ONTARIO, Calif.--(BUSINESS WIRE)-- CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank ("the Company"), announced results for the second quarter of 2009. The Company reported increased earnings for the second quarter of 2009 compared to the first quarter of 2009. Net income of $15.9 million, increased by $2.7 million, or 20.45%, compared to net income of $13.2 million for the first quarter of 2009. Diluted earnings per common share of $0.17 for the second quarter of 2009, increased by $0.04 or 30.77%, from diluted earnings per common share of $0.13 for the first quarter of 2009.
"We are very pleased with our results for the second quarter of 2009," said Chris Myers, President & CEO. "Our net income increased 20.45% sequentially, our deposit growth and customer repos increased $795.4 million year-over year, and our overall credit quality remained solid. Given the difficulties U.S. banks continue to face, we remain confident that we are well-positioned to continue our strong operating performance during these tough economic times."
Net income of $15.9 million represents a decrease of $1.3 million, or 7.53%, when compared with net earnings of $17.2 million for the second quarter of 2008. Diluted earnings per common share were $0.17 for the second quarter of 2009. This was down $0.04, or 18.91%, from diluted earnings per common share of $0.21 for the same period last year. Of the $0.04 decrease, $0.02 is due to the dividends and amortization of the discount on our preferred stock.
Net income for the second quarter of 2009 produced a return on beginning common equity of 12.61%, a return on average common equity of 12.36% and a return on average assets of 0.99%. Return on beginning equity was 10.16% and return on average equity was 9.99%. The efficiency ratio for the second quarter was 61.29%; excluding the provision for credit losses, the gain on sale of securities and the one-time FDIC special assessment, the efficiency ratio was 49.0%. Operating expenses as a percentage of average assets were 2.05%. Our expenses were impacted by a $3.0 million accrual for the FDIC's special assessment. This assessment was levied on all banking institutions.
Net income for the six months ending June 30, 2009 was $29.0 million. This represents a decrease of $4.3 million, or 12.92%, when compared with net income of $33.3 million for the same period of 2008. Diluted earnings per share for the six months ending June 30, 2009 were $0.30, a decrease of $0.10, or 24.66%, from diluted earnings per share of $0.40 for the same period last year. Of the $0.10 decrease, $0.05 is due to the dividends and amortization of the discount on our preferred stock. The net income for the six months of 2009 includes a provision of $42.0 million for credit losses and a $21.5 million gain on sale of investment securities, as compared to the provision for credit losses of $4.7 million and no gain on sale of securities for the first six months of 2008. Excluding the provision for credit losses, gain on sale of investment securities and the one-time FDIC special assessment, net income would have been $42.6 million.
Net income for the six months ending June 30, 2009 produced a return on beginning common equity of 11.86%, a return on average common equity of 11.51% and a return on average assets of 0.90%. Return on beginning equity was 9.52% and return on average equity was 9.29%. The efficiency ratio for the six-month period was 62.23%; excluding the provision for credit losses, the gain on sale of securities, and the one-time FDIC special assessment, the efficiency ratio was 49.54%. Operating expenses as a percentage of average assets was 1.99%.
The Company made provisions for credit losses totaling $20.0 million during the second quarter ending June 30, 2009. For the six months ending June 30, 2009, provisions for credit losses totaled $42.0 million. This compares with provisions of $3.0 million for the second quarter of 2008 and $4.7 million for the six months ending June 30, 2008. The Company's non-performing assets increased from $13.5 million as of June 30, 2008 to $55.3 million as of June 30, 2009. This represents 0.21% of total assets as of June 30, 2008 and 0.86% of total assets as of June 30, 2009.
