CVB Financial Corp. (NASDAQ:CVBF) Q1 2025 Earnings Conference Call April 24, 2025 10:30 AM ET Company Participants Allen Nicholson - EVP, CFO Dave Brager - President and CEO Conference Call Participants Gary Tenner - D.A. Davidson Andrew Terrell - Stephens David Feaster - Raymond James Adam Butler - Piper Sandler Tim Coffey - Janney Montgomery Kelly Motta - KBW Operator Good day and welcome to the CVB Financial Corp. First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen ...

Image source: The Motley Fool.Wednesday, Apr 23, 2025CALL PARTICIPANTSDavid A. Brager: President and Chief Executive OfficerAllen Nicholson: Executive Vice President and Chief Financial OfficerNeed a quote from one of our analysts? Email [email protected]Net Earnings: Reported net earnings of $51.1 million, or $0.36 per share, for Q1 2025, representing the 192nd consecutive quarter of profitability Net Interest Margin: Expanded by 13 basis points to 3.31% in Q1 2025, up from 3.18% in Q4 2024Total Loans: $8. ...

Exhibit 99.1 Press Release For Immediate Release Contact: David A. Brager President and Chief Executive Officer (909) 980-4030 CVB Financial Corp. Reports Earnings for the First Quarter 2025 First Quarter 2025 Ontario, CA, April 23, 2025-CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (the "Company"), announced earnings for the quarter ended March 31, 2025. CVB Financial Corp. reported net income of $51.1 million for the quarter ended March 31, 2025, compared with $50.9 million ...

Core Insights - CVB Financial reported revenue of $126.67 million for Q1 2025, a year-over-year increase of 0.1%, with an EPS of $0.36 compared to $0.35 a year ago, exceeding the Zacks Consensus Estimate of $124.95 million by 1.38% and delivering an EPS surprise of 9.09% [1] Financial Performance Metrics - Efficiency ratio was 46.7%, better than the estimated 48% [4] - Net Interest Margin stood at 3.3%, surpassing the estimated 3.2% [4] - Total Non-Performing Loans were reported at $25.64 million, lower than the estimated $28.41 million [4] - Total interest-earning assets amounted to $13.56 billion, slightly below the average estimate of $13.60 billion [4] - Total Non-Performing Assets were $26.13 million, significantly lower than the estimated $38.06 million [4] - Net Charge-off as a percentage of Average Loans was 0%, better than the estimated 0.1% [4] - Net Interest Income reached $110.44 million, exceeding the average estimate of $109.47 million [4] - Total Noninterest Income was $16.23 million, above the average estimate of $14.02 million [4] - Net Interest Income (FTE) was reported at $110.97 million, higher than the average estimate of $108.97 million [4] Stock Performance - CVB Financial shares returned -2.8% over the past month, outperforming the Zacks S&P 500 composite's -6.6% change, and currently holds a Zacks Rank 2 (Buy) indicating potential for near-term outperformance [3]

Core Insights - CVB Financial Corp. reported a net income of $51.1 million for Q1 2025, showing a slight increase from $50.9 million in Q4 2024 and $48.6 million in Q1 2024, with diluted earnings per share remaining stable at $0.36 [2][4][7] Financial Performance - The annualized return on average equity (ROAE) was 9.31%, return on average tangible common equity (ROATCE) was 14.51%, and return on average assets (ROAA) was 1.37% for Q1 2025 [3][7] - Net interest income for Q1 2025 was $110.4 million, nearly unchanged from Q4 2024, but down by $2.02 million or 1.79% from Q1 2024 [10][11] - The net interest margin (NIM) increased to 3.31%, up 13 basis points from Q4 2024 and 21 basis points from Q1 2024 [12][13] Income Statement Highlights - Noninterest income rose to $16.2 million in Q1 2025, compared to $13.1 million in Q4 2024 and $14.1 million in Q1 2024 [18] - Noninterest expense was $59.1 million, slightly higher than $58.5 million in Q4 2024 but lower than $59.8 million in Q1 2024 [19][20] Balance Sheet Highlights - Total assets increased to $15.26 billion as of March 31, 2025, up $102.9 million from December 31, 2024, but down $1.2 billion from March 31, 2024 [22][23] - Total loans and leases decreased to $8.36 billion, down 2.02% from Q4 2024 and 4.64% from Q1 2024 [26][27] Asset Quality - The allowance for credit losses was 0.94% of gross loans as of March 31, 2025, consistent with the previous quarters [28] - Nonperforming assets totaled $26.1 million, a decrease from $47.1 million at December 31, 2024, primarily due to the sale of OREO properties [30] Capital and Ratios - Total equity increased to $2.23 billion, with a tangible common equity (TCE) ratio of 10.0% and a common equity tier 1 (CET1) ratio of 16.5% [36][38] - The efficiency ratio improved to 46.69% in Q1 2025, compared to 47.34% in Q4 2024 [20][9] Deposits and Borrowings - Total deposits and customer repurchase agreements reached $12.27 billion, reflecting a net increase of $55.8 million from December 31, 2024 [32] - Total borrowings decreased significantly by $1.5 billion from March 31, 2024, with current borrowings consisting of $500 million of FHLB advances [34]

