UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 9, 2009
CVB FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
| California | 0-10140 | 95-3629339 | ||
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 701 North Haven Avenue,
Ontario, California |
91764 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (909) 980-4030
| Not
Applicable |
| (Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01 Regulation FD Disclosure
CVB Financial Corp. (the “Company”) is providing its investor slide presentation with information as of September 30, 2009. The slide presentation is furnished (not filed) as Exhibit 99.1 to this Current Report on Form 8-K pursuant to Regulation FD.
Item 8.01 Other Events
On November 9, 2009, the Company’s President and Chief Executive Officer, Christopher D. Myers, will discuss the slides furnished as Exhibit 99.1 with various potential investors.
Item 9.01 Financial Statement and Exhibits
(d) Exhibits
99.1 Slide presentation of CVB Financial Corp. as of September 30, 2009 (furnished pursuant to Regulation FD)
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CVB FINANCIAL CORP. (Registrant) |
||
| Date: November 10, 2009 | By: | /s/ Edward J. Biebrich Jr. |
| Edward J. Biebrich Jr., Executive Vice President and Chief Financial Officer |
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3
Exhibit Index
99.1 Slide presentation of CVB Financial Corp. as of September 30, 2009 (furnished pursuant to Regulation FD)
4
Exhibit 99.1
| 1 |
| Certain matters set forth herein constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995 which involve risks and uncertainties. Our actual results may differ significantly from the results discussed in such forward-looking statements. Factors that might cause such a difference include, but are not limited to, economic conditions including changes resulting from a prolonged economic downturn, adverse capital and credit market conditions and volatility within those markets, competition in the geographic and business areas in which we conduct operations, natural disasters, pandemic flu or other pandemic illness, ability to successfully integrate acquisitions, fluctuations in interest rates, ability of borrowers to perform under the terms of their loans, credit quality, and government regulations. For additional information concerning these factors and other factors which may cause actual results to differ from the results discussed in our forward-looking statements, see the periodic filings the Company makes with the Securities and Exchange Commission, and in particular "Item 1A. Risk Factors" contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2008. The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law. 2 |
| 1974 Chino Valley Bank formed 1981 CVB Financial Corp. (holding company formed) 1996 Chino Valley Bank becomes Citizens Business Bank 2001 CVB Financial listed on NASDAQ ("CVBF") ("CVBF") ("CVBF") ("CVBF") ("CVBF") 3 |
| 4 Largest financial institution headquartered in the Inland Empire region of Southern California Serves 39 cities with 41 business financial centers and 5 commercial banking centers throughout the Inland Empire, LA County, Orange County and the Central Valley of California Consistent profitability, with ROAA and PTPP ROAA of 1.17% and 2.01%, respectively, for the quarter ended 9/30/2009 Strong credit culture and underwriting integrity remain paramount at CVB NPA's / Loans & OREO: 1.65% LLR / NPL's: 150% Texas Ratio: 8.8% Total Assets: $6.5 Billion Net Loans: $3.5 Billion Total Deposits: $4.0 Billion Tang. Common Equity: $587.7 Million TARP Preferred: $0 Source: Q3 2009 earnings release & company filings; Texas Ratio = (NPA's + 90 days delinquent) / (Reserves + Tang. Common Equity) Source: Q3 2009 earnings release & company filings; Texas Ratio = (NPA's + 90 days delinquent) / (Reserves + Tang. Common Equity) Operating Highlights Financial Highlights 9/30/09 |
| Headquarters Bakersfield, CA Origin December 1980 Business Financial Centers 5 Assets $732 Million Deposits $530 Million Loans $689 Million Loss Sharing Threshold $144 Million 5 |
| 6 6 Existing Locations Commercial Banking Centers Business Financial Centers New Business Financial Centers (SJB) 46 Business Financial Centers 5 Commercial Banking Centers |
| Edward J. Biebrich Jr. Executive Vice President 27 Years 11 Years Chief Financial Officer Todd E. Hollander Executive Vice President 18 Years 1 Year Sales Division Christopher D. Myers President 24 Years 3 Years Chief Executive Officer Yamynn De Angelis Executive Vice President 30 Years 22 Years Chief Risk Officer Chris A. Walters Executive Vice President 22 Years 2 Years CitizensTrust Banking CVB Name Position Experience Service 7 James F. Dowd Executive Vice President 32 Years 1 Year Chief Credit Officer Interests of senior management and board of directors aligned with those of shareholders Significant equity ownership among executive management and board of directors Total Board: 16.1%, Borba family: 12.8% Knowledgeable team with significant banking experience in the Southern California markets Elsa I. Zavala Executive Vice President 29 Years 16 Years Chief Information Officer Chief Information Officer Chief Information Officer |
