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

Ontario, California, UNITED STATES


  • Net Earnings of $49.8 million for the third quarter of 2021, or $0.37 per share
  • 6% Quarter-over-Quarter Annualized Core Loan Growth
  • Year-to-Date Efficiency Ratio of 40.9%
  • Return on Average Tangible Common Equity of 14.6% for the third quarter of 2021

ONTARIO, Calif., Oct. 20, 2021 (GLOBE NEWSWIRE) -- CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (the “Company”), announced earnings for the quarter ended September 30, 2021.

CVB Financial Corp. reported net income of $49.8 million for the quarter ended September 30, 2021, compared with $51.2 million for the quarter ended June 30, 2021 and $47.5 million for the quarter ended September 30, 2020. Diluted earnings per share were $0.37 for the third quarter, compared to $0.38 for the prior quarter and $0.35 for the same period last year. The third quarter of 2021 included $4.0 million in recapture of provision for credit losses, primarily due to a modest improvement in our economic forecast.   In comparison, the second quarter of 2021 included $2.0 million in recapture of provision. The Company’s allowance for credit losses at September 30, 2021 of $65.4 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, “Citizens Business Bank remains well positioned to take advantage of the improving economic environment in California. Our pre-tax, pre-provision earnings remain strong despite the impact of the low interest rate environment and prevailing lower line utilization rates due to strong customer liquidity. We believe that our net interest margins will increase in a rising rate environment, and we are seeing the steady improvement in our loan pipelines from previous quarters translate into solid loan growth in the third quarter. We are also excited about our announced acquisition of Suncrest Bank and the opportunities it provides to expand into the Sacramento market as well as to solidify our significant position in the Central Valley.”

Net income of $49.8 million for the third quarter of 2021 produced an annualized return on average equity (“ROAE”) of 9.49% and an annualized return on average tangible common equity (“ROATCE”) of 14.62%. ROAE and ROATCE for the second quarter of 2021 were 10.02% and 15.60%, respectively, and 9.51% and 15.20%, respectively, for the third quarter of 2020. Annualized return on average assets (“ROAA”) was 1.26% for the third quarter, compared to 1.35% for the second quarter and 1.38% for the third quarter of 2020. The efficiency ratio for the third quarter of 2021 was 42.27%, compared to 40.05% for the second quarter of 2021 and 42.57% for the third quarter of 2020.       

Net income totaled $164.8 million for the nine months ended September 30, 2021. This represented a $37.7 million, or 29.68%, increase from the prior year, as we recaptured $25.5 million of provision for credit losses for the first nine months of 2021 compared to a $23.5 million provision for credit losses for the same period of 2020. Diluted earnings per share were $1.21 for the nine months ended September 30, 2021, compared to $0.93 for the same period of 2020. Net income for the nine months ended September 30, 2021 produced an annualized ROAE of 10.73%, an ROATCE of 16.64% and an ROAA of 1.46%. This compares to ROAE of 8.55%, an ROATCE of 13.76% and an ROAA of 1.35% for the first nine months of 2020. The efficiency ratio for the nine months ended September 30, 2021 was 40.85%, compared to 41.66% for the first nine months of 2020.

Net interest income before recapture of provision for credit losses was $103.3 million for the third quarter of 2021. This represented a $2.1 million, or 1.98%, decrease from the second quarter of 2021, and was flat compared to the third quarter of 2020. Total interest income was $104.5 million for the third quarter of 2021, which was $2.5 million, or 2.32%, lower than the second quarter of 2021 and $2.1 million, or 1.95%, lower than the same period last year. Total interest income and fees on loans for the third quarter of 2021 of $88.4 million decreased $3.3 million from the second quarter of 2021, and decreased $5.8 million, or 6.17%, from the third quarter of 2020.   Total investment income of $15.0 million increased $461,000 from the second quarter of 2021 and increased $3.2 million, or 26.89%, from the third quarter of 2020. Interest expense decreased $392,000 from the prior quarter and decreased $2.1 million, or 62.19%, compared to the third quarter of 2020.

During the third quarter of 2021 we recaptured $4.0 million of provision for credit losses, compared to a recapture of $2.0 million of provision for credit losses in the second quarter of 2021. The recapture during the quarter reflects continued improvement in our economic forecast of certain macroeconomic variables, as the negative economic impact from the pandemic continues to wane. A $25.5 million recapture of provision for credit losses was recorded for the nine months ended September 30, 2021. In comparison, $23.5 million in provision for credit losses was recorded for the nine months ended September 30, 2020 due to the severe economic forecast at that time as a result of the pandemic.

Noninterest income was $10.5 million for the third quarter of 2021, compared with $10.8 million for the second quarter of 2021 and $13.2 million for the third quarter of 2020. Trust and investment services income declined by $486,000, compared to the second quarter of 2021 and grew by $276,000 year-over-year. Service charges on deposit accounts increased $344,000 quarter-over-quarter and increased $543,000 from the third quarter of 2020. Swap fee income increased $167,000 quarter-over-quarter and decreased $1.4 million from the third quarter of 2020. The third quarter of 2020 included a $1.7 million net gain on the sale of one of our bank owned buildings.

