Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CVB FINANCIAL CORP | c11328e8vk.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 Positive Earnings for 2010
| • | Net income of $62.9 million for 2010 |
| • | Diluted earnings per common share $0.59 |
| • | Non-interest bearing deposits grew $140 million or 8.9% over December 31, 2009 |
| • | Allowance for credit losses 3.12% of total CBB loans & leases |
| • | Net interest margin, excluding discount, was 3.84% for 4th quarter |
Ontario, CA, January 19, 2011-CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens
Business Bank (“the Company”), announced earnings for the year ended December 31, 2010.
CVB Financial Corp. reported net income of $62.9 million for the year ended December 31, 2010.
This represents a decrease of $2.5 million, or 3.80%, when compared with net income of $65.4
million for the year ended December 31, 2009. Diluted earnings per share were $0.59 for the year
ended December 31, 2010. This was up $0.03, or 5.36%, from diluted earnings per share of $0.56 for
the same period last year. Diluted earnings per share for 2009 were impacted by $12.8 million in
preferred stock dividends.
Chris Myers, President and CEO commented, “We persevered in 2010 and were able to achieve several
important goals: (1) The successful integration of our FDIC assisted acquisition of San Joaquin
Bank (2) The continued deleveraging of our balance sheet through our repayment of $450 million in
borrowings (3) Solid core deposit growth despite substantially lowering deposit costs (4) Strong
non-interest income growth in the service fee and trust fee income categories. These
accomplishments helped drive the core earnings of the Bank in 2010 and should positively contribute
to our future earnings success.”
Net income for the year ended December 31, 2010 produced a return on beginning equity of 9.86%, a
return on average equity of 9.40% and a return on average assets of 0.93%.
The efficiency ratio, excluding the provision for credit losses and the gain on sale of securities
was 66.02% for the year. Operating expenses as a percentage of average assets were 2.49%.
The operating results for 2010 include a gain on sale of securities of $38.9 million, a provision
for credit losses of $61.2 million, and an $18.7 million charge for the prepayment of borrowings.
The Company reported net income of $9.9 million for the fourth quarter ending December 31, 2010.
This represented a decrease of $7.2 million, or 42.15%, when compared with the $17.1 million in net
income reported for the fourth quarter of 2009. Diluted earnings per share were $0.09 for the
fourth quarter of 2010. This was down $0.07 from diluted earnings per share of $0.16 for the fourth
quarter of 2009. Diluted earnings per share for 2009 were affected by the excess of the acquired
assets over assumed liabilities from the San Joaquin Bank (SJB) acquisition which resulted in an
after-tax gain of $12.3 million. Without this gain, net income for the fourth quarter 2009 would
have been $4.8 million. Fourth quarter 2010 operating results also include a $12.7 million
provision for credit losses on non-covered loans, compared to $25.5 in the fourth quarter of 2009.
Net income for the fourth quarter of 2010 produced an annualized return on beginning equity of
5.89%, an annualized return on average equity of 5.82% and an annualized return on average assets
of 0.60%. The efficiency ratio, excluding the provision for credit losses, was 77.94%.
Operating expenses as a percentage of average assets were 2.52%.
Interest income on loans for 2010 totaled $240.7 million, which includes $26.7 million in discount
accretion on covered loans acquired from SJB. This amount represents the discount recognized from
accelerated principal payments on SJB loans. Excluding the discount accretion, interest income on
loans would have been $214.0 million for 2010. This represents an increase of $7.9 million, or
3.83%, when compared to interest income on loans of $206.1 million for last year.
Net income for 2010 included the following covered loan activity: (1) The covered loan yield
adjustment to interest income of $26.7 million; (2) included in other operating income, a $15.9
million reduction in the FDIC loss sharing asset and a loss on sale of covered OREO of $0.9
million; and (3) a $1.9 million write-down of covered OREO properties included in OREO expense.
Net Interest Income and Net Interest Margin
Net interest income, before the provision for credit losses, totaled $259.3 million for the year
ended December 31, 2010. “This represents the highest net interest income in the history of the
Company, following a previous record in 2009 of $222.3 million”, said Chris Myers. The increase
resulted from a $30.5 million decrease in interest expense plus a $6.5 million increase in interest
income. The increase in interest income was primarily due to increased average loans outstanding
and a higher yield thereon, partially
offset by lower average balances in lesser earning investments and balances due from banks. The
decrease in interest expense was due to the decrease in the interest rates paid on deposits and
borrowed funds, combined with a decrease in average borrowed funds of $443.6 million.
- 2 -
Net interest income, before provision for credit losses, totaled $59.1 million for the fourth
quarter of 2010. This represents an increase of $1.1 million, or 1.85%, over net interest income
of $58.1 million for the same period in 2009. The increase resulted from an $11.2 million decrease
in interest expense, partially offset by a $10.1 million decrease in interest income.
Net interest margin (tax equivalent and including the yield adjustment to covered loans) increased
from 3.75% for the year ended December 31, 2009 to 4.47% for the year ended December 31, 2010.
