Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CVB FINANCIAL CORP | v59304e8vk.htm |
Exhibit 99.1
Press Release
For Immediate Release
For Immediate Release
| Contact: | Christopher D. Myers | |||
| President and CEO | ||||
| (909) 980-4030 |
CVB Financial Corp. Reports First Quarter Earnings for 2011
| • | Net income of $16.6 million for the first quarter of 2011 | ||
| • | Diluted earnings per common share $0.16 | ||
| • | Allowance for credit losses represents 3.11% of total CBB non-covered loans & leases | ||
| • | Non-performing loans decreased to $108.2 million, down from $157.0 million at December 31, 2010, and now represents 3.33% of total CBB non-covered loans and leases |
Ontario, CA, April 20, 2011-CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business
Bank (“the Company”), announced earnings for the first quarter of 2011.
CVB Financial Corp. reported net income of $16.6 million for the first quarter of 2011. This
represents an increase of $481,000, or 2.98%, when compared with net income of $16.1 million for
the first quarter of 2010. Diluted earnings per share were $0.16 for the first quarter of 2011.
This was up $0.01, or 6.67%, from diluted earnings per share of $0.15 for the same period last
year.
First quarter 2011 operating results included $2.0 million in interest income from accelerated
accretion on loans from our FDIC assisted acquisition of San Joaquin Bank (SJB), $1.4 million in
income from the increase in the FDIC loss sharing asset, and a $7.1 million provision for credit
losses.
During the first quarter of 2011, the Bank sold six of seven notes previously held in connection
with its former largest borrowing relationship. The six notes, with a bank carrying value of $42.9
million (and a legal principal balance of $78.1 million), were sold for $41.0 million, resulting in
a $1.9 million charge-off. This event was previously disclosed in a press release issued on March
28, 2011.
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Chris Myers, President and CEO commented, “We are pleased with the results for the quarter. We
have made significant progress in reducing our non-performing assets from $176.3 million at
September 30, 2010 to $162.3 million at December 31, 2010 to $114.4 million at March 31, 2011. Our
mindset is transitioning from defense to offense, with our strategic objectives focused on growing
loans, non-interest bearing deposits and fee income.”
Net income for the first quarter of 2011 produced an annualized return on beginning equity of
10.31%, an annualized return on average equity of 10.33% and an annualized return on average assets
of 1.03%. The efficiency ratio, excluding the provision for credit losses, was 54.12% for the
quarter. Operating expenses as a percentage of average assets were 2.26%.
Interest income on loans for the first quarter of 2011 totaled $51.3 million, which includes $2.0
million of discount accretion from accelerated principal reductions on covered loans acquired from
SJB. Excluding the discount accretion, interest income on loans would have been $49.4 million for
the first quarter of 2011. This represents a decrease of $5.0 million, or 9.24%, when compared to
interest income on loans of $54.4 million for the same period last year.
In addition to the yield adjustment to interest income of $2.0 million for the first quarter of
2011, there was a $1.4 million net increase in the FDIC loss sharing asset as a result of
additional estimated losses and expenses to be recovered under our loss sharing agreement with the
FDIC. In the quarter ended March 31, 2011, we received $21.7 million from the FDIC from previously
submitted loss claims. The $1.4 million in income from the increase in the FDIC loss sharing asset
was included in other operating income.
Net Interest Income and Net Interest Margin
Net interest income, before the provision for credit losses, totaled $57.1 million for the three
months ending March 31, 2011. Net interest income for the first quarter of 2011 decreased $16.2
million, or 22.13%, compared to the same period in 2010.
Excluding the impact of the yield adjustment on covered loans, net interest margin (tax equivalent)
decreased from 3.86% for the first quarter of 2010 to 3.78% for the first quarter of 2011. Total
average earning asset yields decreased from 4.91% for the first quarter of 2010 to 4.39% for the
first quarter of 2011. Total cost of funds decreased from 1.13% for the first quarter of 2010 to
0.65% for the first quarter of 2011.
Assets
The Company reported total assets of $6.50 billion at March 31, 2011. This represents an increase
of $61.4 million, or 0.95%, from total assets of $6.44 billion at December 31, 2010. Earning assets
totaling $6.07 billion increased $47.8 million, or 0.79%, when compared with earning assets of
$6.02 billion at December 31, 2010. The increase in earning assets was due to an increase in the
investment portfolio, partially offset by a decrease in the loan portfolio.
