Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CVB FINANCIAL CORP | d498257d8k.htm |
| EX-99.2 - EX99.2 - CVB FINANCIAL CORP | d498257dex992.htm |
 Exhibit 99.1
March 2013 |
 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 plans 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; ability to make loans and generate assets; oversupply
of inventory and continued deterioration in values of real estate in
California and other states where our bank makes loans, both residential and
commercial; a prolonged slowdown in business, manufacturing, retail or construction
activity; changes in the financial performance and/or condition of our
borrowers; changes in the level of non-performing assets and charge-offs; the
effect of changes in laws and regulations (including laws and regulations concerning
taxes, banking, business and consumer credit, capital levels, limits on bank
products and fees, 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; the
availability and effectiveness of hedging instruments and strategies; 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 (including mobile banking and cloud computing); threats
to the stability and security of our technology hardware and software, and to
the stability and security of any related vendor or customer hardware and software; 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 effects 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, 2011, 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. |
 3
Total Assets:
$6.4 Billion
Gross Loans:
$3.5 Billion
Total Deposits (Including Repos):
$5.2 Billion
Total Equity:
$763 Million
Source: Q4 2012 earnings release & company filings. *non-covered loans
Largest
financial
institution
headquartered
in
the
Inland
Empire
region
of
Southern California. Founded in 1974.
Serves 41 cities with 40 business financial centers and 5 commercial
banking
centers
and
3
trust
office
locations
throughout
the
Inland
Empire,
LA County, Orange County and the Central Valley of California
Average Cost of Deposits = 0.11%
CVB Financial Corp. (CVBF) |
 4
Name
Position
Banking
Experience
CVBF
Service
Christopher D. Myers
President & CEO
28 Years
6 Years
Richard C. Thomas
Executive Vice President
Chief Financial Officer
3 Years
2 Years
James F. Dowd
Executive Vice President
Chief Credit Officer
36 Years
5 Years
David C. Harvey
Executive Vice President
Chief Operations Officer
23 Years
3 Years
David A. Brager
Executive Vice President
Sales Division
25 Years
10 Years
R. Daniel Banis
Executive Vice President
CitizensTrust
31 Years
1 Year
Yamynn DeAngelis
Executive Vice President
Chief Risk Officer
33 Years
25 Years
Richard Wohl
Executive Vice President
General Counsel
24 Years
1 Year
Experienced Leadership |
 5
Board of Directors
Name
CVBF
Experience
Age
Ronald Kruse -
Chairman
38 Years
73
Linn Wiley –
Vice Chairman
21 Years
74
George Borba Jr.
New
45
Steve Del Guercio
New
51
Robert Jacoby
7 Years
71
Ray O’Brien
New
55
San Vaccaro
13 Years
79
Chris Myers –
CEO
6 Years
50 |
 CVB
Financial Corp.? Who is… |
 7
Source: SNL Financial
Largest Banks Headquartered in California
Rank
Name
Asset Size (12/31/12)
1
Wells Fargo
$1,442,968
2
Union Bank
$96,992
3
Bank of the West
$63,343
4
First Republic Bank
$34,388
5
City National Bank
$28,618
6
OneWest Bank
$25,894
7
SVB Financial
$22,766
8
East West Bank
$22,536
9
Cathay Bank
$10,694
10
CapitalSource Inc.
$8,549
11
CVB
Financial
Corp.
