CVB FINANCIAL CORP false 0000354647 0000354647 2021-10-20 2021-10-20



Washington, D.C. 20549


Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  October 20, 2021


(Exact name of registrant as specified in its charter)


California   000-10140   95-3629339

(State or other jurisdiction of

incorporation or organization)

  (Commission file number)   (I.R.S. employer 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. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, No Par Value   CVBF   The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.        ☐

Item 7.01   Regulation FD Disclosure.

The Chief Executive Officer and Chief Financial Officer of CVB Financial Corp. (the “Company”) will make presentations to institutional investors at various meetings throughout the fourth quarter of 2021. The October 2021 slide presentation, updated to reflect third quarter 2021 financial information, is included as Exhibit 99.1 of this report. The information in this report (including Exhibits 99.1) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other documents filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by the specific reference in such filing. A copy of the slide presentation will be also available on the Company’s website at www.cbbank.com under the “Investors” tab.

Item 9.01   Financial Statements and Exhibits.

(d)  Exhibits


Exhibit No.  



99.1   Copy of the CVB Financial Corp. October 2021 slide presentation.
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)




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.
Date: October 21, 2021            By: /s/ E. Allen Nicholson    
      E. Allen Nicholson

Executive Vice President and Chief

Financial Officer




Slide 1

October 2021 Exhibit 99.1

Slide 2

Forward Looking Statements 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 plans and expectations and our future financial position and operating results. Words such as “will likely result”, “aims”, “anticipates”, “believes”, “could”, “estimates”, “expects”, “hopes”, “intends”, “may”, “plans”, “projects”, “seeks”, “should”, “will,” “strategy”, “possibility”, and variations of these words and similar expressions help to identify these forward-looking statements, which involve risks and uncertainties. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance and/or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, local, regional, national and international economic and market conditions, political events and public health developments and the impact they may have on us, our customers and our assets and liabilities; our ability to attract deposits and other sources of funding or liquidity; supply and demand for commercial or residential real estate and periodic deterioration in real estate prices and/or values in California or other states where we lend; a sharp or prolonged slowdown or decline in real estate construction, sales or leasing activities; changes in the financial performance and/or condition of our borrowers, depositors, key vendors or counterparties; changes in our levels of delinquent loans, nonperforming assets, allowance for credit losses and charge-offs; the costs or effects of mergers, acquisitions or dispositions we may make, whether we are able to obtain any required governmental approvals in connection with any such mergers, acquisitions or dispositions, and/or our ability to realize the contemplated financial or business benefits associated with any such mergers, acquisitions or dispositions, including our recently announced agreement to acquire Suncrest Bank headquartered in Visalia, California; the effects of new laws, regulations and/or government programs, including those laws, regulations and programs enacted by federal, state or local governments in the geographic jurisdictions in which we do business in response to the current national emergency declared in connection with the COVID-19 pandemic; the impact of the federal CARES Act and the significant additional lending activities undertaken by the Company in connection with the Small Business Administration’s Paycheck Protection Program enacted thereunder, including risks to the Company with respect to the uncertain application by the Small Business Administration of new borrower and loan eligibility, forgiveness and audit criteria; the effects of the Company’s participation in one or more of the new lending programs recently established by the Federal Reserve, including the Main Street New Loan Facility, the Main Street Priority Loan Facility and the Nonprofit Organization New Loan Facility, and the impact of any related actions or decisions by the Federal Reserve Bank of Boston and its special purpose vehicle established pursuant to such lending programs; the effect of changes in other pertinent laws, regulations and applicable judicial decisions (including laws, regulations and judicial decisions concerning financial reforms, taxes, bank capital levels, allowance for credit losses, consumer, commercial or secured lending, securities regulation and securities trading and hedging, bank operations, compliance, fair lending rules and regulations, the Community Reinvestment Act, employment, executive compensation, insurance, cybersecurity, vendor management, customer and employee privacy, and information security technology) with which we and our subsidiaries must comply or believe we should comply or which may otherwise impact us; changes in estimates of future reserve requirements and minimum capital requirements, based upon the periodic review thereof under relevant regulatory and accounting standards, including changes in