CVB Financial Corp. (CVBF) and its subsidiary, Citizens Business Bank, announced record results for the third quarter of 2002.
This included record deposits, record loans, record assets and record earnings. This is the 42nd consecutive quarter of record earnings for the company.
CVB Financial Corp. reported net income of $13.2 million for the third quarter ending Sept. 30, 2002. This represents an increase of $2.4 million, or 22.34%, when compared with the $10.8 million in net income reported for the third quarter of 2001. Earnings per share for the third quarter of 2002 were $0.37 per diluted share. This is up $0.07, or 23.33%, when compared with earnings per share of $0.30 for the third quarter of 2001.
Earnings results for the third quarter of 2002 produced a return on beginning equity of 24.26%, a return on average equity of 21.66% and a return on average assets of 1.95%. The efficiency ratio for the third quarter was 46.19%.
During the quarter, the company restructured a portion of the investment portfolio to align it with the current interest rate environment. This involved the sale of $87.6 million in securities. The sale of these securities resulted in a gain of $1.8 million before taxes and a gain of $1.2 million after taxes.
If the company had not realized this gain on the sale of securities, net income would have been $12 million. This would represent an increase in net income of $1.3 million, or 12.54%, over the $10.7 million for 2001. The comparable net income per diluted share would be $0.34. This would be an increase of $0.04, or 11.79%, over the net income per diluted share of $0.30 for 2001.
These earnings results would have produced a return on beginning equity of 22.02%, a return on average equity of 21.16% and a return on average assets of 1.90%. The related efficiency ratio would have been 46.60%.
Net income for the nine months ending Sept. 30, 2002, was $37.2 million. This represents an increase of $7.9 million, or 27.04%, when compared with net earnings of $29.3 million for the same period in 2001. Diluted earnings per share were $1.04. This was up $0.22, or 26.21%, from diluted earnings per share of $0.82 for the same period last year.
Net income for the nine months ending Sept. 30, 2002, produced a return on beginning equity of 22.76%, a return on average equity of 20.67% and a return on average assets of 1.85%. The efficiency ratio for the nine-month period was 45.91%.
The company realized aggregate gains on the sale of a portion of the investment portfolio of $4.9 million before taxes and $3.1 million after taxes through the first nine months of 2002. If the company had not realized these gains on the sale of securities, net income would have been $34 million.
This would represent an increase in net income of $4.8 million, or 16.57%, over the $29.2 million for 2001. The comparable net income per diluted share would be $0.96. This would be an increase of $0.14, or 16.51%, over the net income per diluted share of $0.82 for 2001.
These earnings results would have produced a return on beginning equity of 20.80%, a return on average equity of 18.89% and a return on average assets of 1.69%. The related efficiency ratio would have been 48.16%.
Total deposits rose to $2.19 billion as of Sept. 30, 2002. This is up $443.8 million, or 25.31%, from $1.75 billion for the same period last year. Gross loans and leases grew to $1.33 billion as of Sept. 30, 2002. This is an increase of $256.3 million, or 23.81%, from the $1.08 billion in gross loans and leases on Sept. 30, 2001.
Total assets were $2.85 billion as of Sept. 30, 2002. This represents an increase of $480.9 million, or 20.31%, over the $2.37 billion in total assets reported on Sept. 30, 2001. In addition, trust assets were $932.8 million on Sept. 30, 2002.
"We are pleased to report these positive operating results," said D. Linn Wiley, president and chief executive officer of CVB Financial Corp. "The growth in net earnings exceeds our objective to increase earnings by 15.00% for the year."
CVB Financial Corp. reported non-performing loans and non- performing assets of $818,000 as of Sept. 30, 2002. This represents a ratio of non-performing assets to total assets of 0.03%. The allowance for loan and lease losses was $22.6 million as of Sept. 30, 2002.
This represents 1.70% of gross loans and leases, and compares with 1.98% on Sept. 30, 2001. Non-performing loans and leases were 3.61% of the allowance for loan and lease losses.
CVB Financial Corp. is the holding company for Citizens Business Bank. The bank is the largest bank with headquarters in the Inland Empire region of Southern California. It serves 25 cities with 32 business financial centers in Los Angeles, Orange, Riverside, San Bernardino and Kern counties.
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 the Citizens Business Bank Web site at www.cbbank.com and click on the CVB Investor tab.
Safe Harbor
This document may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from the projected. For a discussion of factors that could cause actual results to differ, 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, 2001, and particularly the discussion of risk factors within that document.
Comparative financial statements to follow.
CVB FINANCIAL CORP.
