-
CVB Financial Corp. Reports Strong Earnings for the Second Quarter 2022
Источник: Nasdaq GlobeNewswire / 20 июл 2022 15:35:06 America/Chicago
- Net Earnings of $59.1 million, or $0.42 per share for Second Quarter
- Return on Average Tangible Common Equity of 18.67% for the Second Quarter
- Net Interest Margin expands to 3.16%
- Quarterly annualized core loan growth of 7%
ONTARIO, Calif., July 20, 2022 (GLOBE NEWSWIRE) -- CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (the “Company”), announced earnings for the quarter ended June 30, 2022.
CVB Financial Corp. reported net income of $59.1 million for the quarter ended June 30, 2022, compared with $45.6 million for the first quarter of 2022 and $51.2 million for the second quarter of 2021. Diluted earnings per share were $0.42 for the second quarter, compared to $0.31 for the prior quarter and $0.38 for the same period last year. The second quarter of 2022 included $3.6 million in provision for credit losses, compared to $2.5 million in provision for the first quarter and a provision recapture of $2.0 million in the second quarter of 2021. Net income of $59.1 million for the second quarter of 2022 produced an annualized return on average equity (“ROAE”) of 11.33%, an annualized return on average tangible common equity (“ROATCE”) of 18.67%, and an annualized return on average assets (“ROAA”) of 1.39%. Our net interest margin, tax equivalent (“NIM”), was 3.16% for the second quarter of 2022, while our efficiency ratio was 37.24%.
David Brager, President and Chief Executive Officer of Citizens Business Bank, commented, “We produced approximately $86 million in pretax pre-provision income during the second quarter, which is a 30% increase from the first quarter. The combination of strong loan growth, expansion of our net interest margin, and our continuing efforts to closely manage expenses in the face of inflationary pressures resulted in a record level of quarterly pretax pre-provision income. This growth supported a 6% increase in our quarterly dividend, which represented a dividend payout ratio of 45%. We continue to focus on executing on our core strategies and supporting our customers through these unpredictable times and I would like to thank our associates, customers, and shareholders for their commitment and support.”
INCOME STATEMENT HIGHLIGHTS
Three Months Ended Six Months Ended June 30,
2022March 31,
2022June 30,
2021June 30,
2022June 30,
2021(Dollars in thousands, except per share amounts) Net interest income $ 121,940 $ 112,840 $ 105,388 $ 234,780 $ 208,856 (Provision for) recapture of credit losses (3,600 ) (2,500 ) 2,000 (6,100 ) 21,500 Noninterest income 14,670 11,264 10,836 25,934 24,517 Noninterest expense (50,871 ) (58,238 ) (46,545 ) (109,109 ) (93,708 ) Income taxes (23,081 ) (17,806 ) (20,500 ) (40,887 ) (46,093 ) Net earnings $ 59,058 $ 45,560 $ 51,179 $ 104,618 $ 115,072 Earnings per common share: Basic $ 0.42 $ 0.31 $ 0.38 $ 0.74 $ 0.85 Diluted $ 0.42 $ 0.31 $ 0.38 $ 0.74 $ 0.85 NIM 3.16 % 2.90 % 3.06 % 3.03 % 3.12 % ROAA 1.39 % 1.06 % 1.35 % 1.23 % 1.56 % ROAE 11.33 % 8.24 % 10.02 % 9.74 % 11.37 % ROATCE 18.67 % 13.08 % 15.60 % 15.73 % 17.70 % Efficiency ratio 37.24 % 46.93 % 40.05 % 41.85 % 40.15 % Noninterest expense to average assets, annualized 1.20 % 1.36 % 1.23 % 1.28 % 1.27 % Net Interest Income
Net interest income was $121.9 million for the second quarter of 2022. This represented a $9.1 million, or 8.06%, increase from the first quarter of 2022, and a $16.6 million, or 15.71%, increase from the second quarter of 2021. The quarter-over-quarter growth in net interest income was primarily due to the expansion of the net interest margin from 2.90% in the first quarter of 2022 to 3.16% for the second quarter of 2022. Total interest income was $123.3 million for the second quarter of 2022, which was $9.2 million, or 8.03%, higher than the first quarter of 2022 and $16.2 million, or 15.17%, higher than the same period last year. The increase in interest income from the first quarter of 2022 to the second quarter was primarily the result of a 27 basis point expansion in earning asset yield. In comparison to the second quarter of 2021, interest income in the most recent quarter grew based on a combination of $1.6 billion of growth in average earnings assets and expanding earning asset yields of 9 basis points. Year-over-year earning asset growth resulted from both the acquisition of Suncrest Bank (“Suncrest”) on January 7, 2022, in addition to core loan and deposit growth over the last year. Interest expense increased $62,000 or 4.92%, from the prior quarter, due to a 1 basis point increase in cost of funds. Although average interest-bearing deposits grew by approximately $616.2 million, interest expense decreased $318,000, or 19.39%, compared to the second quarter of 2021. The year-over-year decrease in interest expense resulted from lower cost of funds, which declined to 4 basis points for the second quarter of 2022 from 5 basis point for the second quarter of 2021.Net Interest Margin
Our tax equivalent net interest margin was 3.16% for the second quarter of 2022, compared to 2.90% for the first quarter of 2022 and 3.06% for the second quarter of 2021. Higher interest rates and a change in the mix of our earning assets resulted in the higher net interest margin. The 26 basis point increase in our net interest margin compared to the first quarter of 2022, was primarily due to a 27 basis point increase in our earning asset yield. The increase in the earning asset yield was due to a 23 basis point increase in security yields for the recent quarter and a quarter-over-quarter change in the composition of average earning assets, with investments growing from 36.19% to 39.23% of earnings assets, while funds held at the Federal Reserve declined from 10.4% to 5.1%. Throughout the first half of 2022, we deployed some of the excess liquidity on the balance sheet at the end of 2021 into additional investment securities by purchasing approximately $1.5 billion in securities. The increase in earning asset yield was also impacted by loan growth, which grew on average over the first quarter of 2022 by $134 million and an increase in loan yields from 4.27% to 4.31%. Interest and fee income from Paycheck Protection Program (“PPP”) loans was approximately $1.4 million in the second quarter of 2022, compared to $2.9 million in the first quarter of 2022. After excluding discount accretion and the impact from PPP loans (“core loan yield”), our core loan yields increased from 4.11% in the first quarter of 2022 to 4.20% in the most recent quarter. The 10 basis point increase in net interest margin, compared to the second quarter of 2021 was primarily the result of a 9 basis point increase in earning asset yield. The increase in earning asset yield was impacted by a change in asset mix and higher yields on investment securities. Excess liquidity held at the Federal Reserve was invested into higher yielding investments, which increased to 39.23% of earning assets on average for the second quarter of 2022 from 28.18% for the second quarter of 2021. The increase associated with investments was partially offset by loan balances declining to 55.49% of earning assets on average for the second quarter of 2022, compared to 59.22% for the second quarter of 2021, as well as a 15 basis point decline in loan yields. Total cost of funds of 0.04% for the second quarter of 2022 increased from 0.03% for the first quarter of 2022 and decreased from 0.05% for the year ago quarter. The 1 basis point increase in the cost of funds from the first quarter of 2022 was the net result of an increase in the cost of interest-bearing deposits from 0.08% to 0.09% and a $202 million quarter over quarter increase in average noninterest-bearing deposits. Compared to the second quarter of 2021, the 1 basis points decrease in cost of funds was the result of a 3 basis point decline in the cost of interest bearing deposits, as well as noninterest-bearing deposits growing on average by $1.22 billion. On average, noninterest-bearing deposits were 62.96% of total deposits during the most recent quarter.Earning Asset and Deposit Growth
