CVB Financial Corp. October 2022 cbbank.com Forward Looking Statements This presentation contains forward-looking statements that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of the management of CVB Financial Corp. and Citizens Business Bank (collectively, the "Company") and are subject to significant risks and uncertainties that could cause actual result ...

PART I – FINANCIAL INFORMATION (UNAUDITED) [General Information and Forward-Looking Statements](index=3&type=section&id=GENERAL) Outlines cautionary notes on forward-looking statements, detailing risks from economic conditions, regulatory changes, credit quality, LIBOR transition, and COVID-19 impacts - Forward-looking statements involve risks including **economic strength**, **monetary and fiscal policies**, effects of acquisitions, **regulatory changes**, and **credit quality**[6](index=6&type=chunk)[8](index=8&type=chunk) - The ultimate extent of **COVID-19 pandemic impacts** on business, financial position, results of operations, liquidity, workforce, and prospects remains uncertain[7](index=7&type=chunk) - **ASU 2016-13 (CECL model)** has changed credit loss estimation and may increase the **allowance for credit losses** in future periods[8](index=8&type=chunk) [ITEM 1. Condensed Consolidated Financial Statements](index=5&type=section&id=ITEM%201.%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Presents unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Earnings, Stockholders' Equity, and Cash Flows [Condensed Consolidated Balance Sheets](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Presents the Company's financial position at specific dates, detailing assets, liabilities, and stockholders' equity [Condensed Consolidated Statements of Earnings and Comprehensive Income](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20EARNINGS%20AND%20COMPREHENSIVE%20INCOME) Reports the Company's financial performance over interim periods, including net earnings and comprehensive income [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Details changes in the Company's equity accounts over interim periods, reflecting earnings, dividends, and other comprehensive income [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Summarizes cash inflows and outflows from operating, investing, and financing activities for interim periods Condensed Consolidated Balance Sheets (in thousands) | Assets/Liabilities | June 30, 2022 | December 31, 2021 | | :----------------- | :------------ | :---------------- | | Total Assets | $16,759,993 | $15,883,697 | | Total Liabilities | $14,777,782 | $13,802,194 | | Total Stockholders' Equity | $1,982,211 | $2,081,503 | | Total Liabilities and Stockholders' Equity | $16,759,993 | $15,883,697 | Condensed Consolidated Statements of Earnings and Comprehensive Income (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net earnings | $59,058 | $51,179 | $104,618 | $115,072 | | Basic earnings per common share | $0.42 | $0.38 | $0.74 | $0.85 | | Diluted earnings per common share | $0.42 | $0.38 | $0.74 | $0.85 | | Comprehensive (loss) income | $(41,519) | $57,474 | $(138,253) | $92,974 | Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :----------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $128,388 | $70,699 | | Net cash used in investing activities | $(776,221) | $(689,133) | | Net cash (used in) provided by financing activities | $(388,006) | $992,139 | | Net (decrease) increase in cash and cash equivalents | $(1,035,839) | $373,705 | | Cash and cash equivalents, end of period | $696,709 | $2,331,865 | [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=NOTES%20TO%20THE%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Provides detailed explanations and disclosures for the condensed consolidated financial statements, covering business operations, accounting policies, acquisitions, investments, and loans [1. Business](index=10&type=section&id=1.%20BUSINESS) CVB Financial Corp. and Citizens Business Bank engage in traditional banking activities in California, completing the Suncrest Bank acquisition to expand geographic presence - The Company's primary operations are **traditional banking activities** (deposits, lending, investing) and trust/investment services through CitizensTrust Division, serving small to mid-sized businesses and individuals in California[22](index=22&type=chunk) - Completed the acquisition of **Suncrest Bank** on January 7, 2022, adding approximately **$1.4 billion in total assets** and seven banking centers, strengthening geographic presence in California's Central Valley and Sacramento metro area[23](index=23&type=chunk) Suncrest Acquisition Key Financials (as of Jan 7, 2022, in millions) | Metric | Value | | :----- | :---- | | Total Assets Acquired | $1,380 | | Acquired Net Loans | $765.9 | | Investment Securities | $131.1 | | Bank-Owned Life Insurance (BOLI) | $9 | | Goodwill | $102.1 | | Core Deposit Premium | $3.9 | | Cash Paid to Suncrest Shareholders | $39.6 | | Noninterest-Bearing Deposits Assumed | $512.8 | | Interest-Bearing Deposits Assumed | $669.8 | [2. Basis of Presentation](index=10&type=section&id=2.%20BASIS%20OF%20PRESENTATION) States that financial statements conform to SEC rules for Form 10-Q and GAAP for interim reporting, reflecting necessary adjustments - Financial statements conform to **SEC rules for Form 10-Q** and **GAAP for interim reporting**, reflecting all necessary normal recurring adjustments[24](index=24&type=chunk) - Certain amounts in prior periods' financial statements were reclassified to conform to current presentation, with **no impact on previously reported net income or stockholders' equity**[25](index=25&type=chunk) [3. Summary of Significant Accounting Policies](index=10&type=section&id=3.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines significant accounting policies, emphasizing management's estimates and assumptions, particularly for the allowance for credit losses - Preparation of financial statements requires management to make **estimates and assumptions**, with actual results potentially differing from these estimates[27](index=27&type=chunk) - The determination of the **allowance for credit losses** is a material estimate particularly susceptible to significant change[27](index=27&type=chunk) - Other significant estimates include **fair value determinations**, impairment of investments, goodwill, loans, and valuation of deferred tax assets[27](index=27&type=chunk) [4. Business Combinations](index=11&type=section&id=4.%20BUSINESS%20COMBINATIONS) Details the acquisition of Suncrest Bank for $39.6 million in cash and $197.1 million in stock, expanding geographic presence and resulting in goodwill and core deposit intangible - Acquired **Suncrest Bank** on January 7, 2022, for **$39.6 million in cash** and **$197.1 million in stock**, enhancing geographic presence in California[28](index=28&type=chunk) - Total assets acquired approximated **$1.38 billion**, including $329.0 million cash, $131.1 million investment securities, and $765.9 million net loans[29](index=29&type=chunk) - The acquisition resulted in **$102.1 million of goodwill** and **$3.9 million in core deposit intangible**[29](index=29&type=chunk) - Incurred **$6.0 million in non-recurring merger-related expenses** associated with the Suncrest acquisition for the six months ended June 30, 2022[30](index=30&type=chunk) [5. Investment Securities](index=12&type=section&id=5.