ONTARIO, Calif.--(BUSINESS WIRE)--
CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank ("the Company"), announced the results for the first quarter of 2008.
Net Income
CVB Financial Corp. reported net income of $16.2 million for the first quarter ending March 31, 2008. This represents an increase of $1.1 million, or 6.88%, when compared with net earnings of $15.1 million for the first quarter of 2007. Diluted earnings per share were $0.19 for the first quarter of 2008. This was up $0.01, or 7.71%, from diluted earnings per share of $0.18 for the same period last year. The net income for the first quarter of 2008 includes a provision of $1.7 million for credit losses. There was no such provision in the first quarter of 2007. Had we not made a provision in the first quarter of 2008, our net income would have been $17.4 million, an increase of $2.3 million or 15.08%.
Net income for the first quarter of 2008 produced a return on beginning equity of 15.32%, a return on average equity of 14.91% and a return on average assets of 1.05%. The efficiency ratio for the first quarter was 56.16%, and operating expenses as a percentage of average assets were 1.83%.
Net Interest Income and Net Interest Margin
Net interest income, after provision for credit losses, totaled $42.4 million for the first quarter of 2008. This represents an increase of $2.6 million, or 6.70%, from the $39.8 million for the same period of 2007. This increase resulted from a $5.3 million decrease in interest expense, offset by a $1.0 million decrease in interest income and a $1.7 million increase in the provision for credit losses. The decrease in interest income was primarily due to the decrease in interest rates, partially offset by the growth in average earning assets. The decrease in interest expense was due to the decrease in the cost of interest bearing deposits and borrowed funds, partially offset by the increase in average borrowed funds.
Net interest margin (tax equivalent) increased from 3.02% for the first quarter of 2007 to 3.25% for the first quarter of 2008. Total average earning asset yields decreased from 6.18% for the first quarter of 2007 to 5.91% for the first quarter of 2008. The cost of funds decreased from 4.15% for the first quarter of 2007 to 3.45% for the first quarter of 2008. The increase in net interest margin is due to the cost of interest-bearing liabilities decreasing faster than the decrease in yields on earning assets.
Balance Sheet
The Company reported total assets of $6.37 billion at March 31, 2008. This represented an increase of $382.5 million, or 6.38%, over total assets of $5.99 billion as of March 31, 2007. Earning assets totaled $6.00 billion and were up $363.3 million, or 6.45%, when compared with earning assets of $5.63 billion as of March 31, 2007. Total deposits and customer repurchase agreements were $3.63 billion as of March 31, 2008. This represents an increase of $29.5 million, or 0.82%, when compared with total deposits and customer repurchase agreements of $3.60 billion at March 31, 2007. Gross loans and leases totaled $3.39 billion at March 31, 2008. This represents an increase of $295.6 million, or 9.55%, when compared with gross loans and leases of $3.10 billion at March 31, 2007.
Investment Securities
Investment securities totaled $2.55 billion at March 31, 2008. This represents an increase of $69.3 million, or 2.79%, when compared with $2.48 billion in investment securities at March 31, 2007.
CitizensTrust
CitizensTrust has approximately $2.5 billion in assets under administration. They provide trust, investment and brokerage related services, as well as financial, estate and business succession planning. Income from CitizensTrust was $1.9 million in the current quarter, down $100,000 from the $2.0 million in the first quarter of 2007.
Loan and Lease Quality
The credit quality of the loan portfolio is good. The allowance for credit losses increased from $27.6 million as of March 31, 2007 to $34.7 million as of March 31, 2008. The increase was primarily due to the provision for credit losses of $4.0 million in the fourth quarter of 2007 and $1.7 million in the first quarter of 2008. During the first quarter of 2008, we had loan charge-offs totaling $246,000 and recoveries on previously charged off loans of $208,000. This resulted in net charge-offs of $38,000. By comparison, during the first three months of 2007, the Company had net charge-offs of $105,000, and no provision for credit losses. The allowance for credit losses was 1.02% and 0.89% of total loans and leases outstanding as of March 31, 2008 and 2007, respectively.
At December 31, 2007, we had $1.4 million in non-performing loans. As of March 31, 2008, we had $2.7 million in non-performing loans and $1.1 million in Other Real Estate Owned. The OREO represents a foreclosed condominium project, a portion of which was charged-off in December 2007. While the economy shows signs of weakness our loan portfolio continues to perform well. Nevertheless, we are closely monitoring our loan portfolio based on economic conditions. We have just completed the annual examination by our bank regulators.