Net Interest Income and Net Interest Margin
Net interest income, before provision for credit losses, totaled $54.1 million for the second quarter of 2009. This represents an increase of $5.6 million, or 11.58%, over net interest income of $48.5 million for the same period in 2008. The increase resulted from a $12.8 million decrease in interest expense which overshadowed a $7.2 million decrease in interest income. The decrease in interest income was primarily due to the decrease in both interest rates and average earning assets. The decrease in interest expense was due to the decrease in the interest rates paid on deposits and borrowed funds, coupled with a decrease in average borrowed funds, which was partially offset by the increase in average interest-bearing deposits.
Net interest margin (tax equivalent) increased from 3.43% for the second quarter of 2008 to 3.76% for the second quarter of 2009. Total average earning asset yields decreased from 5.69% for the second quarter of 2008 to 5.17% for the second quarter of 2009. The cost of funds decreased from 2.95% for the second quarter of 2008 to 1.98% for the second quarter of 2009. 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.
Net interest income, before the provision for credit losses, totaled $109.4 million for the six months ending June 30, 2009. This was the highest net interest income in the history of the Company. This represents an increase of $16.8 million, or 18.11%, compared to the same period in 2008. The increase resulted from a $28.2 million decrease in interest expense which overshadowed an $11.5 million decrease in interest income.
The net interest margin (tax equivalent) increased from 3.34% for the first six months of 2008 to 3.75% for the first six months of 2009. Total average earning asset yields decreased from 5.80% for the first six months of 2008 to 5.22% for the first six months of 2009. Total cost of funds decreased from 3.20% for the first six months of 2008 to 2.03% for the first six months of 2009.
Assets
The Company reported total assets of $6.41 billion at June 30, 2009. This represented a decrease of $38.9 million, or 0.60%, from total assets of $6.45 billion at June 30, 2008. Earning assets totaling $5.91 billion declined $155.7 million, or 2.57%, when compared with earning assets of $6.07 billion at June 30, 2008. The decrease is due to the decrease in total investments of $216.8 million, offset by an increase in loans, net of allowance for loan losses, of $61.1 million. Loans and leases totaled $3.61 billion at June 30, 2009. This represents an increase of $98.5 million, or 2.80%, when compared with loans and leases of $3.52 billion at June 30, 2008.
Total assets of $6.41 billion at June 30, 2009 decreased $234.8 million, or 3.53% from total assets of $6.65 billion at December 31, 2008. This was primarily due to the decrease in investment securities of $222.6 million. Total earning assets of $5.91 billion decreased $364.0 million, or 5.80%, from total earning assets of $6.28 billion at December 31, 2008. Loans and leases totaling $3.61 billion at June 30, 2009 decreased $122.1 million, or 3.27% from loans and leases of $3.74 billion at December 31, 2008.
Investment Securities
Investment securities totaled $2.28 billion at June 30, 2009. This represents a decrease of $220.3 million, or 8.82%, when compared with $2.50 billion in investment securities at June 30, 2008. It also represents a decrease of $222.6 million, or 8.91%, when compared with $2.50 billion in investment securities at December 31, 2008. During the first six months of 2009, we sold certain securities with relatively short maturities and recognized a gain on sale of securities of $21.5 million.
Our investment portfolio continues to perform well. We have no preferred stock and no trust preferred securities. Virtually all of our mortgage-backed securities are issued by Freddie Mac or Fannie Mae, which have the guarantee of the U.S. Government. Those that are private label mortgage-backed issues, approximately $40 million, are also performing well. Ninety-six percent of our $649.9 million municipal bond portfolio contains securities which have an underlying rating of investment grade. Of the $657.5 million in municipal bond securities, $41.4 million, or 6.3%, are located within the state of California. All municipal bond securities are fully performing.
Deposits
Total deposits and customer repos were $4.41 billion at June 30, 2009. This represents an increase of $795.4 million, or 22.01%, when compared with total deposits and customer repos of $3.61 billion at June 30, 2008. Total deposits and customer repos of $4.41 billion at June 30, 2009 increased by $543.4 million, or 14.06%, when compared to total deposits and customer repos of $3.87 billion at December 31, 2008. "Last year we implemented our deposit gathering initiatives through the creation of our Specialty Banking Group and our Commercial Banking Centers," said Chris Myers. "The growth in deposits and customer repos is a reflection of the success of those initiatives."