%20INVESTMENT%20SECURITIES) Reports the investment securities portfolio, which increased to $6.04 billion, with a significant rise in unrealized losses on available-for-sale securities, though no credit losses were identified Total Investment Securities (in thousands) | Category | June 30, 2022 | December 31, 2021 | Change ($) | Change (%) | | :------- | :------------ | :---------------- | :--------- | :--------- | | Available-for-sale | $3,626,157 | $3,183,923 | $442,234 | 13.89% | | Held-to-maturity | $2,412,308 | $1,925,970 | $486,338 | 25.25% | | **Total** | **$6,038,465** | **$5,109,893** | **$928,572** | **18.17%** | Gross Unrealized Losses on Investment Securities (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :------- | :------------ | :---------------- | | Available-for-sale | $(346,811) | $(29,888) | | Held-to-maturity | $(278,888) | $(19,603) | - Approximately **94% of the total investment securities portfolio** at June 30, 2022, consists of securities issued by the U.S. government or U.S. government-sponsored enterprises[38](index=38&type=chunk) - Management determined that **no credit losses existed** for securities in an unrealized loss position as of June 30, 2022, and December 31, 2021[39](index=39&type=chunk)[232](index=232&type=chunk) [6. Loans and Lease Finance Receivables and Allowance for Credit Losses](index=15&type=section&id=6.%20LOANS%20AND%20LEASE%20FINANCE%20RECEIVABLES%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) Reports a 10.20% increase in total loans to $8.69 billion, driven by the Suncrest acquisition, with commercial real estate loans comprising 76.43% of the portfolio, and an increased Allowance for Credit Losses Total Loans and Lease Finance Receivables (in thousands) | Metric | June 30, 2022 | December 31, 2021 | Change ($) | Change (%) | | :----- | :------------ | :---------------- | :--------- | :--------- | | Total loans, at amortized cost | $8,692,229 | $7,887,713 | $804,516 | 10.20% | | Allowance for credit losses | $(80,222) | $(65,019) | $(15,203) | 23.38% | | Net loans and lease finance receivables | $8,612,007 | $7,822,694 | $789,313 | 10.09% | - As of June 30, 2022, **80.12% of the total loan portfolio** consisted of real estate loans, with commercial real estate loans representing **76.43% of total loans**[47](index=47&type=chunk) Allowance for Credit Losses (ACL) (in thousands) | Metric | June 30, 2022 | December 31, 2021 | June 30, 2021 | | :----- | :------------ | :---------------- | :------------ | | ACL | $80,222 | $65,019 | $69,342 | | ACL as % of total loans | 0.92% | 0.82% | 0.86% | | ACL as % of total loans (excl. PPP) | 0.93% | 0.84% | 0.94% | - **Nonperforming loans** (nonaccrual, nonperforming TDRs, and 90+ days past due still accruing) were **$13.0 million (0.15% of total loans)** at June 30, 2022, up from $6.9 million (0.09%) at December 31, 2021[248](index=248&type=chunk)[255](index=255&type=chunk) - **Troubled Debt Restructurings (TDRs)** totaled **$5.2 million** at June 30, 2022, all of which were performing and accruing interest[89](index=89&type=chunk)[249](index=249&type=chunk)[251](index=251&type=chunk) [7. Earnings Per Share Reconciliation](index=27&type=section&id=7.%20EARNINGS%20PER%20SHARE%20RECONCILIATION) Provides the reconciliation for basic and diluted earnings per common share, showing an increase in Q2 2022 but a decrease for the six months ended June 30, 2022 Earnings Per Common Share (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net earnings allocated to common shareholders | $58,660 | $50,940 | $103,968 | $114,525 | | Weighted average shares outstanding | 139,748 | 135,286 | 140,467 | 135,235 | | Basic earnings per common share | $0.42 | $0.38 | $0.74 | $0.85 | | Diluted weighted average shares outstanding | 140,053 | 135,507 | 140,730 | 135,470 | | Diluted earnings per common share | $0.42 | $0.38 | $0.74 | $0.85 | - Shares deemed antidilutive and excluded from EPS computation were **99,000 for the three months** and **540,000 for the six months** ended June 30, 2022[99](index=99&type=chunk) [8. Fair Value Information](index=28&type=section&id=8.%20FAIR%20VALUE%20INFORMATION) Details fair value measurements of financial assets and liabilities, categorized into Level 1, Level 2, and Level 3, with most recurring measurements using Level 2 inputs - Fair value is defined as the exchange price received for an asset or paid to transfer a liability in an orderly transaction between market participants[103](index=103&type=chunk) Assets Measured at Fair Value on a Recurring Basis (June 30, 2022, in thousands) | Description of assets | Carrying Value | Level 1 | Level 2 | Level 3 | | :-------------------- | :------------- | :------ | :------ | :------ | | Investment securities - AFS | $3,626,157 | $- | $3,626,157 | $- | | Interest rate swaps | $582 | $- | $582 | $- | | **Total assets** | **$3,626,739** | **$-** | **$3,626,739** | **$-** | Liabilities Measured at Fair Value on a Recurring Basis (June 30, 2022, in thousands) | Description of liability | Carrying Value | Level 1 | Level 2 | Level 3 | | :----------------------- | :------------- | :------ | :------ | :------ | | Interest rate swaps | $582 | $- | $582 | $- | | **Total liabilities** | **$582** | **$-** | **$582** | **$-** | - Certain assets, such as **collateral-dependent loans**, are measured at fair value on a non-recurring basis, with adjustments usually resulting from lower of cost or fair value accounting or impairment write-downs[110](index=110&type=chunk)[111](index=111&type=chunk) [9. Derivative Financial Instruments](index=31&type=section&id=9.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) Discusses the Bank's use of interest rate swap agreements with customers and offsetting swaps with counterparties to manage interest rate risk, with a total notional amount of $443.5 million at June 30, 2022 - The Bank uses **interest rate swap agreements** with customers and identical offsetting swaps with counterparties to manage interest rate risk, not designated as hedging instruments[117](index=117&type=chunk)[118](index=118&type=chunk) Total Notional Amount of Swaps (in millions) | Date | Notional Amount | | :--- | :-------------- | | June 30, 2022 | $443.5 | | December 31, 2021 | $493.2 | - Changes in the fair value of the swaps primarily offset each other, minimizing significant impact on the Company's results of operations, though **credit and counterparty risk** exist[118](index=118&type=chunk) [10. Other Comprehensive Income](index=32&type=section&id=10.%20OTHER%20COMPREHENSIVE%20INCOME) Summarizes components of other comprehensive income (OCI), reporting a significant after-tax other comprehensive loss of $(242.87) million for the six months ended June 30, 2022, primarily due to fair value changes in available-for-sale securities Other Comprehensive (Loss) Income, Net of Tax (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net change in fair value recorded in accumulated OCI (after-tax) | $(100,642) | $6,281 | $(242,974) | $(22,169) | | Amortization of net unrealized losses on securities (after-tax) | $65 | $14 | $103 | $71 | | **Net change (after-tax)** | **$(100,577)** | **$6,295** | **$(242,871)** | **$(22,098)** | - The significant other comprehensive loss for the six months ended June 30, 2022, was primarily due to the **decline in market value of available-for-sale securities**[125](index=125&type=chunk) [11. Balance Sheet Offsetting](index=33&type=section&id=11.