Noninterest expense for the third quarter of 2021 was $48.1 million, compared to $46.5 million for the second quarter of 2021 and $49.6 million for the third quarter of 2020. The $1.5 million quarter-over-quarter increase was primarily due to a $1.0 million recapture of provision for unfunded loan commitments recorded in the second quarter of 2021 and $809,000 in acquisition expense in the third quarter related to the announced merger with Suncrest Bank. A $905,000 increase in salaries and employee benefit costs resulted from a one-time reduction in benefit expense of approximately $1 million during the second quarter of 2021. Marketing and promotion expense decreased $900,000 due to the timing of donations made during the second quarter of 2021. The year-over-year decrease of $1.5 million included a $1.3 million decrease in salaries and employee benefits, including $1.1 million in additional bonus expense for “Thank You Awards” paid to all Bank employees during the third quarter of 2020, and a $700,000 write-down of one OREO property in the third quarter of 2020. Compared to the third quarter of 2020, merger related expenses increased $809,000 and regulatory assessment expense increased $227,000 in the third 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. As a percentage of average assets, noninterest expense was 1.22% for the third quarter of 2021, compared to 1.23% for the second quarter of 2021 and 1.44% for the third quarter of 2020.

Net Interest Margin and Earning Assets

Our net interest margin (tax equivalent) was 2.89% for the third quarter of 2021, compared to 3.06% for the second quarter of 2021 and 3.34% for the second quarter of 2020. Total average earning asset yields (tax equivalent) were 2.92% for the third quarter of 2021, compared to 3.11% for the second quarter of 2021 and 3.45% for the third quarter of 2020. The decrease in earning asset yield from the prior quarter was due to a combination of a 3 basis point decline in loan yields and a change in asset mix with loan balances declining to 54.97% of earning assets on average for the third quarter of 2021, compared to 59.22% for the second quarter of 2021. Interest and fee income from Paycheck Protection Program (“PPP”) loans was approximately $7.9 million in the third quarter of 2021, compared to $8.1 million in the second quarter of 2021. The decrease in earning asset yield compared to the third quarter of 2020 was primarily due a change in asset mix with loan balances declining to 54.97% of earning assets on average for the third quarter of 2021, compared to 67.08% for the third quarter of 2020. 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 23 basis points compared to the third quarter of 2020. The significant decline in interest rates also impacted the tax equivalent yield on investments, which decreased by 45 basis points from the third quarter of 2020, but remained essentially the same as the prior quarter. Earning asset yields were further impacted by a change in asset mix resulting from an $876.6 million increase in average balances at the Federal Reserve compared to the third quarter of 2020. Average earning assets increased from the second quarter of 2021 by $471.1 million to $14.40 billion for the third quarter of 2021. Of the increase in earning assets, $186.8 million represented an increase in average investment securities while average loans declined by $333.0 million. Average investments increased by $1.51 billion, while balances at the Federal Reserve grew on average by $876.6 million compared to the third quarter of 2020. Average earning assets increased by $1.91 billion from the third quarter of 2020. Average loans declined by $465.8 million from the third quarter of 2020, which included a $336.7 million decrease in PPP loans on average.

Total cost of funds declined to 0.04% for the third quarter of 2021 from 0.05% for the second quarter of 2021. The Company redeemed $27.6 million in subordinated debt on June 15, 2021, which had an average interest rate of 1.57% during the previous quarter. Noninterest bearing deposits grew on average by $292.8 million, from the second quarter of 2021, while interest-bearing deposits and customer repurchase agreements grew on average by $124.3 million. The cost of interest-bearing deposits and customer repurchase agreements declined from 0.12% for the prior quarter to 0.09% for the third quarter of 2021. In comparison to the third quarter of 2020, our overall cost of funds decreased by 7 basis points, as average noninterest bearing deposits grew by $1.26 billion, compared to average growth of $652.6 million in interest-bearing deposits. The cost of interest-bearing deposits and customer repurchase agreements declined by 19 basis points when compared to the third quarter of 2020. On average, noninterest bearing deposits were 62.94% of total deposits during the current quarter.

Income Taxes

Our effective tax rate for the quarter and nine months ended September 30, 2021 was 28.60%, compared with 29.00% for the quarter and nine months ended September 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 $16.20 billion at September 30, 2021. This represented an increase of $662.3 million, or 4.26%, from total assets of $15.54 billion at June 30, 2021.   Interest-earning assets of $14.93 billion at September 30, 2021 increased $669.7 million, or 4.70%, when compared with $14.26 billion at June 30, 2021. The increase in interest-earning assets was primarily due to a $667.1 million increase in investment securities and a $223.4 million increase in interest-earning balances due from the Federal Reserve, partially offset by a $221.8 million decrease in total loans which included a decrease in PPP loans of approximately $327 million for the current quarter.

The Company’s total assets of $16.20 billion at September 30, 2021, represented an increase of $1.78 billion, or 12.36%, from total assets of $14.42 billion at December 31, 2020. Interest-earning assets of $14.93 billion at September 30, 2021 increased $1.71 billion, or 12.92%, when compared with $13.22 billion at December 31, 2020. The increase in interest-earning assets was primarily due to a $1.66 billion increase in investment securities and a $565.9 million increase in interest-earning balances due from the Federal Reserve, partially offset by a $499.3 million decrease in total loans which included a decrease in PPP loans of $552 million for the nine months ended September 30, 2021.