Total average earning asset yields increased from 5.17% for 2009 to 5.43% for 2010. Total cost of
funds decreased from 1.49% for 2009 to 0.96% for 2010.
Net interest margin (tax equivalent and including the yield adjustment to covered loans) increased
from 3.80% for the fourth quarter of 2009 to 4.24% for the fourth quarter of 2010. Total average
earning asset yields (tax equivalent) decreased from 5.15% for the fourth quarter of 2009 to 4.97%
for the fourth quarter of 2010. The cost of funds decreased from 1.39% for the fourth quarter of
2009 to 0.73% for the fourth quarter of 2010.
Excluding the impact of the yield adjustment to covered loans, net interest margin (tax equivalent)
increased from 3.75% for 2009 to 3.92% for 2010. Total average earning asset yields decreased from
5.17% for 2009 to 4.86% for 2010.
Assets
The Company reported total assets of $6.44 billion at December 31, 2010. This represented a
decrease of $303.1 million, or 4.5%, over total assets of $6.74 billion at December 31, 2009.
Earning assets totaling $5.64 billion decreased $555.3 million, or 9.0%, when compared with earning
assets of $6.18 billion at December 31, 2009. The decrease in earnings assets was due to decreases
in our investment and loan portfolios as discussed below. Total loans and leases of $3.75 billion
at December 31, 2010 decreased $331.3 million, or 8.12%, compared to $4.08 billion at December 31,
2009. The loan portfolio attrition was due to runoff associated with problem debt resolution and
lower new loan productivity based on reduced loan demand in the geographic areas we serve.
Investment Securities
Investment securities totaled $1.79 billion at December 31, 2010. This represents a decrease of
$317.6 million, or 15.04%, when compared with $2.11 billion in investment securities at December
31, 2009. During 2010, we sold certain securities with an average yield of 4.71% and recognized a
gain on sale of securities of $38.9 million.
- 3 -
Our available-for-sale investment portfolio continues to perform well. As of December 31, 2010 we
had an unrealized gain of $10.7 million. We have no preferred stock or 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 eleven
private-label mortgage-backed issues, of which ten totaling $10.2 million are fully performing.
In 2010, we recognized a $904,000 other-than-temporary impairment on a private-label,
mortgage-backed, held-to-maturity investment security, which was charged to other operating income.
This Alt-A bond, with a book value of $3.1 million as of December 31, 2010, has had $1.2 million
in net impairment losses to date. These losses have been recorded as a reduction to other operating
income.
Our municipal securities, totaling $606.4 million, are located in 32 states, with approximately
$37.4 million, or 6.17%, located within the state of California. All municipal bond securities are
performing.
Deposits & Customer Repurchases
Total deposits and customer repos were $5.06 billion at December 31, 2010. This represents an
increase of $137.2 million, or 2.79%, when compared with total deposits and customer repos of $4.92
billion at December 31, 2009. At December 31, 2010, we had $4.52 billion in total deposits, of
which $1.70 billion, or 37.7%, were non-interest bearing demand deposits.
Our cost of total deposits and customer repurchase agreements was 0.44% for 2010, compared to our
cost of total deposits and customer repurchase agreements of 0.67% for 2009. Our cost of total
deposits including customer repurchase agreements was 0.36% for the three months ending December
31, 2010.
Borrowings
At December 31, 2010, we had $555.3 million in borrowings. This represents a decrease of $450.2
million, or 44.78%, from borrowings of $1.01 billion at December 31, 2009. As a result of the
increase in deposits and customer repurchases of $137.2 million and the net decrease of $317.6
million in securities, it was possible for us to reduce our reliance on borrowed funds while still
maintaining a strong liquidity position. During 2010, we prepaid a $250.0 million structured
repurchase agreement with an interest rate of 4.95% and a $100.0 million FHLB advance with an
interest rate of 3.21%. These transactions resulted in an $18.7 million prepayment charge recorded
in other operating expense. In addition, a $100 million FHLB advance matured and was not replaced.
We continue to monitor opportunities to reduce our reliance on borrowed funds while maintaining a
strong liquidity position.
Asset Quality
On October 16, 2009, Citizens Business Bank acquired substantially all of the assets and assumed
substantially all of the liabilities of San Joaquin Bank headquartered in Bakersfield, California,
in an FDIC-assisted transaction. We acquired all five SJB branches, one of which was consolidated
into our existing Bakersfield Business Financial
Center in March 2010. The application of the purchase method of accounting resulted in an
after-tax gain of $12.3 million which was included in 2009 earnings.
- 4 -
Due to the nature of the transaction and the loss guarantee from the FDIC, 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 have been marked to fair value at acquisition and also have a loss
sharing guarantee by the FDIC. The allowance for credit losses as of December 31, 2010 pertains
only to those loans made by Citizens Business Bank and not those acquired through the San Joaquin
Bank transaction.