%20BALANCE%20SHEET%20OFFSETTING) Explains that interest rate swap derivatives and customer repurchase agreements, despite master netting arrangements, are not offset in the condensed consolidated balance sheets - **Interest rate swap derivatives** are subject to master netting arrangements but are not offset in the Company's condensed consolidated balance sheet[126](index=126&type=chunk) - **Customer repurchase agreements**, where the Company sells securities overnight to customers with an agreement to repurchase, are not offset in the condensed consolidated balance sheets[126](index=126&type=chunk) Netting Information for Financial Liabilities (June 30, 2022, in thousands) | Financial Liabilities | Gross Amount Recognized | Gross Amounts Offset | Net Amount Presented | Amounts Subject to Master Netting | Net Amount | | :-------------------- | :---------------------- | :------------------- | :------------------- | :-------------------------------- | :--------- | | Derivatives not designated as hedging instruments | $39,098 | $(38,516) | $582 | $38,516 | $22,446 | | Repurchase agreements | $502,829 | $- | $502,829 | $- | $(79,825) | | **Total** | **$541,927** | **$(38,516)** | **$503,411** | **$38,516** | **$(57,379)** | [12. Leases](index=34&type=section&id=12.%20LEASES) Describes the Company's operating leases, primarily for real estate, with Right-of-Use (ROU) assets of $24.5 million and total lease liabilities of $26.1 million at June 30, 2022 - The Company's operating leases, primarily for real estate, are recognized on a straight-line basis, with **ROU assets and lease liabilities** included on the balance sheet[131](index=131&type=chunk) Lease Assets and Liabilities (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :----- | :------------ | :---------------- | | ROU assets | $24,503 | $19,274 | | Total lease liabilities | $26,070 | $20,864 | Lease Term and Discount Rate | Metric | June 30, 2022 | December 31, 2021 | | :----- | :------------ | :---------------- | | Weighted average remaining lease term (years) | 4.36 | 4.26 | | Weighted average discount rate | 2.64% | 2.41% | [13. Revenue Recognition](index=35&type=section&id=13.%20REVENUE%20RECOGNITION) Presents noninterest income, with $23.98 million recognized under Topic 606 for the six months ended June 30, 2022 Noninterest Income by Scope (in thousands) | Category | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------- | :----------------------------- | :----------------------------- | | In-scope of Topic 606 | $23,982 | $18,653 | | Out-of-scope of Topic 606 | $1,952 | $5,864 | | **Total noninterest income** | **$25,934** | **$24,517** | - Key in-scope revenue streams include **service charges on deposit accounts**, trust and investment services, and bankcard services[137](index=137&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Provides a comprehensive discussion and analysis of CVB Financial Corp.'s financial condition, results of operations, liquidity, and capital resources [Impact of COVID-19](index=36&type=section&id=IMPACT%20OF%20COVID-19) Discusses the financial impact of the COVID-19 pandemic, including a $23.5 million provision for credit losses in 2020, a $19.5 million recapture in Q1 2021, and the Company's participation in the Paycheck Protection Program (PPP) - Recorded a **$23.5 million provision for credit losses in 2020** due to COVID-19, followed by a **$19.5 million recapture in Q1 2021** due to improved economic forecasts[141](index=141&type=chunk) - Originated approximately **4,100 PPP loans totaling $1.1 billion** in round one and **1,900 loans totaling $420 million** in round two[142](index=142&type=chunk) - As of June 30, 2022, the remaining outstanding balance of **PPP loans was $67.0 million**, with over 99% of round one loans forgiven[142](index=142&type=chunk) [Critical Accounting Policies](index=37&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) Discusses critical accounting policies involving significant judgments and uncertainties, such as the Allowance for Credit Losses, fair value estimates, goodwill impairment, and income taxes - Critical accounting policies involve **significant judgments and uncertainties**, essential for understanding financial condition and results of operations[145](index=145&type=chunk) - Key critical accounting policies include **Allowance for Credit Losses (ACL)**, fair value estimates for Business Combinations, Impairment of Goodwill, and Income Taxes[146](index=146&type=chunk) - The adoption of **ASU 2022-02** (Troubled Debt Restructurings and Vintage Disclosures) is not expected to have a material impact on consolidated financial statements but will result in additional disclosure requirements[150](index=150&type=chunk) [Overview](index=39&type=section&id=OVERVIEW) Reports Q2 2022 net earnings of $59.1 million ($0.42 diluted EPS), with strong profitability metrics, asset growth driven by the Suncrest acquisition, and a decrease in total equity due to unrealized losses on AFS securities Key Financial Performance Metrics (Q2 2022) | Metric | Value | | :----- | :---- | | Net Earnings | $59.1 million | | Diluted EPS | $0.42 | | Annualized ROAE | 11.33% | | Annualized ROATCE | 18.67% | | Annualized ROAA | 1.39% | | Net Interest Margin (NIM) | 3.16% | | Efficiency Ratio | 37.24% | - The **Suncrest acquisition** contributed to a **$15.2 million increase in the Allowance for Credit Losses (ACL)**, including $8.6 million for purchased credit deteriorated (PCD) loans and a $6.1 million provision for credit losses[156](index=156&type=chunk) Asset and Equity Changes (June 30, 2022 vs. December 31, 2021, in millions) | Metric | June 30, 2022 | December 31, 2021 | Change ($) | Change (%) | | :----- | :------------ | :---------------- | :--------- | :--------- | | Total Assets | $16,759.99 | $15,883.70 | $876.29 | 5.52% | | Total Investment Securities | $6,038.47 | $5,109.89 | $928.58 | 18.17% | | Total Loans & Leases | $8,692.23 | $7,887.71 | $804.52 | 10.20% | | Total Equity | $1,982.21 | $2,081.50 | $(99.29) | -4.77% | - Total equity decreased by **$99.3 million**, primarily due to a **$242.9 million decrease in other comprehensive income** from the tax-effected impact of the decline in market value of available-for-sale securities[165](index=165&type=chunk) [Analysis of the Results of Operations](index=42&type=section&id=ANALYSIS%20OF%20THE%20RESULTS%20OF%20OPERATIONS) Provides a detailed analysis of the Company's financial performance, including net interest income, credit loss provisions, noninterest income and expense, and income taxes [Financial Performance](index=42&type=section&id=Financial%20Performance) Summarizes key financial performance metrics, including net earnings, diluted EPS, return on average assets, and efficiency ratio, for current and prior periods Key Financial Performance Metrics (QoQ and YoY) | Metric | Q2 2022 | Q1 2022 | Change (QoQ) | Q2 2021 | Change (YoY) | | :----- | :------ | :------ | :----------- | :------ | :----------- | | Net earnings (in thousands) | $59,058 | $45,560 | $13,498 (29.63%) | $51,179 | $7,879 (15.39%) | | Diluted EPS | $0.42 | $0.31 | $0.11 | $0.38 | $0.04 | | Return on average assets | 1.39% | 