Total assets of $16.20 billion at September 30, 2021 increased by $2.38 billion, or 17.24%, from total assets of $13.82 billion at September 30, 2020. Interest-earning assets increased $2.34 billion, or 18.58%, when compared with $12.59 billion at September 30, 2020.   The increase in interest-earning assets includes a $1.85 billion increase in investment securities and a $1.06 billion increase in interest-earning balances due from the Federal Reserve, partially offset by a $558.4 million decrease in total loans which included PPP loan decrease of $770 million.   Total loans include the remaining outstanding balance in PPP loans, totaling $331 million as of September 30, 2021, compared to $657.8 million as of June 30, 2021 and $1.1 billion as of September 30, 2020. Excluding PPP loans, total loans grew by $105.1 million from June 30, 2021 and grew by $211.8 million compared to September 30, 2020.

Investment Securities

Total investment securities were $4.64 billion at September 30, 2021, an increase of $667.1 million, or 16.81%, from $3.97 billion at June 30, 2021, an increase of $1.66 billion from December 31, 2020, and an increase of $1.85 billion, or 66.56%, from $2.78 billion at September 30, 2020. In the third quarter of 2021, we purchased $892.5 million of securities with an average investment yield of approximately 1.70%, compared to $317.1 million of securities with an average investment yield of approximately 1.69% in the second quarter of 2021 and $1.23 billion of securities purchased in the first quarter of 2021, with an average expected yield of approximately 1.57%.

At September 30, 2021, investment securities held-to-maturity (“HTM”) totaled $1.71 billion, a $1.13 billion, or 195.69%, increase from December 31, 2020 and a $1.13 billion increase, or 196.17%, from September 30, 2020. In the third quarter of 2021, we purchased approximately $705.1 million of HTM securities. Approximately $546 million of HTM securities were purchased in the first quarter of 2021.

At September 30, 2021 investment securities available-for-sale (“AFS”) totaled $2.93 billion, inclusive of a pre-tax net unrealized gain of $8.8 million. AFS securities increased by $526.1 million, or 21.93%, from December 31, 2020, and increased by $719.4 million, or 32.62%, from September 30, 2020. During the third quarter of 2021, we purchased approximately $187.4 million of AFS securities, compared to approximately $317.1 million of AFS securities purchased in the second quarter of 2021 and 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 $3.81 billion at September 30, 2021, compared to $2.66 billion at December 31, 2020 and $2.48 billion at September 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 $242.8 million as of September 30, 2021, or approximately 5% 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 21.18%, Texas at 10.39%, Massachusetts at 10.30%, Ohio at 8.16%, and Connecticut at 5.74%.

Loans

Total loans and leases, at amortized cost, of $7.85 billion at September 30, 2021 decreased by $221.8 million, or 2.75%, from $8.07 billion at June, 2021. The $221.8 million decrease in total loans included decreases of $326.9 million in PPP loans, $10.9 million in construction loans, and $5.8 million in SFR mortgage loans, partially offset by increases of $64.0 million in commercial real estate loans, $21.8 million in dairy & livestock and agribusiness loans, $20.9 million in commercial and industrial loans, and $15.8 million in Small Business Administration (“SBA”) loans. After adjusting for PPP loans, our loans grew by $105.1 million or at an annualized rate of approximately 6% from the end of the second quarter of 2021.

Total loans and leases, at amortized cost, of $7.85 billion at September 30, 2021 decreased by $499.3 million, or 5.98%, from December 31, 2020. The $499.3 million decrease in total loans included decreases of $552.0 million in PPP loans, $81.6 million in dairy & livestock and agribusiness loans due to seasonal pay downs, $42.1 million in commercial and industrial loans, $39.2 million in SFR mortgage loans, $7.7 million in construction loans, and $13.5 million in consumer and other loans, partially offset by an increase of $233.2 million in commercial real estate loans and $3.6 million in SBA loans. After adjusting for seasonality and PPP loans, our loans grew by $134.3 million or at an annualized rate of approximately 3% from the end of the fourth quarter of 2020.

Total loans and leases, at amortized cost, decreased by $558.4 million, or 6.64%, from September 30, 2020. The decrease in total loans included a $770.2 million decline in PPP loans. After excluding the impact of PPP loans, the $211.8 million or approximately 3% increase in core loans included increases of $306.5 million in commercial real estate loans, $26.8 million in dairy & livestock and agribusiness loans and $9.3 million in municipal lease financings.   Partially offsetting these increases were declines of $47.1 million in commercial and industrial loans, $43.4 million in SFR mortgage loans, $24.5 million in construction loans, and $15.8 million in consumer and other loans.

Asset Quality

During the third quarter of 2021, we experienced credit charge-offs of $11,000 and total recoveries of $33,000, resulting in net recoveries of $22,000. The allowance for credit losses (“ACL”) totaled $65.4 million at September 30, 2021, compared to $93.7 million at December 31, 2020 and $93.9 million at September 30, 2020. The allowance for credit losses for 2021 was decreased by $25.5 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 $2.8 million in year-to-date net charge-offs. At September 30, 2021, ACL as a percentage of total loans and leases outstanding was 0.83%. This compares to 1.12% and 1.12% at December 31, 2020 and September 30, 2020, respectively. When PPP loans are excluded, ACL as a percentage of total adjusted loans and leases outstanding was 0.87% at September 30, 2021, compared to 1.25% at December 31, 2020 and 1.28% at September 30, 2020.