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Investment Securities
Investment securities totaled $2.02 billion at March 31, 2011. This is up from $1.79 billion at
December 31, 2010. Our investment portfolio continues to perform well. As of March 31, 2011 we
had a pretax unrealized gain of $15.1 million of which $7.3 million is in our municipal securities
portfolio. We have no preferred stock nor trust preferred securities in our portfolio.
Virtually all of our mortgage-backed securities are issued by Freddie Mac or Fannie Mae, which have
the guarantee of the U.S. Government. We have one private-label mortgage-backed security that has
impairment. This Alt-A bond, with a book value of $3.04 million as of March 31, 2011, has had $1.2
million in net impairment loss to date since it was purchased in early 2008, with no additional
impairment recorded in the first quarter of 2011.
Our municipal securities, totaling $611.7 million, are located in 30 states, with approximately
$37.5 million, or 6.30%, located within the state of California. Our largest holdings are in New
Jersey at 14.4%, Michigan at 12.5% and Illinois at 12.4%. All municipal bond securities are
performing.
We continue to reinvest our cash flows from the investment portfolio. During the first quarter we
purchased $323.2 million in mortgage-backed securities with an average yield of 3.20% and $12.8
million in municipal securities with an average yield of 5.55%. We are investing in securities
with an average duration of about 3.5 years to avoid extension risk as interest rates rise.
Loans
Total loans and leases of $3.60 billion at March 31, 2011 decreased by $149.3 million, or 3.98%,
from $3.75 billion at December 31, 2010. We attribute a significant portion of the decrease to the
following:
| • | $51.9 million to the non-covered dairy and livestock portfolio. Historically, dairies tend to seasonally draw down on available lines of credit in the fourth quarter and repay these advances in the first quarter. | ||
| • | $42.9 million in note sales related to our former largest borrower. | ||
| • | $25.3 million from working down problem assets acquired from SJB. |
We also experienced a $15.4 million decline in non-covered construction loans and a $11.3 million
decline in purchased mortgage pool loans. These two areas are considered non-core lending niches.
Our core lending strategy is focused on commercial & industrial business lending,
dairy/livestock/agribusiness lending and commercial real estate loans.
We continue to see moderate loan demand in our market areas as a result of the weakness in the
state and local economies. Many of our business owner clients are hesitating to invest in new
equipment, buildings, or employees until they see stronger signs of economic recovery and
stability.
-3-
Deposits & Customer Repurchase Agreements
Total deposits of $4.49 billion and customer repurchase agreements of $578.0 million totaled $5.06
billion at March 31, 2011. This represents an increase of $2.7 million, or 0.05%, when compared
with total deposits and customer repurchase agreements of $5.06 billion at December 31, 2010.
Non-interest bearing deposits were $1.82 billion at March 31, 2011, an increase of $116.4 million
or 6.84% compared to $1.70 billion at December 31, 2010. At March 31, 2011, non-interest bearing
deposits were 40.53% of total deposits, up from 37.65% at December 31, 2010 and 35.37% at March 31,
2010.
Our cost of total deposits was 0.25% for the three months ending March 31, 2011, compared to our
cost of total deposits of 0.48% for the same period last year. Our cost of total deposits
including customer repurchase agreements was 0.27% for the three months ending March 31, 2011.
Borrowings
At March 31, 2011, we had $553.5 million in borrowings, compared to borrowings of $553.4 billion at
December 31, 2010 and $653.2 billion at March 31, 2010. The $99.7 million decrease from March 31,
2010 was primarily due to a $100 million prepayment of FHLB borrowings in the third quarter of
2010.
Asset Quality
We have separated the discussion of asset quality into two sections: non-covered loans and covered
loans. The non-covered loans represent the legacy Citizens Business Bank loans and exclude all
loans acquired in the SJB acquisition. The SJB loans are “covered” loans as defined in the loss
sharing agreement with the FDIC. These loans were marked to fair value at the acquisition date and
also have a guarantee by the FDIC.
Citizens Business Bank Asset Quality (Non-covered loans)
The allowance for credit losses decreased from $105.3 million as of December 31, 2010 to $101.1
million as of March 31, 2011. The decrease was due to net loan charge-offs of $11.3 million, offset
by a provision for credit losses of $7.1 million during the first three months of 2011. The
allowance for credit losses was 3.11% and 3.12% of total non-covered loans and leases outstanding
as of March 31, 2011 and December 31, 2010, respectively.
The provision for credit losses for the first quarter 2011 was $7.1 million, a decrease of $5.6
million, or 44.35%, compared to the fourth quarter of 2010.
