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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):  January 16, 2008

CVB FINANCIAL CORP.
(Exact name of registrant as specified in its charter)

 

California		0-10140		95-3629339
(State or other jurisdiction of		(Commission file number)		(I.R.S. employer
incorporation or organization)				identification number)

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 (See General Instruction A.2.):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))

 

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Item 1.01

Entry into a Material Definitive Agreement

The Compensation Committee of the Board of Directors of CVB Financial Corp. (“the Committee”) approved the Discretionary Performance Compensation Plan for 2007. The Performance Plan provides for bonus compensation based on the achievement of certain performance goals. On January 16, 2008, the Committee met to review goals in the Performance Plan and determined that the goals were met. Based on the Performance Plan, the named executive officers of the CVB Financial Corp. will receive the following 2007 bonus amounts payable in February 2008 as follows:

Named Executive Officer

Amount of 2007 Cash Bonus

Christopher D. Myers

$230,000

Edward J. Biebrich, Jr.

$75,000

Jay W. Coleman

$50,000

Edward J. Mylett, Jr.

$75,000

Christopher A. Walters

$30,000

 

2

On January 17, 2008, CVB Financial Corp. issued a press release setting forth its fourth quarter ending December 31, 2007 earnings. A copy of this press release is attached hereto as Exhibit 99.1 and is being furnished pursuant to this Item 2.02.

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)

Executive Vice President and Chief
Financial Officer

Exhibit Index

Exhibit 99.1

Press Release

For Immediate Release

CVB Financial Corp. Reports Results for 2007

Ontario, CA, January 17, 2008-CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (“the Company”), announced the results for the year ended December 31, 2007.

Net Income

CVB Financial Corp. reported net income of $60.6 million for the year ended December 31, 2007. This represents a decrease of $10.0 million, or 14.16%, when compared with net earnings of $70.6 million for the year ended December 31, 2006. Diluted earnings per share were $0.72 for the year ended December 31, 2007. This was down $0.11, or 13.34%, from diluted earnings per share of $0.83 for the same period last year.

Net income for the year ended December 31, 2007 produced a return on beginning equity of 15.64%, a return on average equity of 15.00% and a return on average assets of 1.00%. The efficiency ratio for the year was 55.93%, and operating expenses as a percentage of average assets were 1.73%.

The Company reported net income of $13.4 million for the fourth quarter ending December 31, 2007. This represented a decrease of $2.5 million, or 15.93%, when compared with the $15.9 million in net income reported for the fourth quarter of 2006. Diluted earnings per share were $0.16 for the fourth quarter of 2007. This was down $0.03, or 14.47%, from diluted earnings per share of $0.19 for the fourth quarter of 2006. These results include a $4 million provision for credit losses taken in the fourth quarter of 2007.

Net income for the fourth quarter of 2007 produced a return on beginning equity of 12.97%, a return on average equity of 12.68% and a return on average assets of 0.86%. The efficiency ratio for the fourth quarter was 60.50%, and operating costs as a percentage of average assets were 1.77%.

Net Interest Income and Net Interest Margin

Net interest income, after provision for credit losses, totaled $157.1 million for the year ended December 31, 2007. This represents a decrease of $8.5 million, or 5.12%, over the net interest income of $165.6 million for the same period of 2006. This decrease resulted from a $25.2 million increase in interest income, offset by a $32.7 million increase in interest expense and a $1.0 million increase in provision for credit losses. The increases in interest income were primarily due to the growth in average earning assets and the increase in interest rates. The increases in interest expense were due to the increases in interest bearing deposits and borrowed funds and the increase in interest rates.

Net interest income, after provision for credit losses, totaled $37.4 million for the fourth quarter of 2007. This represented a decrease of $2.0 million, or 5.07%, over the net interest income of $39.4 million for the fourth quarter of 2006. These decreases resulted from a $1.1 million increase in interest income, and a $0.3 million decrease in interest expense offset by a $3.4 million increase in the provision for credit losses.

