• CVB Financial Corp. Reports Earnings for the Second Quarter 2023

    Source: Nasdaq GlobeNewswire / 26 Jul 2023 15:45:14   America/Chicago

    • Net Earnings of $55.8 million, or $0.40 per share
    • Return on Average Tangible Common Equity of 18.39%
    • Return on Average Assets of 1.36%
    • Efficiency Ratio of 40.86%
    • $126 million Deposit Growth QTR/QTR

    ONTARIO, Calif., July 26, 2023 (GLOBE NEWSWIRE) -- CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (the “Company”), announced earnings for the quarter ended June 30, 2023.

    CVB Financial Corp. reported net income of $55.8 million for the quarter ended June 30, 2023, compared with $59.3 million for the first quarter of 2023 and $59.1 million for the second quarter of 2022. Diluted earnings per share were $0.40 for the second quarter, compared to $0.42 for the prior quarter and $0.42 for the same period last year. The second quarter of 2023 included $500,000 in provision for credit losses, compared to $1.5 million in provision for the first quarter and $3.6 million in the second quarter of 2022. Net income of $55.8 million for the second quarter of 2023 produced an annualized return on average equity (“ROAE”) of 11.03%, an annualized return on average tangible common equity (“ROATCE”) of 18.39%, and an annualized return on average assets (“ROAA”) of 1.36%. Our net interest margin, tax equivalent (“NIM”), was 3.22% for the second quarter of 2023, while our efficiency ratio was 40.86%.

    David Brager, President and Chief Executive Officer of Citizens Business Bank, commented, “We are pleased to present our second quarter results. Despite the challenging environment, the Bank continued to produce solid financial performance across our key operating metrics. We will continue to focus on executing on our core strategies and supporting our customers through these demanding times. I would like to thank our customers and associates for their commitment and loyalty.”  

    INCOME STATEMENT HIGHLIGHTS

       Three Months Ended
    		  Six Months Ended
     June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022
     (Dollars in thousands, except per share amounts)
    Net interest income$119,535  $125,728  $121,940  $245,263  $234,780 
    Provision for credit losses (500)  (1,500)  (3,600)  (2,000)  (6,100)
    Noninterest income 12,656   13,202   14,670   25,858   25,934 
    Noninterest expense (54,017)  (54,881)  (50,871)  (108,898)  (109,109)
    Income taxes (21,904)  (23,279)  (23,081)  (45,183)  (40,887)
         Net earnings$55,770  $59,270  $59,058  $115,040  $104,618 
    Earnings per common share:         
         Basic$0.40  $0.42  $0.42  $0.83  $0.74 
         Diluted$0.40  $0.42  $0.42  $0.82  $0.74 
              
    NIM 3.22%  3.45%  3.16%  3.33%  3.03%
    ROAA 1.36%  1.47%  1.39%  1.42%  1.23%
    ROAE 11.03%  12.15%  11.33%  11.58%  9.74%
    ROATCE 18.39%  20.59%  18.67%  19.46%  15.73%
    Efficiency ratio 40.86%  39.50%  37.24%  40.17%  41.85%
    Noninterest expense to average assets, annualized 1.32%  1.36%  1.20%  1.34%  1.28%
              


    Net Interest Income
    Net interest income was $119.5 million for the second quarter of 2023. This represented a $6.2 million, or 4.93%, decrease from the first quarter of 2023, and a $2.4 million, or 1.97%, decrease from the second quarter of 2022. The $6.2 million quarter-over-quarter decline in net interest income was primarily due to a 0.23% decline in net interest margin. The decline in net interest income compared to the second quarter of 2022 was primarily due to a $593.1 million decrease in average earning assets, that was partially offset by a six basis point increase in the net interest margin.

    Net Interest Margin
    Our tax equivalent net interest margin was 3.22% for the second quarter of 2023, compared to 3.45% for the first quarter of 2023 and 3.16% for the second quarter of 2022. The 23 basis point decrease in our net interest margin compared to the first quarter of 2023, was primarily due to a 34 basis point increase in our cost of funds. Cost of funds increased in part due to a $555 million increase in short-term borrowings, which had an average cost of 4.90% during the second quarter of 2023. The cost of interest-bearing deposits increased by 49 basis points from the first quarter; however, our total cost of deposits and customer repurchases only increased by 18 basis points, as noninterest-bearing deposits were more than 63% of average deposits during the second quarter of 2023. Our interest-earning asset yield increased by 10 basis points over the prior quarter, primarily due to an 11 basis point increase in loan yields. The six basis point increase in net interest margin, compared to the second quarter of 2022 was the net result of an 81 basis point increase in earning asset yield, offset by a 79 basis point increase in cost of funds. Loan yields grew from 4.31% for the second quarter of 2022 to 5.01% for the second quarter of 2023. Likewise, the yield on investment securities increased by 44 basis points from the prior year quarter. Loan balances grew to 59.41% of earning assets on average for the second quarter of 2023, compared to 55.49% for the second quarter of 2022, while our average balance at the Fed declined from 5.1% of earning assets in the second quarter of 2022 to 2.3% in the second quarter of 2023. Total cost of funds of 0.83% for the second quarter of 2023 increased from 0.04% for the year ago quarter. This 79 basis point increase in cost of funds was the result of an 87 basis point increase in the cost of interest-bearing deposits and an average cost of 4.90% on $1.53 billion of short-term borrowings for the second quarter of 2023. On average, noninterest-bearing deposits were 63.58% of total deposits during the most recent quarter, compared to 63.65% for the first quarter of 2023 and 62.96% for the second quarter of 2022.