Borrowings
Borrowings decreased by $779.0 million, or 39.09%, from December 31, 2008. As a result of the increase in deposits and customer repurchases of $543.4 million and the net decrease of $222.6 million in securities, it was possible for us to reduce our reliance on borrowed funds. The replacement of high cost borrowings with low cost deposits helped to improve our margin during the first six months of 2009. "One of our goals has been to decrease our reliance on borrowed funds; we have made significant progress" commented Mr. Myers.
Asset Quality
During the second quarter of 2009 non-accrual loans increased $3.2 million from the first quarter, now totaling $51.3 million. Net charge-offs were $11.0 million in the second quarter of 2009 compared to $10.2 million in the first quarter of 2009. OREO decreased to $4.0 million at June 30, 2009, from $8.7 million at March 31, 2009. This represents a decrease of $4.7 million due to the sale of $6.1 million in OREO properties, offset by the addition of $1.4 million in new OREO properties.
The overall credit quality of the loan portfolio is sound. Our allowance for credit losses increased from $37.3 million as of June 30, 2008 and $54.0 million as of December 31, 2008 to $74.8 million as of June 30, 2009. The increase was primarily due to provisions for credit losses of $17.9 million during the fourth quarter of 2008 and a provision for credit losses of $42.0 million during the first six months of 2009. During the first six months of 2009, we had loan charge-offs totaling $21.9 million and recoveries on previously charged-off loans of $645,000. This resulted in net charge-offs of $21.2 million. By comparison, during the first six months of 2008, the Company had net charge-offs of $439,000 and a $4.7 million contribution to the provision for credit losses. The allowance for credit losses was 2.07% and 1.06% of total loans and leases outstanding as of June 30, 2009 and 2008, respectively. "We continue to make greater provisions for credit losses in order to build our reserves. One of our key internal measurements is the ratio of our loan loss allowance to our non-performing loans. We are pleased to report that this ratio improved from 137% at March 31, 2009 to 146% at June 30, 2009. In looking forward, our goal is to be proactive and fiscally prepared for any further deterioration in economic conditions," said Chris Myers.
We had $51.3 million in non-performing loans at June 30, 2009 or 1.42% of total loans. This compares to $48.0 million in non-performing loans at March 31, 2009, $17.7 million at December 31, 2008 and $12.3 million at June 30, 2008. Non-performing loans consist of $17.4 million in residential construction and land loans, $21.3 million in commercial construction loans, $4.6 million in single-family mortgage loans, $7.0 million in commercial real estate loans, $0.9 million in other commercial loans and $0.1 million in consumer loans. As a follow-up to our 1st quarter earnings release, the Bank continues to have only one borrowing relationship with over $50 million in total loan commitments. The subject relationship consists of eight loans aggregating $85.2 million. We have not advanced any new monies to this borrower since August 2008. All of these loans are backed by the principal owner, paid current and performing as agreed.
A misconception is that all of our loans are in the Inland Empire, one of the hardest hit areas of the United States during this recession. However, of our total loan portfolio, approximately 22% is based in the Inland Empire and 33% is based in L.A. County. Please see attached schedules for a geographic breakdown of our loan portfolio.
At June 30, 2009, we had loans delinquent 30 to 89 days of $7.3 million. This compares to delinquent loans of $13.9 million as of March 31, 2009, $5.2 million as of December, 31, 2008, and $1.0 million as of June 30, 2008. As a percentage of total loans, delinquencies, excluding non-accruals, were 0.20% at June 30, 2009, 0.38% at March 31, 2009, 0.14% at December 31, 2008 and 0.03% at June 30, 2008.