On average, earning assets declined by $401.5 million and grew by $1.63 billion, compared to the first quarter of 2022 and the second quarter of 2021, respectively. The $401.5 million quarter-over-quarter decline in earning assets resulted from a $856.1 million decrease in interest-earning funds held at the Federal Reserve, that was partially offset by average investment securities increasing by $327.6 million, and average loans increasing by $134.1 million. Compared to the second quarter of 2021, average investments increased by $2.18 billion, while the average amount of funds held at the Federal Reserve declined by more than $900 million. Average loans increased by $385.1 million from the second quarter of 2021, which included approximately $775 million in loans acquired from Suncrest on January 7, 2022 and a $742.3 million decrease in average PPP loans. Noninterest-bearing deposits grew on average by $202.3 million, or 2.32%, from the first quarter of 2022, while interest-bearing deposits and customer repurchase agreements declined on average by $313.6 million during the second quarter of 2022, compared to the first quarter of 2022. Compared to the second quarter of 2021, total deposits and customer repurchase agreements grew on average by $1.84 billion, or 14.23%.Three Months Ended SELECTED FINANCIAL HIGHLIGHTS June 30, 2022 March 31, 2022 June 30, 2021 Yield on average investment securities (TE) 1.93% 1.70% 1.55% Yield on average loans 4.31% 4.27% 4.46% Core Loan Yield [1] 4.20% 4.11% 4.33% Yield on average earning assets (TE) 3.20% 2.93% 3.11% Cost of funds 0.04% 0.03% 0.05% Net interest margin (TE) 3.16% 2.90% 3.06% Average Earning Asset Mix Avg % of Total Avg % of Total Avg % of Total Total investment securities $ 6,104,037 39.23 % $ 5,776,440 36.19 % $ 3,925,394 28.18 % Interest-earning deposits with other institutions 804,147 5.17 % 1,666,473 10.44 % 1,738,785 12.48 % Loans 8,634,575 55.49 % 8,500,436 53.25 % 8,249,481 59.22 % Total interest-earning assets 15,560,771 15,962,282 13,931,348 [1] Represents yield on average loans excluding the impact of discount accretion and PPP loans. Provision for Credit Losses
The second quarter of 2022 included $3.6 million in provision for credit losses, compared to a $2.5 million in provision for credit losses in the first quarter of 2022. A $2.0 million recapture of provision for credit losses was recorded in the second quarter of 2021. The $3.6 million provision for credit losses in the most recent quarter was the result of core loan growth during the quarter and an increase in projected loss rates from a deteriorating economic forecast over the next 18 months that assumes very modest growth in GDP, lower commercial real estate values and an increase in unemployment.Noninterest Income
Noninterest income was $14.7 million for the second quarter of 2022, compared with $11.3 million for the first quarter of 2022 and $10.8 million for the second quarter of 2021. Service charges on deposits increased by $274,000, or 5.42% over the first quarter of 2022 and grew by $1.2 million, or 27.92% in comparison to the second quarter of 2021. The second quarter of 2022 included $2.7 million in net gains on the sale of properties associated with banking centers, including $2.4 million from the sale of one property. Second quarter income from Bank Owned Life Insurance (“BOLI”) decreased by $746,000 from the first quarter of 2022 and $637,000 from the second quarter of 2021. The first quarter of 2022 included $508,000 in death benefits that exceeded the asset value of certain BOLI policies.Noninterest Expense
Noninterest expense for the second quarter of 2022 was $50.9 million, compared to $58.2 million for the first quarter of 2022 and $46.5 million for the second quarter of 2021. The $7.4 million quarter-over-quarter decrease included a $5.3 million decrease in acquisition expense and a $1.1 million decrease in salaries and employee benefits. The $4.3 million increase year-over-year was primarily the result of expense growth associated with the acquisition of Suncrest Bank, including an increase of $2.7 million in salaries and employee benefits and an increase in occupancy and equipment of $618,000. Occupancy and equipment expense growth was primarily due to the addition of seven banking centers resulting from the acquisition of Suncrest at the beginning of 2022, two of which were consolidated at the end of the second quarter. Acquisition expense related to the merger of Suncrest was $375,000 for the second quarter of 2022, compared to $5.6 million for the first quarter of 2022. As a percentage of average assets, noninterest expense was 1.20% for the second quarter of 2022, compared to 1.36% for the first quarter of 2022 and 1.23% for the second quarter of 2021. The efficiency ratio for the second quarter of 2022 was 37.24%, compared to 46.93% for the first quarter of 2022 and 40.05% for the second quarter of 2021.Income Taxes
Our effective tax rate for the quarter ended June 30, 2022 and year-to-date was 28.10%, compared with 28.60% for the second quarter of 2021. Our estimated annual effective tax rate can vary depending upon the level of tax-advantaged income as well as available tax credits.BALANCE SHEET HIGHLIGHTS
Assets
The Company reported total assets of $16.76 billion at June 30, 2022. This represented a decrease of $779.1 million, or 4.44%, from total assets of $17.54 billion at March 31, 2022. Interest-earning assets of $15.28 billion at June 30, 2022 decreased by $829.1 million, or 5.15%, when compared with $16.1 billion at March 31, 2022. The decrease in interest-earning assets was primarily due a $958.6 million decrease in interest-earning balances due from the Federal Reserve, partially offset by a $100.5 million increase in total loans and a $28.4 million increase in investment securities.Total assets increased by $876.3 million, or 5.52%, from total assets of $15.88 billion at December 31, 2021. Interest-earning assets of $15.28 billion at June 30, 2022 increased by $595.7 million, or 4.06%, when compared with $14.68 billion at December 31, 2021. The increase in interest-earning assets was primarily due to a $928.6 million increase in investment securities and an $804.5 million increase in total loans, partially offset by a $1.12 billion decrease in interest-earning balances due from the Federal Reserve.
