CVB Financial Corp. Reports Earnings for the Second Quarter of 2021

Ontario, California, UNITED STATES


  • Net Earnings of $51.2 million for the second quarter of 2021, or $0.38 per share
  • Return on Average Tangible Common Equity of 15.60% for the second quarter of 2021
  • Return on Average Assets of 1.35% for the second quarter of 2021

ONTARIO, Calif., July 21, 2021 (GLOBE NEWSWIRE) -- CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (the “Company”), announced earnings for the quarter ended June 30, 2021.

CVB Financial Corp. reported net income of $51.2 million for the quarter ended June 30, 2021, compared with $63.9 million for the quarter ended March 31, 2021 and $41.6 million for the quarter ended June 30, 2020. Diluted earnings per share were $0.38 for the second quarter, compared to $0.47 for the prior quarter and $0.31 for the same period last year. The second quarter of 2021 included $2.0 million in recapture of provision for credit losses, as a result of a modest improvement in our economic forecast.   In comparison, the first quarter of 2021 included a $19.5 million recapture of provision. The Company’s allowance for credit losses at June 30, 2021 of $69.3 million, compares to the pre-pandemic allowance of $68.7 million at December 31, 2019.

David Brager, Chief Executive Officer of Citizens Business Bank, commented, “Despite the on-going impact of the COVID-19 pandemic and the continuing low interest rate environment, our pre-tax, pre-provision earnings remain strong. However, the significant liquidity within the economy continues to impact our balance sheet and weigh on our loan growth, with lower than normal utilization rates on lines of credit. Nevertheless, we are seeing positive signs with increased new loan pipelines, and we remain committed to our customer acquisition strategy of seeking to bank the top businesses in our local markets.”

Net income of $51.2 million for the second quarter of 2021 produced an annualized return on average equity (“ROAE”) of 10.02% and an annualized return on average tangible common equity (“ROATCE”) of 15.60%. ROAE and ROATCE for the first quarter of 2021 were 12.75% and 19.85%, respectively, and 8.51% and 13.80%, respectively, for the second quarter of 2020. Annualized return on average assets (“ROAA”) was 1.35% for the second quarter, compared to 1.79% for the first quarter of 2021 and 1.33% for the second quarter of 2020. The efficiency ratio for the second quarter of 2021 was 40.05%, compared to 40.26% for the first quarter of 2021 and 39.75% for the second quarter of 2020.

Net income totaled $115.1 million for the six months ended June 30, 2021. This represented a $35.5 million, or 44.54%, increase from the prior year, as we recaptured $21.5 million of provision for credit losses for the first six months of 2021 compared to a $23.5 million provision for credit losses for the same period of 2020. Diluted earnings per share were $0.85 for the six months ended June 30, 2021, compared to $0.58 for the same period of 2020. Net income for the six months ended June 30, 2021 produced an annualized ROAE of 11.37%, an ROATCE of 17.70% and an ROAA of 1.56%. This compares to ROAE of 8.06%, an ROATCE of 13.03% and an ROAA of 1.33% for the first six months of 2020. The efficiency ratio for the six months ended June 30, 2021 was 40.15%, compared to 41.20% for the first six months of 2020.

Net interest income before recapture of provision for credit losses was $105.4 million for the second quarter of 2021. This represented a $1.9 million, or 1.86%, increase from the first quarter of 2021, and an $819,000, or 0.78%, increase from the second quarter of 2020. Total interest income was $107.0 million for the second quarter of 2021, which was $1.5 million, or 1.43%, higher than the first quarter of 2021 and $930,000, or 0.86%, lower than the same period last year. Total interest income and fees on loans for the second quarter of 2021 of $91.7 million decreased $69,000 from the first quarter of 2021, and decreased $3.6 million, or 3.80%, from the second quarter of 2020.   Total investment income of $14.5 million increased $1.4 million, or 11.0%, from the first quarter of 2021 and increased $2.4 million, or 20.08%, from the second quarter of 2020. Interest expense decreased $416,000, or 20.23%, from the prior quarter and decreased $1.7 million, or 51.61%, compared to the second quarter of 2020.

During the second quarter of 2021 we recaptured $2.0 million of provision for credit losses. This is in addition to a $19.5 million recapture of provision for credit losses in the first quarter of 2021. The recapture during the quarter reflects continued improvement in our economic forecast of certain macroeconomic variables, which were negatively impacted during 2020 by the pandemic. In comparison, the second quarter of 2020 included an $11.5 million provision for credit losses due to the severe economic forecast at that time that was created by the pandemic.

Noninterest income was $10.8 million for the second quarter of 2021, compared with $13.7 million for the first quarter of 2021 and $12.2 million for the second quarter of 2020. Second quarter income from Bank Owned Life Insurance (“BOLI”) decreased by $3.4 million from the first quarter of 2021 and $443,000 from the second quarter of 2020. The first quarter of 2021 included $3.5 million in death benefits that exceeded the asset value of certain BOLI policies, while the second quarter of 2020 included $450,000 in death benefits. Swap fee income decreased $215,000 quarter-over-quarter and decreased $2.2 million from the second quarter of 2020. Trust and investment services income grew by $556,000 or 21.29%, compared to the first quarter of 2021 and grew by $690,000 or 27.86% year over year.

Noninterest expense for the second quarter of 2021 was $46.5 million, compared to $47.2 million for the first quarter of 2021 and $46.4 million for the second quarter of 2020. The $618,000 quarter-over-quarter decrease included a $1.0 million recapture of provision for unfunded loan commitments and an $870,000 decrease in salaries and employee benefit costs that was impacted by the higher payroll taxes typically incurred in the first quarter of each year. The year-over-year increase of $147,000 included a $972,000 increase in regulatory assessment expense in the second quarter of 2021 compared to the prior year quarter, resulting from the final application of assessment credits provided by the FDIC at the end of the second quarter of 2020. The increase in assessment expense was offset by the $1.0 million recapture of provision for unfunded loan commitments in the second quarter of 2021. The recapture was the result of our improving economic forecast and the resulting impact from the macroeconomic variables on lower expected losses from unfunded commitments. As a percentage of average assets, noninterest expense was 1.23% for the second quarter of 2021, compared to 1.32% for the first quarter of 2021 and 1.48% for the second quarter of 2020.  