1.06% | 0.33% | 1.35% | 0.04% | | Efficiency ratio | 37.24% | 46.93% | -9.69% | 40.05% | -2.81% | [Return on Average Tangible Common Equity Reconciliation (Non-GAAP)](index=43&type=section&id=Return%20on%20Average%20Tangible%20Common%20Equity%20Reconciliation%20(Non-GAAP)) Reconciles return on average tangible common equity, a non-GAAP measure, providing insights into profitability relative to tangible capital Return on Average Tangible Common Equity (Annualized) | Metric | Q2 2022 | Q1 2022 | Q2 2021 | H1 2022 | H1 2021 | | :----- | :------ | :------ | :------ | :------ | :------ | | Return on average equity | 11.33% | 8.24% | 10.02% | 9.74% | 11.37% | | Return on average tangible common equity | 18.67% | 13.08% | 15.60% | 15.73% | 17.70% | Tangible Net Income and Average Tangible Common Equity (in thousands) | Metric | Q2 2022 | Q1 2022 | Q2 2021 | H1 2022 | H1 2021 | | :----- | :------ | :------ | :------ | :------ | :------ | | Net Income | $59,058 | $45,560 | $51,179 | $104,618 | $115,072 | | Tangible net income | $60,465 | $46,967 | $52,705 | $107,433 | $118,125 | | Average stockholders' equity | $2,091,454 | $2,243,335 | $2,048,956 | $2,166,975 | $2,040,861 | | Average tangible common equity | $1,299,251 | $1,456,131 | $1,354,901 | $1,377,258 | $1,345,691 | [Net Interest Income](index=43&type=section&id=Net%20Interest%20Income) Net interest income before provision for credit losses increased by 15.71% YoY to $121.9 million in Q2 2022, driven by asset growth and a 9 bp expansion in earning asset yield, with a net interest margin (TE) of 3.16% Net Interest Income and Margin (QoQ and YoY) | Metric | Q2 2022 | Q2 2021 | Change (YoY) | H1 2022 | H1 2021 | Change (YoY) | | :----- | :------ | :------ | :----------- | :------ | :------ | :----------- | | Net interest income before provision for credit losses (in thousands) | $121,940 | $105,388 | $16,552 (15.71%) | $234,780 | $208,856 | $25,924 (12.41%) | | Net interest margin (TE) | 3.16% | 3.06% | 0.10% | 3.03% | 3.12% | -0.09% | | Average interest-earning assets (in millions) | $15,560.77 | $13,931.35 | $1,629.42 (11.70%) | $15,760.42 | $13,610.34 | $2,150.08 (15.80%) | | Average earning asset yield | 3.20% | 3.11% | 0.09% | 3.06% | 3.18% | -0.12% | | Average cost of funds | 0.04% | 0.05% | -0.01% | 0.04% | 0.06% | -0.02% | - Total interest income for Q2 2022 increased by **$16.2 million (15.17%) YoY**, driven by growth in average interest-earning assets and expanding earning asset yield[187](index=187&type=chunk) - Investment income growth for Q2 2022 resulted from **higher levels of investment securities** and increased investment yields (**1.93% vs. 1.55% YoY**)[189](index=189&type=chunk) - Loan interest and fee income for Q2 2022 increased by **$1.0 million (1.14%) YoY**, despite lower loan yields and a **$6.7 million decline in PPP loan income**[188](index=188&type=chunk) [Provision for (Recapture of) Credit Losses](index=48&type=section&id=Provision%20for%20(Recapture%20of)%20Credit%20Losses) Details the provision for credit losses, which increased to $3.6 million in Q2 2022 and $6.1 million for H1 2022, driven by loan growth and a deteriorating economic forecast Provision for (Recapture of) Credit Losses (in thousands) | Metric | Q2 2022 | Q2 2021 | Change (YoY) | H1 2022 | H1 2021 | Change (YoY) | | :----- | :------ | :------ | :----------- | :------ | :------ | :----------- | | Provision for (recapture of) credit losses | $3,600 | $(2,000) | $5,600 | $6,100 | $(21,500) | $27,600 | - The **$6.1 million provision for H1 2022** includes $8.6 million for acquired Suncrest PCD loans and $4.9 million for non-PCD loans, partially offset by a $2.4 million recapture due to improved loan characteristics and economic forecast changes[198](index=198&type=chunk) - The Q2 2022 provision was driven by **$155 million in core loan growth** and increased projected loss rates due to a deteriorating economic forecast (modest GDP growth, lower CRE values, increased unemployment)[198](index=198&type=chunk)[199](index=199&type=chunk) - **Net recoveries for H1 2022 were $498,000**, contrasting with net charge-offs of $2.9 million in H1 2021[200](index=200&type=chunk) [Noninterest Income](index=49&type=section&id=Noninterest%20Income) Analyzes noninterest income, which increased by 35.38% YoY in Q2 2022 to $14.67 million, driven by property sales and CRA investments, despite a decline in BOLI income Noninterest Income (in thousands) | Metric | Q2 2022 | Q2 2021 | Change (YoY) | H1 2022 | H1 2021 | Change (YoY) | | :----- | :------ | :------ | :----------- | :------ | :------ | :----------- | | Total noninterest income | $14,670 | $10,836 | $3,834 (35.38%) | $25,934 | $24,517 | $1,417 (5.78%) | | Service charges on deposit accounts | $5,333 | $4,169 | $1,164 (27.92%) | $10,392 | $8,154 | $2,238 (27.45%) | | BOLI income | $603 | $1,240 | $(637) (-51.37%) | $1,952 | $5,864 | $(3,912) (-66.71%) | - Q2 2022 noninterest income included **$2.7 million in net gains on property sales** and a **$1.0 million net increase in income on CRA investments**[204](index=204&type=chunk) - CitizensTrust (Wealth Management and Investment Services) generated **$3.0 million in fees for Q2 2022**, negatively impacted by market conditions[206](index=206&type=chunk) - **BOLI income declined** due to lower returns on separate account policies and the absence of death benefits (H1 2021 included $3.5 million in death benefits)[207](index=207&type=chunk)[209](index=209&type=chunk) [Noninterest Expense](index=50&type=section&id=Noninterest%20Expense) Examines noninterest expense, which increased by 9.29% YoY in Q2 2022 to $50.87 million, primarily due to the Suncrest acquisition, while the efficiency ratio improved to 37.24% Noninterest Expense (in thousands) | Metric | Q2 2022 | Q2 2021 | Change (YoY) | H1 2022 | H1 2021 | Change (YoY) | | :----- | :------ | :------ | :----------- | :------ | :------ | :----------- | | Total noninterest expense | $50,871 | $46,545 | $4,326 (9.29%) | $109,109 | $93,708 | $15,401 (16.44%) | | Salaries and employee benefits | $31,553 | $28,836 | $2,717 (9.42%) | $64,209 | $58,542 | $5,667 (9.68%) | | Occupancy and equipment | $5,567 | $4,949 | $618 (12.50%) | $11,138 | $9,812 | $1,326 (13.51%) | | Acquisition related expenses | $375 | $- | $375 | $6,013 | $- | $6,013 | - The increase in noninterest expense is primarily due to the **Suncrest acquisition**, including additional compensation for new associates and increased occupancy and equipment costs from added banking centers[214](index=214&type=chunk)[215](index=215&type=chunk) - The **efficiency ratio improved to 37.24%** in Q2 2022 from 40.05% in Q2 2021, reflecting expense control relative to revenue growth[213](index=213&type=chunk) [Income Taxes](index=51&type=section&id=Income%20Taxes) Reports the Company's effective tax rate, which was 28.10% for the three and six months ended June 30, 2022, primarily influenced by tax-advantaged income Effective Tax Rate | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Effective tax rate | 28.10% | 28.60% | 28.10% | 28.60% | - The Company's effective tax rates are below the nominal combined Federal and State tax rate primarily due to **tax-advantaged income** from municipal security investments, municipal loans and leases, BOLI, and available tax credits[217](index=217&type=chunk) [Analysis of Financial