    Earning Assets and Deposits
    On average, earning assets grew by $164.8 million, compared to the first quarter of 2023, while declining by $593.1 million when compared to the second quarter of 2022. The $164.8 million quarter-over-quarter increase in earning assets resulted from a $310.2 million increase in average earning balances due from the Federal Reserve, offset by average investment securities declining by $73.1 million and average loans decreasing by $70.9 million. Compared to the second quarter of 2022, average loans increased by $257.8 million, while the average balance of investment securities declined by $414.4 million, and the average amount of funds held at the Federal Reserve declined by $450.1 million. Noninterest-bearing deposits declined on average by $269.2 million, or 3.33%, from the first quarter of 2023, while interest-bearing deposits and customer repurchase agreements declined on average by $195.1 million. Compared to the second quarter of 2022, total deposits and customer repurchase agreements declined on average by $1.95 billion, or 13.24%, including a decline of $1.1 billion in noninterest-bearing deposits.

      Three Months Ended 
    SELECTED FINANCIAL HIGHLIGHTSJune 30, 2023 March 31, 2023 June 30, 2022 
      (Dollars in thousands) 
    Yield on average investment securities (TE) 2.37%  2.37%  1.93% 
    Yield on average loans 5.01%  4.90%  4.31% 
    Core Loan Yield [1] 4.96%  4.85%  4.20% 
    Yield on average earning assets (TE) 4.01%  3.91%  3.20% 
    Cost of deposits 0.35%  0.17%  0.03% 
    Cost of funds 0.83%  0.49%  0.04% 
    Net interest margin (TE) 3.22%  3.45%  3.16% 
                  
    Average Earning Asset MixAvg % of Total Avg % of TotalAvg % of Total
     Total investment securities$5,689,606 38.01% $5,762,728 38.93% $6,104,037 39.23% 
     Interest-earning deposits with other institutions 353,610 2.36%  47,934 0.32%  804,147 5.17% 
     Loans 8,892,413 59.41%  8,963,323 60.55%  8,634,575 55.49% 
     Total interest-earning assets 14,967,661    14,802,853    15,560,771   
                  
       [1] Represents yield on average loans excluding the impact of discount accretion and PPP loans.       
                  


    Provision for Credit Losses
    The second quarter of 2023 included $500,000 in provision for credit losses, compared to a $1.5 million in provision for credit losses in the first quarter of 2023 and $3.6 million in the second quarter of 2022. The year-to-date provision for credit losses of $2.0 million was the result of an overall increase in projected loss rates from 0.94% at the end of 2022 to 0.98% at June 30, 2023. The increase in projected loss rates continues to be driven primarily by a deteriorating economic forecast that assumes modest GDP growth through 2024, as well as lower commercial real estate values and an increase in the rate of unemployment.

    Noninterest Income
    Noninterest income was $12.7 million for the second quarter of 2023, compared with $13.2 million for the first quarter of 2023 and $14.7 million for the second quarter of 2022. Service charges on deposits decreased by $506,000, or 9.47% over the first quarter of 2023 and declined by $495,000, or 9.28% in comparison to the second quarter of 2022. Trust and investment services income grew by $401,000 compared to the first quarter of 2023 and increased by $353,000 year-over-year. The second quarter of 2023 included approximately $800,000 in death benefits that exceeded the asset value of certain BOLI policies, and approximately $100,000 in swap fees for transitioning swaps out of LIBOR, partially offset by a $475,000 decrease in CRA investment income due to underlying asset valuation declines. The first quarter of 2023 included approximately $500,000 in interest rate swap related fees for the conversion of instruments from LIBOR to SOFR and the recapture of a previous impairment charge of $500,000, as a result of the payoff of a CRA investment that was previously identified as impaired. Compared to the second quarter of 2022, BOLI income increased $1.5 million due to valuation changes and death benefits that exceeded policy values. Income related to CRA investments declined by $716,000 compared to the year ago quarter. The second quarter of 2022 also included $2.7 million in net gains on the sale of properties associated with our banking centers.

    Noninterest Expense
    Noninterest expense for the second quarter of 2023 was $54.0 million, compared to $54.9 million for the first quarter of 2023 and $50.9 million for the second quarter of 2022. The second quarter of 2023 included $400,000 in provision for unfunded loan commitments, compared to $500,000 in provision for the first quarter of 2023 and no provision for the second quarter of 2022. The $1.7 million quarter-over-quarter decrease in salaries and employee benefit costs was primarily due to the higher payroll taxes typically incurred in the first quarter of each year. The $866,000 quarter-over-quarter increase in professional services included increases of $357,000 in legal expense and $228,000 in other professional services due to the timing of various projects. The $3.1 million increase in noninterest expense year-over-year included an increase of $2.0 million in salaries and employee benefits and a $785,000 increase in FDIC assessments. As a percentage of average assets, noninterest expense was 1.32% for the second quarter of 2023, compared to 1.36% for the first quarter of 2023 and 1.20% for the second quarter of 2022. The efficiency ratio for the second quarter of 2023 was 40.86%, compared to 39.50% for the first quarter of 2023 and 37.24% for the second quarter of 2022.

    Income Taxes
    Our effective tax rate for the quarter ended June 30, 2023 and year-to-date was 28.20%, compared with 28.10% for the second quarter of 2022. 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 $16.48 billion at June 30, 2023. This represented an increase of $210.5 million, or 1.29%, from total assets of $16.27 billion at March 31, 2023. Interest-earning assets of $14.94 billion at June 30, 2023 increased by $136.8 million, or 0.92%, when compared with $14.80 billion at March 31, 2023. The increase in interest-earning assets was primarily due a $322.2 million increase in interest-earning balances due from the Federal Reserve, partially offset by a $159.6 million decrease in investment securities and a $35.1 million decrease in total loans.