We had $108.2 million in non-performing loans at March 31, 2011, or 3.33% of total non-covered
loans. This compares to non-performing loans of $157.0 million at December 31, 2010. The $108.2
million in non-performing loans for the first quarter is summarized as follows: $40.0 million in
commercial construction, $18.4 million in
-4-
residential mortgages, $35.0 million in commercial real estate, $3.0 million in dairy loans, and
$11.8 million in other loans.
At March 31, 2011, we had $6.2 million in Other Real Estate Owned (“OREO”), an increase of $950,000
from OREO of $5.3 million at December 31, 2010. At December 31, 2010, we had three OREO
properties. During the first three months of 2011, we added two properties for a total of $1.0
million to OREO. We sold one property with an OREO value of $119,000 for cash proceeds of
$101,000. We now have four OREO properties.
At March 31, 2011, we had loans delinquent 30 to 89 days of $3.6 million. This compares to
delinquent loans of $9.1 million at December 31, 2010. As a percentage of total loans,
delinquencies, excluding non-accruals, were 0.11% at March 31, 2011 and 0.27% at December 31, 2010.
All loans delinquent 90 days or more were categorized as non-performing.
In total, non-performing assets, defined as non-covered non-accrual loans and other real estate
owned, were $114.4 million at March 31, 2011, a decrease of $47.9 million or 29.52% from $162.3
million at December 31, 2010.
San Joaquin Bank Asset Quality (Covered loans)
At March 31, 2011 we had $446.9 million in gross loans from SJB with a carrying value of $348.8
million, compared to $488.8 million of gross loans at December 31, 2010 and $374.0 million in
carrying value. Of the gross loans, we have $115.1 million in non-performing loans as of March 31,
2011, or 25.76%, compared to $133.1 million in non-performing loans at December 31, 2010. At March
31, 2011, we had gross loans delinquent 30-89 days of $3.0 million compared to gross delinquent
loans of $661,000 at December 31, 2010. We have 16 properties in OREO totaling $11.5 million
compared to 17 properties totaling $11.3 million at December 31, 2010.
CitizensTrust
CitizensTrust has approximately $2.2 billion in assets under administration, including $1.2 billion
in assets under management, as of March 31, 2011. This compares with $2.1 billion in assets under
administration, including $1.1 billion in assets under management, at December 31, 2010. Revenues
from CitizensTrust remained unchanged at $2.1 million for each of the three months ended March 31,
2011 and 2010. CitizensTrust provides trust, investment and brokerage related services, as well as
financial, estate and business succession planning.
Conference Call
Management will hold a conference call at 8:30 a.m. Pacific time/11:30 a.m. Eastern time on
Thursday, April 21st (tomorrow) to discuss the Company’s first quarter 2011 financial
results.
To listen to the conference call, please dial (877) 317-6789. A taped replay will be made available
approximately one hour after the conclusion of the call and will remain
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available through April 28, 2011. To access the replay, please dial (877) 344-7529, passcode
449750.
The conference call will also be simultaneously webcast over the Internet. Please visit the
Company’s website at www.cbbank.com and click on the CVB Investor tab to access the call from the
site. Access the website 15 minutes prior to the call to download any necessary audio software.
This webcast will be recorded and available for replay on the Company’s website approximately two
hours after the conclusion of the conference call, and will be available on the website for twelve
months.
Corporate Overview
CVB Financial Corp. is the holding company for Citizens Business Bank, a financial services company
based in Ontario, California. Citizens Business Bank serves 41 cities with 43 business financial
centers and five 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.
-6-
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, 2010, 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.