Citizens Business Bank Asset Quality (non-covered loans)
The allowance for credit losses decreased from $108.9 million as of December 31, 2009 to $105.3
million as of December 31, 2010. The net decrease was primarily due to a provision for credit
losses of $61.2 million, loan charge-offs totaling $65.5 million and recoveries on previously
charged-off loans of $658,760. By comparison, during 2009, the Company had net charge-offs of
$25.5 million and an $80.5 million provision for credit losses. The allowance for credit losses was
3.12% and 3.02% of total loans and leases outstanding as of December 31, 2010 and 2009,
respectively.
We had $157.0 million in non-performing loans (including $45 million from our largest relationship)
at December 31, 2010. This represents 4.65% of total loans. This compares to non-performing loans
of $69.8 million or 1.93% of total loans at December 31, 2009. The non-performing loans consist of
$4.1 million in residential construction and land loans, $60.6 million in commercial construction
loans, $17.8 million in single-family mortgage loans, $64.9 million in commercial real estate
loans, $5.2 million in dairy & livestock loans, $3.9 million in commercial loans and $0.5 million
in consumer loans.
At December 31, 2010, we had $5.3 million in Other Real Estate Owned (“OREO”), consisting of three
properties. This represents a slight increase of $1.4 million from $3.9 million at December 31,
2009 but significantly lower than levels we experienced during the year. At December 31, 2009, we
had two OREO properties. During 2010, we added eight properties for $17.0 million, wrote down two
properties for $4.1 million and sold seven properties with an OREO value of $11.5 million for
proceeds of $11.9 million.
During the fourth quarter of 2010, we removed one large property from OREO. This was a 300 acre
property in Kings County, California. We carried it on our books at $11.1 million and sold it for
$9.0 million. After selling costs, we received $8.3 million in net proceeds, resulting in a $2.8
million write-down.
At December 31, 2010, we had loans delinquent 30 to 89 days of $9.1 million. This compares to
delinquent loans of $10.5 million at December 31, 2009. As a percentage of non-covered total
loans, delinquencies, excluding non-accruals, were 0.27% at December 31, 2010 and 0.29% at December
31, 2009.
- 5 -
With respect to our largest borrowing relationship, we previously announced a write-down and
forbearance agreements through December 15, 2010. As of December 21, 2010, we entered into new
forbearance agreements, but since then the borrower has failed to satisfy certain obligations under
these agreements. As a result, we are continuing to explore all of our rights and remedies on a
loan-by-loan basis, including without limitation the sale of certain notes, initiation of
foreclosure proceedings against certain collateral and alternative repayment plans. There can be
no assurances as to the outcome of such efforts, which the borrower may oppose. The current
aggregate balance after prior payments and charge-offs is $45.2 million. Further charge-offs may
need to be taken based on loan developments, borrower actions and/or reappraisals of collateral.
San Joaquin Bank Asset Quality (covered loans)
At December 31, 2010 we had $488.8 million in gross loans from SJB with a carrying value of $374.0
million. Of the gross loans, we have $133.1 million in non-accrual and $660,641 in loans
delinquent 30 to 89 days. Non-accrual loans represent 27.22% of gross loans and delinquent loans
represent 0.14%. During 2010 we took 16 properties into OREO totaling $13.1 million.
Included in OREO expense is the $1.9 million write-down of covered OREO from the SJB acquisition.
Under the loss sharing agreement with the FDIC, we will be reimbursed for 80% of the loss. In
addition, as a result of this write-down, the FDIC loss sharing asset was increased by $1.8 million
and recorded in other income.
CitizensTrust
CitizensTrust, a division of Citizens Business Bank, has approximately $2.1 billion in assets under
administration, including $1.1 billion in assets under management, as of December 31, 2010. Trust
and Investment Services income totaled $8.4 million for 2010, up 26% or $1.7 million over 2009.
CitizensTrust provides trust, investment and brokerage related services, as well as financial,
estate and business succession planning.