Total assets at June 30, 2022 increased by $1.22 billion, or 7.86%, from total assets of $15.54 billion at June 30, 2021. Interest-earning assets increased by $1.02 billion, or 7.13%, when compared with $14.26 billion at June 30, 2021. The increase in interest-earning assets included a $2.07 billion increase in investment securities, and a $620.9 million increase in total loans, partially offset by a $1.65 billion decrease in interest-earning balances due from the Federal Reserve. The increase in total loans included a $590.9 million decrease in PPP loans with a remaining outstanding balance totaling $67 million as of June 30, 2022. Excluding PPP loans, total loans increased by $1.21 billion from June 30, 2021.
On January 7, 2022, we completed the acquisition of Suncrest with approximately $1.4 billion in total assets, acquired at fair value, and 7 banking centers. The increase in total assets at June 30, 2022 included $765.9 million of acquired net loans, $131 million of investment securities, and $9 million in bank-owned life insurance. The acquisition resulted in $102.1 million of goodwill and $3.9 million in core deposit premium. Net cash proceeds were used to fund the $39.6 million in cash paid to the former shareholders of Suncrest as part of the merger consideration.
Investment Securities
Total investment securities were $6.04 billion at June 30, 2022, an increase of $928.6 million, or 18.17%, from $5.11 billion at December 31, 2021 and an increase of $2.07 billion, or 52.14%, from $3.97 billion at June 31, 2021.At June 30, 2022, investment securities held-to-maturity (“HTM”) totaled $2.41 billion, an increase of $486.3 million, or 25.25%, from December 31, 2021 and a $1.38 billion increase, or 132.64%, from June 30, 2021.
At June 30, 2022, investment securities available-for-sale (“AFS”) totaled $3.63 billion, inclusive of a pre-tax net unrealized loss of $346.3 million. AFS securities increased by $442.2 million, or 13.89%, from $3.18 billion at December 31, 2021 and increased by $694.1 million, or 23.67%, from June 30, 2021.
Combined, the AFS and HTM investments in mortgage backed securities (“MBS”) and collateralized mortgage obligations (“CMO”) totaled $5.09 billion or approximately 84% of the total investment securities at June 30, 2022. 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. In addition, we had $562.3 million of Government Agency securities (HTM) at June 30, 2022, that represent approximately 9% of the total investment securities.
Our combined AFS and HTM municipal securities totaled $388.2 million as of June 30, 2022, or approximately 6% of our total investment portfolio. These securities are located in 35 states. Our largest concentrations of holdings by state, as a percentage of total municipal bonds, are located in Minnesota at 12.57%, California at 11.73%, Texas at 10.52%, Ohio at 8.39%, Washington at 7.47%, and Massachusetts at 7.03%.
Loans
Total loans and leases, at amortized cost, of $8.69 billion at June 30, 2022 increased by $100.5 million, or 1.17%, from March 31, 2022. After adjusting for PPP loans, our core loans grew by $154.8 million, or approximately 7% annualized from the end of the first quarter and approximately 8% from December 31, 2021. The $154.8 million core loan growth included $172.8 million in commercial real estate loans, $16.8 million in commercial and industrial loans, $5.1 million in SFR mortgage loans, and $7.4 million in consumer and other loans, partially offset by decreases of $19.2 million in dairy & livestock and agribusiness loans, $14.1 million in SBA loans and $12.9 million in construction loans.Total loans and leases increased by $804.5 million, or 10.2%, from December 31, 2021. The increase in total loans included $774.5 million of loans acquired from Suncrest in the first quarter of 2022. After adjusting for acquired loans, seasonality and forgiveness of PPP loans, our core loans grew by $319.8 million, or approximately 8% annualized from December 31, 2021. The $319.8 million core loan growth included $273.1 million in commercial real estate loans, $44.1 million in commercial and industrial loans, $19.3 million in SFR mortgage loans, and $9.8 million in consumer and other loans, partially offset by decreases of $18.4 million in construction loans and $11.6 million in SBA loans. The majority of the $130.6 million decrease in dairy & livestock loans was seasonal.
