CVB Financial (CVBF) Q2 2025 Earnings Call July 24, 2025 10:30 AM ET Company ParticipantsE. Allen Nicholson - EVP & CFODavid Brager - Director, President & CEOAndrew Terrell - Managing DirectorDavid Feaster - Director - BankingKelly Motta - Managing DirectorConference Call ParticipantsMatthew Clark - MD & Senior Research AnalystGary Tenner - MD & Senior Research AnalystOperatorGood morning, ladies and gentlemen, and welcome to the 2025 CVB Financial Corporation and its subsidiary Citizens Business Bank Earn ...

Financial Data and Key Metrics Changes - Revenues for Q4 2024 were $105.3 million, a 5% increase from $100.6 million in Q3 2024 and a 14% increase from $92 million in Q4 2023 [8] - For the year, total revenues reached $393.5 million, a 12% increase from $352 million in 2023 [8] - Net income for Q4 2024 was $5.1 million, down from $7.2 million in Q4 2023, while annual net income was $19.2 million compared to $45.3 million in 2023 [13][14] - Total debt increased to $3.131 billion, a 22% rise from $2.566 billion at the end of 2023 [15] - Shareholders' equity reached $293 million, a 7% increase from $275 million at the end of 2023 [16] Business Line Data and Key Metrics Changes - Loan originations for Q4 2024 were $458 million, a 52% increase from $302 million in Q4 2023, and for the year, originations totaled $1.68 billion, a 24% increase from $1.36 billion in 2023 [9][19] - The fair value portfolio increased to $3.5 billion, yielding 11.3% net of losses [10] - Core operating expenses as a percentage of the managed portfolio decreased to 5.4% in Q4 2024 from 5.9% in Q4 2023 [17] Market Data and Key Metrics Changes - The average FICO score for the portfolio was 571, with an average amount financed of $22,300 per deal [28] - The annual net charge-offs for Q4 2024 were 8.02% of the average portfolio, compared to 7.74% in Q4 2023 [29] - Delinquency greater than 30 days was 14.85% of the total portfolio, slightly up from 14.55% at the end of 2023 [30] Company Strategy and Development Direction - The company is focusing on cautious growth while improving credit performance and preparing for aggressive growth in 2025 [4][6] - Plans include hiring additional sales representatives and expanding into new territories to increase market share [22] - The company aims to tighten its credit model while still pursuing growth opportunities in better-performing geographic areas [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic environment, citing a favorable unemployment rate projected to remain low [38][47] - The company anticipates that the performance of 2024 vintages will improve as they flow through the portfolio, with expectations to move past the weaker 2022 vintages by the end of 2025 [43][46] - Management highlighted the importance of technology advancements, including AI-driven fraud detection, to enhance operational efficiency and credit performance [39][41] Other Important Information - The company reported a significant reduction in loan provision adjustments from $22.3 million in 2023 to $5.3 million in 2024 [11] - The company has implemented measures to improve funding times, reducing them to less than two days, which enhances dealer relationships [27] Q&A Session Summary Question: What are the expectations for growth in 2025? - Management indicated that they are gearing up for a strong growth year in 2025, with a focus on improving credit performance and expanding market share [43][46] Question: How is the company addressing credit performance issues? - Management noted that they are tightening their credit model while still pursuing growth, expecting improvements as newer vintages perform better [32][43] Question: What technological advancements are being implemented? - The company is utilizing AI-driven fraud scores to enhance operational efficiency and plans to implement a new AI voice bot to improve collections [39][41]