Back to GetFilings.com



FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2003

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-10140

CVB FINANCIAL CORP.
Incorporated pursuant to the Laws of California

Internal Revenue Service - Employer Identification No. 95-3629339

701 North Haven Ave, Suite 350, Ontario, California 91764
(909) 980-4030

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes _X_ No ___

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes _X_ No ___

Number of shares of common stock of the registrant: 44,030,364 outstanding as of November 10, 2003.

PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
Dollar amounts in thousands

  September 30, December 31,
  2003
 2002
ASSETS      
Federal funds sold  -   $      40,000  
Investment securities available-for-sale  1,778,751   1,430,599  
Investment in stock of Federal Home Loan Bank (FHLB)  39,448   21,900  
Loans and lease finance receivables  1,629,775   1,446,009  
Allowance for credit losses  (23,787 ) (21,666 )
    Total earning assets  3,424,187   2,916,842  
Cash and due from banks  126,018   124,973  
Premises and equipment, net  31,683   29,413  
Goodwill and other intangibles: 
     Amortizable  9,545   5,012  
     Non-amortizable  17,154   10,708  
Cash value life insurance  15,370   12,845  
   Deferred tax assets  3,260   -  
Accrued interest receivable  16,148   15,841  
Other assets  18,462   7,777  
      TOTAL ASSETS  $ 3,661,827   $ 3,123,411  
LIABILITIES AND STOCKHOLDERS' EQUITY 
Liabilities: 
   Deposits: 
     Noninterest-bearing  $ 1,120,037   $    958,671  
     Interest-bearing  1,493,821   1,351,293  
        Total deposits  2,613,858   2,309,964  
   Demand Note to U.S. Treasury  10,251   14,888  
   Short-term borrowings  398,000   196,000  
   Long-term borrowings  331,000   272,000  
   Deferred tax liabilities  -   5,332  
   Accrued interest payable  3,965   6,497  
   Deferred compensation  6,817   6,988  
   Funds due security purchase  -   25,970  
   Other liabilities  20,114   25,951  
      TOTAL LIABILITIES  3,384,005   2,863,590  
COMMITMENTS AND CONTINGENCIES 
Stockholders' Equity: 
   Preferred stock (authorized, 20,000,000 shares 
      without par; none issued or outstanding)  -   -  
   Common stock (authorized, 78,125,000 shares 
      without par; issued and outstanding 
      44,077,664 (2003) and 43,533,129 (2002))  151,345   144,487  
   Retained earnings  112,645   89,678  
   Accumulated other comprehensive income, net of tax  13,832   25,656  
      Total stockholders' equity  277,822   259,821  
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 3,661,827   $ 3,123,411  

See accompanying notes to the consolidated financial statements.

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
Dollar amounts in thousands, except per share

  For the Three Months For the Nine Months
  Ended September 30, Ended September 30,
  2003
 2002
 2003
 2002
Interest income:          
  Loans, including fees  $24,629   $24,030   $  72,262   $  66,337  
  Investment securities: 
     Taxable  11,780   12,073   36,966   35,609  
     Tax-preferred  3,938   4,071   12,088   12,127  
            Total investment income  15,718   16,144   49,054   47,736  
  Federal funds sold  1   157   41   478  
            Total interest income  40,348   40,331   121,357   114,551  
Interest expense: 
  Deposits  3,723   5,938   12,505   16,545  
  Borrowings  5,191   5,022   15,632   14,552  
            Total interest expense  8,914   10,960   28,137   31,097  
    Net interest income before provision for credit losses  31,434   29,371   93,220   83,454  
Provision for credit losses  -   -   -   -  
       provision for credit losses  31,434   29,371   93,220   83,454  
Other operating income: 
   Service charges on deposit accounts  3,835   3,580   11,280   10,335  
   Wealth Management services  932   924   2,903   2,894  
   Investment services  340   355   1,129   1,071  
   Bankcard services  386   302   1,035   885  
   Other  1,260   835   2,952   2,500  
   Net gain on sale of securities  3,387   1,844   4,210   4,940  
             Total other operating income  10,140   7,840   23,509   22,625  
Other operating expenses: 
   Salaries and employee benefits  10,498   9,617   30,393   26,766  
   Occupancy  1,771   1,602   4,944   4,731  
   Equipment  1,833   1,538   4,904   4,431  
   Stationary and supplies  1,262   993   3,546   2,981  
   Professional services  1,037   947   3,020   3,011  
   Promotion  1,040   721   3,205   2,544  
   Data processing  263   363   810   974  
   Other intangibles amortization  203   268   518   325  
   Other  3,380   1,145   5,544   2,949  
             Total other operating expenses  21,287   17,194   56,884   48,712  
Earnings before income taxes  20,287   20,017   59,845   57,367  
Income taxes  6,785   6,821   21,119   20,214  
    Net earnings  $13,502   $13,196   $  38,726   $  37,153  
Basic earnings per common share  $    0.31   $    0.30   $      0.89   $      0.85  
Diluted earnings per common share  $    0.30   $    0.29   $      0.87   $      0.83  
Cash dividends per common share  $    0.12   $    0.14   $      0.36   $      0.42  
See accompanying notes to the consolidated financial statements 