Our construction loan portfolio was $315.8 million as of March 31, 2008. This represents 9.32% of our total loans outstanding at the end of the quarter. Of the $315.8 million, $135.2 million is for residential construction and residential land loans. This represents 42.80% of the construction loans outstanding, or 3.99% of our total loan portfolio. Of note, 31.12% of our construction loan portfolio is based in the Inland Empire.
Corporate Overview
CVB Financial Corp. is the holding company for Citizens Business Bank. The Bank is the largest financial institution headquartered in the Inland Empire region of Southern California. It serves 40 cities with 45 business financial centers in the Inland Empire, Los Angeles County, Orange County and the Central Valley areas of California. Its leasing division, Citizens Financial Services, provides vehicle leasing, equipment leasing and real estate loan services.
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 website at www.cbbank.com and click on the CVB Investor tab.
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 plan and expectations regarding future operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, the impact of changes in interest rates, a decline in economic conditions, adverse changes resulting from natural and manmade disasters, effects of government regulation and increased competition among financial services providers and other factors set forth in the Company's public reports including its Annual Report on Form 10-K for the year ended December 31, 2007, and particularly the discussion of risk factors within that document. The Company does not undertake, 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 except as required by law.
CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(unaudited)
dollars in thousands
March 31, December 31,
----------------------- ------------
2008 2007 2007
----------- ----------- ------------
Assets:
Cash and due from banks $ 110,102 $ 117,981 $ 89,486
Investment Securities
available-for-sale 2,546,367 2,484,664 2,390,566
Investment Securities held-to-
maturity 7,638 - -
Federal funds sold and
Interest-bearing balances due
from depository institutions 475 - 475
Investment in stock of Federal
Home Loan Bank (FHLB) 85,852 80,826 79,983
Loans and lease finance
receivables 3,392,192 3,096,609 3,495,144
Less allowance for credit
losses (34,711) (27,632) (33,049)
----------- ----------- ------------
Net loans and lease finance
receivables 3,357,481 3,068,977 3,462,095
----------- ----------- ------------
Total earning assets 5,997,813 5,634,467 5,933,119
Premises and equipment, net 46,585 45,597 46,855
Intangibles 13,713 9,533 14,611
Goodwill 55,097 31,531 55,167
Cash value of life insurance 104,499 100,758 103,400
Other assets 46,993 52,420 51,325
----------- ----------- -------------
TOTAL $6,374,802 $5,992,287 $ 6,293,963
=========== =========== =============
Liabilities and Stockholders'
Equity
Liabilities:
Deposits:
Demand Deposits
(noninterest-bearing) $1,218,660 $1,264,243 $ 1,295,959
Investment Checking 351,692 334,229 409,912
Savings/MMDA 952,601 957,538 868,123
Time Deposits 737,715 833,602 790,355
----------- ----------- ------------
Total Deposits 3,260,668 3,389,612 3,364,349
Demand Note to U.S. Treasury 3,622 468 540
Customer Repurchase
Agreements 366,502 208,023 336,309
Repurchase Agreements 250,000 250,000 250,000
Borrowings 1,745,851 1,597,500 1,753,500
Junior Subordinated
Debentures 115,055 108,250 115,055
Other liabilities 181,315 46,643 49,262
----------- ----------- ------------
Total Liabilities 5,923,013 5,600,496 5,869,015
Stockholders' equity:
Stockholders' equity 429,017 399,581 420,818
Accumulated other
comprehensive income
(loss), net of tax 22,772 (7,790) 4,130
----------- ----------- -------------
451,789 391,791 424,948
----------- ----------- -------------
TOTAL $6,374,802 $5,992,287 $ 6,293,963
=========== =========== =============
CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEET
(unaudited)
dollars in thousands