    Total assets increased by $8.0 million, or 0.05%, from total assets of $16.48 billion at December 31, 2022. Interest-earning assets of $14.94 billion at June 30, 2023 decreased by $36.1 million, or 0.24%, when compared with $14.97 billion at December 31, 2022. The decrease in interest-earning assets was primarily due to a $228.7 million decrease in investment securities and a $172.0 million decrease in total loans, partially offset by a $341.8 million increase in interest-earning balances due from the Federal Reserve.

    Total assets at June 30, 2023 decreased by $275.4 million, or 1.64%, from total assets of $16.76 billion at June 30, 2022. Interest-earning assets decreased by $344.3 million, or 2.25%, when compared with $15.28 billion at June 30, 2022. The decrease in interest-earning assets included a $457.6 million decrease in investment securities and a $136.4 million decrease in interest-earning balances due from the Federal Reserve, partially offset by a $215.2 million increase in total loans. The increase in total loans from June 30, 2022, included a $61.9 million decrease in PPP loans with a remaining outstanding balance totaling $5.0 million as of June 30, 2023. Excluding PPP loans, total loans increased by $277.1 million from June 30, 2022.

    Investment Securities
    Total investment securities were $5.58 billion at June 30, 2023, a decrease of $228.7 million, or 3.94%, from $5.81 billion at December 31, 2022 and a decrease of $457.6 million, or 7.58%, from $6.04 billion at June 30, 2022.  

    At June 30, 2023, investment securities held-to-maturity (“HTM”) totaled $2.51 billion, a decrease of $41.6 million, or 1.63%, from December 31, 2022 and a $100.4 million increase, or 4.16%, from June 30, 2022.

    At June 30, 2023, investment securities available-for-sale (“AFS”) totaled $3.07 billion, inclusive of a pre-tax net unrealized loss of $497.7 million. AFS securities decreased by $187.1 million, or 5.75%, from $3.26 billion at December 31, 2022 and decreased by $558.0 million, or 15.39%, from June 30, 2022.  

    In June of 2023, fair value hedging transactions were executed in which $1 billion notional pay-fixed interest rate swaps were consummated with maturities ranging from four to five years, wherein the Company pays a weighted average fixed rate of approximately 3.8% and receives daily SOFR. The fair value of these instruments totaled approximately $8 million on June 30, 2023.

    Combined, the AFS and HTM investments in mortgage-backed securities (“MBS”) and collateralized mortgage obligations (“CMO”) totaled $4.54 billion or approximately 81% of our total investment securities at June 30, 2023. Virtually all of our MBS and CMOs are issued or guaranteed by government or government-sponsored enterprises, which have the implied guarantee of the U.S. Government. In addition, at June 30, 2023, we held $538.9 million of Government Agency securities (HTM) that represent approximately 9.7% of the total investment securities.

    Our combined AFS and HTM municipal securities totaled $496.6 million as of June 30, 2023, or approximately 8.9% 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 Texas at 15.84%, Minnesota at 11.20%, California at 9.53%, Ohio at 6.30%, Massachusetts at 6.25%, and Washington at 5.79%.

    Loans
    Total loans and leases, at amortized cost of $8.91 billion at June 30, 2023, decreased by $35.1 million, or 0.39%, from March 31, 2023. The quarter-over quarter decrease in core loans included decreases of $46.2 million in commercial real estate loans, $15.2 million in construction loans, $4.6 million in SBA loans, and $16.1 million in consumer and other loans, partially offset by an increase of $58.1 million in commercial and industrial loans.

    Total loans and leases, at amortized cost, decreased by $172.0 million, or 1.89%, from December 31, 2022. After adjusting for seasonality of dairy & livestock and PPP loans, our core loans declined by $31.9 million, or 0.37%, from December 31, 2022. The $172.0 million decrease in total loans included decreases of $136.0 million in dairy & livestock loans, $19.4 million in construction loans, $12.0 million in SBA loans, $4.1 million in PPP loans, and $21.8 million in consumer and other loans, partially offset by increases of $19.1 million in commercial real estate loans, and $7.6 million in commercial and industrial loans. Commercial and industrial line utilization was 31% at June 30, 2023, compared to 33% at the end of 2022. The decline in dairy & livestock loans primarily relates to the seasonal peak in line utilization at the end of every calendar year, demonstrated by a decline in utilization from 78% at December 31, 2022 to 68% at June 30, 2023.

    Total loans and leases, at amortized cost, increased by $215.2 million, or 2.48%, from June 30, 2022. After adjusting for PPP loans, our core loans grew by $277.1 million, or 3.21%, from the end of the second quarter of 2022. Commercial real estate loans grew by $260.5 million, dairy & livestock and agribusiness loans grew by $24.7 million, commercial and industrial loans increased $14.6 million, municipal lease financings increased by $13.4 million, and SFR mortgage loans increased by $3.0 million. This core loan growth was partially offset by decreases of $18.2 million in SBA loans and $29.1 million in consumer and other loans.

    Asset Quality
    During the second quarter of 2023, we experienced credit charge-offs of $88,000 and total recoveries of $15,000, resulting in net charge-offs of $73,000. The allowance for credit losses (“ACL”) totaled $87.0 million at June 30, 2023, compared to $86.5 million at March 31, 2023 and $80.2 million at June 30, 2022. The ACL was increased by $1.9 million in 2023, including a $2.0 million provision for credit losses. At June 30, 2023, ACL as a percentage of total loans and leases outstanding was 0.98%. This compares to 0.97% and 0.92% at March 31, 2023 and June 30, 2022, respectively.

    Nonperforming loans, defined as nonaccrual loans, including modified loans on nonaccrual, plus loans 90 days past due and accruing interest, and nonperforming assets, defined as nonperforming loans plus OREO, are highlighted below.