$
$6,363
12
Pacific Western Bank
$5,464
13
BBCN
$5,641
14
Farmers & Merchants of Long Beach
$4,989
15
Westamerica Bank
$4,952
In millions
In millions |
 Bank
Accomplishments & Ratings •
143 Consecutive Quarters of Profitability
•
94 Consecutive Quarters of Cash Dividends
•
#6 Rated Bank: BankDirector Magazine
Bank Performance Scorecard (July 2012)
•
BauerFinancial Report
Five Star Rating (September 2012)
•
Fitch Rating
BBB (October 2012) |
 Our
Markets |
 Existing Locations
10
40 Business Financial Centers
5 Commercial Banking Centers
3 CitizensTrust Locations |
 Deposits*
(000’s)
# of Center
Locations
Total Deposits
(12/31/11)
Total Deposits
(12/31/12)
Los Angeles County
17
$1,872,623
$1,894,958
Inland Empire
(Riverside & San Bernardino Counties)
10
$1,592,445
$1,668,906
Central Valley
11
$821,994
$856,155
Orange County
7
$598,426
$582,616
Other
0
$228,430
$244,596
Total
45
$5,113,918
$5,247,231
*Includes Customer Repurchase Agreements; Balance as of balance sheet date
Average Cost of Deposits (Full Year)
0.21%
0.14% |
 Non-Interest Bearing Deposits
(000’s) |
 Deposit Cost Comparison
13
Source: Q4 2012 earnings release & other company filings, SNL Financial—peers
represent public CA , AZ, HI, NV, OR & WA banks
with
assets
$2
-
$25
billion. |
 Service Charge Income*
12 Months
12/31/11
12 Months
12/31/12
%
Change
Service Charges on Deposit Accounts
$15,767,976
$16,105,811
2.14%
Service Charges/Total Deposits
0.31%
0.31%
14
*Includes Customer Repurchase Agreements |
 Total Loans*
as of 12/31/2012
(000’s)
Non-Covered
Loans*
Covered
Loans*
Total Loans*
%
Los Angeles County
$1,190,214
$16,572
$1,206,786
34.68%
Central Valley
$662,420
$191,419
$853,839
24.54%
Inland Empire
(Riverside & San Bernardino Counties)
$627,173
$1,058
$628,231
18.05%
Orange County
$461,001
$0
$461,001
13.25%
Other
$318,430
$11,510
$329,940
9.48%
Total
$3,259,238
$220,559
$3,479,797
100.00%
*Prior to MTM discount and loan loss reserve
*Prior to MTM discount and loan loss reserve
(Includes loans Held for Sale)
(Includes loans Held for Sale) |
 Total Non-Covered Loans
$2,000,000
$2,200,000
$2,400,000
$2,600,000
$2,800,000
$3,000,000
$3,200,000
$3,400,000
$3,600,000
$3,800,000
Q3
2009
Q4
Q1
2010
Q2
Q3
Q4
Q1
2011
Q2
Q4
Q1
2012
Q2
Q3
Q4
Q3
(000’s) |
 17
Source:
Q4
2012
earnings
release
&
company
reports
|
*Non-covered
loans
Total Loans by Type
Total Loans by Type
Commercial RE
Non-Owner
Occupied
39.5%
Consumer
Consumer
1.5%
1.5%
SFR Mortgage
SFR Mortgage
4.9%
4.9%
Municipal Lease Finance Receivables 3.2%
Municipal Lease Finance Receivables 3.2%
Auto & Equipment 0.4%
Auto & Equipment 0.4%
Dairy, Livestock & Agribusiness 10.3%
Dairy, Livestock & Agribusiness 10.3%
Commercial & Industrial
Commercial & Industrial
16.8%
16.8%
Construction RE 1.8%
Construction RE 1.8%
Commercial RE
Commercial RE
Owner Occupied 21.6%
Owner Occupied 21.6%
Loan Portfolio Composition*
|
 Net of
Discount Net of Discount
Includes Loans Held for Sale
Includes Loans Held for Sale
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
Q4
2009
Q1
2010
Q2
Q3
Q4
Q1
2011
Q2
Q3
Q4
Q1
2012
Q2
Q3
Q4
(000’s)
$184 million
$184 million
$25.3 million
$25.3 million |
 19
|
 -0.25%
0.00%
0.25%
0.50%
0.75%
1.00%
1.25%
1.50%
1.75%
2.00%
2.25%
2.50%
2.75%
3.00%
3.25%
3.50%
3.75%
Q1
2007
Q2
Q3
Q4
Q1
2008
Q2
Q3
Q4
Q1
2009
Q2
Q3
Q4
Q1
2010
Q2
Q3
Q4
Q1
2011
Q2
Q3
Q4
Q1
2012
Q2
Q3
Q4