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 42 cities with 43 Business Financial
Centers, 5 Commercial Banking Centers and 3 trust office locations 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, 2009, 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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CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(unaudited)
dollars in thousands
CONSOLIDATED BALANCE SHEET
(unaudited)
dollars in thousands
| December 31, | ||||||||
| 2010 | 2009 | |||||||
Assets: |
||||||||
Cash and due from banks |
$ | 354,048 | $ | 103,254 | ||||
Interest-bearing balances due from depository institutions |
50,227 | — | ||||||
Total cash and cash equivalents |
404,275 | 103,254 | ||||||
Interest-bearing balances due from depository institutions |
50,190 | 1,226 | ||||||
Investment Securities available-for-sale |
1,791,558 | 2,108,463 | ||||||
Investment Securities held-to-maturity |
3,143 | 3,838 | ||||||
Investment in stock of Federal Home Loan Bank (FHLB) |
86,744 | 97,582 | ||||||
Loans held-for-sale |
2,954 | 1,439 | ||||||
Loans and lease finance receivables |
3,747,740 | 4,079,013 | ||||||
Less allowance for credit losses |
(105,259 | ) | (108,924 | ) | ||||
Net loans and lease finance receivables |
3,642,481 | 3,970,089 | ||||||
Premises and equipment, net |
40,921 | 41,444 | ||||||
Intangibles |
9,029 | 12,761 | ||||||
Goodwill |
55,097 | 55,097 | ||||||
Cash value of life insurance |
112,901 | 109,480 | ||||||
FDIC loss sharing asset |
101,461 | 133,258 | ||||||
Other assets |
135,937 | 101,838 | ||||||
TOTAL |
$ | 6,436,691 | $ | 6,739,769 | ||||
Liabilities and Stockholders’ Equity |
||||||||
Liabilities: |
||||||||
Deposits: |
||||||||
Demand Deposits (noninterest-bearing) |
$ | 1,701,523 | $ | 1,561,981 | ||||
Investment Checking |
384,674 | 469,413 | ||||||
Savings/MMDA |
1,342,758 | 1,213,002 | ||||||
Time Deposits |
1,089,873 | 1,194,258 | ||||||
Total Deposits |
4,518,828 | 4,438,654 | ||||||
Demand Note to U.S. Treasury |
1,917 | 2,425 | ||||||
Customer Repurchase Agreements |
542,188 | 485,132 | ||||||
Repurchase Agreements |
— | 250,000 | ||||||
Borrowings |
553,390 | 753,118 | ||||||
Junior Subordinated Debentures |
115,055 | 115,055 | ||||||
Other liabilities |
61,458 | 57,157 | ||||||
Total Liabilities |
5,792,836 | 6,101,541 | ||||||
Stockholders’ equity: |
||||||||
Stockholders’ equity |
637,670 | 611,838 | ||||||
Accumulated other comprehensive income, net of tax |
6,185 | 26,390 | ||||||
| 643,855 | 638,228 | |||||||
TOTAL |
$ | 6,436,691 | $ | 6,739,769 | ||||
- 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 December 31, | Twelve months ended December 31, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Assets: |
||||||||||||||||
Cash and due from banks |
$ | 405,300 | $ | 228,178 | $ | 382,874 | $ | 156,993 | ||||||||
Federal funds sold and Interest-bearing balances due from depository institutions |
100,374 | 98,492 | 64,437 | 76,274 | ||||||||||||
Total cash and cash equivalents |
505,674 | 326,670 | 447,311 | 233,267 | ||||||||||||
Investment securities available-for-sale |
1,818,102 | 2,200,226 | 1,967,174 | 2,321,956 | ||||||||||||
Investment securities held-to-maturity |
2,984 | 4,055 | 3,237 | 5,826 | ||||||||||||
Investment in stock of Federal Home Loan Bank (FHLB) |
88,547 | 96,213 | 93,461 | 93,989 | ||||||||||||
Loans held-for-sale |
3,872 | 605 | 3,078 | 153 | ||||||||||||
Loans and lease finance receivables |
3,787,741 | 3,997,884 | 3,905,035 | 3,735,339 | ||||||||||||
Less allowance for credit losses |
(109,950 | ) | (92,611 | ) | (114,358 | ) | (77,670 | ) | ||||||||
Net loans and lease finance receivables |
3,677,791 | 3,905,273 | 3,790,677 | 3,657,669 | ||||||||||||
Premises and equipment, net |
41,997 | 42,082 | 41,961 | 43,266 | ||||||||||||
Intangibles |
9,423 | 12,417 | 10,816 | 10,444 | ||||||||||||
Goodwill |
55,097 | 55,097 | 55,097 | 55,097 | ||||||||||||
Cash value of life insurance |
