CVB Financial (CVBF) - 2025 Q3 - Quarterly Results

Executive Summary & Q3 2025 Performance Overview CVB Financial Corp. reported strong Q3 2025 financial results, with increased net income and diluted EPS, demonstrating consistent profitability and a focus on small to medium-sized businesses Third Quarter 2025 Financial Highlights CVB Financial Corp. reported strong earnings for Q3 2025, with net income increasing to $52.6 million and diluted EPS at $0.38. Key performance indicators like ROAA, ROATCE, and Net Interest Margin also showed positive trends Key Financial Highlights | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net Income (millions) | $52.6 | $50.6 | $51.2 | | Diluted EPS | $0.38 | $0.37 | $0.37 | | Annualized ROAE | 9.19% | - | - | | Annualized ROATCE | 14.11% | - | - | | Annualized ROAA | 1.35% | - | - | | Efficiency Ratio | 45.6% | - | - | | Net Interest Margin | 3.33% | - | - | CEO Commentary CEO David Brager highlighted the Company's continued financial strength and consistent performance, emphasizing its long history of profitability (194 consecutive quarters) and cash dividend payments (144 consecutive quarters), driven by a focus on serving small to medium-sized businesses - Citizens Business Bank's performance in Q3 2025 demonstrates continued financial strength and focus on serving the comprehensive financial needs of small to medium-sized businesses and their owners[5] - The Company has achieved 194 consecutive quarters of profitability (over 48 years) and 144 consecutive quarters of paying cash dividends[5] Income Statement Analysis This section analyzes the Company's net interest income, net interest margin, provision for credit losses, noninterest income, noninterest expense, and income taxes for the quarter Net Interest Income Net interest income for Q3 2025 was $115.6 million, showing a 3.6% increase QoQ and a 1.7% increase YoY. This growth was primarily driven by an increase in average earning assets and a slight improvement in net interest margin QoQ, and a significant decline in interest expense YoY due to reduced borrowings Net Interest Income Trends | Metric | Q3 2025 (millions) | Q2 2025 (millions) | Q3 2024 (millions) | Change QoQ (%) | Change YoY (%) | | :-------------------- | :----------------- | :----------------- | :----------------- | :------------- | :------------- | | Net Interest Income | $115.6 | $111.6 | $113.6 | 3.6% | 1.7% | | Interest Income | $150.1 | $144.2 | $165.8 | 4.1% | -9.5% | | Interest Expense | $34.5 | $32.6 | $52.1 | 5.9% | -33.8% | - Quarter-over-quarter growth in net interest income resulted from a $315 million increase in average earning assets, primarily due to a $303 million increase in average balances on deposit at the Federal Reserve, and a 2 basis point increase in net interest margin[10] - Year-over-year increase in net interest income was driven by a $17.6 million decline in interest expense, exceeding a $15.6 million decline in interest income, largely due to a $1.18 billion decrease in average interest-bearing liabilities from BTFP advance redemptions[11] Net Interest Margin The tax equivalent net interest margin (NIM) improved to 3.33% in Q3 2025, up from 3.31% QoQ and 3.05% YoY. This improvement was primarily due to a decrease in the cost of funds, which offset a modest decrease in interest-earning asset yields Net Interest Margin and Components | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------- | :------ | :------ | :------ | | Net Interest Margin (TE) | 3.33% | 3.31% | 3.05% | | Yield on Interest-Earning Assets | 4.32% | 4.28% | 4.43% | | Cost of Funds | 1.05% | 1.03% | 1.47% | | Cost of Deposits | 0.86% | 0.84% | 0.98% | - The 28 basis point increase in NIM YoY was primarily due to a 42 basis point decrease in cost of funds, driven