CONSOLIDATED BALANCE SHEET
(Unaudited)
Dollars in Thousands
Sept. 30,
2002 2001
Assets:
Federal funds sold and
reverse repos $ 99,202 $ 33,000
Investment Securities
available-for-sale 1,239,653 1,105,269
Loans and lease finance
receivables 1,332,835 1,076,499
Less allowance for credit
losses (22,644) (21,288)
Net loans and lease
finance receivables 1,310,191 1,055,211
Total earning assets 2,649,046 2,193,480
Cash and due from banks 124,469 112,483
Premises and equipment, net 28,786 29,330
Goodwill and intangibles 12,537 6,698
Other assets 33,403 25,399
TOTAL $2,848,241 $2,367,390
Liabilities and Stockholders'
Equity
Liabilities:
Deposits:
Demand Deposits
(noninterest-
bearing) $ 882,777 $ 698,456
Investment Checking 171,029 114,704
Savings/MMDA 634,655 488,233
Time Deposits 508,622 451,895
Total Deposits 2,197,083 1,753,288
Other borrowings 344,700 325,000
Other liabilities 50,966 67,829
Total Liabilities 2,592,749 2,146,117
Stockholders' equity:
Stockholders' equity 226,553 199,525
Accumulated other
comprehensive income
(loss), net of tax 28,939 21,748
255,492 221,273
TOTAL $2,848,241 $2,367,390
CVB FINANCIAL CORP.
CONSOLIDATED AVERAGE BALANCE SHEET
(Unaudited)
Dollars in Thousands
Three months ended
Sept. 30,
2002 2001
Assets:
Federal funds sold and
reverse repos $ 32,628 $ 17,547
Investment securities
available-for-sale 1,332,299 1,088,179
Loans and lease
finance receivables 1,230,454 1,067,296
Less allowance for
credit losses (22,083) (21,128)
Net loans and lease
finance receivables 1,208,371 1,046,168
Total earning
assets 2,573,298 2,151,894
Cash and due from
banks 100,558 98,557
Premises and
equipment, net 28,883 27,836
Other real estate
owned, net 0 0
Goodwill and
intangibles 12,667 6,823
Other assets 35,356 30,119
TOTAL $2,750,762 $2,315,229
Liabilities and
Stockholders' Equity
Liabilities:
Deposits:
Noninterest-
bearing $ 809,625 $ 666,734
Interest-
bearing 1,260,634 1,037,068
Total Deposits 2,070,259 1,703,802
Other borrowings 401,207 372,173
Other liabilities 32,031 29,822
Total Liabilities 2,503,497 2,105,797
Stockholders' equity:
Stockholders'
equity 226,156 198,855
Accumulated other
comprehensive
income (loss), net of tax 21,109 10,577
247,265 209,432
TOTAL $2,750,762 $2,315,229
Nine months ended
Sept. 30,
2002 2001
Assets:
Federal funds sold and
reverse repos $ 44,158 $ 8,510
Investment securities
available-for-sale 1,258,104 1,083,262
Loans and lease
finance receivables 1,234,762 1,056,464
Less allowance for
credit losses (21,971) (20,329)
Net loans and lease
finance receivables 1,212,791 1,036,135
Total earning
assets 2,515,053 2,127,907
Cash and due from
banks 106,154 96,202
Premises and
equipment, net 30,340 27,694
Other real estate
owned, net 0 232
Goodwill and
intangibles 12,787 7,046
Other assets 57,812 30,475
TOTAL $2,722,146 $2,289,556
Liabilities and
Stockholders' Equity
Liabilities:
Deposits:
Noninterest-
bearing $ 802,589 $ 637,106
Interest-
bearing 1,247,558 1,002,207
Total Deposits 2,050,147 1,639,313
Other borrowings 393,739 418,815
Other liabilities 35,196 28,545
Total Liabilities 2,479,082 2,086,673
Stockholders' equity:
Stockholders'
equity 227,887 192,977
Accumulated other
comprehensive
income (loss), net of tax 15,177 9,906
243,064 202,883
TOTAL $2,722,146 $2,289,556
CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Dollar Amounts in Thousands, Except Per Share
For the
Three Months Ended
Sept. 30,
2002 2001
Interest Income:
Loans, including fees $24,030 $22,576
Investment
securities:
Taxable 12,073 12,000
Tax-advantaged 4,071 4,068
Total
investment
income 16,144 16,068
Federal funds sold 157 140
Total
interest
income 40,331 38,784
Interest Expense:
Deposits 5,938 7,624
Borrowings 5,022 4,656
Total
interest
expense 10,960 12,280
Net interest income
before provision
for credit losses 29,371 26,504
Provision for credit
losses 0 250
Net interest income
after provision for
credit losses 29,371 26,254
Other Operating Income:
Service charges on