112,489 | 109,075 | 111,210 | 107,933 | ||||||||||||
FDIC loss sharing asset |
105,951 | 110,376 | 117,087 | 27,821 | ||||||||||||
Other assets |
154,287 | 91,870 | 130,708 | 85,069 | ||||||||||||
TOTAL |
$ | 6,576,214 | $ | 6,953,959 | $ | 6,771,817 | $ | 6,642,490 | ||||||||
Liabilities and Stockholders’ Equity |
||||||||||||||||
Liabilities: |
||||||||||||||||
Deposits: |
||||||||||||||||
Noninterest-bearing |
$ | 1,780,340 | $ | 1,573,039 | $ | 1,669,611 | $ | 1,431,204 | ||||||||
Interest-bearing |
2,832,396 | 2,877,983 | 2,887,507 | 2,561,734 | ||||||||||||
Total Deposits |
4,612,736 | 4,451,022 | 4,557,118 | 3,992,938 | ||||||||||||
Other borrowings |
1,115,141 | 1,644,925 | 1,369,301 | 1,812,873 | ||||||||||||
Junior Subordinated Debentures |
115,055 | 115,055 | 115,055 | 115,055 | ||||||||||||
Other liabilities |
60,275 | 65,221 | 61,020 | 67,746 | ||||||||||||
Total Liabilities |
5,903,207 | 6,276,223 | 6,102,494 | 5,988,612 | ||||||||||||
Stockholders’ equity: |
||||||||||||||||
Stockholders’ equity |
644,815 | 631,059 | 636,628 | 620,083 | ||||||||||||
Accumulated other comprehensive income,
net of tax |
28,192 | 46,677 | 32,695 | 33,795 | ||||||||||||
| 673,007 | 677,736 | 669,323 | 653,878 | |||||||||||||
TOTAL |
$ | 6,576,214 | $ | 6,953,959 | $ | 6,771,817 | $ | 6,642,490 | ||||||||
- 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 | For the Twelve Months | |||||||||||||||
| Ended December 31, | Ended December 31, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Interest Income: |
||||||||||||||||
Loans held-for-sale |
$ | 14 | $ | 5 | $ | 54 | $ | 5 | ||||||||
Loans and leases, including fees |
51,200 | 56,217 | 213,932 | 206,074 | ||||||||||||
Accelerated accretion on acquired loans |
4,407 | — | 26,740 | — | ||||||||||||
Total loans and leases, including fees |
55,621 | 56,222 | 240,726 | 206,079 | ||||||||||||
Investment securities: |
||||||||||||||||
Taxable |
7,784 | 16,950 | 49,720 | 76,798 | ||||||||||||
Tax-advantaged |
6,129 | 6,769 | 25,394 | 27,329 | ||||||||||||
Total investment income |
13,913 | 23,719 | 75,114 | 104,127 | ||||||||||||
Dividends from FHLB Stock |
90 | — | 324 | 195 | ||||||||||||
Federal funds sold & Interest-bearing CDs |
367 | 162 | 1,125 | 358 | ||||||||||||
Total interest income |
69,991 | 80,103 | 317,289 | 310,759 | ||||||||||||
Interest Expense: |
||||||||||||||||
Deposits |
3,814 | 5,993 | 18,253 | 24,956 | ||||||||||||
Borrowings and junior subordinated debentures |
7,028 | 16,039 | 39,719 | 63,539 | ||||||||||||
Total interest expense |
10,842 | 22,032 | 57,972 | 88,495 | ||||||||||||
Net interest income before provision for credit losses |
59,149 | 58,071 | 259,317 | 222,264 | ||||||||||||
Provision for credit losses |
12,700 | 25,500 | 61,200 | 80,500 | ||||||||||||
Net interest income after
provision for credit losses |
46,449 | 32,571 | 198,117 | 141,764 | ||||||||||||
Other Operating Income: |
||||||||||||||||
Impairment loss on investment securities |
(92 | ) | (144 | ) | (317 | ) | (1,994 | ) | ||||||||
Loss reclassified to/(from) other comprehensive income |
— | 53 | (587 | ) | 1,671 | |||||||||||
Net impairment loss on investment securities
recognized in earnings |
(92 | ) | (91 | ) | (904 | ) | (323 | ) | ||||||||
Service charges on deposit accounts |
4,060 | 3,809 | 16,745 | 14,889 | ||||||||||||
Trust and investment services |
2,108 | 1,709 | 8,363 | 6,657 | ||||||||||||
Gain on sale of investment securities |
— | — | 38,900 | 28,446 | ||||||||||||
Reduction in FDIC loss sharing asset |
(1,056 | ) | — | (15,856 | ) | — | ||||||||||
Gain from SJB acquisition |
— | 21,122 | — | 21,122 | ||||||||||||
Other |
2,168 | 3,354 | 9,866 | 10,280 | ||||||||||||
Total other operating income |
7,188 | 29,903 | 57,114 | 81,071 | ||||||||||||
Other operating expenses: |
||||||||||||||||
Salaries and employee benefits |
16,556 | 16,172 | 69,419 | 62,985 | ||||||||||||
Occupancy |
2,959 | 3,334 | 12,127 | 11,649 | ||||||||||||
Equipment |
1,748 | 1,828 | 7,221 | 6,712 | ||||||||||||