    Nonperforming Assets and Delinquency TrendsJune 30, 2023 March 31, 2023 June 30, 2022
        
    Nonperforming loans (Dollars in thousands)
    Commercial real estate $3,159  $2,634  $6,843 
    SBA  629   702   1,075 
    SBA - PPP  -   -   - 
    Commercial and industrial  2,039   2,049   1,655 
    Dairy & livestock and agribusiness  273   406   3,354 
    SFR mortgage  -   -   - 
    Consumer and other loans  354   384   37 
    Total $ 6,454  $ 6,175  $ 12,964 
    % of Total loans  0.07%  0.07%  0.15%
    OREO      
    Commercial real estate $-  $-  $- 
    SFR mortgage  -   -   - 
    Total $ -  $ -  $ - 
           
    Total nonperforming assets $ 6,454  $ 6,175  $ 12,964 
    % of Nonperforming assets to total assets  0.04%  0.04%  0.08%
           
    Past due 30-89 days      
    Commercial real estate $532  $425  $559 
    SBA  -   575   - 
    Commercial and industrial  -   -   - 
    Dairy & livestock and agribusiness  555   183   - 
    SFR mortgage  -   -   - 
    Consumer and other loans  -   -   - 
    Total $ 1,087  $ 1,183  $ 559 
    % of Total loans  0.01%  0.01%  0.01%
           
    Classified Loans $ 77,834  $ 66,977  $ 76,170 
     

    The $279,000 increase in nonperforming loans from March 31, 2023 was primarily due to an increase of $525,000 in commercial real estate loans. Classified loans are loans that are graded “substandard” or worse. Classified loans increased $10.9 million quarter-over-quarter, primarily due to a $9.7 million increase in classified commercial real estate loans and a $6.1 million increase in classified dairy & livestock and agribusiness loans, partially offset by a $4.4 million decrease in classified commercial and industrial loans.

    Deposits & Customer Repurchase Agreements
    Deposits of $12.40 billion and customer repurchase agreements of $452.3 million totaled $12.85 billion at June 30, 2023. This represented an increase of $125.7 million in deposits and a decrease of $37.9 million in customer repurchases compared to March 31, 2023. Deposits and customer repurchase agreements declined by $551.8 million, or 4.12%, when compared with $13.40 billion at December 31, 2022. Total deposits and customer repurchase agreements decreased $1.73 billion, or 11.84% when compared with $14.58 billion at June 30, 2022. Higher interest rates that have resulted from the Federal Reserve’s significant increase in the federal funds rate over the last year have continued to impact deposit levels, including approximately $550 million of funds on deposit at the end of 2022 that were transferred from the Bank’s balance sheet to be invested by Citizens Trust in higher yielding instruments such as treasury notes.

    Noninterest-bearing deposits were $7.88 billion at June 30, 2023, an increase of $34.5 million, or 0.44%, when compared to $7.84 billion at March 31, 2023. Noninterest-bearing deposits decreased $285.6 million, or 3.50% when compared to $8.16 billion at December 31, 2022, and decreased $1.0 billion, or 11.29%, when compared to $8.88 billion at June 30, 2022. At June 30, 2023, noninterest-bearing deposits were 63.55% of total deposits, compared to 63.92% at March 31, 2023, 63.60% at December 31, 2022, and 63.11% at June 30, 2022.

    Short–Term Borrowings
    As of June 30, 2023, total short-term borrowings, consisted of $695 million of one-year advances from the Federal Reserve’s Bank Term Funding Program, at a cost of 4.7% and $800 million of short-term Federal Home Loan Bank advances, at an average cost of approximately 5%.

    Capital
    The Company’s total equity was $2.00 billion at June 30, 2023. This represented an overall increase of $52.9 million from total equity of $1.95 billion at December 31, 2022. Increases to equity included $115.0 million in net earnings and a $9.9 million increase in other comprehensive income. At the end of the second quarter of 2023, we entered into pay-fixed rate swaps to mitigate the risks of rising interest rates. This resulted in a fair value remeasurement of this swap derivative of $7.8 million at June 30, 2023, resulting in an increase in other comprehensive income. Decreases from December 31, 2022 included $55.8 million in cash dividends. We engaged in no stock repurchases during the second quarter of 2023, compared to the first quarter of 2023, when we repurchased, under our 10b5-1 stock repurchase plan, 791,800 shares of common stock, at an average repurchase price of $23.43, totaling $18.5 million. This 10b5-1 plan expired on March 2, 2023 and no new plan has been put in place since that time. Our tangible book value per share at June 30, 2023 was $8.74.

    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 Buffer June 30, 2023 December 31, 2022 June 30, 2022 
              
    Tier 1 leverage capital ratio 4.0% 9.8% 9.5% 8.8% 
    Common equity Tier 1 capital ratio 7.0% 14.1% 13.6% 13.4% 
    Tier 1 risk-based capital ratio 8.5% 14.1% 13.6% 13.4% 
    Total risk-based capital ratio 10.5% 14.9% 14.4% 14.2% 
              
    Tangible common equity ratio   7.8% 7.4% 7.5% 
                 


    CitizensTrust
    As of June 30, 2023 CitizensTrust had approximately $3.61 billion in assets under management and administration, including $2.41 billion in assets under management. Revenues were $3.3 million for the second quarter of 2023 and $6.2 million for the six months ended June 30, 2023, compared to $3.0 million and $5.8 million, respectively, for the same periods of 2022. 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 3 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 27, 2023 to discuss the Company’s second quarter 2023 financial results. The conference call can be accessed live by registering at: https://register.vevent.com/register/BI330d7e9b6832431083833dedd79e1141.

    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 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 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, goals, and statements about the Company’s outlook regarding revenue and asset growth, financial performance and profitability, capital and liquidity levels, loan and deposit growth and retention, yields and returns, loan diversification and credit management, stockholder value creation, tax rates, the impact of economic developments, 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.