by a $1.23 billion decline in average borrowings[14] - Average earning assets increased by $315.0 million QoQ, mainly due to a $303.4 million increase in funds held at the Federal Reserve, but declined by $1.06 billion YoY[15] Provision for Credit Losses The Company recorded a $1.0 million provision for credit losses in Q3 2025, compared to no provision in the prior quarter and the same period last year. Net recoveries were $333,000 for the quarter Provision for Credit Losses and Net Recoveries | Metric | Q3 2025 (thousands) | Q2 2025 (thousands) | Q3 2024 (thousands) | | :-------------------------- | :------------------ | :------------------ | :------------------ | | Provision for Credit Losses | $1,000 | $- | $- | | Net Recoveries (Charge-offs)| $333 | $(249) | - | | ACL as % of Gross Loans | 0.94% | 0.93% | - | Noninterest Income Noninterest income was $13.0 million in Q3 2025, a decrease from $14.7 million QoQ but an increase from $12.8 million YoY. The QoQ decrease was primarily due to an $8.2 million loss on AFS securities sales, partially offset by a $6.0 million legal settlement Noninterest Income Breakdown | Metric | Q3 2025 (millions) | Q2 2025 (millions) | Q3 2024 (millions) | | :-------------------- | :----------------- | :----------------- | :----------------- | | Noninterest Income | $13.0 | $14.7 | $12.8 | | Loss on AFS Securities Sales | $(8.2) | $- | - | | Other Income (incl. legal settlement) | $12.5 | $6.1 | - | | Trust and Investment Services Income | $3.9 | $3.7 | $3.6 | - Noninterest income decreased QoQ primarily due to an $8.2 million loss on sales of available-for-sale securities, offset by a $6.4 million increase in other income, which included a $6.0 million legal settlement[19] Noninterest Expense Noninterest expense was $58.6 million in Q3 2025, a slight increase QoQ but a decrease YoY. The QoQ increase included a $500,000 provision for unfunded loan commitments and higher salaries and benefits, while the YoY decrease was broad-based, partially offset by increased software expense Noninterest Expense and Efficiency Ratio | Metric | Q3 2025 (millions) | Q2 2025 (millions) | Q3 2024 (millions) | | :-------------------- | :----------------- | :----------------- | :----------------- | | Noninterest Expense | $58.6 | $57.6 | $58.8 | | Salaries and Benefits | $35.9 | $35.0 | $36.6 | | Provision for Unfunded Loan Commitments | $0.5 | $- | $(0.75) | | Efficiency Ratio | 45.6% | 45.6% | 46.5% | - The $1.02 million QoQ increase in noninterest expense included a $500,000 provision for unfunded loan commitments and an $877,000 increase in salaries and benefits due to mid-year salary increases[20] - The efficiency ratio remained stable QoQ at 45.6% and improved from 46.5% YoY[21] Income Taxes The effective tax rate for Q3 2025 was 23.80%, lower than 26.50% in Q2 2025 and 24.25% in Q3 2024. Investments in tax credits contributed to a year-to-date effective tax rate of 25.6% Effective Tax Rate | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :---------------- | :------ | :------ | :------ | | Effective Tax Rate | 23.80% | 26.50% | 24.25% | - Investments in tax credits contributed to the year-to-date effective tax rate of 25.6%[22] Balance Sheet Analysis This section provides an analysis of the Company's assets, asset quality, deposits, borrowings, and capital structure, highlighting key trends and changes Assets Total assets increased to $15.67 billion at September 30, 2025, representing a 1.64% increase QoQ, a 3.38% increase YTD, and a 1.71% increase YoY. This growth was primarily driven by increases in interest-earning balances due from the Federal Reserve, investment securities, and total loans Total Assets and Key Components | Metric | Sep 30, 2025 (billions) | Jun 30, 2025 (billions) | Dec 31, 