Nonperforming loans, defined as nonaccrual loans and loans 90 days past due accruing interest plus nonperforming TDR loans, were $8.4 million at September 30, 2021, or 0.11% of total loans. This compares to nonperforming loans of $14.3 million, or 0.17% of total loans, at December 31, 2020 and $11.8 million, or 0.14% of total loans, at September 30, 2020. The $8.4 million in nonperforming loans at September 30, 2021 are summarized as follows: $4.1 million in commercial real estate loans, $2.0 million in commercial and industrial loans, $1.5 million in SBA loans, $399,000 in SFR mortgage loans, $305,000 in consumer and other loans, and $118,000 in dairy & livestock and agribusiness loans.

As of September 30, 2021, we had no OREO properties, compared to $3.4 million at December 31, 2020 and $4.2 million at September 30, 2020.

At September 30, 2021, we had loans delinquent 30 to 89 days of $1.1 million. This compares to $3.1 million at December 31, 2020 and $3.8 million at September 30, 2020. As a percentage of total loans, delinquencies, excluding nonaccruals, were 0.01% at September 30, 2021, 0.04% at December 31, 2020, and 0.04% at September 30, 2020.

At September 30, 2021, we had $8.0 million in performing TDR loans, compared to $2.2 million in performing TDR loans at December 31, 2020 and $2.2 million in performing TDR loans at September 30, 2020.

Nonperforming assets, defined as nonaccrual loans and loans 90 days past due accruing interest plus OREO, totaled $8.4 million at September 30, 2021, $17.7 million at December 31, 2020, and $16.0 million at September 30, 2020. As a percentage of total assets, nonperforming assets were 0.05% at September 30, 2021, 0.12% at December 31, 2020, and 0.12% at September 30, 2020.

Classified loans are loans that are graded “substandard” or worse. At September 30, 2021, classified loans totaled $49.8 million, compared to $78.8 million at December 31, 2020 and $72.7 million at September 30, 2020.

Deposits & Customer Repurchase Agreements

Deposits of $12.93 billion and customer repurchase agreements of $659.6 million totaled $13.59 billion at September 30, 2021. This represented an increase of $342.5 million, or 2.59%, when compared with $13.25 billion at June 30, 2021. Total deposits and customer repurchase agreements increased $1.41 billion, or 11.61% when compared to $12.18 billion at December 31, 2020 and increased $1.94 billion, or 16.63%, when compared with $11.65 billion at September 30, 2020.

Noninterest-bearing deposits were $8.31 billion at September 30, 2021, an increase of $245.3 million, or 3.04%, when compared to June 30, 2021, an increase of $855.3 million, or 11.47%, when compared to $7.46 billion at December 31, 2020, and an increase of $1.39 billion, or 20.11%, when compared to $6.92 billion at September 30, 2020. At September 30, 2021, noninterest-bearing deposits were 64.27% of total deposits, compared to 63.66% at June 30, 2021, 63.52% at December 31, 2020 and 61.95% at September 30, 2020.

Capital

The Company’s total equity was $2.06 billion at September 30, 2021. This represented an increase of $55.9 million, or 2.79%, from total equity of $2.01 billion at December 31, 2020. The increase was primarily due to net earnings of $164.8 million, partially offset by a $32.3 million decrease in other comprehensive income from the tax effected impact of the decrease in market value of available-for-sale securities and $73.4 million in cash dividends. During the third quarter, we repurchased 390,336 shares of common stock for $7.4 million, or an average repurchase price of $18.97. Our tangible book value per share at September 30, 2021 was $10.13.

Our capital ratios under the revised capital framework referred to as Basel III remain well-above regulatory standards. As of September 30, 2021, the Company’s Tier 1 leverage capital ratio was 9.2%, common equity Tier 1 ratio was 14.9%, Tier 1 risk-based capital ratio was 14.9%, and total risk-based capital ratio was 15.7%.

CitizensTrust

As of September 30, 2021 CitizensTrust had approximately $3.28 billion in assets under management and administration, including $2.39 billion in assets under management. Revenues were $2.7 million for the third quarter of 2021 and $8.5 million for the nine months ended September 30, 2021, compared to $2.4 million and $7.3 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, October 21, 2021 to discuss the Company’s third quarter 2021 financial results.

To listen to the conference call, please dial (833) 301-1161, participant passcode 9938279. A taped replay will be made available approximately one hour after the conclusion of the call and will remain available through October 28, 2021 at 6:00 a.m. PDT/9:00 a.m. EDT. To access the replay, please dial (855) 859-2056, participant passcode 9938279.

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, including our recently announced agreement to acquire Suncrest Bank ; 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 regulation and securities trading and hedging, bank operations, compliance, fair lending rules and regulations, the Community Reinvestment Act, employment, executive compensation, insurance, cybersecurity, vendor management, customer and employee privacy, 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 any 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, 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.