Total loans and leases increased by $620.9 million, or 7.69%, from June 30, 2021. Total loans, excluding PPP loans, grew by $1.21 billion, or 16.35%, from the end of the second quarter of 2021. After adjusting for acquired loans and forgiveness of PPP loans, our core loans grew by $476.9 million, or 6.43%, from the end of the second quarter of 2021. Commercial real estate loans grew by $392.1 million, commercial and industrial loans increased $108.0 million, SFR mortgage loans increased by $22.8 million, municipal lease financings increased by $2.5 million, and consumer and other loans increased by $10.4 million. This core loan growth was partially offset by decreases of $44.4 million in construction loans and $14.8 million in SBA loans.
Asset Quality
During the second quarter of 2022, we experienced credit charge-offs of $8,000 and total recoveries of $511,000, resulting in net recoveries of $503,000. The allowance for credit losses (“ACL”) totaled $80.2 million at June 30, 2022, compared to $76.1 million at March 31, 2022 and $69.3 million at June 30, 2021. The ACL was increased by $15.2 million in 2022, including $8.6 million for the acquired Suncrest PCD loans and $6.1 million in provision for credit losses. At June 30, 2022, ACL as a percentage of total loans and leases outstanding was 0.92%. This compares to 0.89% and 0.86% at March 31, 2022 and June 30, 2021, respectively. When PPP loans are excluded, the ACL as a percentage of total loans and leases outstanding was 0.93% at June 30, 2022, compared to 0.90% at March 31, 2022 and 0.94% at June 30, 2021.Nonperforming loans, defined as nonaccrual loans and loans 90 days past due accruing interest plus nonperforming TDR loans, and nonperforming assets, defined as nonaccrual loans and loans 90 days past due accruing interest plus OREO, are highlighted below.
Nonperforming Assets and Delinquency Trends June 30, March 31, June 30, 2022 2022 2021 Nonperforming loans Commercial real estate $ 6,843 $ 7,055 $ 4,439 SBA 1,075 1,575 1,382 SBA - PPP - 2 - Commercial and industrial 1,655 1,771 1,818 Dairy & livestock and agribusiness 3,354 2,655 118 SFR mortgage - 167 406 Consumer and other loans 37 40 308 Total $ 12,964 $ 13,265 $ 8,471 % of Total loans 0.15 % 0.15 % 0.10 % OREO Commercial real estate $ - $ - $ - SFR mortgage - - - Total $ - $ - $ - Total nonperforming assets $ 12,964 $ 13,265 $ 8,471 % of Nonperforming assets to total assets 0.08 % 0.08 % 0.05 % Past due 30-89 days Commercial real estate $ 559 $ 565 $ - SBA - 549 - Commercial and industrial - 6 415 Dairy & livestock and agribusiness - 1,099 - SFR mortgage - 403 - Consumer and other loans - - - Total $ 559 $ 2,622 $ 415 % of Total loans 0.01 % 0.03 % 0.01 % Classified Loans $ 76,170 $ 64,108 $ 49,044 Of the $12.96 million in nonperforming loans, $4.4 million were acquired from Suncrest. Classified loans are loans that are graded “substandard” or worse. Classified loans increased $12.1 million quarter-over-quarter. Total classified loans at June 30, 2022 included $17.8 million of classified loans acquired from Suncrest. Excluding the $17.8 million of acquired classified Suncrest loans, classified loans increased $11.8 million quarter-over-quarter and included a $15.3 million increase in classified commercial real estate, partially offset by a $2.4 million decrease in classified commercial and industrial loans.
Deposits & Customer Repurchase Agreements
Deposits of $14.07 billion and customer repurchase agreements of $502.8 million totaled $14.58 billion at June 30, 2022. This represented a decrease of $511.6 million, or 3.39%, when compared with $15.09 billion at March 31, 2022. Total deposits and customer repurchase agreements increased $956.2 million, or 7.02% when compared to $13.62 billion at December 31, 2021, or 10.02% when compared with $13.25 billion at June 30, 2021.Noninterest-bearing deposits were $8.88 billion at June 30, 2022, a decrease of $226.1 million, or 2.48%, when compared to $9.11 billion at March 31, 2022. Noninterest-bearing deposits increased $777.2 million, or 9.59% when compared to $8.10 billion at December 31, 2021 and increased $815.8 million, or 10.12%, when compared to $8.07 billion at June 30, 2021. At June 30, 2022, noninterest-bearing deposits were 63.11% of total deposits, compared to 62.86% at March 31, 2022, 62.45% at December 31, 2021, and 63.66% at June 30, 2021.
Capital
The Company’s total equity was $1.98 billion at June 30, 2022. This represented an overall decrease of $99.3 million from total equity of $2.08 billion at December 31, 2021. Increases to equity included $197.1 million for issuance of 8.6 million shares to acquire Suncrest and $104.6 million in net earnings. Decreases included $52.2 million in cash dividends and a $242.9 million decrease in other comprehensive income from the tax effected impact of the decline in market value of available-for-sale securities. During 2022, we executed on a $70 million accelerated stock repurchase program and retired 2,993,551 shares of common stock at an average price of $23.38. We also repurchased, under our 10b5-1 stock repurchase plan, 1,682,537 shares of common stock, at an average repurchase price of $23.37, totaling $39.3 million. Our tangible book value per share at June 30, 2022 was $8.51.Our capital ratios under the revised capital framework referred to as Basel III remain well-above regulatory standards.