the Basel Committee framework establishing capital standards for bank credit, operations and market risks; the accuracy of the assumptions and estimates and the absence of technical error in implementation or calibration of models used to estimate the fair value of financial instruments or currently expected credit losses or delinquencies; inflation, changes in market interest rates, securities market and monetary fluctuations; changes in government-established interest rates, reference rates or monetary policies, including the possible imposition of negative interest rates on bank reserves; the impact of the anticipated phase-out of the London Interbank Offered Rate (LIBOR) on interest rate indexes specified in certain of our customer loan agreements and in our interest rate swap arrangements, including any economic and compliance effects related to the expected change from LIBOR to an alternative reference rate; changes in the amount, cost and availability of deposit insurance; disruptions in the infrastructure that supports our business and the communities where we are located, which are concentrated in California, involving or related to public health, physical site access and/or communication facilities; cyber incidents, attacks, infiltrations, exfiltrations, or theft or loss of any Company, customer or employee data or money; political developments, uncertainties or instability, catastrophic events, acts of war or terrorism, or natural disasters, such as earthquakes, drought, the effects of pandemic diseases, climate change or extreme weather events, that may affect electrical, environmental and communications or other services, computer services or facilities we use, or that may affect our assets, customers, employees or third parties with whom we conduct business; our timely development and implementation of new banking products and services and the perceived overall value of these products and services by our customers and potential customers; the Company’s relationships with and reliance upon outside vendors with respect to certain of the Company’s key internal and external systems, applications and controls; changes in commercial or consumer spending, borrowing and savings patterns, preferences or behaviors; technological changes and the expanding use of technology in banking and financial services (including the adoption of mobile banking, funds transfer applications, electronic marketplaces for loans, block-chain technology and other financial products, systems or services); our ability to retain and increase market share, to retain and grow customers and to control expenses; changes in the competitive environment among banks and other financial services and technology providers; competition and innovation with respect to financial products and services by banks, financial institutions and non-traditional providers including retail businesses and technology companies; volatility in the credit and equity markets and its effect on the general economy or local or regional business conditions or on the Company’s capital, deposits, assets or customers; fluctuations in the price of the Company’s common stock or other securities, and the resulting impact on the Company’s ability to raise capital or to make acquisitions; the effect of changes in accounting policies and practices, as may be adopted from time-to-time by the principal regulatory agencies with jurisdiction over the Company, as well as by 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, and our ability to recruit and retain or expand or contract our workforce, management team, key executive positions and/or our board of directors; our ability to identify suitable, qualified replacements for any of our executive officers who may leave their employment with us, including our Chief Executive Officer; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (including any securities, lender liability, bank operations, check or wire fraud, financial product or service, data privacy, health and safety, consumer or employee class action litigation); regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews; our ongoing relations with our various federal and state regulators, including the SEC, Federal Reserve Board, FDIC and California DFPI; our success at managing the risks involved in the foregoing items and all other factors set forth in the Company's public reports, including our Annual Report on Form 10-K for the year ended December 31, 2020, and particularly the discussion of risk factors within that document. Among other risks, the ongoing COVID-19 pandemic may significantly affect the banking industry, the health and safety of the Company’s employees, and the Company’s business prospects. The ultimate impact of the COVID-19 pandemic on our business and financial results will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic, the impact on the economy, our customers, our employees and our business partners, the safety, effectiveness, distribution and acceptance of vaccines developed to mitigate the pandemic, and actions taken by governmental authorities in response to the pandemic. 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. Any statements about future operating results, such as those concerning accretion and dilution to the Company’s earnings or shareholders, are for illustrative purposes only, are not forecasts, and actual results may differ.

Slide 3

Total Assets: $16.2 Billion Gross Loans: $ 7.8 Billion Total Deposits (Including Repos):$13.6 Billion Total Equity: $ 2.0 Billion CVB Financial Corp. (CVBF) Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974.

