EX-99.1 2 d482182dex991.htm EX-99.1

Exhibit 99.1 February 2013

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 regarding future operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, local, regional, national and international economic conditions and events and the impact they may have on us and our customers; ability to attract deposits and other sources of liquidity; ability to make loans and generate assets; oversupply of inventory and continued deterioration in values of real estate in California and other states where our bank makes loans, both residential and commercial; a prolonged slowdown in business, manufacturing, retail or construction activity; changes in the financial performance and/or condition of our borrowers; changes in the level of non-performing assets and charge-offs; the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, business and consumer credit, capital levels, limits on bank products and fees, securities, executive compensation and insurance) with which we and our subsidiaries must comply; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; inflation, interest rate, securities market and monetary fluctuations; the availability and effectiveness of hedging instruments and strategies; political instability; acts of war or terrorism, or natural disasters, such as earthquakes, or the effects of pandemic flu; the timely development and acceptance of new banking products and services and perceived overall value of these products and services by users; changes in consumer spending, borrowing and savings habits; technological changes (including mobile banking and cloud computing); threats to the stability and security of our technology hardware and software, and to the stability and security of any related vendor or customer hardware and software; the ability to increase market share and control expenses; changes in the competitive environment among financial and bank holding companies and other financial service providers; continued volatility in the credit and equity markets and its effects on the general economy; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as 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; the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; our success at managing the risks involved in the foregoing items and other factors set forth in the Company's public reports including its Annual Report on Form 10-K for the year ended December 31, 2011, and particularly the discussion of risk factors within that document. 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. Safe Harbor

3 Total Assets: $6.4 Billion Gross Loans: $3.5 Billion Total Deposits (Including Repos): $5.2 Billion Total Equity: $763 Million Source: Q4 2012 earnings release & company filings. *non-covered loans Largest financial institution headquartered in the Inland Empire region of Southern California. Founded in 1974. Serves 41 cities with 40 business financial centers and 5 commercial banking centers and 3 trust office locations throughout the Inland Empire, LA County, Orange County and the Central Valley of California Average Cost of Deposits = 0.11% CVB Financial Corp. (CVBF)

4 Name Position Banking Experience CVBF Service Christopher D. Myers President & CEO 28 Years 6 Years Richard C. Thomas Executive Vice President Chief Financial Officer 3 Years 2 Years James F. Dowd Executive Vice President Chief Credit Officer 36 Years 5 Years David C. Harvey Executive Vice President Chief Operations Officer 23 Years 3 Years David A. Brager Executive Vice President Sales Division 25 Years 10 Years R. Daniel Banis Executive Vice President CitizensTrust 31 Years 1 Year Yamynn DeAngelis Executive Vice President Chief Risk Officer 33 Years 25 Years Richard Wohl Executive Vice President General Counsel 24 Years 1 Year Experienced Leadership

5 Name CVBF Experience Age Ronald Kruse - Chairman 38 Years 73 Linn Wiley – Vice Chairman 21 Years 74 George Borba Jr. New 45 Steve Del Guercio New 51 Robert Jacoby 7 Years 71 Ray O’Brien New 55 San Vaccaro 13 Years 79 Chris Myers – CEO 6 Years 50 Board of Directors

Who is… CVB Financial Corp.?

7 Rank Name Asset Size (9/30/12) 1 Wells Fargo $1,374,715 2 Union Bank $88,185 3 Bank of the West $63,037 4 First Republic Bank $32,576 5 City National Bank $26,252 6 OneWest Bank $25,827 7 East West Bank $21,813 8 SVB Financial $21,577 9 Cathay Bank $10,605 10 CVB Financial Corp $6,321 11 Pacific Capital Bank $5,991 12 Pacific Western Bank $5,539 13 BBCN $5,332 14 Farmers & Merchants of Long Beach $4,872 15 Westamerica Bank $4,860 In millions In millions Source: SNL Financial Largest Banks Headquartered in California