Our construction loan portfolio totaled $303.6 million as of June 30, 2009 down from $351.5 million as of December 31, 2008. This represents 8.4% of our total loans outstanding at June 30, 2009. Of the $303.6 million, $83.6 million is for residential construction and residential land loans. This represents 28% of the construction loans outstanding or 2.3% of our total loan portfolio. Of note, 33% of our total construction loan portfolio is based in the Inland Empire.
CitizensTrust
CitizensTrust has approximately $1.6 billion in assets under administration, including $750.4 million in assets under management, as of June 30, 2009. This compares with $2.1 billion in assets under administration, including $807.4 million in assets under management at June 30, 2008. CitizensTrust provides trust, investment and brokerage related services, as well as financial, estate and business succession planning. Income from CitizensTrust was $1.6 million in the current quarter, down $371,000 from $2.0 million for the second quarter of 2008.
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 39 cities with 42 business financial centers and 5 commercial banking centers in the Inland Empire, Los Angeles County, Orange County and the Central Valley areas of California.
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 (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 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, local, regional, national and international economic conditions and events and the impact they may have on us and our customers; ability to attract deposits and other sources of liquidity; oversupply of inventory and continued deterioration in values of California real estate, both residential and commercial; a prolonged slowdown in construction activity; changes in the financial performance and/or condition of our borrowers; changes in the level of non-performing assets and charge-offs; ability to repurchase our securities issued to the U.S. Treasury pursuant to its Capital Purchase Program; the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, executive compensation and insurance) with which we and our subsidiaries must comply; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; inflation, interest rate, securities market and monetary fluctuations; political instability; acts of war or terrorism, or natural disasters, such as earthquakes, or the effects of pandemic flu; the timely development and acceptance of new banking products and services and perceived overall value of these products and services by users; changes in consumer spending, borrowing and savings habits; technological changes; the ability to increase market share and control expenses; changes in the competitive environment among financial and bank holding companies and other financial service providers; continued volatility in the credit and equity markets and its effect on the general economy; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; changes in our organization, management, compensation and benefit plans; the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; our success at managing the risks involved in the foregoing items 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, 2008, 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
June 30, December 31,
2009 2008 2008
Assets:
Cash and due from banks $ 221,242 $ 110,966 $ 95,297
Investment Securities 2,271,393 2,490,677 2,493,476
available-for-sale