Slide 4

As of 10/18/2021 CVB Financial Corp. is the holding company for Citizens Business Bank SNL Financial ranking of largest bank holding companies in CA, as of 12/31/2020 Bank Accomplishments & Ratings 178 Consecutive Quarters of Profitability 128 Consecutive Quarters of Cash Dividends Ranked #1 Forbes, 2021 Best Banks in America (January 2021) Ranked #1 Forbes, 2020 Best Banks in America (January 2020) Ranked #4 Forbes, 2019 Best Banks in America (January 2019) Ranked #2 Forbes, 2017 Best Banks in America (January 2017) Ranked #1 Forbes, 2016 Best Banks in America (January 2016) BauerFinancial Report Five Star Superior Rating (December 2020) 47 Consecutive Quarters Fitch Rating BBB+ (July 2021) One of the 10 largest bank holding companies in CA

Slide 5

58 Business Financial Centers 3 CitizensTrust Locations Corporate Office Business Financial Centers CitizensTrust

Slide 6

Our Vision Citizens Business Bank will strive to become the premier financial services company operating throughout the state of California, servicing the comprehensive financial needs of successful small to medium sized businesses and their owners.

Slide 7

Target Customer The best privately-held and/or family-owned businesses throughout California Annual revenues of $1-300 million Top 25% in their respective industry Full relationship banking Build 20-year relationships

Slide 8

Three Areas of Growth De Novo San Diego (2014) Oxnard (2015) Santa Barbara (2015) San Diego (2017) Stockton (2018) Modesto (2020) Acquisitions American Security Bank (2014) County Commerce Bank (2016) Valley Business Bank (2017) Community Bank (2018) Suncrest Bank (Announced July 2021)

Slide 9

Acquisition Strategy Target size: $1 billion to $8 billion in assets Financial & Strategic In-market and/or adjacent geographic market (California) Banks: Banking Teams: In-market New markets

Slide 10

Q3 2021 Financial Highlights Profitability ROATCE = 14.62% ROAA = 1.26% NIM = 2.89% Efficiency Ratio = 42.27% Income Statement Net Income =$49.8 million $4.0 million recapture of provision for credit losses Diluted EPS =$0.37 Balance Sheet ~6% annualized core loan growth in Q3 $1.7 billion increase in investment portfolio vs. 2020 YE > $14 billion in average earning assets > $13 billion in total deposits and customer repos $1.4 billion increase in deposits & customer repos vs. 2020 YE 64% of total deposits noninterest bearing Asset Quality Net recoveries (charge-offs) Q3 = $22,000 / YTD = ($2.8) million NPA/TA = 0.05% (NPA = $8.4 million) Classified loans = $49 million or 0.63% of total loans ACL = $65.4 million or 112% of NPL and classified loans Capital TCE Ratio = 8.9% CET1 Ratio = 14.9% Total Risk-Based Ratio = 15.7%

Slide 11

Selected Ratios 2018 2019 2020 Q3’20 Q2’21 Q3’21 ROATCE 15.18% 17.56% 14.25% 15.20% 15.60% 14.62% NIM 4.03% 4.36% 3.59% 3.34% 3.06% 2.89% Cost of Funds 0.16% 0.24% 0.13% 0.11% 0.05% 0.04% Efficiency Ratio 45.83% 40.16% 41.40% 42.57% 40.05% 42.27% NIE % Avg. Assets 1.89% 1.76% 1.49% 1.44% 1.23% 1.22% NPA % Total Assets 0.18% 0.09% 0.12% 0.12% 0.05% 0.05% Net Charge-Offs (Recoveries) to Avg. Loans (0.04%) 0.00% 0.00% 0.00% 0.01% 0.00% TCE Ratio 10.5% 12.2% 9.6% 9.8% 9.2% 8.9% CET1 Ratio 13.0% 14.8% 14.8% 14.6% 15.1% 14.9% Total Risk-Based Capital Ratio 14.1% 16.0% 16.2% 16.1% 15.9% 15.7% Performance Credit Quality Capital

Slide 12

Summary – Round 1 Originated and funded more than 4,000 PPP loans for greater than $1.1 billion $1.07 billion forgiven thru September 30, 2021 ~ 99+% forgiven Total Fees of ~$35 million recognized in Net Interest Income Q3’21 = $1.5 million / 2021 YTD = $13.6 million / FY 2020 = $21.4 million SBA Paycheck Protection Program Summary – Round 2 Originated and funded more than 1,900 PPP loans for $420 million $134 million forgiven thru September 30, 2021 Total Fees of ~$16 million recognized in Net Interest Income Q3’21 = $5.2 million / 2021 YTD = $7.2 million