• 143 Consecutive Quarters of Profitability • 94 Consecutive Quarters of Cash Dividends • #6 Rated Bank: BankDirector Magazine Bank Performance Scorecard (July 2012) • BauerFinancial Report Five Star Rating (September 2012) • Fitch Rating BBB (October 2012) Bank Accomplishments & Ratings

Our Markets

10 40 Business Financial Centers 5 Commercial Banking Centers 3 CitizensTrust Locations

(000’s) # of Center Locations Total Deposits (12/31/11) Total Deposits (12/31/12) Los Angeles County 17 $1,872,623 $1,894,958 Inland Empire (Riverside & San Bernardino Counties) 10 $1,592,445 $1,668,906 Central Valley 11 $821,994 $856,155 Orange County 7 $598,426 $582,616 Other 0 $228,430 $244,596 Total 45 $5,113,918 $5,247,231 *Includes Customer Repurchase Agreements; Balance as of balance sheet date Average Cost of Deposits (Full Year) 0.21% 0.14% Deposits*

(000’s) Non-Interest Bearing Deposits

13 Source: Q4 2012 earnings release & other company filings, SNL Financial—peers represent public CA , AZ, HI, NV, OR & WA banks with assets $2 - $25 billion. Peer data as of 9/30/12 Deposit Cost Comparison

12 Months 12/31/11 12 Months 12/31/12 % Change Service Charges on Deposit Accounts $15,767,976 $16,105,811 2.14% Service Charges/Total Deposits 0.31% 0.31% 14 *Includes Customer Repurchase Agreements Service Charge Income*

(000’s) Non-Covered Loans* Covered Loans* Total Loans* % Los Angeles County $1,190,214 $16,572 $1,206,786 34.68% Central Valley $662,420 $191,419 $853,839 24.54% Inland Empire (Riverside & San Bernardino Counties) $627,173 $1,058 $628,231 18.05% Orange County $461,001 $0 $461,001 13.25% Other $318,430 $11,510 $329,940 9.48% Total $3,259,238 $220,559 $3,479,797 100.00% *Prior to MTM discount and loan loss reserve *Prior to MTM discount and loan loss reserve (Includes loans Held for Sale) (Includes loans Held for Sale) Total Loans* as of 12/31/2012

Total Non-Covered Loans

17 Source: Q4 2012 earnings release & company reports | *Non-covered loans Consumer Consumer 1.5% 1.5% SFR Mortgage SFR Mortgage 4.9% 4.9% Municipal Lease Finance Receivables 3.2% Municipal Lease Finance Receivables 3.2% Auto & Equipment 0.4% Auto & Equipment 0.4% Dairy, Livestock & Agribusiness 10.3% Dairy, Livestock & Agribusiness 10.3% Commercial & Industrial Commercial & Industrial 16.8% 16.8% Construction RE 1.8% Construction RE 1.8% Commercial RE Commercial RE Owner Occupied 21.6% Owner Occupied 21.6% Total Loans by Type Total Loans by Type Commercial RE Non-Owner Occupied 39.5% Loan Portfolio Composition*

Includes Loans Held for Sale Includes Loans Held for Sale Total Covered Loans

19 Non-Performing Assets Non-Covered

Loan Loss Allowance/ Charge-Offs --Non-Covered--

(000’s) Classified Loans Non-Covered

CVBF’s strong loan underwriting culture has limited its exposure to problem credits Continued profitability has allowed CVB to build its capital base and reserves for loan losses. Texas Ratio Texas Ratio NPA’s/Loans & OREO NPA’s/Loans & OREO Source: Q4 2012 earnings release & other company filings, SNL Financial—peers represent public CA , AZ, HI, NV, OR & WA banks with assets $2 - $25 billion. Peer data as of 9/30/12 Non-Covered Superior Credit Quality 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2008 2009 Q1 2010 Q2 Q3 Q4 Q1 2011 Q1 2012 Q2 Q4 Q3 Q2 Q4 Q3 2008 Q1 2010 Q3 Q1 2011 Q2 Q4 Q3 Q4 Q3 2009 Q2 Q4 Q2 Q1 2012 CVBF Peer CVBF Peer