| 8 |
| 9 Financial Institution 2008 ROAE 1 Bank of Hawaii 24.54% 2 Bank of Ozarks 15.96% 3 Northern Trust Corp. 15.57% 4 First Financial Bankshares 15.27% 5 S&T Bancorp 14.77% 6 Westamerica Bancorp 14.77% 7 State Street Corp. 14.60% 8 TrustCo Bank Corp. NY 14.28% 9 NBT Bancorp 14.16% 10 CVB Financial Corp. 13.75% 13 U.S. Bancorp 13.05% 61 City National Corp. 6.08% 66 Wells Fargo 4.97% 80 JPMorgan Chase 4.05% 93 Bank of America 2.43% Source: ABA Banking Journal April 2009 "145 Banks" |
| BauerFinancial Report (2009) '5' Star Rating ABA Banking Journal (2009) 10th Ranked Bank in the Nation U.S. Banker Magazine (2008) 6th Ranked Bank in the Nation (3-year ROE) U.S. Banker Magazine (2007) Top Business Bank in the Nation 15th Ranked Bank in the Nation America's Finest Companies Investment Directory #318 out of 19,000 U.S. public companies The Findley Report 19 Consecutive Years - Super Premier Performing Bank Fitch Rating BBB+ (September 2009) 10 |
| 11 Net Interest Income Plus Non- Interest Income (Before Loan Loss Allowance) Net Income After Taxes (000's) |
| 12 (000's) Net Income After Taxes |
| 13 (000's) Net Income After Taxes Provision For Loan Losses |
| 14 Source: Q3 2009 earnings release & company filings; core deposits defined as total deposits less jumbo CD's, total deposits does not include customer repos The average cost of deposits stands at .59%. This low cost of deposits has helped the Bank expand its net interest margin to 3.75%, compared to 3.76% and 3.40% for the periods ended 6/30/ 2009 and 12/31/2008, respectively Strong relationship based deposit franchise, 72% of deposits are considered "core" Savings and demand deposits are showing a positive trend line, up 22% and 6% respectively, 12/31/2008 to 9/30/2009 Customer Repurchase Agreements or "Citizens Sweep Manager" totaled $460.3 Million as of 9/30/09. Average cost 0.98% Demand Deposits - 35% NOW, ATS and Other Transaction Accounts - 10.3% CDs > 100k - 2.4% MMA & Other Savings - 24.3% CDs > 100k - 27.9% |
| 15 Source: Q3 2009 earnings release & other company filings, SNL Financial-peers represent select CA, OR & WA banks with assets $2 - $9.5 billion CVB has historically enjoyed significantly lower deposit costs than its peers Core deposits have been steady throughout this difficult credit cycle, showing customers' confidence in CVB and its ability to thrive in the future confidence in CVB and its ability to thrive in the future confidence in CVB and its ability to thrive in the future confidence in CVB and its ability to thrive in the future Cost of Deposits (%) Core Deposits (000's) |
| 16 Geographic diversification, a focus on relationship banking, and a strong credit culture have allowed CVB to mitigate loan losses through this economic downturn CVB has a strong CRE banking team, lending to projects involving apartment buildings, commercial office space and industrial centers Profitable niche in dairy finance lending, currently 11% of total loans 100% of SFR portfolio is owner occupied Source: Q3 2009 earnings release & company reports Commercial & Industrial 10.7% Construction RE 8.2% Dairy & Livestock 11.4% Auto & Equipment 0.9% Municipal Lease Finance Receivables 4.5% Consumer 1.9% SFR Mortgage 8.1% Commercial RE 54.3% Orange County 14.5% Other Areas 13.5% Los Angeles 32.9% Inland Empire 21.9% Central Valley 17.2% 17.2% 17.2% Total Loans by Type Total Loans by Region |
| 17 As of 9/30/2009 CRE loans totaled $1.96 billion, while construction stood at $295.3 million, or 8.2% of total loans. Construction loans totaled $351.5 million at 12/31/08 Of the CRE loans on the balance sheet, 37.8% are owner-occupied $77 million of the construction portfolio is related to residential construction, while the remaining $218 million is allocated to commercial construction CVB's land development exposure is limited, which has helped the Bank avoid losses in that struggling asset class. Approximately 23% of the construction portfolio is related to commercial / residential land development Source: Q3 2009 earnings release & company reports Orange County 10.4% Other Areas 8.1% Los Angeles 35.8% Inland Empire 31.5% Central Valley 14.2% Orange County 9.8% San Diego 2.1% Other Areas 16.2% Los Angeles 21.6% Inland Empire 34.3% Central Valley 16.0% 16.0% 16.0% CRE Portfolio by Region Construction Portfolio by Region |
| 18 As of 6/30/2009 real estate loans totaled $2.3 billion, with the largest allocation going to industrial real estate at $653 million, or 28.8% of RE loans The weighted average owner occupied level for the RE portfolio is approximately 46% CVB's single family portfolio is 100% owner occupied Single family mortgage pools were purchased to diversify the Bank's portfolio as it makes few single family loans, target metrics - FICO's in the 700-800 range with LTV's in the 60% -80% range. No sub-prime lending Source: Q3 2009 earnings release & company reports Single Family Direct 2.8% Single Family Mortgage Pools 10.1% Multifamily 4.9% Industrial 28.8% Office 16.9% Retail 9.8% Medical 5.7% Secured by Farmland 6.8% Other 13.1% 13.1% 13.1% |