Three months ended March 31,
2008 2007
---------------- -----------
Assets:
Cash and due from banks $ 107,878 $ 124,427
Investment securities available-for-sale 2,386,918 2,512,260
Investment securities held-to-maturity 6,117 -
Federal funds sold and Interest-bearing
balances due from depository institutions 1,296 444
Investment in stock of Federal Home Loan Bank
(FHLB) 84,719 80,039
Loans and lease finance receivables 3,383,772 3,059,186
Less allowance for credit losses (33,906) (27,720)
---------------- -----------
Net loans and lease finance
receivables 3,349,866 3,031,466
---------------- -----------
Total earning assets 5,828,916 5,624,209
Premises and equipment, net 46,773 45,471
Intangibles 14,061 9,763
Goodwill 55,131 31,531
Cash value of life insurance 103,787 100,202
Other assets 69,967 85,989
---------------- -----------
TOTAL $6,226,513 $6,021,592
================ ===========
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing $1,225,327 $1,283,749
Interest-bearing 2,050,628 2,114,142
---------------- -----------
Total Deposits 3,275,955 3,397,891
Other borrowings 2,339,159 2,078,177
Junior Subordinated Debentures 115,055 108,250
Other liabilities 59,744 39,264
---------------- -----------
Total Liabilities 5,789,913 5,623,582
Stockholders' equity:
Stockholders' equity 432,265 411,110
Accumulated other comprehensive income
(loss), net of tax 4,335 (13,100)
---------------- -----------
436,600 398,010
---------------- ----------
TOTAL $6,226,513 $6,021,592
================ ===========
CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
dollar amounts in thousands, except per share
For the Three Months
Ended March 31,
2008 2007
------------ -------
Interest Income:
Loans and leases, including fees $54,046 $52,714
Investment securities:
Taxable 20,877 23,093
Tax-advantaged 7,188 7,231
------ ------
Total investment income 28,065 30,324
Dividends from FHLB Stock 1,093 1,138
Federal funds sold & Interest-bearing CDs with
other institutions 15 6
------ ------
Total interest income 83,219 84,182
Interest Expense:
Deposits 12,278 17,158
Borrowings and junior subordinated debentures 26,811 27,260
------ ------
Total interest expense 39,089 44,418
------ ------
Net interest income before provision for
credit losses 44,130 39,764
Provision for credit losses 1,700 -
------ ------
Net interest income after provision for
credit losses 42,430 39,764
Other Operating Income:
Service charges on deposit accounts 3,745 3,276
Trust and investment services 1,913 1,951
Gain on sale of investment securities - -
Other 2,482 2,671
------ ------
Total other operating income 8,140 7,898
Other operating expenses:
Salaries and employee benefits 15,543 14,072
Occupancy 2,871 2,405
Equipment 1,649 1,735
Professional services 1,541 1,103
Amortization of intangible assets 898 588
Other 5,897 5,997
------ ------
Total other operating expenses 28,399 25,900
------ ------
Earnings before income taxes 22,171 21,762
Income taxes 5,987 6,620
------------ -------
Net earnings $16,184 $15,142
============ =======
Basic earnings per common share $ 0.19 $ 0.18
============ =======
Diluted earnings per common share $ 0.19 $ 0.18
============ =======
Cash dividends per common share $ 0.085 $ 0.085
============ =======
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
Three months ended March 31,
2008 2007
--------------- ------------
Interest income - (Tax-Effected) (te) $ 86,133 $ 86,612
Interest Expense 39,089 44,418
--------------- ------------
Net Interest income - (te) $ 47,044 $ 42,194
=============== ============
Return on average assets 1.05% 1.02%
Return on average equity 14.91% 15.43%
Efficiency ratio 56.16% 54.34%
Net interest margin (te) 3.25% 3.02%
Weighted average shares outstanding
Basic 83,151,328 83,482,208
Diluted 83,521,594 84,175,313
Dividends declared $ 7,093 $ 7,109
Dividend payout ratio 43.83% 46.95%
Number of shares outstanding-EOP 83,095,678 83,537,214
Book value per share $ 5.44 $ 4.69
March 31,
2008 2007
--------------- ------------
Non-performing Assets (dollar amount in