2024 (billions) | Sep 30, 2024 (billions) | | :-------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Total Assets | $15.67 | $15.41 | $15.15 | $15.40 | | Interest-Earning Balances from Fed | $0.63 | $0.54 | $0.05 | $0.25 | | Investment Securities | $4.88 | $4.85 | $4.92 | $4.87 | | Total Loans | $8.47 | $8.36 | $8.54 | $8.57 | - The QoQ increase in assets included an $88.5 million increase in interest-earning balances due from the Federal Reserve, a $63.8 million increase in investment securities, and an $112.4 million increase in total loans[24] Investment Securities Investment securities totaled $4.88 billion, with AFS securities increasing QoQ and YoY, while the pre-tax unrealized loss on AFS securities decreased Investment Securities Portfolio | Metric | Sep 30, 2025 (billions) | Jun 30, 2025 (billions) | Dec 31, 2024 (billions) | Sep 30, 2024 (billions) | | :-------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Total Investment Securities | $4.88 | $4.81 | $4.92 | $4.87 | | HTM Securities | $2.30 | $2.33 | $2.38 | $2.41 | | AFS Securities | $2.58 | $2.49 | $2.54 | $2.47 | | AFS Pre-tax Unrealized Loss | $(332.2) million | $(363.7) million | $(447.4) million | $(367.7) million | - AFS securities increased by $93.1 million QoQ and $113.8 million YoY, while the pre-tax unrealized loss decreased by $31.5 million QoQ and $35.5 million YoY[29] Loans Total loans and leases were $8.47 billion, showing a QoQ increase driven by growth in dairy & livestock, agribusiness, commercial and industrial, and commercial real estate loans Total Loans and Leases | Metric | Sep 30, 2025 (billions) | Jun 30, 2025 (billions) | Dec 31, 2024 (billions) | Sep 30, 2024 (billions) | | :-------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Total Loans and Leases | $8.47 | $8.36 | $8.54 | $8.57 | | Change QoQ | +$112.4 million | - | - | - | | Change YTD | -$65.5 million | - | - | - | | Change YoY | -$101.7 million | - | - | - | - The QoQ increase in loans included significant growth in dairy & livestock and agribusiness loans (+$59.2 million), commercial and industrial loans (+$26.7 million), and commercial real estate loans (+$17.9 million)[30] Asset Quality Asset quality metrics showed mixed trends. Net recoveries were $333,000 in Q3 2025. The Allowance for Credit Losses (ACL) totaled $79.3 million, representing 0.94% of total loans, consistent with prior periods. Nonperforming assets increased QoQ and YoY Asset Quality Metrics | Metric | Sep 30, 2025 (thousands) | Jun 30, 2025 (thousands) | Sep 30, 2024 (thousands) | | :-------------------------- | :----------------------- | :----------------------- | :----------------------- | | Net Recoveries (Charge-offs)| $333 | $(249) | $156 | | Allowance for Credit Losses | $79,336 | $78,003 | $82,942 | | ACL as % of Total Loans | 0.94% | 0.93% | 0.97% | | Total Nonperforming Assets | $28,465 | $26,630 | $22,560 | | % of Nonperforming Assets to Total Assets | 0.18% | 0.17% | 0.15% | Nonperforming Assets and Delinquency Trends Nonperforming loans increased QoQ, primarily driven by SBA nonperforming loans, while OREO remained stable Nonperforming Assets and Delinquency | Category | Sep 30, 2025 (thousands) | Jun 30, 2025 (thousands) | Sep 30, 2024 (thousands) | | :-------------------------- | :----------------------- | :----------------------- | :----------------------- | | Nonperforming Loans | $27,804 | $25,969 | $21,913 | | Commercial real estate | $23,707 | $24,379 | $18,794 | | SBA | $3,952 | $1,265 | $151 | | OREO | $661 | $661 | $647 | | Past Due 30-89 Days (accruing) | $85 | $3,419 | $30,765 | - Total nonperforming loans increased QoQ, primarily driven by an increase in SBA nonperforming loans[35] Classified Loans Classified loans increased by $4.8 million QoQ, mainly due to a downgrade