Professional services |
3,485 | 1,967 | 13,308 | 6,965 | ||||||||||||
Amortization of intangible assets |
909 | 906 | 3,732 | 3,163 | ||||||||||||
Provision for unfunded commitments |
450 | 1,950 | 2,600 | 3,750 | ||||||||||||
OREO Expense |
6,344 | 13 | 7,490 | 1,211 | ||||||||||||
Prepayment penalties on borrowings |
— | 4,402 | 18,663 | 4,402 | ||||||||||||
Other |
9,354 | 8,793 | 33,932 | 32,749 | ||||||||||||
Total other operating expenses |
41,805 | 39,365 | 168,492 | 133,586 | ||||||||||||
Earnings before income taxes |
11,832 | 23,109 | 86,739 | 89,249 | ||||||||||||
Income taxes |
1,958 | 6,041 | 23,804 | 23,830 | ||||||||||||
Net earnings |
9,874 | 17,068 | 62,935 | 65,419 | ||||||||||||
Preferred stock dividend and other reductions |
41 | 63 | 217 | 12,942 | ||||||||||||
Net earnings allocated to common shareholders |
$ | 9,833 | $ | 17,005 | $ | 62,718 | $ | 52,477 | ||||||||
Basic earnings per common share |
$ | 0.09 | $ | 0.16 | $ | 0.59 | $ | 0.56 | ||||||||
Diluted earnings per common share |
$ | 0.09 | $ | 0.16 | $ | 0.59 | $ | 0.56 | ||||||||
Cash dividends per common share |
$ | 0.085 | $ | 0.085 | $ | 0.340 | $ | 0.340 | ||||||||
- 10 -
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Interest income — (Tax-Effected) (te) |
$ | 72,534 | $ | 82,870 | $ | 327,769 | $ | 321,917 | ||||||||
Interest Expense |
10,842 | 22,032 | 57,972 | 88,495 | ||||||||||||
Net Interest income — (te) |
$ | 61,692 | $ | 60,838 | $ | 269,797 | $ | 233,422 | ||||||||
Return on average assets |
0.60 | % | 0.97 | % | 0.93 | % | 0.98 | % | ||||||||
Return on average equity |
5.82 | % | 9.99 | % | 9.40 | % | 10.00 | % | ||||||||
Efficiency ratio |
77.94 | % | 63.01 | % | 66.02 | % | 59.95 | % | ||||||||
Yield on average earning assets |
4.98 | % | 5.15 | % | 5.43 | % | 5.17 | % | ||||||||
Cost of funds |
0.73 | % | 1.39 | % | 0.96 | % | 1.49 | % | ||||||||
Net interest margin (te) |
4.24 | % | 3.80 | % | 4.47 | % | 3.75 | % | ||||||||
Net interest margin (te) excluding discount |
3.84 | % | 3.80 | % | 3.92 | % | 3.75 | % | ||||||||
Weighted average shares outstanding |
||||||||||||||||
Basic |
105,043,076 | 105,902,311 | 105,879,779 | 92,955,172 | ||||||||||||
Diluted |
105,303,245 | 106,023,730 | 106,125,761 | 93,055,801 | ||||||||||||
Dividends declared |
$ | 9,016 | $ | 9,054 | $ | 36,103 | $ | 32,228 | ||||||||
Dividend payout ratio |
91.31 | % | 53.05 | % | 57.37 | % | 49.26 | % | ||||||||
Number of shares outstanding-EOP |
106,080,576 | 106,231,511 | ||||||||||||||
Book value per share |
$ | 6.07 | $ | 6.01 | ||||||||||||
| December 31, | ||||||||
| (Non-covered loans) | 2010 | 2009 | ||||||
Non-performing Assets (dollar amount in thousands): |
||||||||
Non-accrual loans |
$ | 157,020 | $ | 69,779 | ||||
Loans past due 90 days or more
and still accruing interest |
— | — | ||||||
Other real estate owned (OREO), net |
5,290 | 3,936 | ||||||
Total non-performing assets |
$ | 162,310 | $ | 73,715 | ||||
Percentage of non-performing assets
to total loans outstanding and OREO |
4.74 | % | 1.80 | % | ||||
Percentage of non-performing
assets to total assets |
2.52 | % | 1.09 | % | ||||
Allowance for loan losses to
non-performing assets |
64.85 | % | 147.76 | % | ||||
Net Charge-off to Average loans |
1.86 | % | 0.68 | % | ||||
Allowance for Credit Losses: |
||||||||
Beginning Balance |
$ | 108,924 | $ | 53,960 | ||||
Total Loans Charged-Off |
(65,524 | ) | (26,339 | ) | ||||
Total Loans Recovered |
659 | 803 | ||||||
Net Loans Charged-off |
(64,865 | ) | (25,536 | ) | ||||
Provision Charged to Operating Expense |
61,200 | 80,500 | ||||||
Allowance for Credit Losses at End of period |
$ | 105,259 | $ | 108,924 | ||||
- 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
| 2010 | 2009 | 2008 | ||||||||||||||||||||||
| Quarter End | High | Low | High | Low | High | Low | ||||||||||||||||||
March 31, |
$ | 10.89 | $ | 8.44 | $ | 12.11 | $ | 5.31 | $ | 11.20 | $ | 8.45 | ||||||||||||
June 30, |