###
-7-
CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(unaudited)
dollars in thousands
CONSOLIDATED BALANCE SHEET
(unaudited)
dollars in thousands
| March 31, | December 31, | |||||||||||
| 2011 | 2010 | 2010 | ||||||||||
Assets: |
||||||||||||
Cash and due from banks |
$ | 87,973 | $ | 92,018 | $ | 67,279 | ||||||
Interest-bearing balances due from Federal Reserve |
260,800 | 189,257 | 286,769 | |||||||||
Interest-bearing balances due from depository institutions |
50,287 | 50,003 | 50,227 | |||||||||
Total cash and cash equivalents |
399,060 | 331,278 | 404,275 | |||||||||
Interest-bearing balances due from depository institutions |
50,190 | 190 | 50,190 | |||||||||
Investment Securities available-for-sale |
2,017,528 | 2,073,975 | 1,791,558 | |||||||||
Investment Securities held-to-maturity |
3,039 | 3,472 | 3,143 | |||||||||
Investment in stock of Federal Home Loan Bank (FHLB) |
83,310 | 97,582 | 86,744 | |||||||||
Loans held-for-sale |
3,505 | 5,141 | 2,954 | |||||||||
Loans and lease finance receivables |
3,598,447 | 3,947,129 | 3,747,740 | |||||||||
Less allowance for credit losses |
(101,067 | ) | (112,321 | ) | (105,259 | ) | ||||||
Net loans and lease finance receivables |
3,497,380 | 3,834,808 | 3,642,481 | |||||||||
Premises and equipment, net |
39,431 | 41,519 | 40,921 | |||||||||
Intangibles |
8,128 | 11,811 | 9,029 | |||||||||
Goodwill |
55,097 | 55,097 | 55,097 | |||||||||
Cash value of life insurance |
113,605 | 110,331 | 112,901 | |||||||||
FDIC loss sharing asset |
81,142 | 119,108 | 101,461 | |||||||||
Other assets |
146,937 | 104,340 | 135,937 | |||||||||
TOTAL |
$ | 6,498,352 | $ | 6,788,652 | $ | 6,436,691 | ||||||
Liabilities and Stockholders’ Equity |
||||||||||||
Liabilities: |
||||||||||||
Deposits: |
||||||||||||
Demand Deposits (noninterest-bearing) |
$ | 1,817,951 | $ | 1,598,022 | $ | 1,701,523 | ||||||
Investment Checking |
345,833 | 473,287 | 384,674 | |||||||||
Savings/MMDA |
1,360,496 | 1,223,217 | 1,342,758 | |||||||||
Time Deposits |
961,409 | 1,224,073 | 1,089,873 | |||||||||
Total Deposits |
4,485,689 | 4,518,599 | 4,518,828 | |||||||||
Demand Note to U.S. Treasury |
2,966 | 4,232 | 1,917 | |||||||||
Customer Repurchase Agreements |
578,009 | 535,214 | 542,188 | |||||||||
Repurchase Agreements |
— | 250,000 | — | |||||||||
Borrowings |
553,458 | 653,186 | 553,390 | |||||||||
Junior Subordinated Debentures |
115,055 | 115,055 | 115,055 | |||||||||
Other liabilities |
108,571 | 59,601 | 61,458 | |||||||||
Total Liabilities |
5,843,748 | 6,135,887 | 5,792,836 | |||||||||
Stockholders’ equity: |
||||||||||||
Stockholders’ equity |
645,864 | 619,641 | 637,670 | |||||||||
Accumulated other comprehensive income, net of tax |
8,740 | 33,124 | 6,185 | |||||||||
| 654,604 | 652,765 | 643,855 | ||||||||||
TOTAL |
$ | 6,498,352 | $ | 6,788,652 | $ | 6,436,691 | ||||||
- 8 -
CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEET
(unaudited)
dollars in thousands
CONSOLIDATED AVERAGE BALANCE SHEET
(unaudited)
dollars in thousands
| Three months ended March 31, | ||||||||
| 2011 | 2010 | |||||||
Assets: |
||||||||
Cash and due from banks |
$ | 108,923 | $ | 96,596 | ||||
Interest-bearing balances due from Federal Reserve |
331,001 | 167,672 | ||||||
Federal funds sold and Interest-bearing balances due from
depository institutions |
50,248 | 12,777 | ||||||
Total cash and cash equivalents |
490,172 | 277,045 | ||||||
Interest-bearing balances due from depository institutions |
50,190 | 972 | ||||||
Investment securities available-for-sale |
1,856,465 | 2,084,660 | ||||||
Investment securities held-to-maturity |
2,999 | 3,658 | ||||||