Net Interest Margin and Earning Assets

Our net interest margin (tax equivalent) was 3.06% for the second quarter of 2021, compared to 3.18% for the first quarter of 2021 and 3.70% for the second quarter of 2020. Total average earning asset yields (tax equivalent) were 3.11% for the second quarter of 2021, compared to 3.24% for the first quarter of 2021 and 3.82% for the second quarter of 2020. The decrease in earning asset yield from the prior quarter was due to a combination of a 4 basis point decline in loan yields, a 10 basis point decrease in investment yields and a change in asset mix with loan balances declining to 59.22% of earning assets on average for the second quarter of 2021, compared to 62.25% for the first quarter of 2021. Interest and fee income from Paycheck Protection Program (“PPP”) loans was approximately $8.1 million in the second quarter of 2021, compared to $10.4 million in the first quarter of 2021. The decrease in earning asset yield compared to the second quarter of 2020 was primarily due to a 31 basis point decrease in loan yields from 4.77% in the year ago quarter to 4.46% for the second quarter of 2021. The decline in interest rates since the start of the pandemic has had a negative impact on loan yields, which after excluding discount accretion, nonaccrual interest income, and the impact from PPP loans, declined by 14 basis points compared to the second quarter of 2020. The significant decline in interest rates also impacted the tax equivalent yield on investments, which decreased by 67 basis points from the second quarter of 2020. Earning asset yields were further impacted by a change in asset mix resulting from a $662.4 million increase in average balances at the Federal Reserve compared to the second quarter of 2020. Average earning assets increased from the first quarter of 2021 by $645.6 million to $13.93 billion for the second quarter of 2021. Of that increase in earning assets, $591.8 million represented an increase in average investment securities and average loans declined by $20.8 million. Average earning assets increased by $2.54 billion from the second quarter of 2020. Loans on average grew by $202.4 million from the second quarter of 2020. Investments increased by $1.68 billion, while balances at the Federal Reserve grew on average by $662.4 million compared to the second quarter of 2020.

Total cost of funds declined to 0.05% for the second quarter of 2021 from 0.07% for the first quarter of 2021 and 0.13% in the year ago quarter. On average, noninterest bearing deposits were 62.43% of total deposits during the current quarter. Noninterest bearing deposits grew on average by $458.1 million, or 6.33%, from the first quarter of 2021, while interest-bearing deposits and customer repurchase agreements grew on average by $223.4 million. The cost of interest-bearing deposits and customer repurchase agreements declined from 0.16% for the prior quarter to 0.12% for the second quarter of 2021. In comparison to the second quarter of 2020, our overall cost of funds decreased by 8 basis points, as average noninterest bearing deposits grew by $1.49 billion, compared to $789.1 million in growth in interest-bearing deposits, and the cost of deposits declined to 5 basis points in the current quarter.

Income Taxes

Our effective tax rate for the quarter and six months ended June 30, 2021 was 28.60%, compared with 29.23% and 29.00% for the quarter and six months ended June 30, 2020, respectively.   Our estimated annual effective tax rate can vary depending upon the level of tax-advantaged income as well as available tax credits.

Assets

The Company reported total assets of $15.54 billion at June 30, 2021. This represented an increase of $698.9 million, or 4.71%, from total assets of $14.84 billion at March 31, 2021.   Interest-earning assets of $14.26 billion at June 30, 2021 increased $639.2 million, or 4.69%, when compared with $13.62 billion at March 31, 2021. The increase in interest-earning assets was primarily due to a $792.8 million increase in interest-earning balances due from the Federal Reserve and a $69.6 million increase in investment securities, partially offset by a $221.7 million decrease in total loans which included PPP loan forgiveness of approximately $300 million for the current quarter.

The Company reported total assets of $15.54 billion at June 30, 2021. This represented an increase of $1.12 billion, or 7.77%, from total assets of $14.42 billion at December 31, 2020. Interest-earning assets of $14.26 billion at June 30, 2021 increased $1.04 billion, or 7.86%, when compared with $13.22 billion at December 31, 2020. The increase in interest-earning assets was primarily due to a $991.4 million increase in investment securities and a $342.5 million increase in interest-earning balances due from the Federal Reserve, partially offset by a $277.5 million decrease in total loans which included PPP loan forgiveness of approximately $600 million for the six months ended June 30, 2021.

Total assets of $15.54 billion at June 30, 2021 increased by $1.79 billion, or 13.00%, from total assets of $13.75 billion at June 30, 2020. Interest-earning assets increased $1.75 billion, or 13.95%, when compared with $12.52 billion at June 30, 2020.   The increase in interest-earning assets includes a $1.68 billion increase in investment securities and a $409.5 million increase in interest-earning balances due from the Federal Reserve, partially offset by a $331.2 million decrease in total loans which included PPP loan forgiveness of approximately $900 million. Total loans include the remaining outstanding balance in PPP loans, totaling $657.8 million as of June 30, 2021, compared to $897.7 million as of March 31, 2021 and $1.1 billion as of June 30, 2020. Excluding PPP loans, total loans grew by $18.2 million from March 31, 2021 and grew by $108.1 million compared to June 30, 2020.

Investment Securities

Total investment securities were $3.97 billion at June 30, 2021, an increase of $69.6 million, or 1.79%, from $3.90 billion at March 31, 2021, an increase of $991.4 million from December 31, 2020, and an increase of $1.68 billion, or 73.37%, from $2.29 billion at June 30, 2020. In the second quarter of 2021, we purchased $317.1 million of securities with an average investment yield of approximately 1.69%, compared to $1.23 billion of securities purchased in the first quarter of 2021, with an average expected yield of approximately 1.57%.

At June 30, 2021, investment securities held-to-maturity (“HTM”) totaled $1.04 billion, a $458.3 million, or 79.20%, increase from December 31, 2020 and a $423.8 million increase, or 69.11%, from June 30, 2020. In the first quarter of 2021, we purchased approximately $546 million of HTM securities.

At June 30, 2021 investment securities available-for-sale (“AFS”) totaled $2.93 billion, inclusive of a pre-tax net unrealized gain of $23.3 million. AFS securities increased by $533.1 million, or 22.22%, from December 31, 2020, and increased by $1.26 billion, or 74.93%, from June 30, 2020. During the second quarter of 2021, we purchased approximately $317.1 million of AFS securities, compared to approximately $683 million of AFS securities purchased in the first quarter of 2021.