Allowance to Non-Covered Loans
Net Charge-Offs / Average Loans (Non-Covered)
-
Loan Loss Allowance/ Charge-Offs
--Non-Covered--
|
 21
(000’s)
Classified Loans
Non-Covered |
 CVBF’s strong loan underwriting culture has limited its exposure to problem
credits Continued profitability has allowed CVB to build its capital base and
reserves for loan losses. Superior Credit Quality
Texas Ratio
NPA’s/Loans & OREO
Source: Q4 2012 earnings release & other company filings, SNL Financial—peers
represent public CA , AZ, HI, NV, OR & WA banks with assets $2 -
$25 billion. Peer data as of 9/30/12
Non-Covered |
 Profits |
 Net
Income (000’s)
Net Income After Taxes
$20.4 million FHLB prepayment charge |
 Earnings
2008
2009
2010
2011
12 Months to
12/31/2012
Net Interest Income
$193,679
$222,264
$259,317
$234,681
$236,950
Provision for Credit
Losses
($26,600)
($80,500)
($61,200)
($7,068)
$0
Other Operating
Income/Expenses (Net)
($81,331)
($52,515)
($111,378)
($106,809)
($122,257)
Income Taxes
($22,675)
($23,830)
($23,804)
($39,071)
($37,413)
Net Profit After Tax
$63,073
$65,419
$62,935
$81,733
$77,280
25
(000’s) |
 Net
Interest Margin 26
Normalized*
*Normalized excludes
accelerated accretion on covered loans |
 Expenses |
 Expenses
28
*Includes $20.4 million FHLB prepayment charge
(000’s)
2009
2010
2011
2012
Salaries & Employee Benefits
$62,985
$69,419
$69,993
$68,496
Promotion & Entertainment
$6,528
$6,084
$4,977
$4,869
Supplies
$2,989
$3,314
$2,558
$2,212
Software Licenses &
Maintenance
$2,320
$5,031
$3,669
$4,269
Professional Services
$6,965
$13,308
$15,031
$6,249
OREO Expense
$1,211
$7,490
$6,729
$2,146
Other
$50,588
$63,846
$38,068
$49,919*
Total:
$133,586
$168,492
$141,025
$138,160 |
 Bank Borrowings |
 Debt
Repayment Activity 2012 Type of Debt
Payoff Date
Amount
Weighted Average
Interest Rate
FHLB Borrowings
8/28/2012
$250,000
3.39%
Subordinated Debentures
FCB Statutory Trust II
1/07/2012
$6,805
3-Month LIBOR + 3.25%
CVB Statutory Trust I
6/18/2012
$20,619
3-Month LIBOR + 2.85%
CVB Statutory Trust I
9/17/2012
$20,619
3-Month LIBOR + 2.85%
Total
$298,043
30
(000’s)
(000’s) |
 Outstanding Debt*
12/31/2012
31
(000’s)
Type of Debt
Maturity
Balance at
12/31/2012
Interest Rate
FHLB Borrowings
11/28/2016
$198,934
4.52%
Subordinated Debentures
CVB Statutory Trust II**
$20,619
3-Month LIBOR + 2.85%
CVB Statutory Trust II
$20,619
3-Month LIBOR + 2.85%
CVB Statutory Trust III
$25,774
3-Month LIBOR + 1.38%
Total
$265,946
*Does not include $26 million in overnight borrowings from FHLB
**This portion of CVB Statutory Trust II was repaid on January 7
2013
th |
 Capital |
 Capital Ratios
Regulatory
Minimum Ratio
Regulatory
Well-Capitalized Ratio
December 31, 2012*
Tier 1 Risk-based Capital Ratio
4.0%
6.0%
18.23%
Total Risk-based Capital Ratio
8.0%
10.0%
19.49%
Tier 1 Leverage Ratio
4.0%
5.0%
11.50%
Tangible Capital Ratio
4.0%
5.0%
11.17%
Core Tier 1 Capital Ratio
16.60%
33
* CVB Financial Corp. -
Consolidated |
 34
Source:
Q3
2012
earnings
release
&
other
company
filings,
SNL
Financial—peers
represent
public
CA
,
AZ,
HI,
NV,
OR
&
WA
banks
with
assets
$2
-
$25
billion
Peer Capital Metrics
Tier 1 Capital Ratio
Total Risk –
Based Capital Ratio
Tangible Common Equity/Tangible Assets |
 Securities & Investments |
 Source: Q4
2012 earnings release. As of 12/31/2012 securities held-to-maturity were valued at approximately $2.1million | Yield on securities represents the fully taxable