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

             

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
       
       
  September 30,
2021
 December 31,
2020
 September 30,
2020
Assets      
Cash and due from banks $159,563  $122,305  $145,455 
Interest-earning balances due from Federal Reserve  2,401,800   1,835,855   1,339,498 
Total cash and cash equivalents  2,561,363   1,958,160   1,484,953 
Interest-earning balances due from depository institutions  27,260   43,563   44,367 
Investment securities available-for-sale  2,925,060   2,398,923   2,205,646 
Investment securities held-to-maturity  1,710,938   578,626   577,694 
Total investment securities  4,635,998   2,977,549   2,783,340 
Investment in stock of Federal Home Loan Bank (FHLB)  17,688   17,688   17,688 
Loans and lease finance receivables  7,849,520   8,348,808   8,407,872 
Allowance for credit losses  (65,364)  (93,692)  (93,869)
  Net loans and lease finance receivables  7,784,156   8,255,116   8,314,003 
Premises and equipment, net  49,812   51,144   51,477 
Bank owned life insurance (BOLI)  251,781   226,818   228,132 
Intangibles  27,286   33,634   35,804 
Goodwill  663,707   663,707   663,707 
Other assets  182,547   191,935   195,240 
      Total assets $16,201,598  $14,419,314  $13,818,711 
Liabilities and Stockholders' Equity      
Liabilities:      
Deposits:      
Noninterest-bearing $8,310,709  $7,455,387  $6,919,423 
Investment checking  594,347   517,976   447,910 
Savings and money market  3,680,721   3,361,444   3,356,353 
Time deposits  344,439   401,694   445,148 
  Total deposits  12,930,216   11,736,501   11,168,834 
Customer repurchase agreements  659,579   439,406   483,420 
Other borrowings  -   5,000   10,000 
Junior subordinated debentures  -   25,774   25,774 
Payable for securities purchased  421,751   60,113   - 
Other liabilities  126,132   144,530   148,726 
    Total liabilities  14,137,678   12,411,324   11,836,754 
Stockholders' Equity      
Stockholders' equity  2,060,842   1,972,641   1,945,864 
Accumulated other comprehensive income, net of tax  3,078   35,349   36,093 
    Total stockholders' equity  2,063,920   2,007,990   1,981,957 
      Total liabilities and stockholders' equity $16,201,598  $14,419,314  $13,818,711 
       


CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
          
          
  Three Months Ended
 Nine Months Ended
  September 30,
2021
 June 30,
2021
 September 30,
2020
 September 30,
2021
 September 30,
2020
Assets            
Cash and due from banks $156,575  $157,401  $156,132  $154,861  $154,543 
Interest-earning balances due from Federal Reserve  2,328,745   1,711,878   1,452,167   1,890,160   916,849 
Total cash and cash equivalents  2,485,320   1,869,279   1,608,299   2,045,021   1,071,392 
Interest-earning balances due from depository institutions  27,376   26,907   41,982   32,074   30,362 
Investment securities available-for-sale  2,942,255   2,862,552   2,006,829   2,787,617   1,774,620 
Investment securities held-to-maturity  1,169,892   1,062,842   594,751   1,005,613   626,594 
Total investment securities  4,112,147   3,925,394   2,601,580   3,793,230   2,401,214 
Investment in stock of FHLB  17,688   17,688   17,688   17,688   17,688 
Loans and lease finance receivables  7,916,443   8,249,481   8,382,257   8,144,105   7,972,208 
Allowance for credit losses  (69,309)  (71,756)  (93,972)  (78,094)  (82,529)
Net loans and lease finance receivables  7,847,134   8,177,725   8,288,285   8,066,011   7,889,679 
Premises and equipment, net  50,105   50,052   52,052   50,348   52,817 
Bank owned life insurance (BOLI)  251,099   239,132   227,333   239,137   226,209 
Intangibles  28,240   30,348   37,133   30,377   39,376 
Goodwill  663,707   663,707   663,707   663,707   663,707 
Other assets  190,445   189,912   189,117   190,034   183,118 
     Total assets $15,673,261  $15,190,144  $13,727,176  $15,127,627  $12,575,562 
Liabilities and Stockholders' Equity         
Liabilities:         
Deposits:         
Noninterest-bearing $7,991,462  $7,698,640  $6,731,711  $7,646,283  $6,063,469 
Interest-bearing  4,704,976   4,633,103   4,184,688   4,591,779   3,844,874 
 Total deposits  12,696,438   12,331,743   10,916,399   12,238,062   9,908,343 
Customer repurchase agreements  636,393   583,996   504,039   593,543   475,103 
Other borrowings  4   3,022   10,020   2,658   4,833 
Junior subordinated debentures  -   20,959   25,774   15,483   25,774 
Payable for securities purchased  151,866   98,771   157,057   113,685   53,630 
Other liabilities  108,322   102,697   128,045   110,064   121,579 
   Total liabilities  13,593,023   13,141,188   11,741,334   13,073,495   10,589,262 
Stockholders' Equity         
Stockholders' equity  2,067,072   2,041,906   1,948,351   2,035,787   1,956,676 
Accumulated other comprehensive income, net of tax  13,166   7,050   37,491   18,345   29,624 
   Total stockholders' equity  2,080,238   2,048,956   1,985,842   2,054,132   1,986,300 
      Total liabilities and stockholders' equity $15,673,261  $15,190,144  $13,727,176  $15,127,627  $12,575,562 
          


CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
          
          
  Three Months Ended Nine Months Ended
  September 30,
2021
 June 30,
2021
 September 30,
2020
 September 30,
2021
 September 30,
2020
Interest income:            
Loans and leases, including fees $88,390  $91,726  $94,200  $271,911  $281,669 
Investment securities:         
Investment securities available-for-sale  9,813   9,410   8,447   28,382   26,945 
Investment securities held-to-maturity  5,188   5,130   3,375   14,258   11,033 
Total investment income  15,001   14,540   11,822   42,640   37,978 
Dividends from FHLB stock  258   283   215   758   761 
Interest-earning deposits with other institutions  898   479   389   1,790   1,285 
Total interest income  104,547   107,028   106,626   317,099   321,693 
Interest expense:         
Deposits  1,113   1,425   2,958   4,350   10,077 
Borrowings and junior subordinated debentures  135   215   343   594   1,416 
Total interest expense  1,248   1,640   3,301   4,944   11,493 
Net interest income before (recapture of) provision for credit losses  103,299   105,388   103,325   312,155   310,200 
(Recapture of) provision for credit losses  (4,000)  (2,000)  -   (25,500)  23,500 
Net interest income after (recapture of) provision for credit losses  107,299   107,388   103,325   337,655   286,700 
Noninterest income:         
Service charges on deposit accounts  4,513   4,169   3,970   12,667   12,555 
Trust and investment services  2,681   3,167   2,405   8,459   7,302 
Gain on OREO, net  -   48   13   477   23 
Gain on sale of building, net  -   -   1,680   -   1,680 
Other  3,289   3,452   5,085   13,397   15,385 
Total noninterest income  10,483   10,836   13,153   35,000   36,945 
Noninterest expense:         
Salaries and employee benefits  29,741   28,836   31,034   88,283   90,617 
Occupancy and equipment  5,122   4,949   5,275   14,934   15,143 
Professional services  1,626   2,248   2,019   6,042   6,643 
Computer software expense  3,020   2,657   2,837   8,521   8,407 
Marketing and promotion  857   1,799   728   3,381   3,538 
Amortization of intangible assets  2,014   2,167   2,292   6,348   7,182 
(Recapture of) provision for unfunded loan commitments  -   (1,000)  -   (1,000)  - 
Acquisition related expenses  809   -   -   809   - 
Other  4,910   4,889   5,403   14,489   13,097 
Total noninterest expense  48,099   46,545   49,588   141,807   144,627 
Earnings before income taxes  69,683   71,679   66,890   230,848   179,018 
Income taxes  19,930   20,500   19,398   66,023   51,915 
Net earnings $49,753  $51,179  $47,492  $164,825  $127,103 
          
Basic earnings per common share $0.37  $0.38  $0.35  $1.21  $0.93 
Diluted earnings per common share $0.37  $0.38  $0.35  $1.21  $0.93 
Cash dividends declared per common share $0.18  $0.18  $0.18  $0.54  $0.54 
          


CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
          
  Three Months Ended Nine Months Ended
  September 30,
2021
 June 30,
2021
 September 30,
2020
 September 30,
2021
 September 30,
2020
Interest income - tax equivalent (TE) $104,812  $107,300  $106,950  $317,909  $322,732 
Interest expense  1,248   1,640   3,301   4,944   11,493 
Net interest income - (TE) $103,564  $105,660  $103,649  $312,965  $311,239 
             
Return on average assets, annualized  1.26%  1.35%  1.38%  1.46%  1.35%
Return on average equity, annualized  9.49%  10.02%  9.51%  10.73%  8.55%
Efficiency ratio [1]  42.27%  40.05%  42.57%  40.85%  41.66%
Noninterest expense to average assets, annualized  1.22%  1.23%  1.44%  1.25%  1.54%
Yield on average loans  4.43%  4.46%  4.47%  4.46%  4.72%
Yield on average earning assets (TE)  2.92%  3.11%  3.45%  3.09%  3.82%
Cost of deposits  0.03%  0.05%  0.11%  0.05%  0.14%
Cost of deposits and customer repurchase agreements  0.04%  0.05%  0.11%  0.05%  0.14%
Cost of funds  0.04%  0.05%  0.11%  0.05%  0.15%
Net interest margin (TE)  2.89%  3.06%  3.34%  3.04%  3.68%
[1] Noninterest expense divided by net interest income before provision for credit losses plus noninterest income.   
          
Weighted average shares outstanding         
Basic  135,200,249   135,285,867   135,016,723   135,225,605   136,368,742 
Diluted  135,383,614   135,507,364   135,183,918   135,441,390   136,536,372 
Dividends declared $24,421  $24,497  $24,419  $73,413  $73,252 
Dividend payout ratio [2]  49.08%  47.87%  51.42%  44.54%  57.63%
[2] Dividends declared on common stock divided by net earnings.   
          