Combined, the AFS and HTM investments in mortgage backed securities (“MBS”) and collateralized mortgage obligations (“CMO”) totaled $3.13 billion at June 30, 2021, compared to $2.66 billion at December 31, 2020 and $1.97 billion at June 30, 2020. Virtually all of our MBS and CMO are issued or guaranteed by government or government sponsored enterprises, which have the implied guarantee of the U.S. Government.

Our combined AFS and HTM municipal securities totaled $242.7 million as of June 30, 2021, or approximately 6% of our total investment portfolio. These securities are located in 28 states. Our largest concentrations of holdings by state, as a percentage of total municipal bonds, are located in Minnesota at 21.74%, Texas at 10.83%, Massachusetts at 10.31%, Ohio at 8.19%, and Connecticut at 5.76%.

Loans

Total loans and leases, net of deferred fees and discounts, of $8.07 billion at June 30, 2021 decreased by $221.7 million, or 2.67%, from $8.29 billion at March 31, 2021. The $221.7 million decrease in total loans included decreases of $239.9 million in PPP loans, $18.3 million in SFR mortgage loans, $15.9 million in Small Business Administration (“SBA”) loans, $8.1 million in construction loans and $13.4 million in other loans, partially offset by an increase of $73.9 million in commercial real estate loans. After adjusting for PPP loans, our loans grew by $18.2 million or at an annualized rate of approximately 1.0% from the end of the first quarter of 2021.

Total loans and leases, net of deferred fees and discounts, of $8.07 billion at June 30, 2021 decreased by $277.5 million, or 3.32%, from December 31, 2020. The $277.5 million decrease in total loans included decreases of $225.2 million in PPP loans, $103.4 million in dairy & livestock and agribusiness loans due to seasonal pay downs, $62.9 million in commercial and industrial loans, $33.4 million in SFR mortgage loans, $12.1 million in SBA loans, and $9.7 million in other loans, partially offset by an increase of $169.2 million in commercial real estate loans. After adjusting for seasonality and PPP loans, our loans grew by $51.0 million or at an annualized rate of approximately 1.4% from the end of the fourth quarter of 2020.

Total loans and leases, net of deferred fees and discounts decreased by $331.2 million, or 3.94%, from June 30, 2020. The decrease in total loans included a $439.3 million decline in PPP loans. After excluding the impact of PPP loans, the $108.1 million increase in core loans included increases of $305.6 million in commercial real estate loans and $5.9 million in dairy & livestock and agribusiness loans.   Partially offsetting these increases were declines of $91.6 million in commercial and industrial loans, $49.4 million in SFR mortgage loans, $37.5 million in construction loans, $11.3 million in consumer and other loans, $8.4 million in SBA loans, and $5.2 million in municipal lease financings.

Asset Quality

During the second quarter of 2021, we experienced credit charge-offs of $510,000 and total recoveries of $47,000, resulting in net charge-offs of $463,000. The allowance for credit losses (“ACL”) totaled $69.3 million at June 30, 2021, compared to $93.7 million at December 31, 2020 and $94.0 million at June 30, 2020. The allowance for credit losses for 2021 was decreased by $21.5 million, due to the improved outlook in our forecast of certain macroeconomic variables that were influenced by the economic impact of the pandemic and government stimulus, and by $2.9 million in year-to-date net charge-offs. At June 30, 2021, ACL as a percentage of total loans and leases outstanding was 0.86%. This compares to 1.12% and 1.12% at December 31, 2020 and June 30, 2020, respectively. When PPP loans are excluded, ACL as a percentage of total adjusted loans and leases outstanding was 0.94% at June 30, 2021, compared to 1.25% at December 31, 2020 and 1.29% at June 30, 2020.

Nonperforming loans, defined as nonaccrual loans and loans 90 days past due accruing interest plus nonperforming TDR loans, were $8.5 million at June 30, 2021, or 0.10% of total loans. This compares to nonperforming loans of $14.3 million, or 0.17% of total loans, at December 31, 2020 and $6.8 million, or 0.08% of total loans, at June 30, 2020. The $8.5 million in nonperforming loans at June 30, 2021 are summarized as follows: $4.4 million in commercial real estate loans, $1.8 million in commercial and industrial loans, $1.4 million in SBA loans, $406,000 in SFR mortgage loans, $308,000 in consumer and other loans, and $118,000 in dairy & livestock and agribusiness loans.

As of June 30, 2021, we had no OREO properties, compared to $3.4 million at December 31, 2020 and $4.9 million at June 30, 2020.

At June 30, 2021, we had loans delinquent 30 to 89 days of $415,000. This compares to $3.1 million at December 31, 2020 and $2.6 million at June 30, 2020. As a percentage of total loans, delinquencies, excluding nonaccruals, were 0.01% at June 30, 2021, 0.04% at December 31, 2020, and 0.03% at June 30, 2020.

At June 30, 2021, we had $8.2 million in performing TDR loans, compared to $2.2 million in performing TDR loans at December 31, 2020 and $2.8 million in performing TDR loans at June 30, 2020.

Nonperforming assets, defined as nonaccrual loans and loans 90 days past due accruing interest plus OREO, totaled $8.5 million at June 30, 2021, $17.7 million at December 31, 2020, and $11.7 million at June 30, 2020. As a percentage of total assets, nonperforming assets were 0.05% at June 30, 2021, 0.12% at December 31, 2020, and 0.09% at June 30, 2020.

Classified loans are loans that are graded “substandard” or worse. At June 30, 2021, classified loans totaled $49.0 million, compared to $78.8 million at December 31, 2020 and $86.3 million at June 30, 2020.

Deposits & Customer Repurchase Agreements

Deposits of $12.67 billion and customer repurchase agreements of $578.2 million totaled $13.25 billion at June 30, 2021. This represented an increase of $662.3 million, or 5.26%, when compared with $12.59 billion at March 31, 2021. Total deposits and customer repurchase agreements increased $1.07 billion, or 8.80% when compared to $12.18 billion at December 31, 2020 and increased $1.80 billion, or 15.68%, when compared with $11.45 billion at June 30, 2020.

Noninterest-bearing deposits were $8.07 billion at June 30, 2021, an increase of $487.6 million, or 6.43%, when compared to March 31, 2021, $610.0 million, or 8.18%, when compared to $7.46 billion at December 31, 2020, and an increase of $1.16 billion, or 16.87%, when compared to $6.90 billion at June 30, 2020. At June 30, 2021, noninterest-bearing deposits were 63.66% of total deposits, compared to 62.74% at March 31, 2021, 63.52% at December 31, 2020 and 62.83% at June 30, 2020.