equivalent
*Securities Available For Sale
Securities portfolio totaled $2.45 billion at 12/31/2012. The portfolio represents 38.5%
of the Bank’s total assets Virtually
all
of
the
Bank’s
mortgage-backed
securities
were
issued
by
Freddie
Mac
or
Fannie
Mae
which
have
the
implied guarantee of the U.S. government. 99% of the Bank’s municipal portfolio contains
securities which have an underlying rating of investment grade. California municipals
represent only 4% of the municipal bond portfolio Yield on securities
portfolio = 2.49%
for the 4th Quarter 2012
Securities Portfolio*
--$2.45 Billion--
MBS 36.24%
Government
Agency &
GSEs 14.67%
Municipal
Bonds 25.53%
Trust
Preferred
0.21%
CMO's /
REMIC's
23.35% |
 Securities Portfolio*
$2.45 Billion
Mark-to-Market
(Pre-tax)
(000’s)
*Securities Available For Sale
$74,571
MBS & CMO’s
$31,395
Municipal
Bonds
$41,736
Other Securities
$1,440 |
 CVBF
Assets 38
*Includes overnight funds held at the Federal Reserve, Interest earning -
due from
Correspondent Banks, other short-term money market accounts or certificates of
deposit Loans
Loans
Securities
Securities
Fed Balance*
Fed Balance*
Other
Other
Goodwill & Intangibles
Goodwill & Intangibles
12/31/12
$6.4 Billion
12/31/06
$6.1 Billion
Securities
Securities
Fed Balance*
Fed Balance*
Goodwill & Intangibles
Goodwill & Intangibles
Other
Other
Loans
Loans
0.2%
0.2% |
 12/31/06
12/31/06
$5.7 Billion
$5.7 Billion
12/31/12
12/31/12
$5.6 Billion
$5.6 Billion
TOTAL DEPOSITS*
TOTAL DEPOSITS*
Jr. Subordinated
Jr. Subordinated
Debentures
Debentures
Other Liabilities
Other Liabilities
BORROWINGS
BORROWINGS
Jr. Subordinated
Jr. Subordinated
Debentures
Debentures
BORROWINGS
BORROWINGS
TOTAL DEPOSITS*
TOTAL DEPOSITS*
Other Liabilities
Other Liabilities
*Includes Customer Repurchase Agreements
*Includes Customer Repurchase Agreements
CVBF Liabilities |
 Our
Growth Strategy |
 Our
Vision Citizens Business Bank will strive to become
the dominant financial services company
operating throughout the state of
California, servicing the comprehensive
financial needs of successful small to
medium sized businesses and their owners.
41 |
 Target Customer
The best privately-held and/or family-
owned businesses throughout California
Annual revenues of $1-200 million
Top 25% in their respective industry
Full relationship banking
Build 20-year relationships
42
—
—
—
— |
 Three Areas of Growth
43
Acquisitions
--Banks--
Same Store
Sales
DeNovo
--Trust-- |
 •
Target size: $200 million to $2 billion in assets
•
Financial & Strategic
•
In-market and/or adjacent geographic market
(California only)
Acquisition Strategy
--Banks--
--Trust/Investment--
•
Target size: AUM of $200 million to $1 billion
•
In California
--Banking Teams--
•
In-
market & ‘new’
markets |
 Our
‘Critical Few’ •
Loan Growth
•
Expand Credit Product Offerings & Capabilities
•
Build Core Deposits
•
Drive Service Charge & Fee Income Growth
•
Manage Operating Efficiency
•
Grow Through Acquisition |
 Our
Strategic Focus •
Strong Capital position
•
Strong, disciplined credit underwriting/credit culture
•
Build low-cost, sustainable deposits
•
Multiple forms of growth (don’t depend on one)
•
Same Store Sales
•
DeNovo
•
Acquisitions
•
Cross-sell: capture the whole wallet
•
Drive expense efficiency
•
Long-term outlook
46 |
 Copy of presentation at
www.cbbank.com |