Investment Securities 6,347 7,380 6,867
held-to-maturity
Federal funds sold and
Interest-bearing balances due 1,785 475 285
from depository institutions
Investment in stock of Federal 93,240 90,987 93,240
Home Loan Bank (FHLB)
Loans and lease finance 3,614,756 3,516,243 3,736,838
receivables
Less allowance for credit losses (74,755 ) (37,310 ) (53,960 )
Net loans and lease finance 3,540,001 3,478,933 3,682,878
receivables
Total earning assets 5,912,766 6,068,452 6,276,746
Premises and equipment, net 42,838 45,206 44,420
Intangibles 9,497 12,815 11,020
Goodwill 55,097 55,097 55,097
Cash value of life insurance 108,045 105,644 106,366
Other assets 65,412 55,666 60,705
TOTAL $ 6,414,897 $ 6,453,846 $ 6,649,651
Liabilities and Stockholders'
Equity
Liabilities:
Deposits:
Demand Deposits $ 1,420,535 $ 1,281,838 $ 1,334,248
(noninterest-bearing)
Investment Checking 410,107 346,916 324,907
Savings/MMDA 923,658 861,337 818,872
Time Deposits 1,228,920 723,542 1,030,129
Total Deposits 3,983,220 3,213,633 3,508,156
Demand Note to U.S. Treasury 8,995 77 5,373
Customer Repurchase Agreements 426,111 400,306 357,813
Repurchase Agreements 250,000 250,000 250,000
Borrowings 955,000 1,994,850 1,737,660
Junior Subordinated Debentures 115,055 115,055 115,055
Other liabilities 53,140 45,731 60,702
Total Liabilities 5,791,521 6,019,652 6,034,759
Stockholders' equity:
Stockholders' equity 598,902 439,912 586,161
Accumulated other comprehensive
income
(loss), net of tax 24,474 (5,718 ) 28,731
623,376 434,194 614,892
TOTAL $ 6,414,897 $ 6,453,846 $ 6,649,651
CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEET
(unaudited)
dollars in thousands
Three months ended June 30, Six months ended June 30,
2009 2008 2009 2008
Assets:
Cash and due from $ 101,092 $ 100,568 $ 98,232 $ 104,223
banks
Investment
securities 2,299,700 2,550,131 2,397,601 2,468,525
available-for-sale
Investment
securities 6,432 7,463 6,561 6,790
held-to-maturity
Federal funds sold
and
Interest-bearing 61,283 1,959 30,953 1,627
balances due from
depository
institutions
Investment in stock
of Federal Home 93,240 89,043 93,240 86,881
Loan Bank (FHLB)
Loans and lease 3,654,189 3,438,189 3,667,152 3,410,981
finance receivables
Less allowance for (75,390 ) (35,635 ) (67,898 ) (34,770 )
credit losses
Net loans and lease 3,578,799 3,402,554 3,599,254 3,376,211
finance receivables
Total earning 6,039,454 6,051,150 6,127,609 5,940,034
assets
Premises and 43,778 46,176 44,158 46,475
equipment, net
Intangibles 9,782 13,163 10,149 13,612
Goodwill 55,097 55,097 55,097 55,114
Cash value of life 107,612 104,918 107,163 104,353
insurance
Other assets 84,947 75,019 82,604 72,491
TOTAL $ 6,441,762 $ 6,446,091 $ 6,525,012 $ 6,336,302
Liabilities and
Stockholders'
Equity
Liabilities:
Deposits:
Noninterest-bearing $ 1,375,054 $ 1,248,113 $ 1,358,732 $ 1,236,720
Interest-bearing 2,506,064 1,997,510 2,384,135 2,024,070
Total Deposits 3,881,118 3,245,623 3,742,867 3,260,790
Other borrowings 1,723,364 2,530,603 1,965,178 2,434,881
Junior Subordinated 115,055 115,055 115,055 115,055
Debentures
Other liabilities 85,547 90,148 71,677 74,946
Total Liabilities 5,805,084 5,981,429 5,894,777 5,885,672
Stockholders'
equity:
Stockholders' 601,788 442,203 598,373 437,233
equity
Accumulated other
comprehensive
income
(loss), net of tax 34,890 22,459 31,862 13,397
636,678 464,662 630,235 450,630
TOTAL $ 6,441,762 $ 6,446,091 $ 6,525,012 $ 6,336,302
CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