Condition](index=52&type=section&id=ANALYSIS%20OF%20FINANCIAL%20CONDITION) Provides an in-depth analysis of the Company's balance sheet, detailing assets, liabilities, credit quality, and capital resources [Investment Securities](index=52&type=section&id=Investment%20Securities) Reports an 18.17% increase in total investment securities to $6.04 billion, with available-for-sale securities experiencing a significant increase in unrealized losses due to market interest rate fluctuations Total Investment Securities (in millions) | Metric | June 30, 2022 | December 31, 2021 | Change ($) | Change (%) | | :----- | :------------ | :---------------- | :--------- | :--------- | | Total Investment Securities | $6,038.5 | $5,109.9 | $928.6 | 18.17% | | AFS Investment Securities | $3,626.2 | $3,183.9 | $442.3 | 13.89% | | HTM Investment Securities | $2,412.3 | $1,926.0 | $486.3 | 25.25% | - Available-for-sale (AFS) investment securities totaled **$3.63 billion**, inclusive of a pre-tax net unrealized loss of **$346.3 million** at June 30, 2022, significantly higher than the $29.9 million loss at December 31, 2021, reflecting market interest rate fluctuations[223](index=223&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - The Company purchased **$1.5 billion in new investment securities** during the first half of 2022, with yields on average of approximately **2.69%**[223](index=223&type=chunk) - Management determined that **credit losses did not exist** for securities in an unrealized loss position as of June 30, 2022, and December 31, 2021[232](index=232&type=chunk) [Loans](index=55&type=section&id=Loans) Reports a 10.20% increase in total loans and leases to $8.69 billion, with core loans growing by $319.8 million and real estate loans comprising 80.12% of the portfolio Total Loans and Leases (in thousands) | Metric | June 30, 2022 | December 31, 2021 | Change ($) | Change (%) | | :----- | :------------ | :---------------- | :--------- | :--------- | | Total loans, at amortized cost | $8,692,229 | $7,887,713 | $804,516 | 10.20% | - Core loans (excluding acquired loans, seasonality, and PPP loans) grew by **$319.8 million (4.35% or approximately 8% annualized)** from December 31, 2021[235](index=235&type=chunk) - Real estate loans comprise **80.12% of the total loan portfolio**, with commercial real estate loans representing **76.43%**[47](index=47&type=chunk) - SBA - Paycheck Protection Program (PPP) loans outstanding decreased to **$66.96 million** at June 30, 2022, from $186.59 million at December 31, 2021[46](index=46&type=chunk)[238](index=238&type=chunk) [Nonperforming Assets](index=57&type=section&id=Nonperforming%20Assets) Reports an 88.08% increase in nonperforming assets to $13.0 million, primarily due to nonaccrual loans, with classified loans also rising, while Troubled Debt Restructurings remained stable and performing Nonperforming Assets (in thousands) | Metric | June 30, 2022 | December 31, 2021 | Change ($) | Change (%) | | :------------------------------------------------------------------------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Nonaccrual loans | $12,964 | $6,893 | $6,071 | 88.08% | | Total nonperforming loans | $12,964 | $6,893 | $6,071 | 88.08% | | Total nonperforming assets | $12,964 | $6,893 | $6,071 | 88.08% | | Percentage of nonperforming assets to total loans, at amortized cost, and OREO | 0.15% | 0.09% | 0.06% | 66.67% | - Of the **$13.0 million in nonperforming loans** at June 30, 2022, **$4.4 million were commercial real estate loans acquired from Suncrest**[255](index=255&type=chunk) - **Classified loans** (graded 'substandard' or worse) increased to **$76.2 million** at June 30, 2022, from $56.1 million at December 31, 2021, including $17.8 million of classified loans acquired from Suncrest[255](index=255&type=chunk) - Total **Troubled Debt Restructurings (TDRs) were $5.2 million** at June 30, 2022, all performing and accruing interest[249](index=249&type=chunk)[251](index=251&type=chunk) [Allowance for Credit Losses](index=59&type=section&id=Allowance%20for%20Credit%20Losses) Reports an increase in the Allowance for Credit Losses (ACL) to $80.2 million, driven by the Suncrest acquisition and a provision for credit losses reflecting a deteriorating economic forecast Allowance for Credit Losses (ACL) (in thousands) | Metric | June 30, 2022 | December 31, 2021 | June 30, 2021 | | :----- | :------------ | :---------------- | :------------ | | ACL | $80,222 | $65,019 | $69,342 | | ACL as % of total loans | 0.92% | 0.82% | 0.86% | | ACL as % of total loans (excl. PPP) | 0.93% | 0.84% | 0.94% | - The **ACL increased by $15.2 million** from December 31, 2021, including $8.6 million for acquired Suncrest PCD loans and a $6.1 million provision for credit losses for the first six months of 2022[258](index=258&type=chunk) - The economic forecast assumes **GDP growth of 0.5% in H2 2022, 0.8% for 2023, and 2.5% in 2024**, with unemployment at 4.6% in H2 2022, 5.4% in 2023, and 5% in 2024, contributing to projected loss rates[260](index=260&type=chunk) - **Net recoveries were $498,000** for the six months ended June 30, 2022, compared to net charge-offs of $2.9 million for the same period of 2021[258](index=258&type=chunk) [Deposits](index=61&type=section&id=Deposits) Reports an 8.44% increase in total deposits to $14.07 billion, with noninterest-bearing deposits comprising 63.11% of the total, contributing to a low cost of funds Total Deposits (in thousands) | Metric | June 30, 2022 | December 31, 2021 | Change ($) | Change (%) | | :----- | :------------ | :---------------- | :--------- | :--------- | | Total Deposits | $14,072,219 | $12,976,442 | $1,095,777 | 8.44% | Deposit Composition (in thousands) | Category | June 30, 2022 | % of Total | December 31, 2021 | % of Total | | :------- | :------------ | :--------- | :---------------- | :--------- | | Noninterest-bearing | $8,881,223 | 63.11% | $8,104,056 | 62.45% | | Interest-bearing | $5,190,996 | 36.89% | $4,872,386 | 37.55% | - **Noninterest-bearing deposits increased by $777.2 million (9.59%)** and represented **63.11% of total deposits** at June 30, 2022, contributing to a low cost of funds[269](index=269&type=chunk) [Borrowings](index=61&type=section&id=Borrowings) Details the Company's borrowings, including a decrease in customer repurchase agreements and the redemption of junior subordinated debentures, with significant loans and investment securities pledged as collateral Customer Repurchase Agreements (in thousands) | Metric | June 30, 2022 | December 31, 2021 | Change ($) | Change (%) | | :----- | :------------ | :---------------- | :--------- | :--------- | | Customer repurchase agreements | $502,829 | $642,388 | $(139,559) | -21.72% | | Weighted average interest rate | 0.09% | 0.08% | 0.01% | 12.50% | - The Company redeemed **$25.8 million in junior subordinated debentures** on June 15, 2021[272](index=272&type=chunk) - At June 30, 2022, **$4.27 billion of loans and $2.20 billion of investment securities were pledged** to secure public deposits, repurchase agreements, and lines of credit[274](index=274&type=chunk) [Aggregate Contractual Obligations](index=62&type=section&id=Aggregate%20Contractual%20Obligations) Presents a summary of the Company's aggregate contractual obligations, including deposits, repurchase agreements, deferred compensation, operating