CVB Financial Corp. Consolidated Capital Ratios Minimum Required Plus
Capital Conservation BufferJune 30,
2022December 31,
2021June 30,
2021Tier 1 leverage capital ratio 4.0% 8.8% 9.2% 9.4% Common equity Tier 1 capital ratio 7.0% 13.4% 14.9% 15.1% Tier 1 risk-based capital ratio 8.5% 13.4% 14.9% 15.1% Total risk-based capital ratio 10.5% 14.2% 15.6% 15.9% Tangible common equity ratio 7.5% 9.2% 9.2% CitizensTrust
As of June 30, 2022 CitizensTrust had approximately $3.14 billion in assets under management and administration, including $2.32 billion in assets under management. Revenues were $3.0 million for the second quarter of 2022 and $5.8 million for the six months ended June 30, 2022, compared to $3.2 million and $5.8 million, respectively, for the same periods of 2021. 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 $16 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 with more than 60 banking centers and 4 trust office locations serving 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 21, 2022 to discuss the Company’s second quarter 2022 financial results. The conference call can be accessed live by registering at: https://register.vevent.com/register/BI86ab2690eb0846e98502d9bb56ccfb8bThe 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 statements set forth herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 that could cause our actual results or performance to differ materially from those projected. These forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies and goals, and statements about the Company’s outlook regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, stockholder value creation, tax rates, and the impact of acquisitions we have made or may make. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company, and there can be no assurance that future developments affecting the Company will be the same as those anticipated by management. The Company cautions readers that a number of important factors in addition to those set forth below could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements.Given the ongoing and dynamic nature of the COVID-19 pandemic, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, workforce, operating platform and prospects remain uncertain. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to the COVID-19 pandemic, could affect us in substantial and unpredictable ways, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance.
General risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct business; the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; the effect of acquisitions we have made or may make, including, without limitation, the failure to obtain the necessary regulatory approvals, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; the effectiveness of our risk management framework and quantitative models; changes in the levels of our nonperforming assets and charge-offs; the transition away from USD LIBOR and uncertainties regarding potential alternative reference rates, including SOFR; the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the CECL model, which has changed how we estimate credit losses and may further increase the required level of our allowance for credit losses in future periods; possible credit related impairments or declines in the fair value of securities held by us; possible impairment charges to goodwill; changes in consumer spending, borrowing, and savings habits; the effects of our lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; periodic fluctuations in commercial or residential real estate prices or values; our ability to attract deposits and other sources of liquidity; the possibility that we may reduce or discontinue the payments of dividends on our common stock; changes in the financial performance and/or condition of our borrowers; changes in the competitive environment among financial and bank holding companies and other financial service providers; technological changes in banking and financial services; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism, and/or military conflicts, which could impact business and economic conditions in the United States and abroad; catastrophic events or natural disasters, including earthquakes, drought, climate change or extreme weather events that may affect our assets, communications or computer services, customers, employees or third party vendors; public health crises and pandemics, such as the COVID-19 pandemic, and their effects on the economic and business environments in which we operate, including on our credit quality and business operations, as well as the impact on general economic and financial market conditions; cybersecurity and fraud risks and threats to the Company, our vendors and our customers, and the costs of defending against them, including the costs of compliance with potential legislation to bolster cybersecurity at a state, national, or global level; our ability to recruit and retain key executives, board members and other employees, and changes in employment laws and regulations; unanticipated regulatory or legal proceedings; and our ability to manage the risks involved in the foregoing. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's 2021 Annual Report on Form 10-K filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).
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.
Non-GAAP Financial Measures — Certain financial information provided in this presentation has not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and is presented on a non-GAAP basis. Investors and analysts should refer to the reconciliations included in this presentation and should consider the Company’s non-GAAP measures in addition to, not as a substitute for or as superior to, measures prepared in accordance with GAAP. These measures may or may not be comparable to similarly titled measures used by other companies.