Capital

The Company’s total equity was $2.06 billion at June 30, 2021. This represented an increase of $47.1 million, or 2.34%, from total equity of $2.01 billion at December 31, 2020. The increase was primarily due to net earnings of $115.1 million, partially offset by a $22.1 million decrease in other comprehensive income from the tax effected impact of the decrease in market value of available-for-sale securities and $49.0 million in cash dividends. Our tangible common equity ratio was 9.2% at June 30, 2021.

Our capital ratios under the revised capital framework referred to as Basel III remain well-above regulatory standards. As of June 30, 2021, the Company’s Tier 1 leverage capital ratio was 9.4%, common equity Tier 1 ratio was 15.1%, Tier 1 risk-based capital ratio was 15.1%, and total risk-based capital ratio was 15.9%.

CitizensTrust

As of June 30, 2021 CitizensTrust had approximately $3.25 billion in assets under management and administration, including $2.40 billion in assets under management. Revenues were $3.2 million for the second quarter of 2021 and $5.8 million for the six months ended June 30, 2021, compared to $2.5 million and $4.9 million, respectively, for the same periods of 2020. CitizensTrust provides trust, investment and brokerage related services, as well as financial, estate and business succession planning.

Corporate Overview

CVB Financial Corp. (“CVBF”) is the holding company for Citizens Business Bank. CVBF is one of the 10 largest bank holding companies headquartered in California with over $15 billion in total assets. Citizens Business Bank is consistently recognized as one of the top performing banks in the nation and offers a wide array of banking, lending and investing services through 58 banking centers and 3 trust office locations serving the Inland Empire, Los Angeles County, Orange County, San Diego County, Ventura County, Santa Barbara County, and the Central Valley area of California.

Shares of CVB Financial Corp. common stock are listed on the NASDAQ under the ticker symbol “CVBF”. For investor information on CVB Financial Corp., visit our Citizens Business Bank website at www.cbbank.com and click on the “Investors” tab.

Conference Call

Management will hold a conference call at 7:30 a.m. PDT/10:30 a.m. EDT on Thursday, July 22, 2021 to discuss the Company’s second quarter 2021 financial results.

To listen to the conference call, please dial (833) 301-1161, participant passcode 2777402. A taped replay will be made available approximately one hour after the conclusion of the call and will remain available through July 29, 2021 at 6:00 a.m. PDT/9:00 a.m. EDT. To access the replay, please dial (855) 859-2056, participant passcode 2777402.

The conference call will also be simultaneously webcast over the Internet; please visit our Citizens Business Bank website at www.cbbank.com and click on the “Investors” tab to access the call from the site. Please access the website 15 minutes prior to the call to download any necessary audio software. This webcast will be recorded and available for replay on the Company’s website approximately two hours after the conclusion of the conference call, and will be available on the website for approximately 12 months.

Safe Harbor
Certain matters set forth herein (including the exhibits hereto) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company's current business plans and expectations and our future financial position and operating results. Words such as “will likely result”, “aims”, “anticipates”, “believes”, “could”, “estimates”, “expects”, “hopes”, “intends”, “may”, “plans”, “projects”, “seeks”, “should”, “will,” “strategy”, “possibility”, and variations of these words and similar expressions help to identify these forward-looking statements, which involve risks and uncertainties. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance and/or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, local, regional, national and international economic and market conditions, political events and public health developments and the impact they may have on us, our customers and our assets and liabilities; our ability to attract deposits and other sources of funding or liquidity; supply and demand for commercial or residential real estate and periodic deterioration in real estate prices and/or values in California or other states where we lend; a sharp or prolonged slowdown or decline in real estate construction, sales or leasing activities; changes in the financial performance and/or condition of our borrowers, depositors, key vendors or counterparties; changes in our levels of delinquent loans, nonperforming assets, allowance for credit losses and charge-offs; the costs or effects of mergers, acquisitions or dispositions we may make, whether we are able to obtain any required governmental approvals in connection with any such mergers, acquisitions or dispositions, and/or our ability to realize the contemplated financial or business benefits associated with any such mergers, acquisitions or dispositions; the effects of new laws, regulations and/or government programs, including those laws, regulations and programs enacted by federal, state or local governments in the geographic jurisdictions in which we do business in response to the current national emergency declared in connection with the COVID-19 pandemic; the impact of the federal CARES Act and the significant additional lending activities undertaken by the Company in connection with the Small Business Administration’s Paycheck Protection Program enacted thereunder, including risks to the Company with respect to the uncertain application by the Small Business Administration of new borrower and loan eligibility, forgiveness and audit criteria; the effects of the Company’s participation in one or more of the new lending programs recently established by the Federal Reserve, including the Main Street New Loan Facility, the Main Street Priority Loan Facility and the Nonprofit Organization New Loan Facility, and the impact of any related actions or decisions by the Federal Reserve Bank of Boston and its special purpose vehicle established pursuant to such lending programs; the effect of changes in other pertinent laws, regulations and applicable judicial decisions (including laws, regulations and judicial decisions concerning financial reforms, taxes, bank capital levels, allowance for credit losses, consumer, commercial or secured lending, securities and securities trading and hedging, bank operations, compliance, fair lending, the Community Reinvestment Act, employment, executive compensation, insurance, cybersecurity, vendor management and information security technology) with which we and our subsidiaries must comply or believe we should comply or which may otherwise impact us; changes in estimates of future reserve requirements and minimum capital requirements, based upon the periodic review thereof under relevant regulatory and accounting standards, including changes in the Basel Committee framework establishing capital standards for bank credit, operations and market risks; the accuracy of the assumptions and estimates and the absence of technical error in implementation or calibration of models used to estimate the fair value of financial instruments or currently expected credit losses or delinquencies; inflation, changes in market interest rates, securities market and monetary fluctuations; changes in government-established interest rates, reference rates or monetary policies, including the possible imposition of negative interest rates on bank reserves; the impact of the anticipated phase-out of the London Interbank Offered Rate (LIBOR) on interest rate indexes specified in certain of our customer loan agreements and in our interest rate swap arrangements, including any economic and compliance effects related to the expected change from LIBOR to an alternative reference rate; changes in the amount, cost and availability of deposit insurance; disruptions in the infrastructure that supports our business and the communities where we are located, which are concentrated in California, involving or related to public health, physical site access and/or communication facilities; cyber incidents, attacks, infiltrations, exfiltrations, or theft or loss of Company, customer or employee data or money; political developments, uncertainties or instability, catastrophic events, acts of war or terrorism, or natural disasters, such as earthquakes, drought, the effects of pandemic diseases, climate change or extreme weather events, that may affect electrical, environmental and communications or other services, computer services or facilities we use, or that may affect our assets, customers, employees or third parties with whom we conduct business; our timely development and implementation of new banking products and services and the perceived overall value of these products and services by our customers and potential customers; the Company’s relationships with and reliance upon outside vendors with respect to certain of the Company’s key internal and external systems, applications and controls; changes in commercial or consumer spending, borrowing and savings patterns, preferences or behaviors; technological changes and the expanding use of technology in banking and financial services (including the adoption of mobile banking, funds transfer applications, electronic marketplaces for loans, block-chain technology and other financial products, systems or services); our ability to retain and increase market share, to retain and grow customers and to control expenses; changes in the competitive environment among banks and other financial services and technology providers; competition and innovation with respect to financial products and services by banks, financial institutions and non-traditional providers including retail businesses and technology companies; volatility in the credit and equity markets and its effect on the general economy or local or regional business conditions or on the Company’s capital, deposits, assets or customers; fluctuations in the price of the Company’s common stock or other securities, and the resulting impact on the Company’s ability to raise capital or to make acquisitions; the effect of changes in accounting policies and practices, as may be adopted from time-to-time by the principal regulatory agencies with jurisdiction over the Company, as well as by the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard-setters; changes in our organization, management, compensation and benefit plans, and our ability to recruit and retain or expand or contract our workforce, management team, key executive positions and/or our board of directors; our ability to identify suitable and qualified replacements for any of our executive officers who may leave their employment with us, including our Chief Executive Officer; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (including any securities, lender liability, bank operations, check or wire fraud, financial product or service, data privacy, health and safety, consumer or employee class action litigation); regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews; our ongoing relations with our various federal and state regulators, including the SEC, Federal Reserve Board, FDIC and California DFPI; our success at managing the risks involved in the foregoing items and all other factors set forth in the Company's public reports, including our Annual Report on Form 10-K for the year ended December 31, 2020, and particularly the discussion of risk factors within that document. Among other risks, the ongoing COVID-19 pandemic may significantly affect the banking industry, the health and safety of the Company’s employees, and the Company’s business prospects.  The ultimate impact of the COVID-19 pandemic on our business and financial results will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic, the impact on the economy, our customers, our employees and our business partners, the safety, effectiveness, distribution and acceptance of vaccines developed to mitigate the pandemic, and actions taken by governmental authorities in response to the pandemic. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements, except as required by law. Any statements about future operating results, such as those concerning accretion and dilution to the Company’s earnings or shareholders, are for illustrative purposes only, are not forecasts, and actual results may differ.