leases, and affordable housing investments Aggregate Contractual Obligations (June 30, 2022, in thousands) | Obligation | Total | Less Than One Year | One Year Through Three Years | Four Years Through Five Years | Over Five Years | | :--------- | :---- | :----------------- | :--------------------------- | :---------------------------- | :-------------- | | Deposits | $14,072,219 | $14,041,312 | $22,472 | $7,723 | $712 | | Customer repurchase agreements | $502,829 | $502,829 | $- | $- | $- | | Deferred compensation | $25,000 | $883 | $1,177 | $1,152 | $21,788 | | Operating leases | $27,655 | $7,274 | $11,454 | $7,389 | $1,538 | | Affordable housing investment | $6,350 | $1,511 | $4,826 | $13 | $- | | **Total** | **$14,634,053** | **$14,553,809** | **$39,929** | **$16,277** | **$24,038** | [Off-Balance Sheet Arrangements](index=62&type=section&id=Off-Balance%20Sheet%20Arrangements) Details off-balance sheet arrangements, primarily commitments to extend credit and obligations under letters of credit, totaling $1.86 billion at June 30, 2022 Off-Balance Sheet Items (June 30, 2022, in thousands) | Item | Total | Less Than One Year | One Year Through Three Years | Four Years Through Five Years | Over Five Years | | :--- | :---- | :----------------- | :--------------------------- | :---------------------------- | :-------------- | | Commitment to extend credit | $1,811,489 | $1,020,348 | $386,912 | $173,415 | $230,814 | | Obligations under letters of credit | $45,316 | $7,126 | $38,172 | $- | $18 | | **Total** | **$1,856,805** | **$1,027,474** | **$425,084** | **$173,415** | **$230,832** | - Commitments to extend credit are generally variable rate, and many are expected to expire without being drawn upon[282](index=282&type=chunk) - The **reserve for unfunded loan commitments remained at $8.0 million** as of June 30, 2022[282](index=282&type=chunk) [Capital Resources](index=63&type=section&id=Capital%20Resources) Analyzes the Company's capital resources, reporting a $99.3 million decrease in total equity due to unrealized losses on AFS securities, partially offset by stock issuance and net earnings, while maintaining strong capital ratios Total Equity (in millions) | Metric | June 30, 2022 | December 31, 2021 | Change ($) | Change (%) | | :----- | :------------ | :---------------- | :--------- | :--------- | | Total equity | $1,982.21 | $2,081.50 | $(99.29) | -4.77% | - Equity decrease driven by a **$242.9 million decrease in other comprehensive income** (unrealized losses on AFS securities), partially offset by $197.1 million from Suncrest stock issuance and $104.6 million in net earnings[222](index=222&type=chunk)[285](index=285&type=chunk) - Executed a **$70 million accelerated stock repurchase program** and other repurchases, retiring 4,676,088 shares at an average price of $23.38 during H1 2022[287](index=287&type=chunk)[326](index=326&type=chunk)[328](index=328&type=chunk) Capital Ratios (June 30, 2022) | Capital Ratio | Well Capitalized Ratios | CVB Financial Corp. Consolidated | Citizens Business Bank | | :------------ | :---------------------- | :------------------------------- | :--------------------- | | Tier 1 leverage capital ratio | 5.00% | 8.85% | 8.56% | | Common equity Tier 1 capital ratio | 6.50% | 13.41% | 12.97% | | Tier 1 risk-based capital ratio | 8.00% | 13.41% | 12.97% | | Total risk-based capital ratio | 10.00% | 14.22% | 13.79% | [Asset/Liability and Market Risk Management](index=65&type=section&id=ASSET/LIABILITY%20AND%20MARKET%20RISK%20MANAGEMENT) Focuses on managing liquidity and interest rate risk through strong core deposits, available lines of credit, and simulation models, indicating an asset-sensitive balance sheet benefiting from rising interest rates [Liquidity and Cash Flow](index=65&type=section&id=Liquidity%20and%20Cash%20Flow) Discusses daily liquidity management through liquid assets, investment cash flow, loan demand, and deposit fluctuations, supported by significant available lines of credit - Liquidity is managed daily by controlling liquid assets, cash flow from investments, loan demand, and deposit fluctuations[297](index=297&type=chunk) - Total deposits increased by **$1.1 billion (8.44%) to $14.07 billion** at June 30, 2022, primarily due to customers maintaining greater liquidity[296](index=296&type=chunk) - The Bank has available lines of credit exceeding **$4 billion**, most of which is secured by pledged loans[297](index=297&type=chunk) Consolidated Summary of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | Change ($) | Change (%) | | :----------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $128,388 | $70,699 | $57,689 | 81.60% | | Net cash used in investing activities | $(776,221) | $(689,133) | $(87,088) | 12.64% | | Net cash (used in) provided by financing activities | $(388,006) | $992,139 | $(1,380,145) | -139.11% | | Net (decrease) increase in cash and cash equivalents | $(1,035,839) | $373,705 | $(1,409,544) | -377.22% | [Interest Rate Sensitivity Management](index=66&type=section&id=Interest%20Rate%20Sensitivity%20Management) Explains the Company's management of interest rate risk by controlling the spread between asset and liability rates, using simulation models to assess sensitivity to various rate changes - Interest rate risk is managed by attempting to control the spread between rates earned on interest-earning assets and rates paid on interest-bearing liabilities within policy limits[303](index=303&type=chunk) - The Company uses simulation analysis to model **Net Interest Income (NII) at risk** and **Economic Value of Equity (EVE) at risk** under various interest rate scenarios[304](index=304&type=chunk) Net Interest Income Sensitivity (Percentage change from base scenario) | Interest Rate Scenario | June 30, 2022 (12-month Period) | June 30, 2022 (24-month Period) | | :--------------------- | :------------------------------ | :------------------------------ | | +200 basis points | 5.46% | 9.93% | | -200 basis points | -6.07% | -10.83% | - The balance sheet is considered **asset sensitive** over both a one-year and a two-year horizon, indicating a positive impact on NII from rising interest rates[309](index=309&type=chunk) Economic Value of Equity Sensitivity (Percentage change) | Instantaneous Rate Change | June 30, 2022 | December 31, 2021 | | :------------------------ | :------------ | :---------------- | | 200 bp decrease | -18.9% | N/A | | 100 bp decrease | -7.6% | -14.1% | | 100 bp increase | 4.9% | 5.3% | | 200 bp increase | 8.6% | 11.8% | [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Reports no futures, forwards, or option contracts as of June 30, 2022, and ongoing assessment of the LIBOR transition's impact on financial instruments - As of June 30, 2022, the Company had **not entered into any futures, forwards, or option contracts**[313](index=313&type=chunk) - The Company continues to assess the impacts of the **LIBOR transition** and is exploring alternatives for LIBOR-indexed financial instruments[313](index=313&type=chunk) [ITEM 4. Controls and Procedures](index=68&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Concludes that disclosure controls and procedures were effective as of June 30, 2022, with no material changes in internal controls over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the Company's **disclosure controls and procedures were