Contact:
David A. Brager
President and Chief Executive Officer
(909) 980-4030
CVB FINANCIAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands) June 30, 2022 December 31, 2021 June 30, 2021 Assets Cash and due from banks $ 173,266 $ 90,012 $ 153,475 Interest-earning balances due from Federal Reserve 523,443 1,642,536 2,178,390 Total cash and cash equivalents 696,709 1,732,548 2,331,865 Interest-earning balances due from depository institutions 7,382 25,999 26,258 Investment securities available-for-sale 3,626,157 3,183,923 2,932,021 Investment securities held-to-maturity 2,412,308 1,925,970 1,036,924 Total investment securities 6,038,465 5,109,893 3,968,945 Investment in stock of Federal Home Loan Bank (FHLB) 18,012 17,688 17,688 Loans and lease finance receivables 8,692,229 7,887,713 8,071,310 Allowance for credit losses (80,222 ) (65,019 ) (69,342 ) Net loans and lease finance receivables 8,612,007 7,822,694 8,001,968 Premises and equipment, net 47,100 49,096 49,914 Bank owned life insurance (BOLI) 259,958 251,570 250,305 Intangibles 25,312 25,394 29,300 Goodwill 765,822 663,707 663,707 Other assets 289,226 185,108 199,338 Total assets $ 16,759,993 $ 15,883,697 $ 15,539,288 Liabilities and Stockholders' Equity Liabilities: Deposits: Noninterest-bearing $ 8,881,223 $ 8,104,056 $ 8,065,400 Investment checking 695,054 655,333 588,831 Savings and money market 4,145,634 3,889,371 3,649,305 Time deposits 350,308 327,682 365,521 Total deposits 14,072,219 12,976,442 12,669,057 Customer repurchase agreements 502,829 642,388 578,207 Other borrowings - 2,281 - Payable for securities purchased 80,230 50,340 110,430 Other liabilities 122,504 130,743 126,520 Total liabilities 14,777,782 13,802,194 13,484,214 Stockholders' Equity Stockholders' equity 2,229,050 2,085,471 2,041,823 Accumulated other comprehensive (loss) income, net of tax (246,839 ) (3,968 ) 13,251 Total stockholders' equity 1,982,211 2,081,503 2,055,074 Total liabilities and stockholders' equity $ 16,759,993 $ 15,883,697 $ 15,539,288
CVB FINANCIAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited) (Dollars in thousands) Three Months Ended Six Months Ended June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Assets Cash and due from banks $ 178,752 $ 187,061 $ 157,401 $ 182,884 $ 153,990 Interest-earning balances due from Federal Reserve 797,268 1,653,349 1,711,878 1,222,943 1,667,234 Total cash and cash equivalents 976,020 1,840,410 1,869,279 1,405,827 1,821,224 Interest-earning balances due from depository institutions 6,879 13,124 26,907 9,985 34,461 Investment securities available-for-sale 3,736,076 3,546,957 2,862,552 3,642,009 2,709,013 Investment securities held-to-maturity 2,367,961 2,229,483 1,062,842 2,299,134 922,115 Total investment securities 6,104,037 5,776,440 3,925,394 5,941,143 3,631,128 Investment in stock of FHLB 18,012 18,933 17,688 18,470 17,688 Loans and lease finance receivables 8,634,575 8,500,436 8,249,481 8,567,876 8,259,824 Allowance for credit losses (76,492 ) (73,082 ) (71,756 ) (74,796 ) (82,560 ) Net loans and lease finance receivables 8,558,083 8,427,354 8,177,725 8,493,080 8,177,264 Premises and equipment, net 51,607 54,015 50,052 52,804 50,472 Bank owned life insurance (BOLI) 259,500 259,799 239,132 259,649 233,057 Intangibles 26,381 28,190 30,348 27,280 31,463 Goodwill 765,822 759,014 663,707 762,437 663,707 Other assets 240,607 206,671 189,912 223,733 189,824 Total assets $ 17,006,948 $ 17,383,950 $ 15,190,144 $ 17,194,408 $ 14,850,288 Liabilities and Stockholders' Equity Liabilities: Deposits: Noninterest-bearing $ 8,923,043 $ 8,720,728 $ 7,698,640 $ 8,822,444 $ 7,470,832 Interest-bearing 5,249,262 5,464,552 4,633,103 5,356,312 4,534,242 Total deposits 14,172,305 14,185,280 12,331,743 14,178,756 12,005,074 Customer repurchase agreements 581,574 679,931 583,996 630,481 571,764 Other borrowings 39 51 3,022 45 4,007 Junior subordinated debentures - - 20,959 - 23,353 Payable for securities purchased 66,693 165,665 98,771 115,906 94,278 Other liabilities 94,883 109,688 102,697 102,245 110,951 Total liabilities 14,915,494 15,140,615 13,141,188 15,027,433 12,809,427 Stockholders' Equity Stockholders' equity 2,238,788 2,248,871 2,041,906 2,243,801 2,019,884 Accumulated other comprehensive (loss) income, net of tax (147,334 ) (5,536 ) 7,050 (76,826 ) 20,977 Total stockholders' equity 2,091,454 2,243,335 2,048,956 2,166,975 2,040,861 Total liabilities and stockholders' equity $ 17,006,948 $ 17,383,950 $ 15,190,144 $ 17,194,408 $ 14,850,288
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, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Interest income: Loans and leases, including fees $ 92,770 $ 89,461 $ 91,726 $ 182,231 $ 183,521 Investment securities: Investment securities available-for-sale 17,042 12,832 9,410 29,874 18,569 Investment securities held-to-maturity 11,714 10,663 5,130 22,377 9,070 Total investment income 28,756 23,495 14,540 52,251 27,639 Dividends from FHLB stock 273 371 283 644 500 Interest-earning deposits with other institutions 1,463 773 479 2,236 892 Total interest income 123,262 114,100 107,028 237,362 212,552 Interest expense: Deposits 1,201 1,127 1,425 2,328 3,237 Borrowings and junior subordinated debentures 121 133 215 254 459 Total interest expense 1,322 1,260 1,640 2,582 3,696 Net interest income before provision for (recapture of) credit losses 121,940 112,840 105,388 234,780 