| 19 |
| As of 9/30/2009 non-performing assets totaled $59.3 million, of which $58.1 million and $1.2 million were from non-performing loans and OREO, respectively On a peer comparison basis, CVB's credit metrics are superior NPA's / Loans & OREO: 1.65% vs. 4.7% for peers LLR / NPL's: 150.2% vs. 69.9% for peers NCO's / Avg. Loans: 0.05% vs. 2.3% for peers As of 9/30/2009 over 30 days past due loans totaled 0.19% 20 Source: Q3 2009 earnings release and other company filings, Peers represent select CA, OR & WA banks with assets $2 - $9.5 billion, peer data as of 6/30/09 Consumer 0.2% C&I 1.8% CRE 23.3% SFR Mortgage 13.9% RE Construction Commercial 33.8% RE Construction & Land - Residential 27% 27% 27% 27% |
| 21 CVB's strong loan underwriting culture has limited its exposure to problem credits Continued profitability has allowed CVB to build its capital base and reserves for loan losses. Source: Q3 2009 earnings release, SNL Financial-peers represent select CA, OR & WA banks with assets $2 - $9.5 billion, peer data as of 9/30/09 Source: Q3 2009 earnings release, SNL Financial-peers represent select CA, OR & WA banks with assets $2 - $9.5 billion, peer data as of 9/30/09 Texas Ratio NPA's/Loans & OREO |
| 22 Reserves to loans currently stands at 2.43%, up from 1.44% and 0.95% at 12/31/2008 and 12/31/2007. |
| 23 On a "PTPP" earnings basis, CVB continues to outperform its competitors The Bank's focus on controlling expenses is ongoing, the Bank had an efficiency ratio of 52.4% for the quarter ended 9/30/2009 CVB has never reported an annual loss in over thirty years The Bank continues to pay a per-share dividend of 8.5 cents per quarter, yielding 4.5% Note: Peers = Nationwide public banks with assets between $3-$10 billion, peer data as of 9/30/09 Source: Q3 2009 earnings release & company filings Pre-Tax Pre-Provision ROA (%) Pre-Tax Pre-Provision ROA (%) |
| 24 Source: Q3 2009 earnings release & company reports, SNL Financial-peers represent select CA, OR & WA banks with assets $2 - $9.5 billion, peer data as of 9/30/09 Source: Q3 2009 earnings release & company reports, SNL Financial-peers represent select CA, OR & WA banks with assets $2 - $9.5 billion, peer data as of 9/30/09 Return on Average Assets Efficiency Ratio Return on Average Tangible Equity Net Interest Margin |
| 25 Source: Q3 2009 earnings release & company reports, SNL Financial-peers represent select CA, OR & WA banks with assets $2 - $9.5 billion, peer data as of 9/30/09 PF TCE/TA ratio reflects net proceeds of a $115 million common equity raise with a 15% over-allotment option, as well as the redemption of TARP preferred stock PF TCE/TA ratio reflects net proceeds of a $115 million common equity raise with a 15% over-allotment option, as well as the redemption of TARP preferred stock PF TCE/TA ratio reflects net proceeds of a $115 million common equity raise with a 15% over-allotment option, as well as the redemption of TARP preferred stock Tangible Equity/Tangible Assets Tier 1 Capital Ratio Tangible Common Equity/Tangible Assets Total Risk - Based Capital Ratio |
| 26 Source: Q3 2009 earnings release. As of 9/30/2009 securities held-to-maturity were valued at approximately $4.2 million Yield on securities represents the fully taxable equivalent Securities Available For Sale Securities portfolio totaled $2.3 billion at the end of the third quarter, 2009. During the first nine months of 2009, the Bank sold certain short maturity securities and recognized a gain on sale of $28.4 million. The portfolio represents 37.8% of the Bank's total earning assets Virtually all of the Bank's mortgage-backed securities were issued by Freddie Mac or Fannie Mae which have the guarantee of the U.S. government. Ninety-four percent of the Bank's municipal portfolio contains securities which have an underlying rating of investment grade. California municipals represent only 6.3% of the municipal bond portfolio Government Agency & GSEs 4.2% MBS 30.1% CMO's / REMIC's 35.2% Municipal Bonds 30.5% Yield on securities portfolio: 4.86% Excel.Chart.8 Excel.Chart.8 |
| Dec - 07 Mar - 08 June - 08 $7,120 $39,023 ($10,100) $47,439 $42,197 June - 09 Sep. - 09 $82,480 |
| 28 28 Organic Growth 5 New Commercial Banking Teams One Specialty Banking Team Total Deposits increased (including REPO's) by $944 million from 9/30/08 to 9/30/09 Growth Through Acquisitions FDIC Assisted "Good Banks" Trust/Wealth Management |
| 29 Quality low-cost core deposit franchise Disciplined credit culture Strong capital position Well-positioned to expand business High-quality client relationships Talented bankers/rainmakers Strong capital base for acquisitions Diminished local competition Strong board ownership position (16%) Attractive long-term growth markets Consistent historical dividend payments (current yield 4.5%) |
| 30 |