115 2,488
---------- ----------
Total other operating expenses 23,470 20,384
---------- ----------
Earnings before income taxes 27,834 27,319
Income taxes 9,594 9,618
---------- ----------
Net earnings $18,240 $17,701
========== ==========
Basic earnings per common share $0.24 $0.23
========== ==========
Diluted earnings per common share $0.24 $0.23
========== ==========
Cash dividends per common share $0.09 $0.11
========== ==========
All per share information has been retroactively adjusted to reflect
the 5-for-4 stock split declared on Dec. 21, 2005.
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
Three months ended March 31,
2006 2005
------------- -------------
Interest income - (Tax Effective)(te) $74,152 $57,000
Interest Expense 28,307 15,059
------------- -------------
Net Interest income - (te) $45,845 $41,941
============= =============
Return on average assets 1.35% 1.58%
Return on average equity 20.82% 21.86%
Efficiency ratio 45.75% 42.73%
Net interest margin (te) 3.62% 3.96%
Weighted average shares outstanding
Basic 76,460,288 76,393,381
Diluted 76,997,334 77,163,021
Dividends declared $6,883 $6,775
Dividend payout ratio 37.74% 38.27%
Number of shares outstanding-EOP 76,479,277 77,083,741
Book value per share $4.44 $4.21
March 31,
2006 2005
------------- -------------
Non-performing Assets (dollar amount in
thousands):
Non-accrual loans $0 $9
Loans past due 90 days or more and still
accruing interest - -
Restructured loans - -
Other real estate owned (OREO), net - -
------------- -------------
Total non-performing assets $0 $9
============= =============
Percentage of non-performing assets to
total loans outstanding and OREO 0.00% 0.00%
Percentage of non-performing assets to
total assets 0.00% 0.00%
Non-performing assets to allowance for
loan losses 0.00% 0.04%
Net Charge-off (Recovered) to Average
loans 0.00% -0.07%
Allowance for Credit Losses:
Beginning Balance $23,204 $22,494
Total Loans Charged-Off (20) (89)
Total Loans Recovered 150 771
Acquisition of Granite State Bank 0 756
------------- -------------
Net Loans Recovery (Charged-Off) 130 1,438
Provision Charged to Operating Expense 250 -
------------- -------------
Allowance for Credit Losses at End of
period $23,584 $23,932
============= =============
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(unaudited)
Quarterly Common Stock Price
2006 2005 2004
--------------- --------------- ---------------
Quarter End High Low High Low High Low
------- ------- ------- ------- ------- -------
March 31, $17.16 $16.18 $17.04 $14.08 $13.63 $12.10
June 30, $16.10 $13.60 $14.05 $12.58
Sept. 30, $17.52 $14.43 $14.96 $12.93
Dec. 31, $16.72 $13.90 $17.87 $14.24
Quarterly Consolidated Statements of Earnings
1Q 4Q 3Q 2Q 1Q
2006 2005 2005 2005 2005
-------- -------- -------- -------- --------
Interest income
Loans, including fees $44,292$42,432$38,341$35,268$32,380
Investment securities
and federal funds
sold 27,840 26,039 24,732 24,454 23,303
-------- -------- -------- -------- --------
72,132 68,471 63,509 60,073 55,996
Interest expense
Deposits 13,201 10,060 7,539 6,247 5,061
Other borrowings 15,106 13,991 12,950 11,589 9,998
-------- -------- -------- -------- --------
28,307 24,051 20,489 17,836 15,059
Net interest income
before provision for
credit losses 43,825 44,420 43,020 42,237 40,937
Provision for credit
losses 250 - - - -
-------- -------- -------- -------- --------
Net interest income
after provision for
credit losses 43,575 44,420 43,020 42,237 40,937
Non-interest income 7,729 5,273 7,861 7,293 7,079
Non-interest expenses 23,470 23,926 22,679 23,064 20,384
-------- -------- -------- -------- --------
Earnings before income
taxes 27,834 25,767 27,766 26,115 27,319
Income taxes 9,594 8,593 9,499 8,637 9,618
-------- -------- -------- -------- --------
Net earnings $18,240 $17,174 $18,267 $17,478 $17,701
======== ======== ======== ======== ========
Basic earning per common
share $0.24 $0.22 $0.24 $0.23 $0.23
Diluted earnings per
common share $0.24 $0.22 $0.23 $0.22 $0.23
Cash dividends per common
share $0.09 $0.09 $0.11 $0.11 $0.11
Dividends Declared $6,883 $6,877 $6,722 $6,716 $6,775
Financial Measures That Supplement GAAP
Our discussions sometimes contain financial information not required
to be presented by generally accepted accounting principles (GAAP). We
do this to better inform readers of our financial statements. The SEC
requires us to present a reconciliation of GAAP presentation with
non-GAAP presentation.
The following table reconciles the differences in net earnings with
and without the settlement of robbery loss in conformity with GAAP.
Net Earnings Reconciliation (non-GAAP disclosure): Three months ended
March 31,
2006 2005
--------- --------
Net earnings without the settlement of robbery loss $18,240$16,016
Settlement of robbery loss, net of tax - $1,685
--------- --------
Reported net earnings $18,240 $17,701
========= ========
Settlement of robbery loss $0 $2,600
Tax effect - (915)
--------- --------
Net of taxes $0 $1,685
========= ========
We have presented net earnings without the settlement of robbery loss
to show shareholders the earnings from operations unaffected by the
impact of these items. We believe this presentation allows the reader
to more easily assess the results of the Company's operations and
business.
CONTACT: CVB Financial Corp., OntarioD. Linn Wiley, 909-980-4030
SOURCE: CVB Financial Corp.