$ | 11.85 | $ | 9.00 | $ | 7.77 | $ | 5.69 | $ | 12.10 | $ | 9.44 | ||||||||||||
September 30, |
$ | 10.99 | $ | 6.61 | $ | 8.70 | $ | 4.90 | $ | 15.01 | $ | 7.65 | ||||||||||||
December 31, |
$ | 9.09 | $ | 7.30 | $ | 9.00 | $ | 6.93 | $ | 13.39 | $ | 9.29 | ||||||||||||
Quarterly Consolidated Statements of Earnings
| 4Q | 3Q | 2Q | 1Q | 4Q | ||||||||||||||||
| 2010 | 2010 | 2010 | 2010 | 2009 | ||||||||||||||||
Interest income |
||||||||||||||||||||
Loans, including fees |
$ | 55,621 | $ | 58,165 | $ | 59,172 | $ | 67,768 | $ | 56,222 | ||||||||||
Investment securities and other |
14,370 | 18,308 | 21,101 | 22,784 | 23,881 | |||||||||||||||
| 69,991 | 76,473 | 80,273 | 90,552 | 80,103 | ||||||||||||||||
Interest expense |
||||||||||||||||||||
Deposits |
3,814 | 4,310 | 4,841 | 5,288 | 5,993 | |||||||||||||||
Other borrowings |
7,028 | 9,548 | 11,218 | 11,925 | 16,039 | |||||||||||||||
| 10,842 | 13,858 | 16,059 | 17,213 | 22,032 | ||||||||||||||||
Net interest income before
provision for credit losses |
59,149 | 62,615 | 64,214 | 73,339 | 58,071 | |||||||||||||||
Provision for credit losses |
12,700 | 25,300 | 11,000 | 12,200 | 25,500 | |||||||||||||||
Net interest income after
provision for credit losses |
46,449 | 37,315 | 53,214 | 61,139 | 32,571 | |||||||||||||||
Non-interest income |
7,188 | 36,719 | 15,418 | (2,211 | ) | 29,903 | ||||||||||||||
Non-interest expenses |
41,805 | 49,318 | 41,447 | 35,922 | 39,365 | |||||||||||||||
Earnings before income taxes |
11,832 | 24,716 | 27,185 | 23,006 | 23,109 | |||||||||||||||
Income taxes |
1,958 | 6,789 | 8,170 | 6,887 | 6,041 | |||||||||||||||
Net earnings |
9,874 | 17,927 | 19,015 | 16,119 | 17,068 | |||||||||||||||
Preferred stock dividend and
other reductions |
41 | 58 | 64 | 54 | 63 | |||||||||||||||
Net earnings allocated to common
shareholders |
$ | 9,833 | $ | 17,869 | $ | 18,951 | $ | 16,065 | $ | 17,005 | ||||||||||
Basic earning per common share |
$ | 0.09 | $ | 0.17 | $ | 0.18 | $ | 0.15 | $ | 0.16 | ||||||||||
Diluted earnings per common share |
$ | 0.09 | $ | 0.17 | $ | 0.18 | $ | 0.15 | $ | 0.16 | ||||||||||
Cash dividends per common share |
$ | 0.085 | $ | 0.085 | $ | 0.085 | $ | 0.085 | $ | 0.085 | ||||||||||
Dividends Declared |
$ | 9,016 | $ | 9,011 | $ | 9,041 | $ | 9,035 | $ | 9,054 | ||||||||||
- 12 -
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
Distribution of Loan Portfolio
| 12/31/2010 | 9/30/2010 | 6/30/2010 | 3/31/2010 | 12/31/2009 | ||||||||||||||||
Commercial and Industrial |
$ | 499,986 | $ | 509,502 | $ | 513,483 | $ | 471,071 | $ | 475,517 | ||||||||||
Real Estate: |
||||||||||||||||||||
Construction |
223,478 | 280,756 | 305,724 | 349,046 | 401,509 | |||||||||||||||
Commercial Real Estate |
2,272,270 | 2,280,861 | 2,321,257 | 2,318,905 | 2,346,784 | |||||||||||||||
SFR Mortgage |
224,325 | 238,179 | 254,499 | 261,676 | 283,053 | |||||||||||||||
Consumer |
67,371 | 71,487 | 73,342 | 74,308 | 78,759 | |||||||||||||||
Municipal lease finance receivables |
129,128 | 149,584 | 154,042 | 156,392 | 160,565 | |||||||||||||||
Auto and equipment leases |
17,982 | 20,658 | 23,754 | 27,546 | 30,337 | |||||||||||||||
Dairy, Livestock and Agribusiness |
433,447 | 420,984 | 448,448 | 458,057 | 493,451 | |||||||||||||||
Gross Loans |
3,867,987 | 3,972,011 | 4,094,549 | 4,117,001 | 4,269,975 | |||||||||||||||
Less: |
||||||||||||||||||||
Purchase Accounting Discount |
(114,763 | ) | (143,752 | ) | (159,393 | ) | (163,842 | ) | (184,419 | ) | ||||||||||
Deferred net loan fees |
(5,484 | ) | (5,457 | ) | (5,835 | ) | (6,030 | ) | (6,543 | ) | ||||||||||
Allowance for credit losses |
(105,259 | ) | (105,289 | ) | (118,548 | ) | (112,321 | ) | (108,924 | ) | ||||||||||
Net Loans |
$ | 3,642,481 | $ | 3,717,513 | $ | 3,810,773 | $ | 3,834,808 | $ | 3,970,089 | ||||||||||
Covered Loans |
$ | 374,012 | $ | 403,822 | $ | 424,377 | $ | 438,539 | $ | 470,634 | ||||||||||
Non-covered Loans |
3,268,469 | 3,313,691 | 3,386,396 | 3,396,269 | 3,499,455 | |||||||||||||||