    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 and key personnel 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 level 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; possible credit related impairments or declines in the fair value of loans and securities held by us; possible impairment charges to goodwill; changes in customer 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 or retain deposits or to access government or private lending facilities and other sources of liquidity; the possibility that we may reduce or discontinue the payment 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, and their effects on the economic and business environments in which we operate, including on our credit quality, business operations, and employees, as well as the impact on general economic and financial market conditions; cybersecurity threats and the costs of defending against them, including the costs of compliance with potential legislation to combat 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 or outcomes; 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 2022 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, 2023 December 31, 2022 June 30, 2022
    Assets      
    Cash and due from banks $231,316  $158,236  $173,266 
    Interest-earning balances due from Federal Reserve  387,039   45,225   523,443 
    Total cash and cash equivalents  618,355   203,461   696,709 
    Interest-earning balances due from depository institutions  30,478   9,553   7,382 
    Investment securities available-for-sale  3,068,151   3,255,211   3,626,157 
    Investment securities held-to-maturity  2,512,707   2,554,301   2,412,308 
    Total investment securities  5,580,858   5,809,512   6,038,465 
    Investment in stock of Federal Home Loan Bank (FHLB)  29,484   27,627   18,012 
    Loans and lease finance receivables  8,907,397   9,079,392   8,692,229 
    Allowance for credit losses  (86,967)  (85,117)  (80,222)
    Net loans and lease finance receivables  8,820,430   8,994,275   8,612,007 
    Premises and equipment, net  45,518   46,698   47,100 
    Bank owned life insurance (BOLI)  257,348   255,528   259,958 
    Intangibles  18,303   21,742   25,312 
    Goodwill  765,822   765,822   765,822 
    Other assets  317,948   342,322   289,226 
    Total assets $16,484,544  $16,476,540  $16,759,993 
    Liabilities and Stockholders’ Equity      
    Liabilities:      
    Deposits:      
    Noninterest-bearing $7,878,810  $8,164,364  $8,881,223 
    Investment checking  574,817   723,870   695,054 
    Savings and money market  3,627,858   3,653,385   4,145,634 
    Time deposits  316,036   294,626   350,308 
    Total deposits  12,397,521   12,836,245   14,072,219 
    Customer repurchase agreements  452,373   565,431   502,829 
    Other borrowings  1,495,000   995,000   - 
    Payable for securities purchased  -   -   80,230 
    Other liabilities  138,283   131,347   122,504 
    Total liabilities  14,483,177   14,528,023   14,777,782 
    Stockholders’ Equity      
    Stockholders’ equity  2,346,243   2,303,313   2,229,050 
    Accumulated other comprehensive loss, net of tax  (344,876)  (354,796)  (246,839)
    Total stockholders’ equity  2,001,367   1,948,517   1,982,211 
    Total liabilities and stockholders’ equity $16,484,544  $16,476,540  $16,759,993 
           


    CVB FINANCIAL CORP. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED AVERAGE BALANCE SHEETS
    (Unaudited)
    (Dollars in thousands)
              
       Three Months Ended
    		  Six Months Ended
     June 30,
    2023    		 March 31,
    2023    		 June 30,
    2022    		 June 30,
    2023    		 June 30,
    2022
    Assets         
    Cash and due from banks$178,405  $175,129  $178,752  $176,776  $182,884 
    Interest-earning balances due from Federal Reserve 347,161   36,950   797,268   192,913   1,222,943 
    Total cash and cash equivalents 525,566   212,079   976,020   369,689   1,405,827 
    Interest-earning balances due from depository institutions 6,449   10,984   6,879   8,704   9,985 
    Investment securities available-for-sale 3,162,917   3,216,143   3,736,076   3,189,384   3,642,009 
    Investment securities held-to-maturity 2,526,689   2,546,585   2,367,961   2,536,580   2,299,134 
    Total investment securities 5,689,606   5,762,728   6,104,037   5,725,964   5,941,143 
    Investment in stock of FHLB 32,032   28,868   18,012   30,459   18,470 
    Loans and lease finance receivables 8,892,413   8,963,323   8,634,575   8,927,672   8,567,876 
    Allowance for credit losses (86,508)  (85,151)  (76,492)  (85,833)  (74,796)
    Net loans and lease finance receivables 8,805,905   8,878,172   8,558,083   8,841,839   8,493,080 
    Premises and equipment, net 45,629   46,258   51,607   45,942   52,804 
    Bank owned life insurance (BOLI) 257,428   256,137   259,500   256,786   259,649 
    Intangibles 19,298   20,983   26,381   20,136   27,280 
    Goodwill 765,822   765,822   765,822   765,822   762,437 
    Other assets 308,789   331,105   240,607   319,885   223,733 
    Total assets$16,456,524  $16,313,136  $17,006,948  $16,385,226  $17,194,408 
    Liabilities and Stockholders’ Equity         
    Liabilities:         
    Deposits:         
    Noninterest-bearing$7,823,496  $8,092,704  $8,923,043  $7,957,357  $8,822,444 
    Interest-bearing 4,481,766   4,621,247   5,249,262   4,551,121   5,356,312 
    Total deposits 12,305,262   12,713,951   14,172,305   12,508,478   14,178,756 
    Customer repurchase agreements 495,179   550,754   581,574   522,813   630,481 
    Other borrowings 1,526,958   971,701   39   1,250,863   45 
    Payable for securities purchased -   79   66,693   39   115,906 
    Other liabilities 101,417   98,407   94,883   99,921   102,245 
    Total liabilities 14,428,816   14,334,892   14,915,494   14,382,114   15,027,433 
    Stockholders’ Equity         
    Stockholders’ equity 2,353,975   2,332,625   2,238,788   2,343,358   2,243,801 
    Accumulated other comprehensive (loss) income, net of tax (326,267)  (354,381)  (147,334)  (340,246)  (76,826)
    Total stockholders’ equity 2,027,708   1,978,244   2,091,454   2,003,112   2,166,975 
    Total liabilities and stockholders’ equity$16,456,524  $16,313,136  $17,006,948  $16,385,226  $17,194,408 
              