of a commercial and industrial loan Classified Loans | Metric | Sep 30, 2025 (thousands) | Jun 30, 2025 (thousands) | | :-------------- | :----------------------- | :----------------------- | | Classified Loans | $78,180 | $73,422 | - Classified loans increased by $4.8 million QoQ, mainly due to a downgrade of a $2.9 million commercial and industrial loan[36] Deposits & Customer Repurchase Agreements Total deposits and customer repurchase agreements increased to $12.58 billion at September 30, 2025, up by $186.5 million QoQ, $365.2 million YTD, and $108.5 million YoY. Noninterest-bearing deposits remained a significant portion, at 59.76% of total deposits Deposits and Customer Repurchase Agreements | Metric | Sep 30, 2025 (billions) | Jun 30, 2025 (billions) | Dec 31, 2024 (billions) | Sep 30, 2024 (billions) | | :-------------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Total Deposits & Customer Repos | $12.58 | $12.39 | $12.21 | $12.47 | | Noninterest-Bearing Deposits | $7.24 | $7.25 | $7.04 | $7.14 | | Noninterest-Bearing Deposits as % of Total Deposits | 59.76% | 60.47% | 58.90% | 59.12% | - Total deposits and customer repurchase agreements increased by $186.5 million QoQ, $365.2 million YTD, and $108.5 million YoY[37] Borrowings Total borrowings remained stable at $500 million, consisting entirely of FHLB advances with maturities in May 2026 and May 2027, at average costs of 4.73% and 4.27% respectively Borrowings Composition | Metric | Sep 30, 2025 (millions) | Dec 31, 2024 (millions) | Sep 30, 2024 (millions) | | :-------------------- | :---------------------- | :---------------------- | :---------------------- | | Total Borrowings | $500 | $500 | $500 | | FHLB Advances (2026 maturity) | $300 | - | - | | FHLB Advances (2027 maturity) | $200 | - | - | - FHLB advances include $300 million maturing in May 2026 at an average cost of approximately 4.73%, and $200 million maturing in May 2027 at a cost of 4.27%[39] Capital Total equity increased to $2.28 billion at September 30, 2025, up by $95.8 million YTD, driven by net earnings and an increase in other comprehensive income, partially offset by cash dividends and stock repurchases. The Company's capital ratios remain well-above regulatory standards Capital Ratios and Equity | Metric | Sep 30, 2025 (billions) | Dec 31, 2024 (billions) | Sep 30, 2024 (billions) | | :-------------------------- | :---------------------- | :---------------------- | :---------------------- | | Total Equity | $2.28 | $2.19 | $2.20 | | Tangible Book Value Per Share | $10.98 | $10.10 | $10.17 | | Tier 1 Leverage Capital Ratio | 11.8% | 11.5% | 10.6% | | Common Equity Tier 1 Capital Ratio | 16.3% | 16.2% | 15.8% | | Total Risk-Based Capital Ratio | 17.1% | 17.1% | 16.6% | - Increases to equity included $154.3 million in net earnings and a $64.3 million increase in other comprehensive income, partially offset by $83.1 million in cash dividends and $43.5 million in stock repurchases[40] - The Company's capital ratios under Basel III remain well-above regulatory standards[41] Business Segments This section highlights the performance of CitizensTrust, the Company's wealth management and trust services division CitizensTrust CitizensTrust reported $5.2 billion in assets under management and administration as of September 30, 2025, with revenues of $3.9 million for the third quarter, showing consistent growth QoQ and YoY CitizensTrust Performance | Metric | Q3 2025 (millions) | Q2 2025 (millions) | Q3 2024 (millions) | | :-------------------------- | :----------------- | :----------------- | :----------------- | | Assets Under Management & Administration | $5,200 | - | - | | Assets Under Management | $3,700 | - | - | | Revenues | $3.9 | $3.7 | $3.6 | - CitizensTrust provides trust, investment