CVB Financial (US:CVBF)2025-08-08 19:11PART I – FINANCIAL INFORMATION This section provides unaudited condensed consolidated financial statements and management's analysis of financial performance and condition Item 1. Condensed Consolidated Financial Statements Unaudited condensed consolidated financial statements, including balance sheets, earnings, and cash flows, are presented with detailed accounting notes Condensed Consolidated Balance Sheets Total assets increased to $15.41 billion by June 30, 2025, driven by cash growth, while net loans decreased and stockholders' equity rose Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $15,414,130 | $15,153,655 | | Total cash and cash equivalents | $738,636 | $204,698 | | Net loans and lease finance receivables | $8,280,498 | $8,456,310 | | Total investment securities | $4,813,536 | $4,921,783 | | Total Liabilities | $13,173,808 | $12,967,339 | | Total deposits | $11,984,823 | $11,948,381 | | Customer repurchase agreements | $404,154 | $261,887 | | Total Stockholders' Equity | $2,240,322 | $2,186,316 | Condensed Consolidated Statements of Earnings and Comprehensive Income Net earnings for Q2 2025 were $50.6 million, with six-month earnings increasing to $101.7 million, significantly boosting comprehensive income Key Earnings Data (in thousands, except per share amounts) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $111,608 | $110,849 | $222,052 | $223,310 | | Provision for (recapture of) credit losses | $0 | $0 | $(2,000) | $0 | | Net Earnings | $50,564 | $50,035 | $101,668 | $98,634 | | Diluted EPS | $0.37 | $0.36 | $0.73 | $0.71 | | Comprehensive Income | $59,732 | $50,992 | $145,600 | $87,875 | Notes to the Condensed Consolidated Financial Statements Detailed notes explain accounting policies, investment and loan portfolio composition, credit loss allowance, and subsequent events like a $6 million legal settlement - The company operates as a single reportable segment, focusing on relationship-based banking for small to mid-sized companies and individuals primarily in California253031 - Subsequent to quarter-end, the company received a $6 million legal settlement and realized a $6 million pre-tax loss from selling available-for-sale securities with a carrying value of approximately $50 million141142 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses financial performance, highlighting $50.6 million net earnings, $15.41 billion total assets, and strategic actions including share repurchases Overview Q2 2025 net earnings were $50.6 million, with total assets reaching $15.41 billion, strong capital ratios, and $37.5 million in share repurchases Q2 2025 Financial Highlights | Metric | Q2 2025 | | :--- | :--- | | Net Earnings | $50.6 million | | Diluted EPS | $0.37 | | ROAE (annualized) | 9.06% | | ROAA (annualized) | 1.34% | | Net Interest Margin (NIM) | 3.31% | | Efficiency Ratio | 45.55% | - Total assets increased by $260.5 million (1.72%) since year-end 2024, primarily due to a $492.8 million increase in balances at the Federal Reserve, offset by decreases in loans and investment securities156 - During the first half of 2025, the company repurchased 2,063,564 shares at an average price of $18.15, totaling $37.5 million163 Analysis of the Results of Operations Q2 2025 net interest income was $111.6 million, with noninterest income rising to $14.7 million and noninterest expense increasing to $57.6 million Comparison of Q2 2025 vs Q2 2024 (in thousands) | Item | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $111,608 | $110,849 | $759 | 0.68% | | Noninterest Income | $14,744 | $14,424 | $320 | 2.22% | | Noninterest Expense | $57,557 | $56,497 | $1,060 | 1.88% | | Net Earnings | $50,564 | $50,035 | $529 | 1.06% | - The increase in net interest income compared to Q2 2024 was driven by a $15.6 million decrease in interest expense, which more than offset a $14.9 million decline in interest income183187 - The effective tax rate decreased to 26.50% for the first six months of 2025 from 27.25% in the prior year period, primarily due to increased investments in solar tax credits210 Analysis of Financial Condition Financial condition remained strong with $15.41 billion in total assets, a $4.81 billion investment portfolio, and significantly reduced nonperforming assets - Total assets increased by $260.5 million (1.72%) from year-end 2024, driven by a $492.8 million increase in interest-earning balances at the Federal Reserve213 - Nonperforming assets decreased to 0.17% of total assets, down from 0.31% at December 31, 2024235 Capital Ratios as of June 30, 2025 | Ratio | CVB Financial Corp. | Well-Capitalized Minimum | | :--- | :--- | :--- | | Tier 1 leverage capital ratio | 11.84% | 5.00% | | Common equity Tier 1 capital ratio | 16.52% | 6.50% | | Tier 1 risk-based capital ratio | 16.52% | 8.00% | | Total risk-based capital ratio | 17.33% | 10.00% | Asset/Liability and Market Risk Management The company manages liquidity and interest rate risk, maintaining substantial liquidity and an asset-sensitive balance sheet with projected 4.87% NII increase in a +200 bps rate scenario - The company maintains substantial liquidity sources, including $4.06 billion of unused FHLB capacity and $1.09 billion of unused borrowing capacity at the Fed's discount window as of June 30, 2025291 Estimated Net Interest Income Sensitivity (June 30, 2025) | Interest Rate Scenario | 12-month Period Change | 24-month Period Change (Cumulative) | | :--- | :--- | :--- | | + 200 basis points | 4.87% | 6.82% | | - 200 basis points | -4.38% | -7.41% | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate risk, with detailed disclosures provided in the MD&A section of this report - The company's main market risk is interest rate risk. Detailed disclosures are provided in the MD&A section of this report307 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period308 - No material changes were made to the company's internal controls over financial reporting during the quarter ended June 30, 2025309 PART II – OTHER INFORMATION This section provides other information, including legal proceedings, risk factors, equity security sales, and required exhibits Item 1. Legal Proceedings Management does not anticipate any material adverse effects from pending legal proceedings on the company's financial condition or results - The company does not expect any currently pending lawsuits to have a material adverse effect on its financial results or condition315 Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors were reported since the last Annual Report on Form 10-K316 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 1.28 million shares for $22.2 million in Q2 2025, with 7.94 million shares remaining available under the program Share Repurchase Activity - Q2 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | Shares Purchased Under Program | Average Price Paid Under Program | | :--- | :--- | :--- | :--- | :--- | | April 1 - 30, 2025 | 907 | $17.48 | 1,281,501 | $17.30 | | May 1 - 31, 2025 | 651 | $19.42 | — | - | | June 1 - 30, 2025 | 702 | $18.73 | — | - | | Total Q2 | 2,260 | $18.43 | 1,281,501 | $17.30 | - As of June 30, 2025, 7,936,436 shares remained available for repurchase under the company's 2024 Repurchase Program317 Item 3. Defaults Upon Senior Securities Not applicable Item 4. Mine Safety Disclosures Not applicable Item 5. Other Information None Item 6. Exhibits This section lists the exhibits filed with the quarterly report, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002 and XBRL data files