208,856 Provision for (recapture of) credit losses 3,600 2,500 (2,000 ) 6,100 (21,500 ) Net interest income after provision for (recapture of) credit losses 118,340 110,340 107,388 228,680 230,356 Noninterest income: Service charges on deposit accounts 5,333 5,059 4,169 10,392 8,154 Trust and investment services 2,962 2,822 3,167 5,784 5,778 Gain on OREO, net - - 48 - 477 Other 6,375 3,383 3,452 9,758 10,108 Total noninterest income 14,670 11,264 10,836 25,934 24,517 Noninterest expense: Salaries and employee benefits 31,553 32,656 28,836 64,209 58,542 Occupancy and equipment 5,567 5,571 4,949 11,138 9,812 Professional services 2,305 2,045 2,248 4,350 4,416 Computer software expense 3,103 3,795 2,657 6,898 5,501 Marketing and promotion 1,638 1,458 1,799 3,096 2,524 Amortization of intangible assets 1,998 1,998 2,167 3,996 4,334 (Recapture of) unfunded loan commitments - - (1,000 ) - (1,000 ) Acquisition related expenses 375 5,638 - 6,013 - Other 4,332 5,077 4,889 9,409 9,579 Total noninterest expense 50,871 58,238 46,545 109,109 93,708 Earnings before income taxes 82,139 63,366 71,679 145,505 161,165 Income taxes 23,081 17,806 20,500 40,887 46,093 Net earnings $ 59,058 $ 45,560 $ 51,179 $ 104,618 $ 115,072 Basic earnings per common share $ 0.42 $ 0.31 $ 0.38 $ 0.74 $ 0.85 Diluted earnings per common share $ 0.42 $ 0.31 $ 0.38 $ 0.74 $ 0.85 Cash dividends declared per common share $ 0.19 $ 0.18 $ 0.18 $ 0.37 $ 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, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Interest income - tax equivalent (TE) $ 123,661 $ 114,463 $ 107,300 $ 238,124 $ 213,097 Interest expense 1,322 1,260 1,640 2,582 3,696 Net interest income - (TE) $ 122,339 $ 113,203 $ 105,660 $ 235,542 $ 209,401 Return on average assets, annualized 1.39% 1.06% 1.35% 1.23% 1.56% Return on average equity, annualized 11.33% 8.24% 10.02% 9.74% 11.37% Efficiency ratio [1] 37.24% 46.93% 40.05% 41.85% 40.15% Noninterest expense to average assets, annualized 1.20% 1.36% 1.23% 1.28% 1.27% Yield on average loans 4.31% 4.27% 4.46% 4.29% 4.48% Yield on average earning assets (TE) 3.20% 2.93% 3.11% 3.06% 3.18% Cost of deposits 0.03% 0.03% 0.05% 0.03% 0.05% Cost of deposits and customer repurchase agreements 0.04% 0.03% 0.05% 0.04% 0.06% Cost of funds 0.04% 0.03% 0.05% 0.04% 0.06% Net interest margin (TE) 3.16% 2.90% 3.06% 3.03% 3.12% [1] Noninterest expense divided by net interest income before provision for credit losses plus noninterest income. Weighted average shares outstanding Basic 139,748,311 144,725,296 135,285,867 140,467,038 135,235,138 Diluted 140,053,074 145,018,517 135,507,364 140,730,309 135,470,332 Dividends declared $ 26,719 $ 25,467 $ 24,497 $ 52,186 $ 48,992 Dividend payout ratio [2] 45.24% 55.90% 47.87% 49.88% 42.58% [2] Dividends declared on common stock divided by net earnings. Number of shares outstanding - (end of period) 140,025,579 141,626,059 135,927,287 Book value per share $ 14.16 $ 14.65 $ 15.12 Tangible book value per share $ 8.51 $ 9.05 $ 10.02 June 30, December 31, June 30, 2022 2021 2021 Nonperforming assets: Nonaccrual loans $ 12,964 $ 6,893 $ 8,471 Loans past due 90 days or more and still accruing interest - - - Troubled debt restructured loans (nonperforming) - - - Other real estate owned (OREO), net - - - Total nonperforming assets $ 12,964 $ 6,893 $ 8,471 Troubled debt restructured performing loans $ 5,198 $ 5,293 $ 8,215 Percentage of nonperforming assets to total loans outstanding and OREO 0.15% 0.09% 0.10% Percentage of nonperforming assets to total assets 0.08% 0.04% 0.05% Allowance for credit losses to nonperforming assets 618.81% 943.26% 818.58% Three Months Ended Six Months Ended June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Allowance for credit losses: Beginning balance $ 76,119 $ 65,019 $ 71,805 $ 65,019 $ 93,692 Suncrest FV PCD loans - 8,605 - 8,605 - Total charge-offs (8 ) (16 ) (510 ) (24 ) (2,985 ) Total recoveries on loans previously charged-off 511 11 47 522 135 Net recoveries (charge-offs) 503 (5 ) (463 ) 498 (2,850 ) Provision for (recapture of) credit losses 3,600 2,500 (2,000 ) 6,100 (21,500 ) Allowance for credit losses at end of period $ 80,222 $ 76,119 $ 69,342 $ 80,222 $ 69,342 Net recoveries (charge-offs) to average loans 0.006% 0.000% -0.006% 0.006% -0.035%
CVB FINANCIAL CORP. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in millions) Allowance for Credit Losses by Loan Type June 30, 2022 December 31, 2021 June 30, 2021 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 $ 61.5 0.9% $ 50.9 0.9% $ 55.2 1.0% Construction 1.1 1.8% 0.8 1.2% 1.8 2.1% SBA 2.6 0.9% 2.7 0.9% 2.5 0.9% SBA - PPP - - - - - - Commercial and industrial 7.2 0.8% 6.7 0.8% 5.7 0.8% Dairy & livestock and agribusiness 6.8 2.5% 3.0 0.8% 2.8 1.1% Municipal lease finance receivables 0.2 0.3% 0.1 0.2% - 0.2% SFR mortgage 0.2 0.1% 0.2 0.1% 0.3 0.1% Consumer and other loans 0.6 0.7% 0.6 0.8% 1.0 1.3% Total $ 80.2 0.9% $ 65.0 0.8% $ 69.3 0.9%