    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,
    2023    		 March 31,
    2023    		 June 30,
    2022    		 June 30,
    2023    		 June 30,
    2022
    Interest income:         
    Loans and leases, including fees$110,990 $108,394 $92,770 $219,384 $182,231
    Investment securities:         
    Investment securities available-for-sale 19,356  19,596  17,042  38,952  29,874
    Investment securities held-to-maturity 13,740  13,956  11,714  27,696  22,377
    Total investment income 33,096  33,552  28,756  66,648  52,251
    Dividends from FHLB stock 483  349  273  832  644
    Interest-earning deposits with other institutions 4,670  491  1,463  5,161  2,236
    Total interest income 149,239  142,786  123,262  292,025  237,362
    Interest expense:         
    Deposits 10,765  5,365  1,201  16,130  2,328
    Borrowings and junior subordinated debentures 18,939  11,693  121  30,632  254
    Total interest expense 29,704  17,058  1,322  46,762  2,582
    Net interest income before provision for credit losses 119,535  125,728  121,940  245,263  234,780
    Provision for credit losses 500  1,500  3,600  2,000  6,100
    Net interest income after provision for credit losses 119,035  124,228  118,340  243,263  228,680
    Noninterest income:         
    Service charges on deposit accounts 4,838  5,344  5,333  10,182  10,392
    Trust and investment services 3,315  2,914  2,962  6,229  5,784
    Other 4,503  4,944  6,375  9,447  9,758
    Total noninterest income  12,656  13,202  14,670  25,858  25,934
    Noninterest expense:         
    Salaries and employee benefits 33,548  35,247  31,553  68,795  64,209
    Occupancy and equipment 5,517  5,450  5,567  10,967  11,138
    Professional services 2,562  1,696  2,305  4,258  4,350
    Computer software expense 3,316  3,408  3,103  6,724  6,898
    Marketing and promotion 1,321  1,715  1,638  3,036  3,096
    Amortization of intangible assets 1,719  1,720  1,998  3,439  3,996
    Provision for unfunded loan commitments 400  500  -  900  -
    Acquisition related expenses -  -  375  -  6,013
    Other 5,634  5,145  4,332  10,779  9,409
    Total noninterest expense 54,017  54,881  50,871  108,898  109,109
    Earnings before income taxes 77,674  82,549  82,139  160,223  145,505
    Income taxes 21,904  23,279  23,081  45,183  40,887
    Net earnings$55,770 $59,270 $59,058 $115,040 $104,618
              
    Basic earnings per common share$0.40 $0.42 $0.42 $0.83 $0.74
    Diluted earnings per common share$0.40 $0.42 $0.42 $0.82 $0.74
    Cash dividends declared per common share$0.20 $0.20 $0.19 $0.40 $0.37
              


    CVB FINANCIAL CORP. AND SUBSIDIARIES
    SELECTED FINANCIAL HIGHLIGHTS
    (Unaudited)
    (Dollars in thousands, except per share amounts)
              
     Three Months Ended Six Months Ended
     June 30,
    2023    		 March 31,
    2023    		 June 30,
    2022    		 June 30,
    2023    		 June 30,
    2022
    Interest income - tax equivalent (TE)$149,785  $143,332  $123,661  $293,117  $238,124 
    Interest expense 29,704   17,058   1,322   46,762   2,582 
    Net interest income - (TE)$120,081  $126,274  $122,339  $246,355  $235,542 
              
    Return on average assets, annualized 1.36%  1.47%  1.39%  1.42%  1.23%
    Return on average equity, annualized 11.03%  12.15%  11.33%  11.58%  9.74%
    Efficiency ratio [1] 40.86%  39.50%  37.24%  40.17%  41.85%
    Noninterest expense to average assets, annualized 1.32%  1.36%  1.20%  1.34%  1.28%
    Yield on average loans 5.01%  4.90%  4.31%  4.95%  4.29%
    Yield on average earning assets (TE) 4.01%  3.91%  3.20%  3.96%  3.06%
    Cost of deposits 0.35%  0.17%  0.03%  0.26%  0.03%
    Cost of deposits and customer repurchase agreements 0.35%  0.17%  0.04%  0.26%  0.04%
    Cost of funds 0.83%  0.49%  0.04%  0.66%  0.04%
    Net interest margin (TE) 3.22%  3.45%  3.16%  3.33%  3.03%
    [1] Noninterest expense divided by net interest income before provision for credit losses plus noninterest income.    
              
    Tangible Common Equity Ratio (TCE) [2]         
    CVB Financial Corp. Consolidated 7.75%  7.77%  7.46%    
    Citizens Business Bank 7.67%  7.69%  7.17%    
    [2] (Capital - [GW+Intangibles])/(Total Assets - [GW+Intangibles])    
              
    Weighted average shares outstanding         
    Basic 138,330,131   138,592,371   139,748,311   138,420,067   140,467,038 
    Diluted 138,383,239   138,953,172   140,053,074   138,556,510   140,730,309 
    Dividends declared$27,787  $28,007  $26,719  $55,794  $52,186 
    Dividend payout ratio [3] 49.82%  47.25%  45.24%  48.50%  49.88%
    [3] Dividends declared on common stock divided by net earnings.    
              