dollar amounts in thousands, except per share
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2009 2008 2009 2008
Interest Income:
Loans and leases, including fees $ 49,771 $ 52,211 $ 99,296 $ 106,257
Investment securities:
Taxable 19,134 22,430 41,570 43,306
Tax-advantaged 6,815 7,111 13,811 14,299
Total investment income 25,949 29,541 55,381 57,605
Dividends from FHLB Stock - 1,205 - 2,299
Federal funds sold &
Interest-bearing CDs with other 55 12 59 27
institutions
Total interest income 75,775 82,969 154,736 166,188
Interest Expense:
Deposits 6,439 8,537 13,029 20,816
Borrowings and junior subordinated 15,241 25,949 32,321 52,760
debentures
Total interest expense 21,680 34,486 45,350 73,576
Net interest income before 54,095 48,483 109,386 92,612
provision for credit losses
Provision for credit losses 20,000 3,000 42,000 4,700
Net interest income after
provision for credit losses 34,095 45,483 67,386 87,912
Other Operating Income:
Service charges on deposit accounts 3,643 3,807 7,360 7,552
Trust and investment services 1,604 1,975 3,265 3,888
Gain on sale of investment 12,619 - 21,548 -
securities
Other 1,843 2,920 3,893 5,403
Total other operating income 19,709 8,702 36,066 16,843
Other operating expenses:
Salaries and employee benefits 15,376 15,501 31,196 31,044
Occupancy 2,686 3,080 5,538 5,951
Equipment 1,735 2,019 3,332 3,668
Professional services 1,658 1,874 3,352 3,415
Amortization of intangible assets 734 898 1,523 1,796
Provision for unfunded commitments 450 1,000 1,350 1,250
OREO Expense 143 - 1,174 -
Other 10,197 6,006 16,911 11,653
Total other operating expenses 32,979 30,378 64,376 58,777
Earnings before income taxes 20,825 23,807 39,076 45,978
Income taxes 4,964 6,655 10,048 12,642
Net earnings $ 15,861 $ 17,152 $ 29,028 $ 33,336
Basic earnings per common share $ 0.17 $ 0.21 $ 0.30 $ 0.40
Diluted earnings per common share $ 0.17 $ 0.21 $ 0.30 $ 0.40
Cash dividends per common share $ 0.085 $ 0.085 $ 0.170 $ 0.170
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
Three months ended June 30, Six months ended June 30,
2009 2008 2009 2008
Interest income
- $ 78,559 $ 85,856 $ 160,367 $ 171,988
(Tax-Effected)
(te)
Interest 21,680 34,486 45,350 73,576
Expense
Net Interest $ 56,879 $ 51,370 $ 115,017 $ 98,412
income - (te)
Return on 0.99 % 1.07 % 0.90 % 1.06 %
average assets
Return on 9.99 % 14.85 % 9.29 % 14.88 %
average equity
Efficiency 61.29 % 56.06 % 62.23 % 56.11 %
ratio
Net interest 3.76 % 3.43 % 3.75 % 3.34 %
margin (te)
Weighted
average shares
outstanding
Basic 83,222,011 83,105,378 83,198,635 83,128,353
Diluted 83,290,941 83,478,290 83,299,071 83,456,005
Dividends $ 7,079 $ 7,058 $ 14,162 $ 14,151
declared
Dividend payout 44.63 % 41.15 % 48.79 % 42.45 %
ratio
Number of
shares 83,326,511 83,221,358
outstanding-EOP
Book value per $ 6.01 $ 5.22
share
June 30,
2009 2008
Non-performing
Assets (dollar
amount in
thousands):
Non-accrual $ 51,265 $ 12,337
loans
Loans past due
90 days or more
and still
accruing - -
interest
Other real
estate owned 4,035 1,137
(OREO), net
Total
non-performing $ 55,300 $ 13,474
assets
Percentage of
non-performing
assets
to total loans
outstanding and 1.52 % 0.38 %
OREO
Percentage of
non-performing
assets to total 0.86 % 0.21 %
assets
Allowance for
loan losses to
non-performing 135.18 % 276.90 %
assets
Net Charge-off
to Average 0.58 % 0.01 %
loans
Allowance for
Credit Losses:
Beginning $ 53,960 $ 33,049
Balance
Total Loans (21,850 ) (685 )
Charged-Off
Total Loans 645 246
Recovered