Slide 13

Net Income & Pretax-Pre Provision Income PTPP income (Non -GAAP*) Net income PTPP ROAA (Non-GAAP*) ROAA * We use certain non-GAAP financial measures to provide supplemental information regarding our performance. Annually Quarterly ($ in Millions)

Slide 14

Core Loan Growth CRE +$307 6% growth C&I ($47) Other ($31) D&L and Agribus. +$27 SFR ($43) ($ in Millions) 2021Q3 vs 2020Q3 6% growth (core loans annualized)

Slide 15

Net Interest Income and NIM ($ in Millions)

Slide 16

Asset Sensitive Balance Sheet CVBF’s net interest income sensitivity is +21%* when rates are ramped up 200bps over a 12 month time horizon 45% of earning assets combined between Federal Reserve balance and investment portfolio > 63% of Banks funding from Noninterest-bearing deposits CVBF’s Cost of Funds increased from 9bps to 17bps from 2014 to end of 2018, compared to a 225bps increase in Fed Funds Rate * Source: June 30, 2021 10Q

Slide 17

Dividends – 128 Consecutive Quarters 128 Consecutive Quarters More than 30 years of cash dividends since 1989 * Dividend payout ratio calculated on per share basis.

Slide 18

Strong Capital Ratios * Source: SNL Financial—peers represent public CA, AZ, HI, NV, OR & WA banks and thrifts with assets $2 - $35 billion $781MM $734MM $595MM $484MM

Slide 19

Credit Quality * Source: SNL Financial—peers represent public CA, AZ, HI, NV, OR & WA banks and thrifts with assets $2 - $35 billion $21MM in remaining loan fair value discounts (1)

Slide 20

Q3 2021 Allowance by Portfolio CECL Update Highlights $4MM recapture of credit losses in Q3 2021 Lifetime historical loss models - Macroeconomic variables include GDP, Unemployment Rate, & CRE price index Weighting of multiple forecasts Allowance for Credit Losses – by Loan Type ($ in Millions) 06/30/2021 09/30/2021 Variance Segmentation ACL Balance % of Loans ACL Balance % of Loans ACL Balance % of Loans C&I $5.7 0.8% $4.9 0.6% $(0.8) -0.2% SBA $2.5 0.9% $2.9 1.0% $0.4 0.1% Real estate:   Commercial RE $55.2 1.0% $52.3 0.9% $(2.9) -0.1% Construction $1.8 2.1% $1.1 1.4% $(0.7) -0.7% SFR Mortgage $0.3 0.1% $0.2 0.1% $(0.1) 0.0% Dairy & livestock $2.8 1.1% $3.2 1.1% $0.4 0.0% Municipal lease $0.0 0.1% $0.1 0.2% $0.1 0.1% Consumer and other $1.0 1.3% $0.7 1.0% $(0.3) -0.3% Sub Total (Excluding PPP) $69.3 0.9% $65.4 0.9% $(3.9) 0.0%   PPP $0.0 0.0% $0.0 0.0% $0.0 0.0% Total $69.3 0.9% $65.4 0.8% $(3.9) -0.1% Key Economic Assumptions – Weighted Forecast FY’21 FY’22 FY’23 GDP % Change 5.7% 2.3% 2.1% Unempl. Rate 5.7% 5.6% 5.3%

Slide 21

Loans by Type CRE $5.73B C&I $0.77B Other $1.35B

Slide 22

(000’s) # of Center Locations (9/30/21) Average Loans per Location Total Loans (9/30/21) % Los Angeles County 21 $155,841 $ 3,272,657 41.7% Central Valley 10 138,963 1,389,634 17.7% Orange County 10 103,423 1,034,232 13.2% Inland Empire (Riverside & San Bernardino Counties) 10 100,968 1,009,682 12.9% Central Coast 5 91,567 457,836 5.8% San Diego 2 124,239 248,478 3.2% Other California 145,338 1.8% Out of State 291,663 3.7% Total 58 $135,337 $ 7,849,520 100.0% Loans by Region