Net interest margin (tax equivalent) declined from 3.30% for the year ended December 31, 2006 to 3.03% for the year ended December 31, 2007. Total average earning asset yields increased from 6.04% for 2006 to 6.17% for 2007. The cost of funds increased from 2.76% for 2006 to 3.17% for 2007. The decline in net interest margin is due to the cost of interest-bearing liabilities rising faster than the increase in yields on earning assets. This decline in net interest margin has been mitigated by the strong growth in the balance sheet. In addition, the Company has approximately $1.30 billion, or 38.52%, of its deposits in interest free demand deposits.

Net interest margin (tax equivalent) for the fourth quarter of 2007 was 3.06%. This represents an increase of 5 basis points when compared to the 3.01% for the fourth quarter of 2006. Average earning asset yields for the fourth quarter of 2007 were 6.06%, compared with asset yields of 6.10% for the fourth quarter of 2006. The cost of funds for the fourth quarter of 2007 was 3.04% compared with 3.13% for the same period last year.

The credit quality of the loan portfolio continues to be strong. The allowance for credit losses increased from $27.7 million as of December 31, 2006 to $33.0 million as of December 31, 2007. During 2007, the Company experienced net charge-offs of $1.4 million and made a provision for credit losses of $4.0 million. During 2006, the Company had net recoveries of $1.5 million and a $3 million provision for credit losses. The allowance for credit losses was .95% and .90% of the total loans and leases outstanding as of December 31, 2007 and 2006, respectively.

Balance Sheet

The Company reported total assets of $6.29 billion at December 31, 2007. This represented an increase of $202 million, or 3.31%, over total assets of $6.09 billion on December 31, 2006. Earning assets totaling $5.91 billion were up $204 million, or 3.57%, when compared with earning assets of $5.70 billion at December 31, 2006. Total deposits and customer repos were $3.70 billion at December 31, 2007. This represents an

increase of $200 million, or 5.70%, when compared with total deposits and customer repos of $3.50 billion at December 31, 2006. Gross loans and leases totaled $3.50 billion at December 31, 2007. This represents an increase of $425 million, or 13.84%, when compared with gross loans and leases of $3.07 billion at December 31, 2006.

Investment Securities

Investment securities totaled $2.37 billion at December 31, 2007. This represents a decrease of $217 million, or 8.42%, when compared with $2.58 billion in investment securities at December 31, 2006.

CitizensTrust

CitizensTrust has approximately $2.6 billion in assets under administration. They provide trust, investment and brokerage related services, as well as financial, estate and business succession planning.

Loan and Lease Quality

CVB Financial Corp reported non-performing assets as of December 31, 2007 of $1.4 million compared with zero non-performing assets as of December 31, 2006. The $1.4 million in non-performing assets, while higher than December 31, 2006, was down $2.1 million from the $3.5 million in non-performing assets at the end of the September 30, 2007. Delinquencies at December 31, 2007 were .10% of the portfolio compared with the industry average of approximately 1.08% at September 30, 2007.

As of December 31, 2007, the Company had $308.4 million in construction loans. This represents 8.8% of the total loans outstanding of $3.5 billion. Of this $308.4 million in construction loans, approximately 52%, or $159.2 million, were for single-family residences and land loans. The remaining construction loans, totaling $149.2 million, were related to commercial construction.

Approximately 29% of the total loan portfolio of $3.5 billion is located in the Inland Empire region of California. The rest of the portfolio is from outside this region. The Company does not make “subprime” mortgage loans.

The allowance for loan and lease losses was $33.0 million as of December 31, 2007. This represents 0.95% of gross loans and leases. It compares with an allowance for loan and lease losses of $27.7 million, or 0.90% of gross loans and leases as of December 31, 2006.

During 2007, we made a provision for credit losses of $4 million and we added an additional $2.7 million from the acquisition of First Coastal Bank in June 2007. These increases to the Allowance for Credit Losses were offset by the net charge offs of $1.4 million in 2007.

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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 37 cities with 44 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.

U.S. Banker Magazine named Citizens Business Bank the “Top Business Bank” in the nation in their January 2007 issue. The Bank was also recognized for having the fifteenth highest return on equity in the nation at 20.88%.

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, 2006, 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.

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