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
       
       
  June 30,
2021
 December 31,
2020
 June 30,
2020
Assets      
Cash and due from banks $153,475  $122,305  $158,397 
Interest-earning balances due from Federal Reserve  2,178,390   1,835,855   1,768,886 
Total cash and cash equivalents  2,331,865   1,958,160   1,927,283 
Interest-earning balances due from depository institutions  26,258   43,563   38,611 
Investment securities available-for-sale  2,932,021   2,398,923   1,676,067 
Investment securities held-to-maturity  1,036,924   578,626   613,169 
Total investment securities  3,968,945   2,977,549   2,289,236 
Investment in stock of Federal Home Loan Bank (FHLB)  17,688   17,688   17,688 
Loans and lease finance receivables  8,071,310   8,348,808   8,402,534 
Allowance for credit losses  (69,342)  (93,692)  (93,983)
Net loans and lease finance receivables  8,001,968   8,255,116   8,308,551 
Premises and equipment, net  49,914   51,144   51,766 
Bank owned life insurance (BOLI)  250,305   226,818   226,330 
Intangibles  29,300   33,634   38,096 
Goodwill  663,707   663,707   663,707 
Other assets  199,338   191,935   190,029 
  Total assets $15,539,288  $14,419,314  $13,751,297 
Liabilities and Stockholders' Equity      
Liabilities:      
Deposits:      
Noninterest-bearing $8,065,400  $7,455,387  $6,901,368 
Investment checking  588,831   517,976   472,509 
Savings and money market  3,649,305   3,361,444   3,150,013 
Time deposits  365,521   401,694   459,690 
Total deposits  12,669,057   11,736,501   10,983,580 
Customer repurchase agreements  578,207   439,406   468,156 
Other borrowings  -   5,000   10,000 
Junior subordinated debentures  -   25,774   25,774 
Payable for securities purchased  110,430   60,113   162,090 
Other liabilities  126,520   144,530   142,599 
  Total liabilities  13,484,214   12,411,324   11,792,199 
Stockholders' Equity      
Stockholders' equity  2,041,823   1,972,641   1,921,594 
Accumulated other comprehensive income, net of tax  13,251   35,349   37,504 
  Total stockholders' equity  2,055,074   2,007,990   1,959,098 
     Total liabilities and stockholders' equity $15,539,288  $14,419,314  $13,751,297 
       



CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
           
           
  Three Months Ended
 Six Months Ended
  June 30,
2021
 March 31,
2021
 June 30,
2020
 June 30,
2021
 June 30,
2020
Assets          
Cash and due from banks $157,401  $150,542  $140,665  $153,990  $153,740 
Interest-earning balances due from Federal Reserve  1,711,878   1,622,093   1,049,430   1,667,234   646,249 
Total cash and cash equivalents  1,869,279   1,772,635   1,190,095   1,821,224   799,989 
Interest-earning balances due from depository institutions  26,907   42,100   31,003   34,461   24,488 
Investment securities available-for-sale  2,862,552   2,553,767   1,616,907   2,709,013   1,657,185 
Investment securities held-to-maturity  1,062,842   779,826   626,557   922,115   642,745 
Total investment securities  3,925,394   3,333,593   2,243,464   3,631,128   2,299,930 
Investment in stock of FHLB  17,688   17,688   17,688   17,688   17,688 
Loans and lease finance receivables  8,249,481   8,270,282   8,047,054   8,259,824   7,764,930 
Allowance for credit losses  (71,756)  (93,483)  (82,752)  (82,560)  (76,744)
Net loans and lease finance receivables  8,177,725   8,176,799   7,964,302   8,177,264   7,688,186 
Premises and equipment, net  50,052   50,896   52,719   50,472   53,204 
Bank owned life insurance (BOLI)  239,132   226,914   225,818   233,057   225,640 
Intangibles  30,348   32,590   39,287   31,463   40,510 
Goodwill  663,707   663,707   663,707   663,707   663,707 
Other assets  189,912   189,733   182,972   189,824   180,086 
  Total assets $15,190,144  $14,506,655  $12,611,055  $14,850,288  $11,993,428 
Liabilities and Stockholders' Equity          
Liabilities:          
Deposits:          
Noninterest-bearing $7,698,640  $7,240,494  $6,204,329  $7,470,832  $5,725,677 
Interest-bearing  4,633,103   4,434,282   3,844,025   4,534,242   3,673,100 
Total deposits  12,331,743   11,674,776   10,048,354   12,005,074   9,398,777 
Customer repurchase agreements  583,996   559,395   442,580   571,764   460,476 
Other borrowings  3,022   5,001   3,981   4,007   2,210 
Junior subordinated debentures  20,959   25,774   25,774   23,353   25,774 
Payable for securities purchased  98,771   89,735   2,697   94,278   1,348 
Other liabilities  102,697   119,298   121,069   110,951   118,311 
Total liabilities  13,141,188   12,473,979   10,644,455   12,809,427   10,006,896 
Stockholders' Equity          
Stockholders' equity  2,041,906   1,997,618   1,928,210   2,019,884   1,960,885 
Accumulated other comprehensive income, net of tax  7,050   35,058   38,390   20,977   25,647 
Total stockholders' equity  2,048,956   2,032,676   1,966,600   2,040,861   1,986,532 
  Total liabilities and stockholders' equity $15,190,144  $14,506,655  $12,611,055  $14,850,288  $11,993,428 
           



CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
             
             
  Three Months Ended
 Six Months Ended
  June 30,
2021
 March 31,
2021
 June 30,
2020
 June 30,
2021
 June 30,
2020
Interest income:            
Loans and leases, including fees $91,726  $91,795  $95,352  $183,521  $187,469 
Investment securities:            
Investment securities available-for-sale  9,410   9,159  8,449   18,569  18,498 
Investment securities held-to-maturity  5,130   3,940  3,660   9,070  7,658 
Total investment income  14,540   13,099  12,109   27,639  26,156 
Dividends from FHLB stock  283   217  214   500  546 
Interest-earning deposits with other institutions  479   413  283   892  896 
Total interest income  107,028   105,524  107,958   212,552  215,067 
Interest expense:            
Deposits  1,425   1,812  2,995   3,237  7,119 
Borrowings and junior subordinated debentures  215   244  394   459  1,073 
Total interest expense  1,640   2,056  3,389   3,696  8,192 
Net interest income before (recapture of) provision for credit losses  105,388   103,468  104,569   208,856  206,875 
(Recapture of) provision for credit losses  (2,000)  (19,500) 11,500   (21,500) 23,500 
Net interest income after (recapture of) provision for credit losses  107,388   122,968  93,069   230,356  183,375 
Noninterest income:            
Service charges on deposit accounts  4,169   3,985  3,809   8,154  8,585 
Trust and investment services  3,167   2,611  2,477   5,778  4,897 
Gain on OREO, net  48   429  -   477  10 
Other  3,452   6,656  5,866   10,108  10,300 
Total noninterest income   10,836   13,681  12,152   24,517  23,792 
Noninterest expense:            
Salaries and employee benefits  28,836   29,706  28,706   58,542  59,583 
Occupancy and equipment  4,949   4,863  5,031   9,812  9,868 
Professional services  2,248   2,168  2,368   4,416  4,624 
Computer software expense  2,657   2,844  2,754   5,501  5,570 
Marketing and promotion  1,799   725  1,255   2,524  2,810 
Amortization of intangible assets  2,167   2,167  2,445   4,334  4,890 
(Recapture of) provision for unfunded loan commitments  (1,000)  -  -   (1,000) - 
Other  4,889   4,690  3,839   9,579  7,694 
Total noninterest expense  46,545   47,163  46,398   93,708  95,039 
Earnings before income taxes  71,679   89,486  58,823   161,165  112,128 
Income taxes  20,500   25,593  17,192   46,093  32,517 
Net earnings $51,179  $63,893  $41,631  $115,072  $79,611 
             
Basic earnings per common share $0.38  $0.47  $0.31  $0.85  $0.58 
Diluted earnings per common share $0.38  $0.47  $0.31  $0.85  $0.58 
Cash dividends declared per common share $0.18  $0.18  $0.18  $0.36  $0.36 
             



CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
 
           
  Three Months Ended Six Months Ended
  June 30,
2021
 March 31,
2021
 June 30,
2020
 June 30,
2021
 June 30,
2020
Interest income - tax equivalent (TE) $107,300  $105,797  $108,305  $213,097  $215,782 
Interest expense  1,640   2,056   3,389   3,696   8,192 
Net interest income - (TE) $105,660  $103,741  $104,916  $209,401  $207,590 
           
Return on average assets, annualized  1.35%  1.79%  1.33%  1.56%  1.33%
Return on average equity, annualized  10.02%  12.75%  8.51%  11.37%  8.06%
Efficiency ratio [1]  40.05%  40.26%  39.75%  40.15%  41.20%
Noninterest expense to average assets, annualized  1.23%  1.32%  1.48%  1.27%  1.59%
Yield on average loans  4.46%  4.50%  4.77%  4.48%  4.85%
Yield on average earning assets (TE)  3.11%  3.24%  3.82%  3.18%  4.03%
Cost of deposits  0.05%  0.06%  0.12%  0.05%  0.15%
Cost of deposits and customer repurchase agreements  0.05%  0.06%  0.12%  0.06%  0.16%
Cost of funds  0.05%  0.07%  0.13%  0.06%  0.17%
Net interest margin (TE)  3.06%  3.18%  3.70%  3.12%  3.88%
[1] Noninterest expense divided by net interest income before provision for credit losses plus noninterest income.
           