Investment in stock of Federal Home Loan Bank (FHLB) |
86,591 | 97,582 | ||||||
Loans held-for-sale |
3,460 | 2,143 | ||||||
Loans and lease finance receivables |
3,678,587 | 4,011,896 | ||||||
Less allowance for credit losses |
(109,861 | ) | (114,536 | ) | ||||
Net loans and lease finance receivables |
3,568,726 | 3,897,360 | ||||||
Premises and equipment, net |
40,552 | 41,431 | ||||||
Intangibles |
8,522 | 12,237 | ||||||
Goodwill |
55,097 | 55,097 | ||||||
Cash value of life insurance |
113,207 | 109,780 | ||||||
FDIC loss sharing asset |
90,157 | 133,141 | ||||||
Other assets |
155,428 | 122,621 | ||||||
TOTAL |
$ | 6,521,566 | $ | 6,837,727 | ||||
Liabilities and Stockholders’ Equity |
||||||||
Liabilities: |
||||||||
Deposits: |
||||||||
Noninterest-bearing |
$ | 1,790,839 | $ | 1,574,633 | ||||
Interest-bearing |
2,773,622 | 2,905,302 | ||||||
Total Deposits |
4,564,461 | 4,479,935 | ||||||
Other borrowings |
1,134,516 | 1,540,496 | ||||||
Junior Subordinated Debentures |
115,055 | 115,055 | ||||||
Other liabilities |
55,691 | 53,150 | ||||||
Total Liabilities |
5,869,723 | 6,188,636 | ||||||
Stockholders’ equity: |
||||||||
Stockholders’ equity |
645,630 | 622,627 | ||||||
Accumulated other comprehensive income,
net of tax |
6,213 | 26,464 | ||||||
| 651,843 | 649,091 | |||||||
TOTAL |
$ | 6,521,566 | $ | 6,837,727 | ||||
- 9 -
CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
dollar amounts in thousands, except per share
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
dollar amounts in thousands, except per share
| For the Three Months | ||||||||
| Ended March 31, | ||||||||
| 2011 | 2010 | |||||||
Interest Income: |
||||||||
Loans held-for-sale |
$ | 20 | $ | 18 | ||||
Loans and leases, including fees |
49,344 | 54,372 | ||||||
Accelerated accretion on acquired loans |
1,951 | 13,378 | ||||||
Total loans and leases, including fees |
51,315 | 67,768 | ||||||
Investment securities: |
||||||||
Taxable |
8,839 | 16,084 | ||||||
Tax-advantaged |
5,919 | 6,532 | ||||||
Total investment income |
14,758 | 22,616 | ||||||
Dividends from FHLB Stock |
65 | 66 | ||||||
Federal funds sold & Interest-bearing CDs |
374 | 102 | ||||||
Total interest income |
66,512 | 90,552 | ||||||
Interest Expense: |
||||||||
Deposits |
2,788 | 5,288 | ||||||
Borrowings and junior subordinated debentures |
6,615 | 11,925 | ||||||
Total interest expense |
9,403 | 17,213 | ||||||
Net interest income before provision for credit losses |
57,109 | 73,339 | ||||||
Provision for credit losses |
7,068 | 12,200 | ||||||
Net interest income after
provision for credit losses |
50,041 | 61,139 | ||||||
Other Operating Income: |
||||||||
Impairment loss on investment securities |
— | (98 | ) | |||||
Loss reclassified to/(from) other comprehensive income |
— | (587 | ) | |||||
Net impairment loss on investment securities
recognized in earnings |
— | (685 | ) | |||||
Service charges on deposit accounts |
3,723 | 4,264 | ||||||
Trust and investment services |
2,152 | 2,118 | ||||||
Increase (reduction) in FDIC loss sharing asset |
1,415 | (10,583 | ) | |||||
Other |
2,688 | 2,675 | ||||||
Total other operating income |
9,978 | (2,211 | ) | |||||
Other operating expenses: |
||||||||
Salaries and employee benefits |
17,660 | 18,073 | ||||||
Occupancy |
2,831 | 3,133 | ||||||
Equipment |
1,490 | 1,919 | ||||||
Professional services |
3,610 | 2,807 | ||||||
Amortization of intangible assets |
901 | 950 | ||||||
Provision for unfunded commitments |
732 | 1,250 | ||||||
OREO Expense |
1,105 | 13 | ||||||
Other |
7,976 | 7,777 | ||||||
Total other operating expenses |
36,305 | 35,922 | ||||||