Net Loans (21,205 ) (439 )
Charged-off
Provision
Charged to 42,000 4,700
Operating
Expense
Allowance for
Credit Losses $ 74,755 $ 37,310
at End of
period
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(unaudited)
Quarterly Common
Stock Price
2009 2008 2007
Quarter End High Low High Low High Low
March 31, $ 11.62 $ 5.62 $ 11.20 $ 8.45 $ 13.38 $ 11.42
June 30, $ 7.72 $ 5.75 $ 12.10 $ 9.44 $ 12.40 $ 10.63
September 30, $ 15.01 $ 7.65 $ 12.71 $ 9.51
December 31, $ 13.89 $ 9.29 $ 11.97 $ 9.98
Quarterly
Consolidated
Statements of
Earnings
2Q 1Q 4Q 3Q 2Q
2009 2009 2008 2008 2008
Interest income
Loans, including fees $ 49,771 $ 49,526 $ 53,416 $ 52,954 $ 52,211
Investment securities
and federal funds 26,004 29,436 29,407 30,553 30,758
sold
75,775 78,962 82,823 83,507 82,969
Interest expense
Deposits 6,439 6,590 7,569 7,417 8,537
Other borrowings 15,241 17,080 23,200 27,078 25,949
21,680 23,670 30,769 34,495 34,486
Net interest income
before
provision for credit 54,095 55,292 52,054 49,012 48,483
losses
Provision for credit 20,000 22,000 17,900 4,000 3,000
losses
Net interest income
after
provision for credit 34,095 33,292 34,154 45,012 45,483
losses
Non-interest income 19,709 16,357 9,242 8,373 8,702
Non-interest expenses 32,979 31,397 27,954 29,057 30,378
Earnings before 20,825 18,252 15,442 24,328 23,807
income taxes
Income taxes 4,964 5,084 3,165 6,868 6,655
Net earnings $ 15,861 $ 13,168 $ 12,277 $ 17,460 $ 17,152
Basic earning per $ 0.17 $ 0.13 $ 0.14 $ 0.21 $ 0.21
common share
Diluted earnings per $ 0.17 $ 0.13 $ 0.14 $ 0.21 $ 0.21
common share
Cash dividends per $ 0.085 $ 0.085 $ 0.085 $ 0.085 $ 0.085
common share
Dividends Declared $ 7,079 $ 7,083 $ 7,078 $ 7,088 $ 7,058
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
Distribution
of Loan
Portfolio
6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
Commercial
and $ 372,162 $ 355,591 $ 370,829 $ 356,973 $ 424,515
Industrial
Real Estate:
Construction 303,629 333,234 351,543 359,859 333,303
Commercial 1,964,258 1,965,531 1,945,706 1,932,778 1,851,123
Real Estate
SFR Mortgage 306,225 328,145 333,931 341,389 351,120
Consumer 67,947 69,708 66,255 61,710 57,380
Municipal
lease 165,527 169,230 172,973 173,600 163,459
finance
receivables
Auto and
equipment 37,242 41,708 45,465 47,753 53,121
leases
Dairy and 405,427 404,090 459,329 331,333 293,133
Livestock
Gross Loans 3,622,417 3,667,237 3,746,031 3,605,395 3,527,154
Less:
Deferred net (7,661 ) (8,378 ) (9,193 ) (10,058 ) (10,911 )
loan fees
Allowance
for credit (74,755 ) (65,755 ) (53,960 ) (40,058 ) (37,310 )
losses
Net Loans $ 3,540,001 $ 3,593,104 $ 3,682,878 $ 3,555,279 $ 3,478,933
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
Non-Performing Assets &
Delinquency Trends
June 30, March 31, December 31, September 30, June 30,
2009 2009 2008 2008 2008
Non-Performing
Loans
Residential
Construction $ 17,348 $ 20,943 $ 7,524 $ 8,020 $ 9,802
and Land
Commercial 21,270 22,102 - - -
Construction
Residential 4,632 2,203 3,116 2,062 1,672
Mortgage
Commercial Real 7,041 1,661 4,658 4,995 337
Estate
Commercial and 859 792 2,074 1,248 214
Industrial
Consumer 115 336 312 312 312
Total $ 51,265 $ 48,037 $ 17,684 $ 16,637 $ 12,337
% of Total 1.42 % 1.31 % 0.47 % 0.46 % 0.35 %
Loans
Past Due 30+
Days
Residential
Construction $ - $ - $ - $ - $ -
and Land
Commercial - - - 2,500 -
Construction
Residential 2,069 3,814 1,931 481 483
Mortgage
Commercial Real 1,074 8,341 2,402 19 255
Estate
Commercial and 590 1,720 592 1,852 228