    Number of shares outstanding - (end of period) 139,343,284   139,302,451   140,025,579     
    Book value per share$14.36  $14.28  $14.16     
    Tangible book value per share$8.74  $8.64  $8.51     
              
     June 30,
    2023    		 December 31,
    2022    		 June 30,
    2022    		    
           
    Nonperforming assets:         
    Nonaccrual loans$6,454  $4,930  $12,964     
    Total nonperforming assets$6,454  $4,930  $12,964     
    Modified loans/performing troubled debt restructured loans (TDR) [4]$3,307  $7,817  $5,198     
              
    [4] Effective January 1, 2023, performing and nonperforming TDRs are reflected as Loan Modifications to borrowers experiencing financial difficulty.
              
    Percentage of nonperforming assets to total loans outstanding and OREO 0.07%  0.05%  0.15%    
    Percentage of nonperforming assets to total assets 0.04%  0.03%  0.08%    
    Allowance for credit losses to nonperforming assets 1347.49%  1726.51%  618.81%    
              
     Three Months Ended Six Months Ended
     June 30,
    2023    		 March 31,
    2023    		 June 30,
    2022    		 June 30,
    2023    		 June 30,
    2022
    Allowance for credit losses:         
    Beginning balance$86,540  $85,117  $76,119  $85,117  $65,019 
    Suncrest FV PCD loans -   -   -   -   8,605 
    Total charge-offs (88)  (110)  (8)  (198)  (24)
    Total recoveries on loans previously charged-off 15   33   511   48   522 
    Net recoveries (charge-offs) (73)  (77)  503   (150)  498 
    Provision for (recapture of) credit losses 500   1,500   3,600   2,000   6,100 
    Allowance for credit losses at end of period$86,967  $86,540  $80,222  $86,967  $80,222 
              
    Net recoveries (charge-offs) to average loans -0.001%  -0.001%  0.006%  -0.002%  0.006%
              


    CVB FINANCIAL CORP. AND SUBSIDIARIES
    SELECTED FINANCIAL HIGHLIGHTS
    (Unaudited)
    (Dollars in millions)
                
    Allowance for Credit Losses by Loan Type
                
     June 30, 2023 December 31, 2022 June 30, 2022
     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$67.9 0.98% $64.8 0.94% $61.5 0.93%
    Construction 1.2 1.69%  1.7 1.93%  1.1 1.75%
    SBA 2.7 0.95%  2.8 0.97%  2.6 0.88%
    Commercial and industrial 9.1 0.95%  10.2 1.08%  7.2 0.76%
    Dairy & livestock and agribusiness 5.0 1.66%  4.4 1.01%  6.8 2.50%
    Municipal lease finance receivables 0.3 0.35%  0.3 0.36%  0.2 0.28%
    SFR mortgage 0.4 0.17%  0.4 0.14%  0.2 0.10%
    Consumer and other loans 0.4 0.73%  0.5 0.69%  0.6 0.68%
                
    Total$87.0 0.98% $85.1 0.94% $80.2 0.92%
                


    CVB FINANCIAL CORP. AND SUBSIDIARIES
    SELECTED FINANCIAL HIGHLIGHTS
    (Unaudited)
    (Dollars in thousands, except per share amounts)
                 
    Quarterly Common Stock Price
                 
      2023
    		 2022
    		 2021
    Quarter End High Low High Low High Low
    March 31, $25.98 $16.34  $24.37  $21.36  $25.00  $19.15 
    June 30, $16.89 $10.66  $25.59  $22.37  $22.98  $20.50 
    September 30, $- $-  $28.14  $22.63  $20.86  $18.72 
    December 31, $- $-  $29.25  $25.26  $21.85  $19.00 
                 
    Quarterly Consolidated Statements of Earnings
                 
        Q2 Q1 Q4 Q3 Q2
        2023 2023 2022 2022 2022
    Interest income            
    Loans and leases, including fees   $110,990  $108,394  $106,884  $100,077  $92,770 
    Investment securities and other    38,249   34,392   35,234   35,111   30,492 
    Total interest income    149,239   142,786   142,118   135,188   123,262 
    Interest expense            
    Deposits    10,765   5,365   2,774   1,728   1,201 
    Other borrowings    18,939   11,693   1,949   122   121 
    Total interest expense    29,704   17,058   4,723   1,850   1,322 
    Net interest income before provision for          
    credit losses    119,535   125,728   137,395   133,338   121,940 
    Provision for credit losses    500   1,500   2,500   2,000   3,600 
    Net interest income after provision for          
    credit losses    119,035   124,228   134,895   131,338   118,340 
                 
    Noninterest income    12,656   13,202   12,465   11,590   14,670 
    Noninterest expense    54,017   54,881   54,419   53,027   50,871 
    Earnings before income taxes    77,674   82,549   92,941   89,901   82,139 
    Income taxes    21,904   23,279   26,773   25,262   23,081 
    Net earnings   $55,770  $59,270  $66,168  $64,639  $59,058 
                 
    Effective tax rate    28.20%  28.20%  28.81%  28.10%  28.10%
                 
    Basic earnings per common share  $0.40  $0.42  $0.47  $0.46  $0.42 
    Diluted earnings per common share $0.40  $0.42  $0.47  $0.46  $0.42 
                 
    Cash dividends declared per common share $0.20  $0.20  $0.20  $0.20  $0.19 
                 
    Cash dividends declared   $27,787  $28,007  $27,995  $27,965  $26,719 
                 


    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,
      2023   2023   2022   2022   2022 
              