Earnings before income taxes |
23,714 | 23,006 | ||||||
Income taxes |
7,114 | 6,887 | ||||||
Net earnings |
16,600 | 16,119 | ||||||
Allocated to restircted stock |
66 | 54 | ||||||
Net earnings allocated to common shareholders |
$ | 16,534 | $ | 16,065 | ||||
Basic earnings per common share |
$ | 0.16 | $ | 0.15 | ||||
Diluted earnings per common share |
$ | 0.16 | $ | 0.15 | ||||
Cash dividends per common share |
$ | 0.085 | $ | 0.085 | ||||
- 10 -
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
| Three months ended March 31, | ||||||||
| 2011 | 2010 | |||||||
Interest income — (Tax-Effected) (te) |
$ | 68,982 | $ | 93,236 | ||||
Interest Expense |
9,403 | 17,213 | ||||||
Net Interest income — (te) |
$ | 59,579 | $ | 76,023 | ||||
Return on average assets, annualized |
1.03 | % | 0.96 | % | ||||
Return on average equity, annualized |
10.33 | % | 10.07 | % | ||||
Efficiency ratio |
60.49 | % | 60.96 | % | ||||
Yield on average earning assets |
4.60 | % | 5.90 | % | ||||
Cost of funds |
0.65 | % | 1.13 | % | ||||
Net interest margin (te) |
3.98 | % | 4.82 | % | ||||
Net interest margin (te) excluding discount |
3.78 | % | 3.86 | % | ||||
Weighted average shares outstanding |
||||||||
Basic |
105,651,193 | 105,928,593 | ||||||
Diluted |
105,703,855 | 106,121,135 | ||||||
Dividends declared |
$ | 9,017 | $ | 9,035 | ||||
Dividend payout ratio |
54.32 | % | 56.05 | % | ||||
Number of shares outstanding-EOP |
106,078,253 | 106,293,270 | ||||||
Book value per share |
$ | 6.17 | $ | 6.14 | ||||
| March 31, | ||||||||
| (Non-covered loans) | 2011 | 2010 | ||||||
Non-performing Assets (dollar amount in thousands): |
||||||||
Non-accrual loans |
$ | 108,150 | $ | 76,840 | ||||
Loans past due 90 days or more
and still accruing interest |
— | — | ||||||
Other real estate owned (OREO), net |
6,240 | 15,178 | ||||||
Total non-performing assets |
$ | 114,390 | $ | 92,018 | ||||
Percentage of non-performing assets
to total loans outstanding and OREO |
3.52 | % | 2.61 | % | ||||
Percentage of non-performing
assets to total assets |
1.76 | % | 1.36 | % | ||||
Allowance for loan losses to
non-performing assets |
88.35 | % | 122.06 | % | ||||
Net Charge-offs to Average loans |
0.34 | % | 0.25 | % | ||||
Allowance for Credit Losses: |
||||||||
Beginning Balance |
$ | 105,259 | $ | 108,924 | ||||
Total Loans Charged-Off |
(12,038 | ) | (8,931 | ) | ||||
Total Loans Recovered |
778 | 128 | ||||||
Net Loans Charged-off |
(11,260 | ) | (8,803 | ) | ||||
Provision Charged to Operating Expense |
7,068 | 12,200 | ||||||
Allowance for Credit Losses at End of period |
$ | 101,067 | $ | 112,321 | ||||
- 11 -
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(unaudited)
SELECTED FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(unaudited)
Quarterly Common Stock Price
| 2011 | 2010 | 2009 | ||||||||||||||||||||||
| Quarter End | High | Low | High | Low | High | Low | ||||||||||||||||||
March 31, |
$ | 9.32 | $ | 7.83 | $ | 10.89 | $ | 8.44 | $ | 12.11 | $ | 5.31 | ||||||||||||
June 30, |
$ | 11.85 | $ | 9.00 | $ | 7.77 | $ | 5.69 | ||||||||||||||||
September 30, |
$ | 10.99 | $ | 6.61 | $ | 8.70 | $ | 4.90 | ||||||||||||||||
December 31, |
$ | 9.09 | $ | 7.30 | $ | 9.00 | $ | 6.93 | ||||||||||||||||
Quarterly Consolidated Statements of Earnings
| 1Q | 4Q | 3Q | 2Q | 1Q | ||||||||||||||||
| 2011 | 2010 | 2010 | 2010 | 2010 | ||||||||||||||||
Interest income |
||||||||||||||||||||
Loans, including fees |
$ | 51,315 | $ | 55,621 | $ | 58,165 | $ | 59,172 | $ | 67,768 | ||||||||||
Investment securities and other |
15,197 | 14,370 | 18,308 | 21,101 | 22,784 | |||||||||||||||