Number of shares outstanding - (end of period)  135,516,404   135,927,287   135,509,143    
Book value per share $15.23  $15.12  $14.63    
Tangible book value per share $10.13  $10.02  $9.46    
          
  September 30, December 31, September 30,   
   2021   2020   2020    
Nonperforming assets:         
Nonaccrual loans $8,446  $14,347  $11,775    
Loans past due 90 days or more and still accruing interest  -   -   -    
Troubled debt restructured loans (nonperforming)  -   -   -    
Other real estate owned (OREO), net  -   3,392   4,189    
Total nonperforming assets $8,446  $17,739  $15,964    
Troubled debt restructured performing loans $7,975  $2,159  $2,217    
          
Percentage of nonperforming assets to total loans outstanding and OREO  0.11%  0.21%  0.19%   
Percentage of nonperforming assets to total assets  0.05%  0.12%  0.12%   
Allowance for credit losses to nonperforming assets  773.90%  528.17%  588.00%   
          
  Three Months Ended Nine Months Ended
  September 30,
2021
 June 30,
2021
 September 30,
2020
 September 30,
2021
 September 30,
2020
Allowance for credit losses:            
Beginning balance $69,342  $71,805  $93,983  $93,692  $68,660 
Impact of adopting ASU 2016-13  -   -   -   -   1,840 
Total charge-offs  (11)  (510)  (231)  (2,996)  (484)
Total recoveries on loans previously charged-off  33   47   117   168   353 
Net charge-offs  22   (463)  (114)  (2,828)  (131)
(Recapture of) provision for credit losses  (4,000)  (2,000)  -   (25,500)  23,500 
Allowance for credit losses at end of period $65,364  $69,342  $93,869  $65,364  $93,869 
          
Net charge-offs to average loans  0.000%  -0.006%  -0.001%  -0.035%  -0.002%
          


CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in millions)
                   
Allowance for Credit Losses by Loan Type                 
                   
  September 30, 2021 December 31, 2020 September 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 $52.3   0.9%  $75.4   1.4%  $74.5   1.4% 
Construction  1.1   1.4%   1.9   2.3%   1.9   1.9% 
SBA  2.9   1.0%   3.0   1.0%   3.5   1.1% 
SBA - PPP  -   -
   -   -   -   - 
Commercial and industrial  4.9   0.6%   7.1   0.9%   8.6   1.1% 
Dairy & livestock and agribusiness  3.2   1.1%   4.0   1.1%   3.7   1.5% 
Municipal lease finance receivables  0.1   0.2%   0.1   0.2%   0.2   0.4% 
SFR mortgage  0.2   0.1%   0.4   0.1%   0.2   0.1% 
Consumer and other loans  0.7   1.0%   1.8   2.1%   1.3   1.4% 
                   
Total $65.4   0.8%  $93.7   1.1%  $93.9   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, $20.86  $18.72  $19.87  $15.57  $22.23  $20.00 
December 31,     $21.34  $16.26  $22.18  $19.83 
             
Quarterly Consolidated Statements of Earnings
             
    Q3 Q2 Q1 Q4 Q3
     2021   2021   2021   2020   2020 
Interest income            
Loans and leases, including fees   $88,390  $91,726  $91,795  $95,733  $94,200 
Investment securities and other    16,157   15,302   13,729   12,911   12,426 
Total interest income    104,547   107,028   105,524   108,644   106,626 
Interest expense            
Deposits    1,113   1,425   1,812   2,525   2,958 
Other borrowings    135   215   244   266   343 
Total interest expense    1,248   1,640   2,056   2,791   3,301 
Net interest income before (recapture of) provision for credit losses    103,299   105,388   103,468   105,853   103,325 
(Recapture of) provision for credit losses  (4,000)  (2,000)  (19,500)  -   - 
Net interest income after (recapture of) provision for credit losses    107,299   107,388   122,968   105,853   103,325 
             
Noninterest income    10,483   10,836   13,681   12,925   13,153 
Noninterest expense    48,099   46,545   47,163   48,276   49,588 
Earnings before income taxes    69,683   71,679   89,486   70,502   66,890 
Income taxes    19,930   20,500   25,593   20,446   19,398 
Net earnings   $49,753  $51,179  $63,893  $50,056  $47,492 
             
Effective tax rate    28.60%  28.60%  28.60%  29.00%  29.00%
             
Basic earnings per common share  $0.37  $0.38  $0.47  $0.37  $0.35 
Diluted earnings per common share $0.37  $0.38  $0.47  $0.37  $0.35 
             
Cash dividends declared per common share $0.18  $0.18  $0.18  $0.18  $0.18 
             
Cash dividends declared   $24,421  $24,497  $24,495  $24,413  $24,419 
             


CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)
           
Loan Portfolio by Type
  September 30, June 30, March 31, December 31, September 30,
   2021   2021   2021   2020   2020 
           
Commercial real estate $5,734,699  $5,670,696  $5,596,781  $5,501,509  $5,428,223 
Construction  77,398   88,280   96,356   85,145   101,903 
SBA  307,533   291,778   307,727   303,896   304,987 
SBA - PPP  330,960   657,815   897,724   882,986   1,101,142 
Commercial and industrial  769,977   749,117   753,708   812,062   817,056 
Dairy & livestock and agribusiness  279,584   257,781   261,088   361,146   252,802 
Municipal lease finance receivables  47,305   44,657   42,349   45,547   38,040 
SFR mortgage  231,323   237,124   255,400   270,511   274,731 
Consumer and other loans  70,741   74,062   81,924   86,006   88,988 
Gross loans, net of deferred loan fees and discounts  7,849,520   8,071,310   8,293,057   8,348,808   8,407,872 
Allowance for credit losses  (65,364)  (69,342)  (71,805)  (93,692)  (93,869)
Net loans $7,784,156  $8,001,968  $8,221,252  $8,255,116  $8,314,003 
           