Total Net Loans |
$ | 3,642,481 | $ | 3,717,513 | $ | 3,810,773 | $ | 3,834,808 | $ | 3,970,089 | ||||||||||
- 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)
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2010 | 2010 | 2010 | 2010 | 2009 | ||||||||||||||||
Non-Performing Loans |
||||||||||||||||||||
Residential
Construction and Land |
$ | 4,090 | $ | 5,085 | $ | 2,789 | $ | 2,855 | $ | 13,843 | ||||||||||
Commercial
Construction |
60,591 | 71,428 | 39,114 | 31,216 | 23,832 | |||||||||||||||
Residential Mortgage |
17,800 | 14,543 | 12,638 | 13,726 | 11,787 | |||||||||||||||
Commercial Real Estate |
64,859 | 56,330 | 20,639 | 22,041 | 17,129 | |||||||||||||||
Commercial and
Industrial |
3,936 | 6,067 | 7,527 | 6,879 | 3,173 | |||||||||||||||
Dairy & Livestock |
5,207 | 5,176 | — | — | — | |||||||||||||||
Consumer |
537 | 242 | 143 | 123 | 15 | |||||||||||||||
Total |
$ | 157,020 | $ | 158,871 | $ | 82,850 | $ | 76,840 | $ | 69,779 | ||||||||||
% of Total Loans |
4.65 | % | 4.65 | % | 2.36 | % | 2.19 | % | 1.93 | % | ||||||||||
Past Due 30-89 Days |
||||||||||||||||||||
Residential
Construction and Land |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Commercial
Construction |
— | — | 9,093 | 8,143 | — | |||||||||||||||
Residential Mortgage |
2,597 | 2,779 | 2,552 | 3,746 | 4,921 | |||||||||||||||
Commercial Real Estate |
3,194 | 1,234 | 1,966 | 3,286 | 2,407 | |||||||||||||||
Commercial and
Industrial |
3,320 | 2,333 | 634 | 2,714 | 2,973 | |||||||||||||||
Dairy & Livestock |
— | 1,406 | — | — | — | |||||||||||||||
Consumer |
29 | 494 | 139 | 28 | 239 | |||||||||||||||
Total |
$ | 9,140 | $ | 8,246 | $ | 14,384 | $ | 17,917 | $ | 10,540 | ||||||||||
% of Total Loans |
0.27 | % | 0.24 | % | 0.41 | % | 0.51 | % | 0.29 | % | ||||||||||
OREO |
||||||||||||||||||||
Residential
Construction and Land |
$ | — | $ | 11,113 | $ | 11,113 | $ | 11,113 | $ | — | ||||||||||
Commercial
Construction |
2,708 | 2,709 | — | — | — | |||||||||||||||
Commercial Real Estate |
2,582 | 3,220 | 3,220 | 3,746 | 3,936 | |||||||||||||||
Commercial and
Industrial |
— | — | 668 | — | — | |||||||||||||||
Residential Mortgage |
— | 345 | — | 319 | — | |||||||||||||||
Consumer |
— | — | — | — | — | |||||||||||||||
Total |
$ | 5,290 | $ | 17,387 | $ | 15,001 | $ | 15,178 | $ | 3,936 | ||||||||||
Total Non-Performing,
Past Due & OREO |
$ | 171,450 | $ | 184,504 | $ | 112,235 | $ | 109,935 | $ | 84,255 | ||||||||||
% of Total Loans |
5.08 | % | 5.40 | % | 3.20 | % | 3.13 | % | 2.33 | % | ||||||||||
- 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 fourth quarter of 2010 net interest
income and net interest margin include a yield adjustment of $4.4 million from
discount accretion on covered loans. The adjustment for 2010 was $26.7 million.
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 | Twelve months ended | |||||||||||||||||||||||
| December 31, 2010 | December 30, 2010 | |||||||||||||||||||||||
| (amounts in thousands) | ||||||||||||||||||||||||
| Average | Average | |||||||||||||||||||||||
| Volume | Interest | Yield | Volume | Interest | Yield | |||||||||||||||||||
Total interest-earning assets |
$ | 5,801,620 | $ | 69,991 | 4.97 | % | $ | 6,036,422 | $ | 317,289 | 5.43 | % | ||||||||||||
Less: |
||||||||||||||||||||||||
Yield adjustment to interest income from
discount accretion |
139,495 | (4,407 | ) | 162,667 | (26,740 | ) | ||||||||||||||||||
Total interest-earning assets, excluding SJB
loan discount and yield adjustment |
$ | 5,941,115 | $ | 65,584 | 4.56 | % | $ | 6,199,089 | $ | 290,549 | 4.86 | % | ||||||||||||
Net interest income and net interest margin (TE) |
$ | 59,149 | 4.24 | % | $ | 259,317 | 4.47 | % | ||||||||||||||||
Less: |
||||||||||||||||||||||||
Yield adjustment to interest income from
discount accretion |
(4,407 | ) | (26,740 | ) | ||||||||||||||||||||
Net interest income and net interest margin
(TE), excluding yield adjustment |
$ | 54,742 | 3.84 | % | $ | 232,577 | 3.92 | % | ||||||||||||||||
- 15 -