Profits

(000’s) Net Income After Taxes Net Income After Taxes $20.4 million FHLB prepayment charge Net Income

2008 2009 2010 2011 12 Months to 12/31/2012 Net Interest Income $193,679 $222,264 $259,317 $234,681 $236,950 Provision for Credit Losses ($26,600) ($80,500) ($61,200) ($7,068) $0 Other Operating Income/Expenses (Net) ($81,331) ($52,515) ($111,378) ($106,809) ($122,257) Income Taxes ($22,675) ($23,830) ($23,804) ($39,071) ($37,413) Net Profit After Tax $63,073 $65,419 $62,935 $81,733 $77,280 25 (000’s) Earnings

26 *Normalized *Normalized excludes excludes accelerated accelerated accretion accretion on on covered covered loans loans Normalized* Normalized* 1.50% 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% Q1 2007 Q2 Q3 Q4 Q1 2008 Q2 Q3 Q4 Q1 2009 Q2 Q3 Q4 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 Q4 Net Interest Margin

Expenses

28 *Includes $20.4 million FHLB prepayment charge Expenses (000’s) Salaries and Employee Benefits $62,985 $69,419 $69,993 $68,496 Promotion & Entertainment $6,528 $6,084 $4,977 $4,869 Supplies $2,989 $3,314 $2,558 $2,212 Software Licenses & Maintenance $2,320 $5,031 $3,669 $4,269 Professional Services $6,965 $13,308 $15,031 $6,249 OREO Expense $1,211 $7,490 $6,729 $2,146 Other $50,588 $63,846 $38,068 $49,919* TOTAL: $133,586 $168,492 $141,025 $138,160 2009 2010 2011 2012

Bank Borrowings

Type of Debt Payoff Date Amount Weighted Average Interest Rate FHLB Borrowings 8/28/2012 $250,000 3.39% Subordinated Debentures FCB Statutory Trust II 1/07/2012 $6,805 3-Month LIBOR + 3.25% CVB Statutory Trust I 6/18/2012 $20,619 3-Month LIBOR + 2.85% CVB Statutory Trust I 9/17/2012 $20,619 3-Month LIBOR + 2.85% Total $298,043 30 (000’s) (000’s) Debt Repayment Activity 2012

31 (000’s) (000’s) Type of Debt Maturity Balance at 12/31/2012 Interest Rate FHLB Borrowings 11/28/2016 $198,934 4.52% Subordinated Debentures CVB Statutory Trust II** $20,619 3-Month LIBOR + 2.85% CVB Statutory Trust II $20,619 3-Month LIBOR + 2.85% CVB Statutory Trust III $25,774 3-Month LIBOR + 1.38% Total $265,946 *Does not include $26 million in overnight borrowings from FHLB **This portion of CVB Statutory Trust II was repaid on January 7 th 2013 Outstanding Debt* 12/31/2012

Capital

Regulatory Minimum Ratio Regulatory Well-Capitalized Ratio September 30, 2012* Tier 1 Risk-based Capital Ratio 4.0% 6.0% 17.96% Total Risk-based Capital Ratio 8.0% 10.0% 19.23% Tier 1 Leverage Ratio 4.0% 5.0% 11.19% Tangible Capital Ratio 4.0% 5.0% 10.95% Core Tier 1 Capital Ratio 16.32% 33 * CVB Financial Corp. - Consolidated Capital Ratios

34 Source: Q3 2012 earnings release & other company filings, SNL Financial—peers represent public CA , AZ, HI, NV, OR & WA banks with assets $2 - $25 billion Tier 1 Capital Ratio Total Risk – Based Capital Ratio Tangible Common Equity/Tangible Assets 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 2007 2008 2009 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 2007 2008 2009 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 2007 2008 2009 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 CVBF Peer CVBF Peer Peer Capital Metrics