effective** as of June 30, 2022[314](index=314&type=chunk) - No changes in internal controls over financial reporting materially affected or are reasonably likely to materially affect internal controls during the quarter ended June 30, 2022[315](index=315&type=chunk) PART II – OTHER INFORMATION [ITEM 1. Legal Proceedings](index=69&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Discusses the Company's involvement in various lawsuits, noting that while accruals are made for probable losses, management does not anticipate a material adverse effect on financial results - The Company is party to various lawsuits and threatened lawsuits in the ordinary course of business, with **accruals made for probable and reasonably estimable losses**[318](index=318&type=chunk) - Due to inherent uncertainties, the probability of loss or amount of damages cannot always be estimated, but disclosures are made if a material impact is reasonably likely[318](index=318&type=chunk)[319](index=319&type=chunk) - Management does not presently believe that the ultimate resolution of any pending lawsuits will have a **material adverse effect** on the Company's results of operations, financial condition, or cash flows, but litigation outcomes are inherently uncertain[320](index=320&type=chunk) [ITEM 1A. Risk Factors](index=69&type=section&id=ITEM%201A.%20RISK%20FACTORS) Updates previously disclosed risk factors, emphasizing that changes in economic, market, and political conditions, particularly high inflation and rising interest rates, and cybersecurity risks, can adversely affect the Company - Changes in **economic, market, and political conditions**, including high inflation and rising interest rates, can adversely affect operating results and financial condition[322](index=322&type=chunk)[323](index=323&type=chunk) - The **Federal Reserve's interest rate hikes** (1.50% YTD to June 30, 2022, with further increases expected) and plans to reduce its balance sheet will impact loans, deposits, and asset quality[323](index=323&type=chunk)[324](index=324&type=chunk) - The occurrence of **fraudulent activity, breaches of information security controls, or cybersecurity-related incidents** could have a material adverse effect on the business, financial condition, and results of operations[325](index=325&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Reports the Board's authorization of a share repurchase plan for up to 10,000,000 shares, with 4,676,088 shares retired during H1 2022 through an accelerated stock repurchase program and other repurchases - The Board of Directors authorized a **share repurchase plan** on February 1, 2022, to repurchase up to **10,000,000 shares of common stock**[326](index=326&type=chunk) - Completed a **$70 million accelerated stock repurchase program** in H1 2022, retiring 2,993,551 shares at an average price of $23.38[326](index=326&type=chunk) Share Repurchase Activity (H1 2022) | Period | Shares Purchased | Average Price Per Share | Shares Available for Repurchase | | :------------------ | :--------------- | :---------------------- | :------------------------------ | | January 1 - 31, 2022 | - | $- | 10,000,000 | | February 1 - 28, 2022 | 2,544,298 | $23.38 | 7,455,702 | | March 1 - 31, 2022 | 536,010 | $23.40 | 6,919,692 | | April 1 - 30, 2022 | 620,613 | $23.09 | 6,299,079 | | May 1 - 31, 2022 | 360,242 | $23.55 | 5,938,837 | | June 1 - 30, 2022 | 614,925 | $23.53 | 5,323,912 | | **Total** | **4,676,088** | **$23.38** | **5,323,912** | [ITEM 3. Defaults Upon Senior Securities](index=70&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This item is marked as 'Not Applicable' in the report, indicating no defaults upon senior securities for the reported period - This item is marked 'Not Applicable' in the report[328](index=328&type=chunk) [ITEM 4. Mine Safety Disclosures](index=70&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is marked as 'Not Applicable' in the report, indicating no mine safety disclosures for the reported period - This item is marked 'Not Applicable' in the report[328](index=328&type=chunk) [ITEM 5. Other Information](index=70&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This item is marked as 'None' in the report, indicating no other information to disclose for the reported period - This item is marked 'None' in the report[328](index=328&type=chunk) [ITEM 6. Exhibits](index=71&type=section&id=ITEM%206.%20EXHIBITS) Lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications under Sarbanes-Oxley Act and Inline XBRL documents for financial data - Includes **certifications of the Chief Executive Officer and Chief Financial Officer** pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[330](index=330&type=chunk) - Contains **Inline XBRL Instance, Schema, Calculation, Definition, and Label Linkbase Documents** for financial data[330](index=330&type=chunk) [Signatures](index=72&type=section&id=SIGNATURES) Confirms the report was duly signed on behalf of CVB Financial Corp. by E. Allen Nicholson, Executive Vice President and Chief Financial Officer, on August 9, 2022 - The report was signed by **E. Allen Nicholson, Executive Vice President and Chief Financial Officer** of CVB Financial Corp. (Registrant)[331](index=331&type=chunk) - The signing date of the report was **August 9, 2022**[331](index=331&type=chunk)

Financial Data and Key Metrics Changes - For Q2 2022, the company reported net earnings of $59.1 million or $0.42 per share, an increase from $45.6 million or $0.31 per share in Q1 2022 and $51.2 million or $0.38 per share in Q2 2021 [5][6] - The pretax pre-provision income reached a record level of $85.7 million, up from $65.9 million in the previous quarter and $70 million in the same quarter last year [8] - The net interest margin grew by 26 basis points from the first quarter to 3.2% in the second quarter [9] Business Line Data and Key Metrics Changes - Total loans at quarter end were $8.7 billion, a $100.5 million or 1.2% increase from the end of Q1 2022, with core loan growth led by commercial real estate loans, which grew by $173 million or 11% annualized [12][13] - New loan commitments were approximately $560 million, representing a growth of over 40% compared to the same period last year [12] - Non-interest income was $14.7 million for Q2 2022, compared to $11.3 million in the prior quarter and $10.8 million in the year-ago quarter [34] Market Data and Key Metrics Changes - Total deposits and customer repurchase agreements were $14.6 billion at June 30, 2022, down from $15.1 billion at March 31, 2022 [17] - Noninterest-bearing deposits averaged $8.9 billion, a $200 million increase from the first quarter [17] - The bank's funding cost was just 4 basis points in Q2 2022, compared to 3 basis points in the prior quarter [18] Company Strategy and Development Direction - The company aims to continue banking the top 25% of clients in their respective industries while maintaining high credit quality [52] - The focus remains on optimizing operations and investing in efficiency improvements, with no immediate plans for new initiatives despite revenue upticks [76] - The company is open to M&A opportunities in the $1 billion to $10 billion range, but is cautious due to current economic uncertainties [68] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are becoming more cautious due to economic