Core Viewpoint - CVB Financial (CVBF) has experienced a significant downtrend, with a 12.6% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to analysts' positive earnings outlook [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to determine if a stock is oversold, with a reading below 30 typically indicating this condition [2]. - CVBF's current RSI reading is 26.16, suggesting that the heavy selling pressure may be exhausting, indicating a possible price rebound [5]. Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts regarding an increase in earnings estimates for CVBF, with a 0.6% rise in the consensus EPS estimate over the last 30 days, which often correlates with price appreciation [7]. - CVBF holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate trends and EPS surprises, further supporting the potential for a near-term turnaround [8].

Core Insights - CVB Financial (CVBF) is positioned to potentially continue its earnings-beat streak in the upcoming report, having a history of surpassing earnings estimates [1][5] - The average surprise for the last two quarters was 5.80%, with the most recent quarter showing earnings of $0.36 per share against an estimate of $0.34, resulting in a surprise of 5.88% [2][5] Earnings Performance - In the last reported quarter, CVB Financial achieved earnings of $0.36 per share, exceeding the Zacks Consensus Estimate of $0.34 per share [2] - For the previous quarter, the company reported earnings of $0.37 per share, surpassing the expected $0.35 per share, which resulted in a surprise of 5.71% [2] Earnings Estimates - There has been a favorable change in earnings estimates for CVB Financial, with a positive Earnings ESP of +5.26%, indicating bullish sentiment among analysts regarding the company's earnings prospects [5][8] - The combination of a positive Earnings ESP and a Zacks Rank 2 (Buy) suggests a high likelihood of another earnings beat in the upcoming report [8] Predictive Metrics - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7]

Core Points - CVB Financial Corp. announced a cash dividend of $0.20 per share for the first quarter of 2025, payable on or about April 16, 2025, to shareholders of record as of April 2, 2025 [1] - This marks the 142nd consecutive quarterly cash dividend paid to shareholders, as stated by the President and CEO David A. Brager [2] Corporate Overview - CVB Financial Corp. is the holding company for Citizens Business Bank and is among the 10 largest bank holding companies in California, with total assets exceeding $15 billion [3] - Citizens Business Bank is recognized as one of the top-performing banks in the nation, offering a wide range of banking, lending, and investing services through more than 60 banking centers and three trust office locations in California [3] Investor Information - Shares of CVB Financial Corp. are listed on NASDAQ under the ticker symbol "CVBF" [4]