Weighted average shares outstanding          
Basic  135,285,867   135,175,494   134,998,440   135,235,138   137,052,180 
Diluted  135,507,364   135,427,982   135,154,479   135,470,332   137,227,984 
Dividends declared $24,497  $24,495  $24,417  $48,992  $48,833 
Dividend payout ratio [2]  47.87%  38.34%  58.65%  42.58%  61.34%
[2] Dividends declared on common stock divided by net earnings.
           
Number of shares outstanding - (end of period)  135,927,287   135,919,625   135,516,316     
Book value per share $15.12  $14.87  $14.46     
Tangible book value per share $10.02  $9.75  $9.28     
           
  June 30, December 31, June 30,    
   2021   2020   2020     
Nonperforming assets:          
Nonaccrual loans $8,471  $14,347  $6,792     
Loans past due 90 days or more and still accruing interest  -   -   25     
Troubled debt restructured loans (nonperforming)  -   -   -     
Other real estate owned (OREO), net  -   3,392   4,889     
Total nonperforming assets $8,471  $17,739  $11,706     
Troubled debt restructured performing loans $8,215  $2,159  $2,771     
           
Percentage of nonperforming assets to total loans outstanding and OREO  0.10%  0.21%  0.14%    
Percentage of nonperforming assets to total assets  0.05%  0.12%  0.09%    
Allowance for credit losses to nonperforming assets  818.58%  528.17%  802.86%    
           
  Three Months Ended Six Months Ended
  June 30,
2021
 March 31,
2021
 June 30,
2020
 June 30,
2021
 June 30,
2020
Allowance for credit losses:          
Beginning balance $71,805  $93,692  $82,641  $93,692  $68,660 
Impact of adopting ASU 2016-13  -   -   -   -   1,840 
Total charge-offs  (510)  (2,475)  (167)  (2,985)  (253)
Total recoveries on loans previously charged-off  47   88   9   135   236 
Net charge-offs  (463)  (2,387)  (158)  (2,850)  (17)
(Recapture of) provision for credit losses  (2,000)  (19,500)  11,500   (21,500)  23,500 
Allowance for credit losses at end of period $69,342  $71,805  $93,983  $69,342  $93,983 
           
Net charge-offs to average loans  -0.006%  -0.029%  -0.0020%  -0.035%  -0.0002%
           



CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in millions)
                      
Allowance for Credit Losses by Loan Type
                      
  June 30, 2021 December 31, 2020 June 30, 2020
  Allowance
For Credit
Losses

 Allowance
as a % of
Total Loans
by Respective
Loan Type
 Allowance
For Credit
Losses

 Allowance
as a % of
Total Loans
by Respective
Loan Type
 Allowance
For Credit
Losses

 Allowance
as a % of
Total Loans
by Respective
Loan Type
                      
Commercial real estate $55.2   1.0%  $75.4   1.4%  $74.9   1.4% 
Construction 1.8   2.1%  1.9   2.3%  2.3   1.8% 
SBA 2.5   0.9%  3.0   1.0%  3.7   1.2% 
SBA - PPP -   -   -   -   -   -  
Commercial and industrial 5.7   0.8%  7.1   0.9%  8.0   1.0% 
Dairy & livestock and agribusiness 2.8   1.1%  4.0   1.1%  3.4   1.3% 
Municipal lease finance receivables -   0.2%  0.1   0.2%  0.3   0.6% 
SFR mortgage 0.3   0.1%  0.4   0.1%  0.2   0.1% 
Consumer and other loans 1.0   1.3%  1.8   2.1%  1.2   1.4% 
                      
Total $69.3   0.9%  $93.7   1.1%  $94.0   1.1% 
                      



CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
             
Quarterly Common Stock Price
             
   2021   2020   2019 
Quarter End High Low High Low High Low
March 31, $25.00  $19.15  $22.01  $14.92  $23.18  $19.94 
June 30, $22.98  $20.50  $22.22  $15.97  $22.22  $20.40 
September 30,     $19.87  $15.57  $22.23  $20.00 
December 31,     $21.34  $16.26  $22.18  $19.83 
             
Quarterly Consolidated Statements of Earnings
             
    Q2 Q1 Q4 Q3 Q2
     2021   2021   2020   2020   2020 
Interest income          
Loans and leases, including fees $91,726  $91,795  $95,733  $94,200  $95,352 
Investment securities and other  15,302   13,729   12,911   12,426   12,606 
Total interest income  107,028   105,524   108,644   106,626   107,958 
Interest expense          
Deposits  1,425   1,812   2,525   2,958   2,995 
Other borrowings  215   244   266   343   394 
Total interest expense  1,640   2,056   2,791   3,301   3,389 
Net interest income before (recapture of) provision for credit losses   105,388   103,468   105,853   103,325   104,569 
(Recapture of) provision for credit losses   (2,000)  (19,500)  -   -   11,500 
Net interest income after (recapture of) provision for credit losses   107,388   122,968   105,853   103,325   93,069 
             
Noninterest income  10,836   13,681   12,925   13,153   12,152 
Noninterest expense  46,545   47,163   48,276   49,588   46,398 
Earnings before income taxes  71,679   89,486   70,502   66,890   58,823 
Income taxes  20,500   25,593   20,446   19,398   17,192 
Net earnings $51,179  $63,893  $50,056  $47,492  $41,631 
             
Effective tax rate  28.60%  28.60%  29.00%  29.00%  29.23%
             
Basic earnings per common share $0.38  $0.47  $0.37  $0.35  $0.31 
Diluted earnings per common share $0.38  $0.47  $0.37  $0.35  $0.31 
             
Cash dividends declared per common share $0.18  $0.18  $0.18  $0.18  $0.18 
             
Cash dividends declared $24,497  $24,495  $24,413  $24,419  $24,417 
             



CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)
           
Loan Portfolio by Type
  June 30, March 31, December 31, September 30, June 30,
   2021   2021   2020   2020   2020 
           
Commercial real estate $5,670,696  $5,596,781  $5,501,509  $5,428,223  $5,365,120 
Construction  88,280   96,356   85,145   101,903   125,815 
SBA  291,778   307,727   303,896   304,987   300,156 
SBA - PPP  657,815   897,724   882,986   1,101,142   1,097,150 
Commercial and industrial  749,117   753,708   812,062   817,056   840,738 
Dairy & livestock and agribusiness  257,781   261,088   361,146   252,802   251,821 
Municipal lease finance receivables  44,657   42,349   45,547   38,040   49,876 
SFR mortgage  237,124   255,400   270,511   274,731   286,526 
Consumer and other loans  74,062   81,924   86,006   88,988   85,332 
Gross loans, net of deferred loan fees and discounts  8,071,310   8,293,057   8,348,808   8,407,872   8,402,534 
Allowance for credit losses  (69,342)  (71,805)  (93,692)  (93,869)  (93,983)
Net loans $8,001,968  $8,221,252  $8,255,116  $8,314,003  $8,308,551 
           