thousands):
Non-accrual loans $ 2,707 $ 0
Loans past due 90 days or more and still
accruing interest - -
Restructured loans - -
Other real estate owned (OREO), net 1,137 -
--------------- ------------
Total non-performing assets $ 3,844 $ 0
=============== ============
Percentage of non-performing assets to
total loans outstanding and OREO 0.11% 0.00%
Percentage of non-performing assets to
total assets 0.06% 0.00%
Non-performing assets to allowance for
loan losses 11.07% 0.00%
Net Charge-off (Recovered) to Average
loans 0.00% 0.00%
Allowance for Credit Losses:
Beginning Balance $ 33,049 $ 27,737
Total Loans Charged-Off (246) (129)
Total Loans Recovered 208 24
--------------- ------------
Net Loans Recovered (38) (105)
Provision Charged to Operating Expense 1,700 -
--------------- ------------
Allowance for Credit Losses at End of
period $ 34,711 $ 27,632
=============== ============
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(unaudited)
Quarterly Common Stock Price
2008 2007 2006
-------------- --------------- ---------------
Quarter End High Low High Low High Low
------ ------- ------- ------- ------- -------
March 31, $11.20 $ 8.45 $ 13.38 $ 11.42 $ 15.60 $ 14.71
June 30, $ 12.40 $ 10.63 $ 15.59 $ 13.25
September 30, $ 12.71 $ 9.51 $ 14.24 $ 12.83
December 31, $ 11.97 $ 9.98 $ 14.13 $ 12.83
Quarterly Consolidated Statements of Earnings
1Q 4Q 3Q 2Q 1Q
2008 2007 2007 2007 2007
------- ------- ------- ------- -------
Interest income
Loans, including fees $54,046 $56,692 $58,677 $53,726 $52,714
Investment securities and
federal funds sold 29,173 28,794 29,203 30,003 31,468
------- ------- ------- ------- -------
83,219 85,486 87,880 83,729 84,182
Interest expense
Deposits 12,278 15,766 18,445 17,928 17,158
Other borrowings 26,811 28,333 27,727 27,518 27,260
------- ------- ------- ------- -------
39,089 44,099 46,172 45,446 44,418
Net interest income
before provision for
credit losses 44,130 41,387 41,708 38,283 39,764
Provision for credit
losses 1,700 4,000 - - -
------- ------- ------- ------- -------
Net interest income
after provision for
credit losses 42,430 37,387 41,708 38,283 39,764
Non-interest income 8,140 7,968 7,863 7,596 7,898
Non-interest expenses 28,399 27,441 27,218 24,845 25,900
------- ------- ------- ------- -------
Earnings before income
taxes 22,171 17,914 22,353 21,034 21,762
Income taxes 5,987 4,547 6,232 5,080 6,620
------- ------- ------- ------- -------
Net earnings $16,184 $13,367 $16,121 $15,954 $15,142
======= ======= ======= ======= =======
Basic earning per common
share $ 0.19 $ 0.16 $ 0.19 $ 0.19 $ 0.18
Diluted earnings per
common share $ 0.19 $ 0.16 $ 0.19 $ 0.19 $ 0.18
Cash dividends per
common share $ 0.085 $ 0.085 $ 0.085 $ 0.085 $ 0.085
Dividends Declared $ 7,093 $ 7,069 $ 7,067 $ 7,234 $ 7,109
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
Distribution of Loan Portfolio
3/31/2008 12/31/2007 9/30/2007 6/30/2007 3/31/2007
--------------------------------------------------------
Commercial and
Industrial $ 349,099 $ 365,214 $ 345,697 $ 334,968 $ 294,265
Real Estate:
Construction 318,549 308,354 307,506 310,390 289,013
Commercial
Real Estate 1,859,785 1,805,946 1,775,812 1,768,539 1,675,964
SFR Mortgage 356,415 365,849 363,765 358,347 316,661
Consumer 57,554 58,999 62,979 64,083 54,379
Municipal
lease finance
receivables 153,270 156,646 143,399 143,316 131,073
Auto and
equipment
leases 54,795 58,505 58,958 55,151 52,321
Dairy and
Livestock 254,156 387,488 265,806 280,114 293,781
--------------------------------------------------------
Gross Loans 3,403,623 3,507,001 3,323,922 3,314,908 3,107,457
Less:
Deferred net
loan fees (11,431) (11,857) (12,173) (11,635) (10,848)
Allowance
for credit
losses (34,711) (33,049) (30,428) (30,244) (27,632)
--------------------------------------------------------
Net Loans $3,357,481 $ 3,462,095 $3,281,321 $3,273,029 $3,068,977
========================================================
Source: CVB Financial Corp.
Contact: CVB Financial Corp. Christopher D. Myers, President and CEO (909) 980-4030