    Commercial real estate$6,904,095  $6,950,302  $6,884,948  $6,685,245  $6,643,628 
    Construction 68,836   83,992   88,271   76,495   60,584 
    SBA 278,904   283,464   290,908   296,664   297,109 
    SBA - PPP 5,017   5,824   9,087   17,348   66,955 
    Commercial and industrial 956,242   898,167   948,683   952,231   941,595 
    Dairy & livestock and agribusiness 298,247   307,820   433,564   323,105   273,594 
    Municipal lease finance receivables 77,867   79,552   81,126   76,656   64,437 
    SFR mortgage 263,201   262,324   266,024   263,646   260,218 
    Consumer and other loans 54,988   71,044   76,781   82,746   84,109 
    Gross loans, at amortized cost 8,907,397   8,942,489   9,079,392   8,774,136   8,692,229 
    Allowance for credit losses (86,967)  (86,540)  (85,117)  (82,601)  (80,222)
    Net loans$8,820,430  $8,855,949  $8,994,275  $8,691,535  $8,612,007 
              
              
              
    Deposit Composition by Type and Customer Repurchase Agreements
              
     June 30, March 31, December 31, September 30,June 30,
      2023   2023   2022   2022   2022 
              
    Noninterest-bearing$7,878,810  $7,844,329  $8,164,364  $8,764,556  $8,881,223 
    Investment checking 574,817   668,947   723,870   751,618   695,054 
    Savings and money market 3,627,858   3,474,651   3,653,385   3,991,531   4,145,634 
    Time deposits 316,036   283,943   294,626   364,694   350,308 
    Total deposits 12,397,521   12,271,870   12,836,245   13,872,399   14,072,219 
              
    Customer repurchase agreements 452,373   490,235   565,431   467,844   502,829 
    Total deposits and customer repurchase agreements$12,849,894  $12,762,105  $13,401,676  $14,340,243  $14,575,048 
              


    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,
     2023 2023 2022 2022 2022
    Nonperforming loans:         
    Commercial real estate$3,159  $2,634  $2,657  $6,705  $6,843 
    Construction -   -   -   -   - 
    SBA 629   702   443   1,065   1,075 
    SBA - PPP -   -   -   -   - 
    Commercial and industrial 2,039   2,049   1,320   1,308   1,655 
    Dairy & livestock and agribusiness 273   406   477   1,007   3,354 
    SFR mortgage 354   384   -   -   - 
    Consumer and other loans -   -   33   32   37 
    Total$ 6,454  $ 6,175  $ 4,930  $ 10,117  $ 12,964 
    % of Total loans 0.07%  0.07%  0.05%  0.12%  0.15%
              
    Past due 30-89 days:         
    Commercial real estate$532  $425  $-  $-  $559 
    Construction -   -   -   -   - 
    SBA -   575   556   -   - 
    Commercial and industrial -   -   -   -   - 
    Dairy & livestock and agribusiness 555   183   -   -   - 
    SFR mortgage -   -   388   -   - 
    Consumer and other loans -   -   175   -   - 
    Total$ 1,087  $ 1,183  $ 1,119  $ -  $ 559 
    % of Total loans 0.01%  0.01%  0.01%  0.00%  0.01%
              
    OREO:         
    Commercial real estate$-  $-  $-  $-  $- 
    SBA -   -   -   -   - 
    SFR mortgage -   -   -   -   - 
    Total$ -  $ -  $ -  $ -  $ - 
    Total nonperforming, past due, and OREO$ 7,541  $ 7,358  $ 6,049  $ 10,117  $ 13,523 
    % of Total loans 0.08%  0.08%  0.07%  0.12%  0.16%
              


    CVB FINANCIAL CORP. AND SUBSIDIARIES
    SELECTED FINANCIAL HIGHLIGHTS
    (Unaudited)
             
    Regulatory Capital Ratios
             
             
             
        CVB Financial Corp. Consolidated
    Capital Ratios Minimum Required Plus Capital Conservation Buffer June 30, 2023 December 31, 2022 June 30, 2022
             
    Tier 1 leverage capital ratio 4.0% 9.8% 9.5% 8.8%
    Common equity Tier 1 capital ratio 7.0% 14.1% 13.6% 13.4%
    Tier 1 risk-based capital ratio 8.5% 14.1% 13.6% 13.4%
    Total risk-based capital ratio 10.5% 14.9% 14.4% 14.2%
             
    Tangible common equity ratio   7.8% 7.4% 7.5%
             


    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, 2023, December 31, 2022 and June 30, 2022.
            
       June 30, December 31, June 30,
       2023 2022 2022
       (Dollars in thousands, except per share amounts)
            
     Stockholders’ equity $2,001,367  $1,948,517  $1,982,211 
     Less: Goodwill  (765,822)  (765,822)  (765,822)
     Less: Intangible assets  (18,303)  (21,742)  (25,312)
     Tangible book value $1,217,242  $1,160,953  $1,191,077 
     Common shares issued and outstanding  139,343,284   139,818,703   140,025,579 
     Tangible book value per share $8.74  $8.30  $8.51 
            


    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,
       2023 2023 2022 2023 2022
       (Dollars in thousands)
                
     Net Income $55,770  $59,270  $59,058  $115,040  $104,618 
     Add: Amortization of intangible assets  1,719   1,720   1,998   3,439   3,996 
     Less: Tax effect of amortization of intangible assets [1]  (508)  (508)  (591)  (1,017)  (1,181)
     Tangible net income $56,981  $60,482  $60,465  $117,462  $107,433 
                
     Average stockholders’ equity $2,027,708  $1,978,244  $2,091,454  $2,003,112  $2,166,975 
     Less: Average goodwill  (765,822)  (765,822)  (765,822)  (765,822)  (762,437)
     Less: Average intangible assets  (19,298)  (20,983)  (26,381)  (20,136)  (27,280)
     Average tangible common equity $1,242,588  $1,191,439  $1,299,251  $1,217,154  $1,377,258 
                
     Return on average equity, annualized  11.03%  12.15%  11.33%  11.58%  9.74%
     Return on average tangible common equity, annualized  18.39%  20.59%  18.67%  19.46%  15.73%
                
                
     [1] Tax effected at respective statutory rates.

     


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