| 66,512 | 69,991 | 76,473 | 80,273 | 90,552 | ||||||||||||||||
Interest expense |
||||||||||||||||||||
Deposits |
2,788 | 3,814 | 4,310 | 4,841 | 5,288 | |||||||||||||||
Other borrowings |
6,615 | 7,028 | 9,548 | 11,218 | 11,925 | |||||||||||||||
| 9,403 | 10,842 | 13,858 | 16,059 | 17,213 | ||||||||||||||||
Net interest income before
provision for credit losses |
57,109 | 59,149 | 62,615 | 64,214 | 73,339 | |||||||||||||||
Provision for credit losses |
7,068 | 12,700 | 25,300 | 11,000 | 12,200 | |||||||||||||||
Net interest income after
provision for credit losses |
50,041 | 46,449 | 37,315 | 53,214 | 61,139 | |||||||||||||||
Non-interest income |
9,978 | 7,188 | 36,719 | 15,418 | (2,211 | ) | ||||||||||||||
Non-interest expenses |
36,305 | 41,805 | 49,318 | 41,447 | 35,922 | |||||||||||||||
Earnings before income taxes |
23,714 | 11,832 | 24,716 | 27,185 | 23,006 | |||||||||||||||
Income taxes |
7,114 | 1,958 | 6,789 | 8,170 | 6,887 | |||||||||||||||
Net earnings |
16,600 | 9,874 | 17,927 | 19,015 | 16,119 | |||||||||||||||
Allocated to restricted stock |
66 | 41 | 58 | 64 | 54 | |||||||||||||||
Net earnings allocated to common shareholders |
$ | 16,534 | $ | 9,833 | $ | 17,869 | $ | 18,951 | $ | 16,065 | ||||||||||
Basic earning per common share |
$ | 0.16 | $ | 0.09 | $ | 0.17 | $ | 0.18 | $ | 0.15 | ||||||||||
Diluted earnings per common share |
$ | 0.16 | $ | 0.09 | $ | 0.17 | $ | 0.18 | $ | 0.15 | ||||||||||
Cash dividends per common share |
$ | 0.085 | $ | 0.085 | $ | 0.085 | $ | 0.085 | $ | 0.085 | ||||||||||
Dividends Declared |
$ | 9,017 | $ | 9,016 | $ | 9,011 | $ | 9,041 | $ | 9,035 | ||||||||||
- 12 -
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
Distribution of Loan Portfolio
| 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | 3/31/2010 | ||||||||||||||||
Commercial and Industrial |
$ | 490,316 | $ | 499,986 | $ | 509,502 | $ | 513,483 | $ | 471,071 | ||||||||||
Real Estate: |
||||||||||||||||||||
Construction |
169,562 | 223,478 | 280,756 | 305,724 | 349,046 | |||||||||||||||
Commercial Real Estate |
2,255,247 | 2,272,270 | 2,280,861 | 2,321,257 | 2,318,905 | |||||||||||||||
SFR Mortgage |
210,445 | 224,325 | 238,179 | 254,499 | 261,676 | |||||||||||||||
Consumer |
61,622 | 67,371 | 71,487 | 73,342 | 74,308 | |||||||||||||||
Municipal lease finance receivables |
122,897 | 129,128 | 149,584 | 154,042 | 156,392 | |||||||||||||||
Auto and equipment leases |
17,399 | 17,982 | 20,658 | 23,754 | 27,546 | |||||||||||||||
Dairy, Livestock and Agribusiness |
374,716 | 433,447 | 420,984 | 448,448 | 458,057 | |||||||||||||||
Gross Loans |
3,702,204 | 3,867,987 | 3,972,011 | 4,094,549 | 4,117,001 | |||||||||||||||
Less: |
||||||||||||||||||||
Purchase Accounting Discount |
(98,117 | ) | (114,763 | ) | (143,752 | ) | (159,393 | ) | (163,842 | ) | ||||||||||
Deferred net loan fees |
(5,640 | ) | (5,484 | ) | (5,457 | ) | (5,835 | ) | (6,030 | ) | ||||||||||
Allowance for credit losses |
(101,067 | ) | (105,259 | ) | (105,289 | ) | (118,548 | ) | (112,321 | ) | ||||||||||
Net Loans |
$ | 3,497,380 | $ | 3,642,481 | $ | 3,717,513 | $ | 3,810,773 | $ | 3,834,808 | ||||||||||
Covered Loans |
$ | 348,759 | $ | 374,012 | $ | 403,822 | $ | 424,377 | $ | 438,539 | ||||||||||
Non-covered Loans |
3,148,621 | 3,268,469 | 3,313,691 | 3,386,396 | 3,396,269 | |||||||||||||||
Total Net Loans |
$ | 3,497,380 | $ | 3,642,481 | $ | 3,717,513 | $ | 3,810,773 | $ | 3,834,808 | ||||||||||
- 13 -
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
Non-Performing Assets & Delinquency Trends
(Non-Covered Loans)
(Non-Covered Loans)
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2011 | 2010 | 2010 | 2010 | 2010 | ||||||||||||||||