Industrial
Dairy & 3,551 - - - -
Livestock
Consumer 8 62 231 55 -
Total $ 7,292 $ 13,937 $ 5,156 $ 4,907 $ 966
% of Total 0.20 % 0.38 % 0.14 % 0.14 % 0.03 %
Loans
OREO
Residential
Construction $ 1,789 $ 2,416 $ 6,158 $ 1,612 $ 1,137
and Land
Commercial Real 1,187 4,612 87 - -
Estate
Commercial and 893 893 - - -
Industrial
Residential - 745 320 315 -
Mortgage
Consumer 166 - - - -
Total $ 4,035 $ 8,666 $ 6,565 $ 1,927 $ 1,137
Total
Non-Performing, $ 62,592 $ 70,640 $ 29,405 $ 23,471 $ 14,440
Past Due & OREO
% of Total 1.73 % 1.93 % 0.78 % 0.65 % 0.41 %
Loans
Total Loans 3,622,417 3,667,237 3,746,031 3,605,395 3,527,154
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
June 30, 2009
Total Loans
Total Loans by County (amounts in thousands)
Los Angeles $ 1,186,400 32.8 %
Inland Empire 798,695 22.0 %
Central Valley 643,524 17.8 %
Orange 518,187 14.3 %
Other Areas 475,611 13.1 %
$ 3,622,417 100.0 %
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. The following table reconciles the differences in net earnings excluding the provision for credit losses, the gain on sale of securities, and the one-time FDIC Special Assessment in conformity with GAAP.
Net Earnings Reconciliation (non-GAAP disclosure): June 30, 2009
Three months Six months
ended ended
(Amounts in thousands)
Net earnings excluding the provision for credit
losses, the gain on sale of securities, and the $ 21,882 $ 42,630
one-time FDIC Special Assessment
Provision for Credit Losses (20,000 ) (42,000 )
Gain on Sale of Securities 12,619 21,548
One-time FDIC Special Assessment (3,000 ) (3,000 )
Tax Effect 4,360 9,850
GAAP Net Earnings $ 15,861 $ 29,028
We have presented net earnings excluding the provision for credit losses, the
gain on sale of securities, and the one-time FDIC Special Assessment to show
shareholders the earnings from operations was uneffected 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.
Ratios Reconciliation (non-GAAP disclosure):
The following table reconciles the differences in ratios excluding the provision
for credit losses, the gain on sale of securities, and the one-time FDIC Special
Assessment in conformity with GAAP.
Ratios Reconciliation Ratios Reconciliation
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2009 2009
Excluding Provision Excluding Provision
provision for credit provision for credit
for credit losses, for credit losses,
losses, gain on losses, gain on
gain on sale of GAAP Net gain on sale of GAAP Net
sale of securities, Earnings sale of securities, Earnings
securities, and FDIC securities, and FDIC
and FDIC special and FDIC special
special assessment special assessment
assessment assessment
( amounts in thousands ) ( amounts in thousands )
Other $ $ $
Operating 29,979 $ 3,000 32,979 61,376 $ 3,000 $ 64,376
Expense
Net $ $ $ $ $ $
Revenues 61,185 (7,381) 53,804 123,904 (20,452) 103,452
Net $ $ $ $ $ $ 29,028
Earnings 21,882 (6,021) 15,861 42,630 (13,602)
Return on
Beginning 14.01% 10.16% 13.98% 9.52%
Equity
Return on
Average 13.79% 9.99% 13.64% 9.29%
Equity
Return on
Average 1.36% 0.99% 1.32% 0.90%
Assets
Efficiency 49.00% 61.29% 49.54% 62.23%
Ratio
We have presented ratios excluding the provision for credit losses, the gain on
sale of securities, and the one-time FDIC Special Assessment to show shareholders
the earnings from operations was 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.
Source: CVB Financial Corp.Contact: CVB Financial Corp. Christopher D. Myers President and CEO 909-980-4030