Financial Position - As of December 31, 2024, CVB Financial Corp. had total consolidated assets of $15.15 billion, net loans of $8.46 billion, deposits of $11.95 billion, and shareholders' equity of $2.19 billion[18]. - Citizens Business Bank had $15.16 billion in assets, $8.46 billion in net loans, $12.00 billion in deposits, and total equity of $2.16 billion as of December 31, 2024[20]. - The Bank had $300 million in brokered deposits as of December 31, 2024, which is only permissible for well-capitalized institutions[59]. - The total carrying value of the company's securities portfolio was $4.92 billion as of December 31, 2024, with $2.54 billion available-for-sale and $2.38 billion held-to-maturity[134]. - The aggregate pre-tax net unrealized loss in available-for-sale securities was $447.7 million, while the loss in held-to-maturity securities was approximately $425.3 million as of December 31, 2024[134]. Capital Requirements - As of December 31, 2024, the Company and the Bank are well-capitalized, meeting the minimum capital ratios of 7.0% for CET1, 8.5% for Tier 1, and 10.5% for Total Risk-Based Capital Ratio[51]. - The Capital Conservation Buffer is fully phased in at 2.5%, increasing the required minimum risk-based capital ratios[49]. - The Company must maintain a Tier 1 Risk-Based Capital Ratio of 6.0% or greater and a Total Risk-Based Capital Ratio of 10.0% or greater to avoid regulatory actions[47]. - The prompt corrective action standards require a common equity Tier 1 ratio of 6.5% and an increased Tier 1 ratio of 8% to be considered well-capitalized[55]. - The company currently exceeds the minimum capital ratio requirements to be deemed "well-capitalized" for regulatory purposes, but faces risks from economic instability and higher inflation, which could adversely affect liquidity and financial condition[163]. Regulatory Compliance - The Company is subject to the Sarbanes-Oxley Act of 2002, which includes requirements for executive certification of financial presentations and internal controls[65]. - The Bank is regulated by the DFPI and FDIC, which oversee its compliance with capital requirements and operational practices[66]. - The company is subject to various federal and state laws, including the California Consumer Privacy Act, which mandates compliance and could result in penalties for noncompliance[88]. - The company must comply with numerous anti-money laundering and consumer protection statutes, including the USA PATRIOT Act and the Bank Secrecy Act[87]. - The company is subject to increased scrutiny under UDAAP regulations, which may lead to changes in pricing, practices, and potential penalties[96]. Operational Risks - The company faces operational risks related to its technological and organizational infrastructure, which are critical for growth and compliance with laws and regulations[137]. - The company is heavily reliant on third-party vendors for critical technology systems, and any failures could lead to significant operational disruptions and potential losses[139]. - The company is exposed to risks from a downturn in real estate markets, particularly in California, where most loans are secured by real estate[122]. - Liquidity risk could impair the company's ability to fund operations, with potential adverse effects from market downturns or regulatory actions[127]. - Elevated interest rates have decreased the market value of the company's securities and loan portfolios, leading to potential losses if liquidation is required[134]. Employee and Leadership Metrics - The Company employed 1,089 associates as of December 31, 2024, reflecting a 1.6% decrease from 1,107 associates at the end of 2023[28]. - In 2024, 92% of associates participated in the 401(k) plan, with the Company contributing 5% of eligible salaries[31]. - The turnover rate among the leadership group was 5.8% in 2024, with an average tenure exceeding 10 years[32]. - 92% of associates earned an incentive bonus in 2024, compared to 93% in 2023[36]. - 38% of the Board of Directors are female or ethnically diverse as of December 31, 2024[35]. Legal and Litigation Risks - The company is involved in various lawsuits, including securities litigation, employment matters, and regulatory compliance claims[212]. - For lawsuits where a loss is probable and estimable, the company has recorded a liability based on known facts[213]. - The company reviews and adjusts accruals for loss contingencies quarterly as new information becomes available[214]. - The company does not believe that the resolution of current lawsuits will materially affect its financial condition or cash flows[215]. - The outcome of litigation is inherently uncertain, and some legal matters could potentially have a material adverse effect on operations[215]. Cybersecurity and Data Protection - Cybersecurity threats are a significant concern, with the company investing in comprehensive risk management and security measures to protect customer data[197][198]. - The company conducts annual cybersecurity risk assessments to identify vulnerabilities and prioritize security initiatives[201]. - The Board of Directors oversees the cybersecurity program, receiving regular updates on risk assessments and incident responses[207]. Market and Economic Risks - The company is subject to significant competition in California's banking sector, including from larger banks and FinTech companies, which may impact loan and deposit growth[166]. - The company may experience adverse effects from potential downgrades of U.S. government securities, which could impact funding availability and the market value of its securities portfolio[169]. - Climate change poses operational and credit risks, particularly for customers in the agricultural sector, which could adversely affect the company's financial performance[171]. - Recent bank failures in 2023 have led to increased regulatory scrutiny, potentially raising operational costs and affecting acquisition opportunities[178]. - Future legislation and regulatory reforms could materially affect the company's operations and profitability, though the specific impacts are currently unpredictable[165].

Core Insights - CVB Financial Corp. has been recognized by Forbes in their annual America's Best Banks list, marking the ninth time in the past decade that the Bank has earned this distinction [1][2] - The recognition reflects the strong financial performance of CVB Financial Corp. and Citizens Business Bank, highlighting the dedication of its associates and customer relationships [2] - In 2024, CVB Financial Corp. was ranked among the Top 50 Public Banks by S&P Global Market Intelligence and recognized as one of America's Greatest Workplaces for Women by Newsweek [2] Corporate Overview - CVB Financial Corp. is the holding company for Citizens Business Bank, one of the 10 largest bank holding companies headquartered in California, with total assets exceeding $15 billion [4] - Citizens Business Bank offers a wide range of banking, lending, and investing services, operating more than 60 banking centers and three trust office locations across California [4] Performance Metrics - Forbes evaluated ten metrics related to credit quality, growth, and profitability for the largest publicly traded banks and thrifts in the nation to establish its rankings [3] - CVB Financial Corp. has maintained a Five-Star Superior rating from BauerFinancial and a "Super Premier" Performing Bank designation from The Findley Reports [2] - The Bank has received a BBB+ rating from Fitch Ratings and was previously named the overall number one "Best Bank in America" by Forbes for four of the past ten years [2]