CVB FINANCIAL CORP. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) Quarterly Common Stock Price 2022 2021 2020 Quarter End High Low High Low High Low March 31, $ 24.37 $ 21.36 $ 25.00 $ 19.15 $ 22.01 $ 14.92 June 30, $ 25.59 $ 22.37 $ 22.98 $ 20.50 $ 22.22 $ 15.97 September 30, $ 20.86 $ 18.72 $ 19.87 $ 15.57 December 31, $ 21.85 $ 19.00 $ 21.34 $ 16.26 Quarterly Consolidated Statements of Earnings Q2 Q1 Q4 Q3 Q2 2022 2022 2021 2021 2021 Interest income Loans and leases, including fees $ 92,770 $ 89,461 $ 84,683 $ 88,390 $ 91,726 Investment securities and other 30,492 24,639 18,848 16,157 15,302 Total interest income 123,262 114,100 103,531 104,547 107,028 Interest expense Deposits 1,201 1,127 996 1,113 1,425 Other borrowings 121 133 140 135 215 Total interest expense 1,322 1,260 1,136 1,248 1,640 Net interest income before provision for (recapture of) credit losses 121,940 112,840 102,395 103,299 105,388 Provision for (recapture of) credit losses 3,600 2,500 - (4,000 ) (2,000 ) Net interest income after provision for (recapture of) credit losses 118,340 110,340 102,395 107,299 107,388 Noninterest income 14,670 11,264 12,385 10,483 10,836 Noninterest expense 50,871 58,238 47,980 48,099 46,545 Earnings before income taxes 82,139 63,366 66,800 69,683 71,679 Income taxes 23,081 17,806 19,104 19,930 20,500 Net earnings $ 59,058 $ 45,560 $ 47,696 $ 49,753 $ 51,179 Effective tax rate 28.10% 28.10% 28.60% 28.60% 28.60% Basic earnings per common share $ 0.42 $ 0.31 $ 0.35 $ 0.37 $ 0.38 Diluted earnings per common share $ 0.42 $ 0.31 $ 0.35 $ 0.37 $ 0.38 Cash dividends declared per common share $ 0.19 $ 0.18 $ 0.18 $ 0.18 $ 0.18 Cash dividends declared $ 26,719 $ 25,467 $ 24,401 $ 24,421 $ 24,497
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, 2022 2022 2021 2021 2021 Commercial real estate $ 6,643,628 $ 6,470,841 $ 5,789,730 $ 5,734,699 $ 5,670,696 Construction 60,584 73,478 62,264 77,398 88,280 SBA 297,109 311,238 288,600 307,533 291,778 SBA - PPP 66,955 121,189 186,585 330,960 657,815 Commercial and industrial 941,595 924,780 813,063 769,977 749,117 Dairy & livestock and agribusiness 273,594 292,784 386,219 279,584 257,781 Municipal lease finance receivables 64,437 65,543 45,933 47,305 44,657 SFR mortgage 260,218 255,136 240,654 231,323 237,124 Consumer and other loans 84,109 76,695 74,665 70,741 74,062 Gross loans, net of deferred loan fees and discounts 8,692,229 8,591,684 7,887,713 7,849,520 8,071,310 Allowance for credit losses (80,222 ) (76,119 ) (65,019 ) (65,364 ) (69,342 ) Net loans $ 8,612,007 $ 8,515,565 $ 7,822,694 $ 7,784,156 $ 8,001,968 Deposit Composition by Type and Customer Repurchase Agreements June 30, March 31, December 31, September 30, June 30, 2022 2022 2021 2021 2021 Noninterest-bearing $ 8,881,223 $ 9,107,304 $ 8,104,056 $ 8,310,709 $ 8,065,400 Investment checking 695,054 714,567 655,333 594,347 588,831 Savings and money market 4,145,634 4,289,550 3,889,371 3,680,721 3,649,305 Time deposits 350,308 376,357 327,682 344,439 365,521 Total deposits 14,072,219 14,487,778 12,976,442 12,930,216 12,669,057 Customer repurchase agreements 502,829 598,909 642,388 659,579 578,207 Total deposits and customer repurchase agreements $ 14,575,048 $ 15,086,687 $ 13,618,830 $ 13,589,795 $ 13,247,264
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, 2022 2022 2021 2021 2021 Nonperforming loans: Commercial real estate $ 6,843 $ 7,055 $ 3,607 $ 4,073 $ 4,439 Construction - - - - - SBA 1,075 1,575 1,034 1,513 1,382 SBA - PPP - 2 - - - Commercial and industrial 1,655 1,771 1,714 2,038 1,818 Dairy & livestock and agribusiness 3,354 2,655 - 118 118 SFR mortgage - 167 380 399 406 Consumer and other loans 37 40 158 305 308 Total $ 12,964 $ 13,265 $ 6,893 $ 8,446 $ 8,471 % of Total loans 0.15% 0.15% 0.09% 0.11% 0.10% Past due 30-89 days: Commercial real estate $ 559 $ 565 $ 438 $ - $ - Construction - - - - - SBA - 549 979 - - Commercial and industrial - 6 - 122 415 Dairy & livestock and agribusiness - 1,099 - 1,000 - SFR mortgage - 403 1,040 - - Consumer and other loans - - - - - Total $ 559 $ 2,622 $ 2,457 $ 1,122 $ 415 % of Total loans 0.01% 0.03% 0.03% 0.01% 0.01% OREO: Commercial real estate $ - $ - $ - $ - $ - SBA - - - - - SFR mortgage - - - - - Total $ - $ - $ - $ - $ - Total nonperforming, past due, and OREO $ 13,523 $ 15,887 $ 9,350 $ 9,568 $ 8,886 % of Total loans 0.16% 0.18% 0.12% 0.12% 0.11%
CVB FINANCIAL CORP. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) Regulatory Capital Ratios Minimum Required Plus Capital Conservation Buffer CVB Financial Corp. Consolidated Capital Ratios June 30, 2022 December 31, 2021 June 30, 2021 Tier 1 leverage capital ratio 4.0% 8.8% 9.2% 9.4% Common equity Tier 1 capital ratio 7.0% 13.4% 14.9% 15.1% Tier 1 risk-based capital ratio 8.5% 13.4% 14.9% 15.1% Total risk-based capital ratio 10.5% 14.2% 15.6% 15.9% Tangible common equity ratio 7.5% 9.2% 9.2%
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, 2022, December 31, 2021 and June 30, 2021. June 30, 2022 December 31, 2021 June 30, 2021 (Dollars in thousands, except per share amounts) Stockholders' equity $ 1,982,211 $ 2,081,503 $ 2,055,074 Less: Goodwill (765,822 ) (663,707 ) (663,707 ) Less: Intangible assets (25,312 ) (25,394 ) (29,300 ) Tangible book value $ 1,191,077 $ 1,392,402 $ 1,362,067 Common shares issued and outstanding 140,025,579 135,526,025 135,927,287 Tangible book value per share $ 8.51 $ 10.27 $ 10.02
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, 2022 2022 2021 2022 2021 (Dollars in thousands) Net Income $ 59,058 $ 45,560 $ 51,179 $ 104,618 $ 115,072 Add: Amortization of intangible assets 1,998 1,998 2,167 3,996 4,334 Less: Tax effect of amortization of intangible assets [1] (591 ) (591 ) (641 ) (1,181 ) (1,281 ) Tangible net income $ 60,465 $ 46,967 $ 52,705 $ 107,433 $ 118,125 Average stockholders' equity $ 2,091,454 $ 2,243,335 $ 2,048,956 $ 2,166,975 $ 2,040,861 Less: Average goodwill (765,822 ) (759,014 ) (663,707 ) (762,437 ) (663,707 ) Less: Average intangible assets (26,381 ) (28,190 ) (30,348 ) (27,280 ) (31,463 ) Average tangible common equity $ 1,299,251 $ 1,456,131 $ 1,354,901 $ 1,377,258 $ 1,345,691 Return on average equity, annualized 11.33% 8.24% 10.02% 9.74% 11.37% Return on average tangible common equity, annualized 18.67% 13.08% 15.60% 15.73% 17.70% [1] Tax effected at respective statutory rates. 