           
           
Deposit Composition by Type and Customer Repurchase Agreements
           
  June 30, March 31, December 31, September 30, June 30,
   2021   2021   2020   2020   2020 
           
Noninterest-bearing $8,065,400  $7,577,839  $7,455,387  $6,919,423  $6,901,368 
Investment checking  588,831   567,062   517,976   447,910   472,509 
Savings and money market  3,649,305   3,526,424   3,361,444   3,356,353   3,150,013 
Time deposits  365,521   407,330   401,694   445,148   459,690 
Total deposits  12,669,057   12,078,655   11,736,501   11,168,834   10,983,580 
           
Customer repurchase agreements  578,207   506,346   439,406   483,420   468,156 
Total deposits and customer repurchase agreements $13,247,264  $12,585,001  $12,175,907  $11,652,254  $11,451,736 
           



CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)
           
Nonperforming Assets and Delinquency Trends
  June 30, March 31, December 31, September 30, June 30,
   2021   2021   2020   2020   2020 
Nonperforming loans [1]:          
Commercial real estate $4,439  $7,395  $7,563  $6,481  $2,628 
Construction  -   -   -   -   - 
SBA  1,382   2,412   2,273   1,724   1,598 
Commercial and industrial  1,818   2,967   3,129   1,822   1,222 
Dairy & livestock and agribusiness  118   259   785   849   - 
SFR mortgage  406   424   430   675   1,080 
Consumer and other loans  308   312   167   224   289 
Total $8,471  $13,769  $14,347  $11,775  $6,817 
% of Total loans  0.10%  0.17%  0.17%  0.14%  0.08%
           
Past due 30-89 days:          
Commercial real estate $-  $178  $-  $-  $4 
Construction  -   -   -   -   - 
SBA  -   258   1,965   66   214 
Commercial and industrial  415   952   1,101   3,627   630 
Dairy & livestock and agribusiness  -   -   -   -   882 
SFR mortgage  -   266   -   -   446 
Consumer and other loans  -   21   -   67   413 
Total $415  $1,675  $3,066  $3,760  $2,589 
% of Total loans  0.01%  0.02%  0.04%  0.04%  0.03%
           
OREO:          
Commercial real estate $-  $1,575  $1,575  $1,575  $2,275 
SBA  -   -   -   797   797 
SFR mortgage  -   -   1,817   1,817   1,817 
Total $-  $1,575  $3,392  $4,189  $4,889 
  Total nonperforming, past due, and OREO $8,886  $17,019  $20,805  $19,724  $14,295 
  % of Total loans  0.11%  0.21%  0.25%  0.23%  0.17%
           
           
[1] As of June 30, 2020, nonperforming loans included $25,000 of commercial and industrial loans past due 90 days or
     more and still accruing.
           



CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
         
Regulatory Capital Ratios
         
    CVB Financial Corp. Consolidated
Capital Ratios Minimum Required Plus
Capital Conservation Buffer
 June 30,
2021
 December 31,
2020
 June 30,
2020
         
Tier 1 leverage capital ratio 4.0% 9.4% 9.9% 10.6%
Common equity Tier 1 capital ratio 7.0% 15.1% 14.8% 14.5%
Tier 1 risk-based capital ratio 8.5% 15.1% 15.1% 14.8%
Total risk-based capital ratio 10.5% 15.9% 16.2% 16.0%
         
Tangible common equity ratio   9.2% 9.6% 9.6%
         



Tangible Book Value Reconciliations (Non-GAAP)
        
The tangible book value per share is a Non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance. The following is a reconciliation of tangible book value to the Company stockholders' equity computed in accordance with GAAP, as well as a calculation of tangible book value per share as of June 30, 2021, December 31, 2020 and June 30, 2020.
        
   June 30,
2021
 December 31,
2020
 June 30,
2020
   (Dollars in thousands, except per share amounts)
        
 Stockholders' equity $2,055,074  $2,007,990  $1,959,098 
 Less: Goodwill  (663,707)  (663,707)  (663,707)
 Less: Intangible assets  (29,300)  (33,634)  (38,096)
 Tangible book value $1,362,067  $1,310,649  $1,257,295 
 Common shares issued and outstanding  135,927,287   135,600,501   135,516,316 
 Tangible book value per share $10.02  $9.67  $9.28 
        



Return on Average Tangible Common Equity Reconciliations (Non-GAAP)
            
The return on average tangible common equity is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance. The following is a reconciliation of net income, adjusted for tax-effected amortization of intangibles, to net income computed in accordance with GAAP; a reconciliation of average tangible common equity to the Company's average stockholders' equity computed in accordance with GAAP; as well as a calculation of return on average tangible common equity.
            
   Three Months Ended Six Months Ended
   June 30, March 31, June 30, June 30, June 30,
    2021   2021   2020   2021   2020 
    
   (Dollars in thousands)
            
 Net Income $51,179  $63,893  $41,631  $115,072  $79,611 
 Add: Amortization of intangible assets  2,167   2,167   2,445   4,334   4,890 
 Less: Tax effect of amortization of intangible assets [1]  (641)  (641)  (723)  (1,281)  (1,446)
 Tangible net income $52,705  $65,419  $43,353  $118,125  $83,055 
            
 Average stockholders' equity $2,048,956  $2,032,676  $1,966,600  $2,040,861  $1,986,532 
 Less: Average goodwill  (663,707)  (663,707)  (663,707)  (663,707)  (663,707)
 Less: Average intangible assets  (30,348)  (32,590)  (39,287)  (31,463)  (40,510)
 Average tangible common equity $1,354,901  $1,336,379  $1,263,606  $1,345,691  $1,282,315 
            
 Return on average equity, annualized  10.02%  12.75%  8.51%  11.37%  8.06%
 Return on average tangible common equity, annualized  15.60%  19.85%  13.80%  17.70%  13.03%
            
            
 [1] Tax effected at respective statutory rates.

Contact:
David A. Brager 
Chief Executive Officer
(909) 980-4030