Securities & Investments

Source: Q4 2012 earnings release. As of 12/31/2012 securities held-to-maturity were valued at approximately $2.1million | Yield on securities represents the fully taxable equivalent *Securities Available For Sale Securities portfolio totaled $2.45 billion at 12/31/2012. The portfolio represents 38.5% of the Bank’s total assets Virtually all of the Bank’s mortgage-backed securities were issued by Freddie Mac or Fannie Mae which have the implied guarantee of the U.S. government. 99% of the Bank’s municipal portfolio contains securities which have an underlying rating of investment grade. California municipals represent only 4% of the municipal bond portfolio Securities Portfolio* --$2.45 Billion-- CMO’s / REMIC’s 23.35% Trust Preferred 0.21% Municipal Bonds 25.53% Government Agency & GSEs 14.67 % MBS 36.24% Yield on securities portfolio = 2.49% for the 4th Quarter 2012

(000’s) *Securities Available For Sale $74,571 MBS & CMO’s $31,395 Municipal Bonds $41,736 Other Securities $1,440 Securities Portfolio* $2.45 Billion Mark-to-Market (Pre-tax)

38 *Includes overnight funds held at the Federal Reserve, Interest earning - due from Correspondent Banks, other short-term money market accounts or certificates of deposit Loans Securities Fed Balance* Other Goodwill & Intangibles 12/31/12 $6.4 Billion 12/31/06 $6.1 Billion Securities Fed Balance* Goodwill & Intangibles Other Loans CVBF Assets

12/31/06 $5.7 Billion 12/31/12 $5.6 Billion TOTAL DEPOSITS* Jr. Subordinated Debentures Other Liabilities BORROWINGS Jr. Subordinated Debentures BORROWINGS TOTAL DEPOSITS* Other Liabilities *Includes Customer Repurchase Agreements CVBF Liabilities

Our Growth Strategy

Citizens Business Bank will strive to become Citizens Business Bank will strive to become the dominant financial services company the dominant financial services company operating throughout the state of operating throughout the state of California, servicing the comprehensive California, servicing the comprehensive financial needs of successful small to financial needs of successful small to medium sized businesses and their owners. medium sized businesses and their owners. 41 Our Vision

The best privately-held and/or family- The best privately-held and/or family- owned businesses throughout California owned businesses throughout California Annual revenues of $1-200 million Annual revenues of $1-200 million Top 25% in their respective industry Top 25% in their respective industry Full relationship banking Full relationship banking Build 20-year relationships Build 20-year relationships 42 Target Customer

43 Three Areas of Growth Acquisitions --Banks-- --Trust-- DeNovo Same Store Sales

• • Target size: $200 million to $2 billion in assets Target size: $200 million to $2 billion in assets • • Financial & Strategic Financial & Strategic • • In-market and/or adjacent geographic market In-market and/or adjacent geographic market (California only) (California only) --Banks-- --Banks-- --Trust/Investment-- --Trust/Investment-- • • Target size: AUM of $200 million to $1 billion Target size: AUM of $200 million to $1 billion • • In California In California --Banking Teams-- --Banking Teams-- • • In- In- market & ‘new’ market & ‘new’ markets markets Acquisition Strategy

• • Loan Growth Loan Growth • • Expand Credit Product Offerings & Capabilities Expand Credit Product Offerings & Capabilities • • Build Core Deposits Build Core Deposits • • Drive Service Charge & Fee Income Growth Drive Service Charge & Fee Income Growth • • Manage Operating Efficiency Manage Operating Efficiency • • Grow Through Acquisition Grow Through Acquisition Our ‘Critical Few’

• • Strong Capital position Strong Capital position • • Strong, disciplined credit underwriting/credit culture Strong, disciplined credit underwriting/credit culture • • Build low-cost, sustainable deposits Build low-cost, sustainable deposits • • Multiple forms of growth (don’t depend on one) Multiple forms of growth (don’t depend on one) • • Same Store Sales Same Store Sales • • DeNovo DeNovo • • Acquisitions Acquisitions • • Cross-sell: capture the whole wallet Cross-sell: capture the whole wallet • • Drive expense efficiency Drive expense efficiency • • Long-term outlook Long-term outlook 46 Our Strategic Focus

Copy of presentation at www.cbbank.com