Slide 23

Owner/Non-Owner Occupied Commercial Real Estate Loans Collateral Type

Slide 24

CRE by Collateral Origination Year Collateral Type Balance ($ in Millions) % of Owner Occupied LTV at Origination Avg. Size ($ in Thousands) 2021 2020 2019 2018 2017 2016 or earlier Industrial $ 1,946 51% 51% $ 1,466 19% 14% 12% 11% 12% 32% Office 1,046 23% 56% 1,676 13% 21% 13% 9% 11% 33% Retail 810 11% 48% 1,726 17% 14% 7% 12% 11% 39% Multi-Family 646 2% 50% 1,545 19% 25% 15% 11% 5% 25% Other 580 55% 48% 1,433 15% 12% 14% 12% 10% 37% Farmland 354 97% 47% 2,229 10% 34% 11% 7% 12% 26% Medical 296 38% 59% 1,699 13% 15% 9% 9% 9% 45% Hospitality 57 28% 42% 1,433 12% 2% 5% 16% 19% 46% Total $ 5,735 37% 51% $ 1,586 16% 18% 11% 11% 11% 33%

Slide 25

C&I by Industry Includes Retail Trade ($21MM or 3% of C&I loans) Includes Accommodation and Food Services ($13MM or 2% of C&I loans) Industry Balance ($ in Millions) % of C&I Total Real Estate Rental and Leasing $ 145 19% Manufacturing 128 17% Wholesale Trade 84 11% Construction 54 7% Health Care and Social Assistance 52 7% Arts, Entertainment, and Recreation 48 6% Transportation and Warehousing 34 4% Professional, Scientific, and Technical Services 31 4% Public Administration 28 4% Other* 166 21% Total $ 770 100%

Slide 26

Line Utilization Trends Total D&L C&I

Slide 27

Loan Interest Income ($ in Millions)

Slide 28

Deposits by Region (000’s) # of Center Locations (9/30/21) Total Deposits (6/30/21) Total Deposits (9/30/21) Average Deposits per Center (9/30/21) Los Angeles County 21 $ 5,575,916 $ 5,535,260 $ 263,584 Inland Empire (Riverside & San Bernardino Counties) 10 3,794,062 4,071,286 407,129 Orange County 10 1,795,132 1,843,139 184,314 Central Valley 10 1,586,428 1,646,925 164,693 Central Coast 5 390,358 399,766 79,953 San Diego 2 95,421 90,689 45,344 Other 9,947 2,730 Total 58 $13,247,264 $ 13,589,795 $ 234,307 *Includes Customer Repurchase Agreements. Average Cost of Deposits* (Annualized) 0.05% 0.04%

Slide 29

Cost of Deposits Source: SNL Financial—peers represent public CA , AZ, HI, NV, OR & WA banks and thrifts with assets $2 - $35B

Slide 30

Current and Planned Client Technology Solutions Leveraging technology and data to better serve our clients Digital Online Banking Powerful personal and business mobile apps with Remote Deposit Personal financial management integration Same-day ACH Intuitive and customizable targeted Online Banking training Zelle® person-to-person payments Digital solutions for online, contactless, and mobility payments and notification alerts End-to-end Treasury Management digital onboarding Technology Solutions Intelligent asset management tools for marketing distribution and business intelligence usage Enhanced Debit Card management and client controls Secure file transfer platform for payments Third-party accounting platform integrations Integrated Receivables and Payables Remote Deposit Capture and Image Cash letter services Advanced merchant payment technology, integration, and intuitive client decision portal Robotic Process Automation

Slide 31

Appendix Non-GAAP Reconciliation

Slide 32

Reconciliation of Return on Average Tangible Common Equity (Non-GAAP) The return on average tangible common equity is a non-GAAP disclosure. We use certain non-GAAP financial measures to provide supplemental information regarding our performance. We believe that presenting the return on average tangible common equity provides additional clarity to the users of our financial statements.

Slide 33

Reconciliation of PTPP Return on Average Assets (Non-GAAP) The Pretax-pre provision income (“PTPP”) return on average assets is a non-GAAP disclosure. We use certain non-GAAP financial measures to provide supplemental information regarding our performance. We believe that presenting the return on average tangible common equity provides additional clarity to the users of our financial statements.

Slide 34

Copy of presentation at www.cbbank.com