Non-Performing Loans |
||||||||||||||||||||
Residential Construction and Land |
$ | 4,001 | $ | 4,090 | $ | 5,085 | $ | 2,789 | $ | 2,855 | ||||||||||
Commercial
Construction and Land |
39,976 | 60,591 | 71,428 | 39,114 | 31,216 | |||||||||||||||
Residential Mortgage |
18,425 | 17,800 | 14,543 | 12,638 | 13,726 | |||||||||||||||
Commercial Real Estate |
34,950 | 64,859 | 56,330 | 20,639 | 22,041 | |||||||||||||||
Commercial and Industrial |
7,542 | 3,936 | 6,067 | 7,527 | 6,879 | |||||||||||||||
Dairy & Livestock |
2,996 | 5,207 | 5,176 | — | — | |||||||||||||||
Consumer |
260 | 537 | 242 | 143 | 123 | |||||||||||||||
Total |
$ | 108,150 | $ | 157,020 | $ | 158,871 | $ | 82,850 | $ | 76,840 | ||||||||||
% of Total Loans |
3.33 | % | 4.65 | % | 4.65 | % | 2.36 | % | 2.19 | % | ||||||||||
Past Due 30-89 Days |
||||||||||||||||||||
Residential Construction and Land |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Commercial
Construction and Land |
1,492 | — | — | 9,093 | 8,143 | |||||||||||||||
Residential Mortgage |
993 | 2,597 | 2,779 | 2,552 | 3,746 | |||||||||||||||
Commercial Real Estate |
898 | 3,194 | 1,234 | 1,966 | 3,286 | |||||||||||||||
Commercial and Industrial |
239 | 3,320 | 2,333 | 634 | 2,714 | |||||||||||||||
Dairy & Livestock |
— | — | 1,406 | — | — | |||||||||||||||
Consumer |
9 | 29 | 494 | 139 | 28 | |||||||||||||||
Total |
$ | 3,631 | $ | 9,140 | $ | 8,246 | $ | 14,384 | $ | 17,917 | ||||||||||
% of Total Loans |
0.11 | % | 0.27 | % | 0.24 | % | 0.41 | % | 0.51 | % | ||||||||||
OREO |
||||||||||||||||||||
Residential Construction and Land |
$ | — | $ | — | $ | 11,113 | $ | 11,113 | $ | 11,113 | ||||||||||
Commercial
Construction and Land |
2,709 | 2,709 | 2,709 | — | — | |||||||||||||||
Commercial Real Estate |
3,322 | 2,581 | 3,220 | 3,220 | 3,746 | |||||||||||||||
Commercial and Industrial |
209 | — | — | 668 | — | |||||||||||||||
Residential Mortgage |
— | — | 345 | — | 319 | |||||||||||||||
Consumer |
— | — | — | — | — | |||||||||||||||
Total |
$ | 6,240 | $ | 5,290 | $ | 17,387 | $ | 15,001 | $ | 15,178 | ||||||||||
Total Non-Performing, Past Due & OREO |
$ | 118,021 | $ | 171,450 | $ | 184,504 | $ | 112,235 | $ | 109,935 | ||||||||||
% of Total Loans |
3.63 | % | 5.08 | % | 5.40 | % | 3.20 | % | 3.13 | % | ||||||||||
- 14 -
Net interest income and net interest margin reconciliations (Non-GAAP)
We use certain non-GAAP financial measures to provide supplemental
information regarding our performance. The first quarter of 2011 net interest
income and net interest margin include a yield adjustment of $2.0 million from
discount accretion on covered loans. We believe that presenting the net
interest income and net interest margin excluding the yield adjustment provides
additional clarity to the users of financial statements regarding core net
interest income and net interest margin.
| Three months ended | ||||||||||||
| March 31, 2011 | ||||||||||||
| (amounts in thousands) | ||||||||||||
| Average | ||||||||||||
| Balance | Interest | Yield | ||||||||||
Total interest-earning assets |
$ | 6,059,541 | $ | 66,512 | 4.60 | % | ||||||
Accelerated accretion on acquired loans |
112,953 | (1,951 | ) | |||||||||
Total interest-earning assets, excluding SJB
loan discount and yield adjustment |
$ | 6,172,494 | $ | 64,561 | 4.39 | % | ||||||
Net interest income and net interest margin (TE) |
$ | 59,579 | 3.98 | % | ||||||||
Yield adjustment to interest income from
discount accretion |
(1,951 | ) | ||||||||||
Net interest income and net interest margin
(TE), excluding yield adjustment |
$ | 57,628 | 3.78 | % | ||||||||
- 15 -