and brokerage related services, as well as financial, estate and business succession planning[43] Corporate Information This section provides an overview of CVB Financial Corp., details regarding the Q3 2025 conference call, and important disclosures on forward-looking statements and non-GAAP financial measures Corporate Overview CVB Financial Corp. is the holding company for Citizens Business Bank, one of California's largest bank holding companies with over $15 billion in assets. It offers a wide range of banking, lending, and investing services through more than 60 banking centers and three trust office locations - CVB Financial Corp. is the holding company for Citizens Business Bank, one of the 10 largest bank holding companies headquartered in California with more than $15 billion in total assets[44] - Citizens Business Bank offers banking, lending, and investing services through over 60 banking centers and three trust office locations[44] - Shares of CVB Financial Corp. common stock are listed on the NASDAQ under the ticker symbol 'CVBF'[45] Conference Call Management will host a conference call on Thursday, October 23, 2025, at 7:30 a.m. PDT/10:30 a.m. EDT to discuss the Q3 2025 financial results, accessible via registration or webcast on the Company's website - A conference call to discuss Q3 2025 financial results will be held on Thursday, October 23, 2025, at 7:30 a.m. PDT/10:30 a.m. EDT[46] - The conference call can be accessed live by registering online or via webcast on the Citizens Business Bank website[46] Safe Harbor Statement The report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from projections. Key risks include economic conditions, interest rate policies, acquisitions, regulatory changes, credit quality, and cybersecurity threats - The document contains forward-looking statements that involve risks and uncertainties, which could cause actual results or performance to differ materially from those projected[47] - Important factors that could cause actual results to differ include the strength of the U.S. economy, effects of monetary and fiscal policies, impact of acquisitions, changes in financial services regulations, and cybersecurity threats[48] - The Company disclaims any obligation to update forward-looking statements, except as required by law[50] Non-GAAP Financial Measures Disclosure Certain financial information in the release is presented on a non-GAAP basis, intended to provide supplemental information and should be considered in addition to, not as a substitute for, GAAP measures - Certain financial information is presented on a non-GAAP basis to provide supplemental information regarding the Company's performance[51] - Investors and analysts should consider non-GAAP measures in addition to, not as a substitute for or as superior to, measures prepared in accordance with GAAP[51] Condensed Consolidated Financial Statements This section presents the Company's condensed consolidated balance sheets, average balance sheets, and statements of earnings for the reported periods Condensed Consolidated Balance Sheets The condensed consolidated balance sheet shows total assets of $15.67 billion at September 30, 2025, with total liabilities of $13.38 billion and total stockholders' equity of $2.28 billion Condensed Consolidated Balance Sheet Summary | Metric | Sep 30, 2025 (thousands) | Dec 31, 2024 (thousands) | Sep 30, 2024 (thousands) | | :-------------------------------- | :----------------------- | :----------------------- | :----------------------- | | Total Assets | $15,666,206 | $15,153,655 | $15,403,216 | | Total Investment Securities | $4,877,306 | $4,921,783 | $4,870,839 | | Net Loans and Lease Finance Receivables | $8,391,570 | $8,456,310 | $8,489,623 | | Total Deposits | $12,124,239 | $11,948,381 | $12,072,489 | | Total Liabilities | $13,384,139 | $12,967,339 | $13,205,385 | | Total Stockholders' Equity | $2,282,067 | $2,186,316 | $2,197,831 | Condensed Consolidated Average Balance Sheets The average balance sheet for Q3 2025 shows average total assets of $15.50 billion, with average total deposits of $12.02 billion and average total stockholders' equity of $2.27 billion Condensed Consolidated Average Balance Sheet Summary | Metric | Q3 2025 (thousands) | Q2 2025 (thousands) | Q3 2024 (thousands) | | :-------------------------------- | :------------------ | :------------------ | :------------------ | | Average Total Assets | $15,498,390 | $15,183,174 | $16,513,161 | | Average Total Investment Securities | $4,835,928 | $4,847,415 | $5,080,033 | | Average Loans and Lease Finance Receivables | $8,372,383 | $8,354,898 | $8,605,270 | | Average Total Deposits | $12,016,725 | $11,807,530 | $12,056,172 | | Average Total Liabilities | $13,227,239 | $12,945,226 | $14,346,368 | | Average Total Stockholders' Equity | $2,271,151 | $2,237,948 | $2,166,793 | Condensed Consolidated Statements of Earnings The condensed consolidated statements of earnings show net income of $52.6 million for Q3 2025, with total interest income of $150.1 million and total interest expense of $34.5 million Condensed Consolidated Statements of Earnings Summary | Metric | Q3 2025 (thousands) | Q2 2025 (thousands) | Q3 2024 (thousands) | | :-------------------------------- | :------------------ | :------------------ | :------------------ | | Total Interest Income | $150,112 | $144,209 | $165,752 | | Total Interest Expense | $34,535 | $32,601 | $52,133 | | Net Interest Income | $115,577 | $111,608 | $113,619 | | Provision for Credit Losses | $1,000 | $- | $- | | Total Noninterest Income | $13,006 | $14,744 | $12,834 | | Total Noninterest Expense | $58,576 | $57,557 | $58,835 | | Net Earnings | $52,586 | $50,564 | $51,224 | | Diluted Earnings Per Common Share | $0.38 | $0.37 | $0.37 | Selected Financial Highlights & Supplementary Data This section provides detailed key performance ratios, allowance for credit losses activity, loan portfolio composition, deposit composition, and regulatory capital ratios Key Performance Ratios This section provides a detailed breakdown of key financial ratios, including profitability, efficiency, yields, and costs, highlighting the Company's performance trends over the past year Key Performance Ratios Summary | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------------- | :------ | :------ | :------ | | Return on Average Assets, annualized | 1.35% | 1.34% | 1.23% | | Return on Average Equity, annualized | 9.19% | 9.06% | 9.40% | | Efficiency Ratio | 45.56% | 45.55% | 46.53% | | Yield on Average Loans | 5.25% | 5.22% | 5.31% | | Cost of Deposits | 0.86% | 0.84% | 0.98% | | Net Interest Margin (TE) | 3.33% | 3.31% | 3.05% | | Tangible Common Equity Ratio (Consolidated) | 10.14% | 10.02% | 9.71% | | Diluted Weighted Average Shares Outstanding | 137,152,562 | 137,172,994 | 138,839,499 | | Cash Dividends Declared Per Common Share | $0.20 | $0.20 | $0.20 | | Dividend Payout Ratio | 52.39% | 54.79% | 54.62% | | Tangible Book Value Per Share | $10.98 | $10.64 | $10.17 | Allowance for Credit Losses Activity The Allowance for Credit Losses (ACL) increased to $79.3 million at the end of Q3 2025. The quarter saw net recoveries of $333,000 and a provision for credit losses of $1.0 million Allowance for Credit Losses Activity | Metric | Q3 2025 (thousands) | Q2 2025 (thousands) | Q3 2024 (thousands) | | :-------------------------------- | :------------------ | :------------------ | :------------------ | | ACL Beginning Balance | $78,003 | $78,252 | $82,786 | | Total Charge-offs | $(67) | $(429) | $(26) | | Total Recoveries | $400 | $180 | $182 | | Net Recoveries (Charge-offs) | $333 | $(249) | $156 | | Provision for Credit Losses | $1,000 | $- | $- | | ACL End of Period | $79,336 | $78,003 | $82,942 | | Net Recoveries (Charge-offs) to Average Loans | 0.004% | -0.003% | 0.002% | Allowance for Credit Losses by Loan Type The distribution of the Allowance for Credit Losses across different loan types shows varying percentages relative to each loan type, with construction loans having the highest percentage at 1.74% and SFR mortgage loans the lowest at 0.17% as of September 30, 2025 Allowance for Credit Losses by Loan Type | Loan Type | Sep 30, 2025 (millions) | Allowance as a % of Respective Loan Type | | :-------------------------- | :---------------------- | :--------------------------------------- | | Commercial real estate | $65.4 | 1.00% | | Construction | $0.5 | 1.74% | | SBA | $2.6 | 0.97% | | Commercial and industrial | $6.6 | 0.71% | | Dairy & livestock and agribusiness | $2.8 | 0.95% | | Municipal lease finance receivables | $0.2 | 0.36% | | SFR mortgage | $0.5 | 0.17% | | Consumer and other loans | $0.7 | 1.13% | | Total | $79.3 | 0.94% | Quarterly Common Stock Price & Earnings This section provides a historical view of the Company's common stock price performance and quarterly consolidated earnings over recent periods, showing consistent diluted EPS of $0.38 in Q3 2025 Quarterly Common Stock Price and Earnings | Metric | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | :------ | | Quarter End High Stock Price | $21.34 | $20.15 | $21.71 | $24.58 | $20.29 | | Quarter End Low Stock Price | $18.12 | $16.01 | $18.22 | $17.20 | $16.08 | | Net Earnings (thousands) | $52,586 | $50,564 | $51,104 | $50,858 | $51,224 | | Diluted Earnings Per Common Share | $0.38 | $0.37 | $0.36 | $0.36 | $0.37 | | Cash Dividends Declared Per Common Share | $0.20 | $0.20 | $0.20 | $0.20 | $0.20 | Loan Portfolio by Type The loan portfolio at September 30, 2025, totaled $8.47 billion, with commercial real estate loans being the largest component at $6.54 billion. Dairy & livestock and agribusiness loans showed a significant QoQ increase Loan Portfolio Composition | Loan Type | Sep 30, 2025 (thousands) | Jun 30, 2025 (thousands) | Dec 31, 2024 (thousands) | Sep 30, 2024 (thousands) | | :-------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Commercial real estate | $6,535,319 | $6,517,415 | $6,507,452 | $6,618,637 | | Construction | $29,976 | $17,658 | $16,082 | $14,755 | | SBA | $266,228 | $271,735 | $273,013 | $272,001 | | Commercial and industrial | $939,174 | $912,427 | $925,178 | $936,489 | | Dairy & livestock and agribusiness | $292,963 | $233,772 | $419,904 | $342,445 | | SFR mortgage | $286,111 | $288,435 | $269,172 | $267,181 | | Gross Loans, at amortized cost | $8,470,906 | $8,358,501 | $8,536,432 | $8,572,565 | Deposit Composition by Type and Customer Repurchase Agreements Total deposits and customer repurchase agreements reached $12.58 billion at September 30, 2025. Noninterest-bearing deposits constituted the largest portion at $7.24 billion, demonstrating a stable funding base Deposit Composition and Customer Repurchase Agreements | Deposit Type | Sep 30, 2025 (thousands) | Jun 30, 2025 (thousands) | Dec 31, 2024 (thousands) | Sep 30, 2024 (thousands) | | :-------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Noninterest-bearing | $7,244,968 | $7,247,128 | $7,037,096 | $7,136,824 | | Investment checking | $487,738 | $483,793 | $551,305 | $504,028 | | Savings and money market | $3,809,768 | $3,669,912 | $3,786,387 | $3,745,707 | | Time deposits | $581,765 | $583,990 | $573,593 | $685,930 | | Total Deposits | $12,124,239 | $11,984,823 | $11,948,381 | $12,072,489 | | Customer Repurchase Agreements | $451,258 | $404,154 | $261,887 | $394,515 | | Total Deposits and Customer Repurchase Agreements | $12,575,497 | $12,388,977 | $12,210,268 | $12,467,004 | Nonperforming Assets and Delinquency Trends (Detailed) This detailed table provides a comprehensive view of nonperforming assets and delinquency trends, showing an increase in nonperforming loans QoQ, particularly in SBA loans, while past due loans decreased significantly YoY Detailed Nonperforming Assets and Delinquency Trends | Category | Sep 30, 2025 (thousands) | Jun 30, 2025 (thousands) | Mar 31, 2025 (thousands) | Dec 31, 2024 (thousands) | Sep 30, 2024 (thousands) | | :-------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Nonaccrual Loans | $27,804 | $25,969 | $25,636 | $27,795 | $21,913 | | % of Total Loans (Nonaccrual) | 0.33% | 0.31% | 0.31% | 0.33% | 0.26% | | Past Due 30-89 Days (accruing) | $85 | $3,419 | $718 | $487 | $30,765 | | OREO | $661 | $661 | $495 | $19,303 | $647 | | Total Nonperforming, Past Due, and OREO | $28,550 | $30,049 | $26,849 | $47,585 | $53,325 | | % of Total Loans (Total Nonperforming, Past Due, and OREO) | 0.34% | 0.36% | 0.32% | 0.56% | 0.62% | Regulatory Capital Ratios (Detailed) The Company's regulatory capital ratios remain strong and well above minimum required levels, demonstrating robust capital adequacy. The Tier 1 leverage capital ratio increased to 11.8% and the tangible common equity ratio to 10.1% at September 30, 2025 Detailed Regulatory Capital Ratios | Capital Ratios | Minimum Required Plus Capital Conservation Buffer | Sep 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :-------------------------- | :------------------------------------------------ | :----------- | :----------- | :----------- | | Tier 1 leverage capital ratio | 4.0% | 11.8% | 11.5% | 10.6% | | Common equity Tier 1 capital ratio | 7.0% | 16.3% | 16.2% | 15.8% | | Tier 1 risk-based capital ratio | 8.5% | 16.3% | 16.2% | 15.8% | | Total risk-based capital ratio | 10.5% | 17.1% | 17.1% | 16.6% | | Tangible common equity ratio | - | 10.1% | 9.8% | 9.7% | Non-GAAP Reconciliations This section provides reconciliations for non-GAAP financial measures, including tangible book value and return on average tangible common equity Tangible Book Value Reconciliations This section provides a reconciliation of tangible book value to GAAP stockholders' equity, showing tangible book value per share of $10.98 at September 30, 2025 Tangible Book Value Reconciliation | Metric | Sep 30, 2025 (thousands) | Dec 31, 2024 (thousands) | Sep 30, 2024 (thousands) | | :-------------------- | :----------------------- | :----------------------- | :----------------------- | | Stockholders' Equity | $2,282,067 | $2,186,316 | $2,197,831 | | Less: Goodwill | $(765,822) | $(765,822) | $(765,822) | | Less: Intangible Assets | $(6,654) | $(9,967) | $(11,130) | | Tangible Book Value | $1,509,591 | $1,410,527 | $1,420,879 | | Tangible Book Value Per Share | $10.98 | $10.10 | $10.17 | Return on Average Tangible Common Equity Reconciliation This reconciliation adjusts net income for tax-effected amortization of intangibles and average stockholders' equity for goodwill and intangibles to calculate the return on average tangible common equity, which was 14.11% for Q3 2025 Return on Average Tangible Common Equity Reconciliation | Metric | Q3 2025 (thousands) | Q2 2025 (thousands) | Q3 2024 (thousands) | | :-------------------------------- | :------------------ | :------------------ | :------------------ | | Net Income | $52,586 | $50,564 | $51,224 | | Tangible Net Income | $53,292 | $51,378 | $52,130 | | Average Stockholders' Equity | $2,271,151 | $2,237,948 | $2,166,793 | | Average Tangible Common Equity | $1,498,218 | $1,463,894 | $1,389,152 | | Return on Average Tangible Common Equity, annualized | 14.11% | 14.08% | 14.93% |