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(unaudited)
(Dollars and shares in thousands)

        Accumulated  
        Other  
  Common     Comprehensive  
  Shares Common Retained Income Comprehensive
  Outstanding
 Stock
 Earnings
 Net of Tax
 Income
Balance January 1, 2002   34,782   $ 146,108   $   60,671   $ 13,969      
Issuance of common stock  148   479              
5-for-4 stock split  8,703                  
Repurchase of common stock  (100 ) (2,100 )            
Tax benefit from exercise of stock options          62          
Cash dividends          (20,800 )        
Comprehensive income: 
  Net earnings          49,745       $ 49,745  
  Other comprehensive income: 
      Unrealized gains on securities 
          available-for-sale, net of tax $8,463              11,687   11,687  
           Comprehensive income                  $ 61,432  
Balance December 31, 2002  43,533   144,487   89,678   25,656      
Issuance of common stock  283   868              
Acquisition of Kaweah National Bank  401   7,904              
Repurchase of common stock  (139 ) (2,745 )            
Tax benefit from exercise of stock options      831              
Cash dividends          (15,759 )        
Comprehensive income: 
  Net earnings          38,726       $ 38,726  
  Other comprehensive loss: 
      Unrealized loss on securities 
          available-for-sale, net of tax ($8,562)              (11,824 ) (11,824 )
           Comprehensive income                  $ 26,902  
Balance September 30, 2003  44,078   $ 151,345   $ 112,645   $ 13,832      

        The Company reported unrealized gains on securities available-for-sale of $15.0 million, net of $10.8 million tax for the nine months ended September 30, 2002. Other comprehensive income for the nine months ended September 30, 2002 was $52.1 million.

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

  For the Nine Months
  Ended September 30,
  2003
 2002
  (Dollar amounts in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:            
        Interest received   $ 126,806   $ 117,956  
        Service charges and other fees received    19,298    17,685  
        Interest paid    (31,196 )  (34,433 )
        Cash paid to suppliers and employees    (49,431 )  (55,251 )
        Income taxes paid    (17,300 )  (18,984 )
          Net cash provided by operating activities    48,177    26,973  
CASH FLOWS FROM INVESTING ACTIVITIES:  
        Proceeds from sales of investment securities available-for-sale    212,641    114,463  
        Proceeds from sales of MBS    20,538    147,641  
        Proceeds from repayment of MBS    544,202    151,445  
        Proceeds from repayment of investment securities available-for-sale    2,155    -  
        Proceeds from maturity of investment securities    6,985    -  
        Purchases of investment securities available-for-sale    (85,630 )  (72,249 )
        Purchases of MBS    (1,105,569 )  (371,005 )
        Purchases of FHLB stock    (17,286 )  (3,067 )
        Net increase in loans    (117,054 )  (23,952 )
        Proceeds from sales of premises and equipment    2,338    3  
        Purchase of premises and equipment    (6,125 )  (2,454 )
        Purchase of Kaweah National Bank    (7,596 )  -  
Purchase of Western Security Bank & Golden West Enterprises    -    (8,125 )
        Other investing activities    (10,073 )  (10,475 )
          Net cash used in investing activities    (560,474 )  (77,775 )
CASH FLOWS FROM FINANCING ACTIVITIES:  
        Net increase in transaction deposits    245,567    166,787  
        Net (decrease) increase in time deposits    (22,947 )  14,731  
        Advances from Federal Home Loan Bank    200,000    15,000  
        Repayment of advances from Federal Home Loan Bank    (121,000 )  (25,000 )
        Net increase (decrease) in short-term borrowings    175,344    (23,421 )
        Cash dividends on common stock    (15,759 )  (15,583 )
        Repurchase of common stock    (2,745 )  (2,100 )
        Proceeds from exercise o