           
           
Deposit Composition by Type and Customer Repurchase Agreements
           
  September 30, June 30, March 31, December 31, September 30,
   2021   2021   2021   2020   2020 
           
Noninterest-bearing $8,310,709  $8,065,400  $7,577,839  $7,455,387  $6,919,423 
Investment checking  594,347   588,831   567,062   517,976   447,910 
Savings and money market  3,680,721   3,649,305   3,526,424   3,361,444   3,356,353 
Time deposits  344,439   365,521   407,330   401,694   445,148 
Total deposits  12,930,216   12,669,057   12,078,655   11,736,501   11,168,834 
           
Customer repurchase agreements  659,579   578,207   506,346   439,406   483,420 
Total deposits and customer repurchase agreements $13,589,795  $13,247,264  $12,585,001  $12,175,907  $11,652,254 
           


CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)
           
Nonperforming Assets and Delinquency Trends
  September 30, June 30, March 31, December 31, September 30,
   2021   2021   2021   2020   2020 
Nonperforming loans:          
Commercial real estate $4,073  $4,439  $7,395  $7,563  $6,481 
Construction  -   -   -   -   - 
SBA  1,513   1,382   2,412   2,273   1,724 
Commercial and industrial  2,038   1,818   2,967   3,129   1,822 
Dairy & livestock and agribusiness  118   118   259   785   849 
SFR mortgage  399   406   424   430   675 
Consumer and other loans  305   308   312   167   224 
Total $8,446  $8,471  $13,769  $14,347  $11,775 
% of Total loans  0.11%  0.10%  0.17%  0.17%  0.14%
           
Past due 30-89 days:          
Commercial real estate $-  $-  $178  $-  $- 
Construction  -   -   -   -   - 
SBA  -   -   258   1,965   66 
Commercial and industrial  122   415   952   1,101   3,627 
Dairy & livestock and agribusiness  1,000   -   -   -   - 
SFR mortgage  -   -   266   -   - 
Consumer and other loans  -   -   21   -   67 
Total $1,122  $415  $1,675  $3,066  $3,760 
% of Total loans  0.01%  0.01%  0.02%  0.04%  0.04%
           
OREO:          
Commercial real estate $-  $-  $1,575  $1,575  $1,575 
SBA  -   -   -   -   797 
SFR mortgage  -   -   -   1,817   1,817 
Total $-  $-  $1,575  $3,392  $4,189 
  Total nonperforming, past due, and OREO $9,568  $8,886  $17,019  $20,805  $19,724 
  % of Total loans  0.12%  0.11%  0.21%  0.25%  0.23%
           


CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
         
Regulatory Capital Ratios
         
         
         
    CVB Financial Corp. Consolidated
Capital Ratios Minimum Required Plus
Capital Conservation Buffer
 September 30,
2021
 December 31,
2020
 September 30,
2020
         
Tier 1 leverage capital ratio 4.0% 9.2% 9.9% 9.9%
Common equity Tier 1 capital ratio 7.0% 14.9% 14.8% 14.6%
Tier 1 risk-based capital ratio 8.5% 14.9% 15.1% 14.9%
Total risk-based capital ratio 10.5% 15.7% 16.2% 16.1%
         
Tangible common equity ratio   8.9% 9.6% 9.8%
         


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 September 30, 2021, December 31, 2020 and September 30, 2020.
        
   September 30,
2021
 December 31,
2020
 September 30,
2020
   (Dollars in thousands, except per share amounts)
        
 Stockholders' equity $2,063,920  $2,007,990  $1,981,957 
 Less: Goodwill  (663,707)  (663,707)  (663,707)
 Less: Intangible assets  (27,286)  (33,634)  (35,804)
 Tangible book value $1,372,927  $1,310,649  $1,282,446 
 Common shares issued and outstanding  135,516,404   135,600,501   135,509,143 
 Tangible book value per share $10.13  $9.67  $9.46 
        


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 Nine Months Ended
   September 30, June 30, September 30, September 30, September 30,
    2021   2021   2020   2021   2020 
   (Dollars in thousands)
            
 Net Income $49,753  $51,179  $47,492  $164,825  $127,103 
 Add: Amortization of intangible assets  2,014   2,167   2,292   6,348   7,182 
 Less: Tax effect of amortization of intangible assets [1]  (595)  (641)  (678)  (1,877)  (2,123)
 Tangible net income $51,172  $52,705  $49,106  $169,296  $132,162 
            
 Average stockholders' equity $2,080,238  $2,048,956  $1,985,842  $2,054,132  $1,986,300 
 Less: Average goodwill  (663,707)  (663,707)  (663,707)  (663,707)  (663,707)
 Less: Average intangible assets  (28,240)  (30,348)  (37,133)  (30,377)  (39,376)
 Average tangible common equity $1,388,291  $1,354,901  $1,285,002  $1,360,048  $1,283,217 
            
 Return on average equity, annualized  9.49%  10.02%  9.51%  10.73%  8.55%
 Return on average tangible common equity, annualized  14.62%  15.60%  15.20%  16.64%  13.76%
            
            
 [1] Tax effected at respective statutory rates.