challenges, which may impact loan demand [59] - The economic forecast includes modest GDP growth of 0.5% in the second half of 2022 and 0.8% for 2023, with an unemployment rate projected at 4.6% in the second half of 2022 [23] - Despite headwinds, the company produced approximately $86 million in pretax pre-provision income during Q2 2022, a 30% increase from the previous quarter [40] Other Important Information - The company completed the integration of Suncrest Bank, which contributed to the increase in loan production and overall financial performance [7][37] - The allowance for credit losses was $80.2 million or 0.92% of total loans, reflecting a provision for credit losses of $3.6 million in Q2 2022 [21][22] Q&A Session Summary Question: Thoughts on deposit growth and deposit beta - Management indicated that deposit growth depends on the Fed's actions, with limited requests for higher rates currently [42][44] Question: Expense run rate expectations - Management expects expenses to grow modestly due to inflationary pressures, with no significant decrease anticipated [46][47] Question: Increase in classified loans - The increase was primarily driven by one well-secured loan, with overall credit metrics remaining strong [48][49] Question: Share repurchase activity - The company remains active in share repurchase, but future activity will depend on share price [50] Question: Loan growth and competition - Management noted that while loan growth has been strong, there is a cautious tone among clients, which may impact future growth [52][59] Question: Appetite for M&A - The company is still looking for M&A opportunities but is cautious due to economic uncertainties and seller expectations [68][70]

July 2022 cbbank.com Forward Looking Statements This presentation contains forward-looking statements that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of the management of CVB Financial Corp. and Citizens Business Bank (collectively, the "Company") and are subject to significant risks and uncertainties that could cause actual results or performance to dif ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 000-10140 CVB FINANCIAL CORP. (Exact name of registrant as specified in its charter) California 95-3629339 (State or other ...

Financial Data and Key Metrics Changes - For Q1 2022, the company reported net earnings of $45.6 million, or $0.31 per share, down from $47.7 million or $0.35 per share in Q4 2021, and $63.9 million or $0.47 per share in Q1 2021 [5][6] - Pre-tax pre-provision income was $65.9 million, compared to $66.8 million in the previous quarter and $70 million in the same quarter last year [8] - The net interest margin expanded by 11 basis points compared to Q4 2021, reaching 2.9% [9][32] Business Line Data and Key Metrics Changes - New loan production was strong, with new loan commitments of approximately $439 million, a 14% increase year-over-year [11] - Total loans at quarter-end were $8.6 billion, including $766 million from Suncrest Bank, but excluding this, loans declined by $70.5 million [11][12] - Core loan growth was led by commercial real estate loans, which grew by $100 million, and C&I loans, which increased by $27 million [12] Market Data and Key Metrics Changes - Total deposits and customer repurchase agreements increased to $15.1 billion from $13.6 billion at the end of Q4 2021 [17] - Non-interest bearing deposits were $9.1 billion, up from $8.1 billion in the previous quarter [18] - The bank's funding cost remained low at three basis points, unchanged from the prior quarter [19][36] Company Strategy and Development Direction - The company completed the acquisition of Suncrest Bank, which is expected to enhance its market presence and customer base [7][46] - The management emphasized a focus on maintaining a strong core deposit base and disciplined approach to rising interest rates [56][70] - The company is open to future M&A opportunities, particularly within or adjacent to its footprint, while maintaining a disciplined approach [71] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about inflation, supply chain disruptions, and potential recession risks, but remains optimistic about credit quality and loan growth [44][62] - The economic forecast assumes GDP growth of 2.6% in 2022, with an unemployment rate of 4.3% [25] - The company aims to leverage the acquisition of Suncrest to expand its product offerings and geographic footprint [41][46] Other Important Information - Non-interest income for Q1 2022 was $11.3 million, down from $12.4 million in the previous quarter [38] - Non-interest expense increased to $58.2 million, primarily due to acquisition-related costs [42] - The efficiency ratio was 46.9%, indicating a slight increase from the previous quarter [44] Q&A Session Summary Question: Outlook on loan yields given Fed rate hikes - Management indicated that loan yields are now above 4% and expect a positive trend due to competitive pressures [48] Question: Loan pipeline and growth outlook - The loan pipeline remains strong, with some contributions from the Suncrest acquisition, but potential headwinds from rising rates were noted [49][50] Question: Share buyback strategy amid macro uncertainty - The company plans to remain modestly active in share repurchases, despite macroeconomic uncertainties [51] Question: Insights on deposit trends and expectations - Management expects to continue focusing on non-interest bearing deposits, with potential slowdowns in interest-bearing deposits [55][56] Question: Asset quality and credit management - The company has not tightened its credit box and remains disciplined in underwriting, with a focus on monitoring economic conditions [58][59] Question: Future M&A appetite - The company is still interested in M&A opportunities, particularly in the $1 billion to $10 billion range, while remaining disciplined [71]

April 2022 cbbank.com Forward Looking Statements This presentation contains forward-looking statements that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of the management of CVB Financial Corp. and Citizens Business Bank (collectively, the "Company") and are subject to significant risks and uncertainties that could cause actual results or performance to di ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from _______ to _______ Commission file number: 000-10140 CVB FINANCIAL CORP. (Exact name of registrant as specified in its charter) California 95-3629339 (State or other jurisd ...

January 2022 cbbank.com Forward Looking Statements This presentation contains forward-looking statements that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of the management of CVB Financial Corp. and Citizens Business Bank (collectively, the "Company") and are subject to significant risks and uncertainties that could cause actual results or performance to ...

CVB Financial Corp. (NASDAQ:CVBF) Q4 2021 Earnings Conference Call January 27, 2022 10:30 AM ET Company Participants Dave Brager – Chief Executive Officer Allen Nicholson – Executive Vice President and Chief Financial Officer Christina Carrabino – Investor Relations Conference Call Participants Matthew Clark – Piper Sandler David Feaster – Raymond James Gary Tenner – D.A. Davidson Kelly Motta – KBW Tim Coffey – Janney Operator Good morning, ladies and gentlemen. And welcome to the Fourth Quarter and Year-en ...