deposit accounts 3,580 3,088
Wealth Management
services 921 906
Gain (loss) on sale
of securities 1,844 146
Gain on sale of
other real estate
owned 0 0
Other 1,495 1,097
Total other
operating
income 7,840 5,237
Other operating
expenses:
Salaries and
employee benefits 9,617 8,318
Occupancy 1,602 1,500
Equipment 1,538 1,331
Professional
services 947 697
Goodwill
Amortization 281 215
Other 3,202 2,735
Total other
operating
expenses 17,187 14,796
Earnings before income
taxes 20,024 16,695
Income taxes 6,821 5,910
Net earnings $13,203 $10,785
Basic earnings per
common share $ 0.39 $ 0.30
Diluted earnings per
common share $ 0.37 $ 0.30
Cash dividends per
common share $ 0.14 $ 0.15
All per-share
information has been
retroactively adjusted
to reflect the 5-for-4
stock split declared on
Dec. 19, 2001
For the
Nine Months Ended
Sept. 30,
2002 2001
Interest Income:
Loans, including fees $ 66,337 $ 68,627
Investment
securities:
Taxable 35,609 37,187
Tax-advantaged 12,127 11,886
Total
investment
income 47,736 49,073
Federal funds sold 478 242
Total
interest
income 114,551 117,942
Interest Expense:
Deposits 16,545 25,202
Borrowings 14,552 16,585
Total
interest
expense 31,097 41,787
Net interest income
before provision
for credit losses 83,454 76,155
Provision for credit
losses 0 1,750
Net interest income
after provision for
credit losses 83,454 74,405
Other Operating Income:
Service charges on
deposit accounts 10,335 9,404
Wealth Management
services 2,891 2,911
Gain(Loss) on sale
of securities 4,940 60
Gain on sale of
other real estate
owned 0 126
Other 4,459 4,179
Total other
operating
income 22,625 16,680
Other operating
expenses:
Salaries and
employee benefits 26,766 24,143
Occupancy 4,731 4,281
Equipment 4,431 3,900
Professional
services 3,011 3,024
Goodwill
Amortization 347 705
Other 9,419 8,437
Total other
operating
expenses 48,705 44,490
Earnings before income
taxes 57,374 46,595
Income taxes 20,214 17,351
Net earnings $ 37,160 $ 29,244
Basic earnings per
common share $ 1.07 $ 0.84
Diluted earnings per
common share $ 1.04 $ 0.82
Cash dividends per
common share $ 0.42 $ 0.43
All per share information has been
retroactively adjusted to reflect
the 5-for-4 stock split declared
on Dec. 19, 2001
Three months ended Nine months ended
Sept. 30, Sept. 30,
2002 2001 2002 2001
Interest income
- (Tax
Effective)(te) 42,041 40,493 119,644 122,934
Interest
Expense 10,960 12,280 31,097 41,787
Net Interest
income - (te) 31,081 28,213 88,547 81,147
Gain (loss) on
sale of
securities 1,844 146 4,940 60
Gain on sale of
OREO 0 0 0 126
Return on
average assets 21.66% 20.88% 20.67% 19.49%
Return on
average equity 24.26% 23.19% 22.76% 20.96%
Efficiency
ratio 1.95% 1.89% 1.85% 1.71%
Net interest
margin (te) 4.86% 5.27% 4.72% 5.11%
Weighted average
shares
outstanding
Diluted 35,651,848 35,446,432 35,637,104 35,359,554
Basic 34,905,629 34,759,675 34,889,608 34,718,615
Dividend payout
ratio 37.02% 38.83% 41.95% 40.91%
Number of
shares
outstanding-
EOP 34,810,736 34,775,200
Book value per
share 7.34 6.36
Sept. 30,
2002 2001
Non-performing Assets (dollar
amount in thousands):
Non-accrual loans $ 192 $1,704
Loans past due
90 days or more
and still accruing
interest 49 0
Restructured
loans 577 0
Other real
estate owned
(OREO), net 0 0
Total non-performing
assets $ 818 $1,704
Percentage of
non-performing
assets to total
loans outstanding
and OREO 0.06% 0.16%
Percentage of
non-performing
assets to
total assets 0.03% 0.07%
Non-performing
loans to allowance
for loan losses 3.61% 8.00%
Net loan losses
to average
loans 0.02% -0.05%
Allowance for
Credit Losses
at Beginning
of Period:
Citizens
Business Bank $ 20,469 $ 19,152
Acquisition
of Western
Security Bank 2,325
Total Loans
Charged-Off 1,287 105
Total Loans
Recovered 1,138 491
Net Loans
Charged-Off 149 (386)
Provision
Charged to
Operating
Expense 0 1,750
Allowance for
Credit Losses
at end of
period 22,645 21,288
CVB Financial Corp.
CVB Financial Corp., Ontario D. Linn Wiley, 909/980-40