CVB Financial (US:CVBF)2024-02-27 16:00Financial Performance - For the year ended December 31, 2023, the company reported net earnings of $221.4 million, a decrease of $14.0 million, or 5.94%, compared to $235.4 million for 2022[63] - Diluted earnings per share for 2023 were $1.59, down by $0.08, or 4.8%, from $1.67 in 2022[63] - The company's net interest income for 2023 was $488.0 million, a decrease of $17.5 million, or 3.47%, compared to $505.5 million for 2022[76] - Noninterest income increased by $2.6 million, driven by a $4.2 million (24.66%) rise in service charges on deposit accounts and a $2.4 million net gain from property sales[82] - Total interest income and fees on loans for 2023 reached $448.3 million, an increase of $59.1 million, or 15.19%, compared to 2022, driven by a growth in average loans of $216.5 million and higher loan yields of 5.04%[110] Equity and Assets - The company's total equity increased to $2.08 billion as of December 31, 2023, up $129.5 million from $1.95 billion at the end of 2022[68] - The bank's total assets as of December 31, 2023, were $16.03 billion, with net loans at $8.82 billion and total deposits at $11.48 billion[164] - As of December 31, 2023, the Company had total consolidated assets of $16.02 billion, net loans of $8.82 billion, deposits of $11.43 billion, and shareholders' equity of $2.08 billion[198] Loans and Credit Quality - The percentage of nonperforming assets to total assets was 0.13% as of December 31, 2023[100] - Nonperforming loans increased to $21.3 million, or 0.24% of total loans, from $4.9 million, or 0.05% at the end of 2022[138] - The allowance for credit losses (ACL) totaled $86.8 million as of December 31, 2023, representing 0.98% of total loans, up from 0.94% in 2022[139] - Classified loans increased by $10 million quarter-over-quarter to $102.2 million, with a percentage of total loans rising to 1.15%[138] - The loan coverage ratio increased to 0.98% as of December 31, 2023, compared to 0.94% in the previous year[153] Deposits and Funding - Total liabilities decreased by $585 million (4.03%) to $13.94 billion as of December 31, 2023, with total deposits declining by $1.4 billion (10.93%)[87] - Average interest-bearing deposits decreased by $444.4 million, or 9.51%, to $4.23 billion at December 31, 2023, compared to $4.67 billion at the end of 2022[67] - Average savings deposits decreased by $526 million, or 10.81%, to $4.34 billion in 2023 from $4.87 billion in 2022[144] - Average noninterest-bearing deposits decreased by $1.05 billion, or 11.84%, from $8.84 billion in 2022 to $7.79 billion in 2023, accounting for 62.66% of total average deposits[155] Regulatory and Compliance - The Company is subject to significant regulation and restrictions by Federal and State laws, which may affect the cost of doing business and limit permissible activities[254] - The Company must maintain a Tier 1 Risk-Based Capital Ratio of 6.0% or greater and a Total Risk-Based Capital Ratio of 10.0% or greater to meet regulatory requirements[215] - The Capital Conservation Buffer is currently at its fully phased-in level of 2.5%, increasing the required minimum risk-based capital ratios[216] - The FDIC finalized a special assessment of approximately 13.4 basis points annually based on uninsured deposits, resulting in an accrued expense of $9.2 million for the Bank in December 2023[235] Workforce and Corporate Culture - The Company employed 1,107 associates as of December 31, 2023, reflecting a 3.3% increase from 1,072 associates at the end of 2022[179] - 93% of associates earned an incentive bonus in 2023, compared to 94% in 2022[183] - The Company reported a 61% increase in nominations for the Citizens Experience Service Awards in 2023, with 708 nominations received[180] - The Company’s Diversity and Inclusion Program aims to enhance workplace diversity, with 38% of the Board of Directors being female or ethnically diverse[181] Economic Outlook - The economic forecast predicts a modest decline in GDP during the first three quarters of 2024, with a return to positive growth in Q4 2024, and a full-year GDP increase of 0.92% in 2025, followed by 2.6% in 2026[106] - The unemployment rate is forecasted to exceed 5% in 2024, peaking at 5.7% in Q1 2025, before declining to less than 5% in Q3 2026[106] Cybersecurity and Risk Management - The Company has implemented multiple layers of cybersecurity controls to manage risks associated with cyber-attacks, which are expected to remain high[239] - The Company does not undertake any obligation to update forward-looking statements, which may involve risks and uncertainties affecting actual results[170]