CVB Financial Corp. Reports Earnings for the Fourth Quarter and the Year Ended 2021

1/26, 10:31 PM (Source: GlobeNewswire)
  • Net Earnings of $47.7 million, or $0.35 per share for Fourth Quarter
  • 2021 Net Earnings of $212.5 million, or $1.56 per share
  • Core loan growth of $235.3 million year-over-year
  • Deposit growth of $1.24 billion or 10.6% year-over-year
  • Completion of the acquisition of Suncrest Bank on January 7, 2022

ONTARIO, Calif., Jan. 26, 2022 (GLOBE NEWSWIRE) -- CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (the “Company”), announced earnings for the quarter and the year ended December 31, 2021.

CVB Financial Corp. reported net income of $47.7 million for the quarter ended December 31, 2021, compared with $49.8 million for the third quarter of 2021 and $50.1 million for the quarter ended December 31, 2020. Diluted earnings per share were $0.35 for the fourth quarter, compared to $0.37 for the prior quarter and $0.37 for the same period last year. The fourth quarter of 2021 did not include a recapture of provision for credit losses, compared to $4.0 million of provision recaptured in the third quarter of 2021. The fourth quarter of 2020 did not include a (recapture of) or provision for credit losses. Net income of $47.7 million for the fourth quarter of 2021 produced an annualized return on average equity (“ROAE”) of 9.05%, an annualized return on average tangible common equity (“ROATCE”) of 13.89%, and an annualized return on average assets (“ROAA”) of 1.18%. Our net interest margin, tax equivalent, (“NIM”) was 2.79% for the fourth quarter of 2021, while our efficiency ratio was 41.80%.

David Brager, President and Chief Executive Officer of Citizens Business Bank, commented, “The Bank delivered another solid quarter and full year of strong earnings. The 2021 earnings represented the highest earnings in the Company’s history. Since the onset of the COVID-19 pandemic, Citizens Business Bank has maintained its high level of performance and confirmed our position as a safe, sound, and secure financial institution. We were also pleased to complete the acquisition of Suncrest Bank on January 7, 2022 and to welcome Suncrest Bank’s associates, customers and shareholders to Citizens Business Bank. As I look forward to 2022, I believe we remain well positioned to benefit from improving economic conditions and rising interest rates. I want to thank our associates for remaining focused on our customers and our vision, our customers for their loyalty, and our shareholders for their confidence in our Bank.”

INCOME STATEMENT HIGHLIGHTS

            
   Three Months Ended Year Ended December 31,
 December 31,
2021
 September 30,
2021
 December 31,
2020
 2021 2020 2019
    (Dollars in thousands, except per share amounts)  
Net interest income$102,395  $103,299  $105,853  $414,550  $416,053  $435,772 
Recapture of (provision for) credit losses -   4,000   -   25,500   (23,500)  (5,000)
Noninterest income 12,385   10,483   12,925   47,385   49,870   59,042 
Noninterest expense (47,980)  (48,099)  (48,276)  (189,787)  (192,903)  (198,740)
Income taxes (19,104)  (19,930)  (20,446)  (85,127)  (72,361)  (83,247)
Net earnings$47,696  $49,753  $50,056  $212,521  $177,159  $207,827 
Earnings per common share:           
Basic$0.35  $0.37  $0.37  $1.57  $1.30  $1.48 
Diluted$0.35  $0.37  $0.37  $1.56  $1.30  $1.48 
            
NIM 2.79%  2.89%  3.33%  2.97%  3.59%  4.36%
ROAA 1.18%  1.26%  1.42%  1.38%  1.37%  1.84%
ROAE 9.05%  9.49%  9.92%  10.30%  8.90%  10.71%
ROATCE 13.89%  14.62%  15.67%  15.93%  14.25%  17.56%
Efficiency ratio 41.80%  42.27%  40.64%  41.09%  41.40%  40.16%
Noninterest expense to average assets, annualized 1.19%  1.22%  1.37%  1.24%  1.49%  1.76%

Net Interest Income
Net interest income was $102.4 million for the fourth quarter of 2021. This represented a $904,000, or 0.88%, decrease from the third quarter of 2021, and a $3.5 million, or 3.27%, decrease from the fourth quarter of 2020. Total interest income was $103.5 million for the fourth quarter of 2021, which was $1.0 million, or 0.97%, lower than the third quarter of 2021 and $5.1 million, or 4.71%, lower than the same period last year. Total interest income and fees on loans for the fourth quarter of 2021 of $84.7 million decreased $3.7 million, or 4.19%, from the third quarter of 2021, and decreased $11.1 million, or 11.54%, from the fourth quarter of 2020.   The decline in interest income and fees on loans was primarily due to lower loan yields resulting from the low interest rate environment. Total investment income of $17.8 million increased $2.8 million, or 18.71%, from the third quarter of 2021 and increased $5.5 million, or 44.82%, from the fourth quarter of 2020. Investment income growth resulted from higher levels of investment securities. Interest expense decreased $112,000 or 8.97%, from the prior quarter and decreased $1.7 million, or 59.30%, compared to the fourth quarter of 2020.   The decrease in interest expense resulted from lower cost of funds, which declined to 3 basis points in the fourth quarter of 2021.

Net interest income before (recapture of) provision for credit losses was $414.6 million for the year ended December 31, 2021, compared to $416.1 million in 2020. Interest income declined by $9.7 million, or 2.26%, as interest income and fees on loans declined by $20.8 million, or 5.51%. Partially offsetting the decrease in loan income was growth in income from investments of $10.2 million, or 20.23% and a decline in interest expense of $8.2 million or 57.43%.

Net Interest Margin
Our net interest margin, tax equivalent, was 2.79% for the fourth quarter of 2021, compared to 2.89% for the third quarter of 2021 and 3.33% for the fourth quarter of 2020. The decrease in the net interest margin from the prior quarter was the result of a 10 basis point decrease in earning asset yield, due to a combination of a 14 basis point decline in loan yields and a change in asset mix with loan balances declining to 53.14% of earning assets on average for the fourth quarter of 2021, compared to 54.97% for the third quarter of 2021. Interest and fee income from Paycheck Protection Program (“PPP”) loans was approximately $4.2 million in the fourth quarter of 2021, compared to $7.9 million in the third quarter of 2021. The 54 basis point decline in net interest margin, compared to the fourth quarter of 2020 was primarily the result of a 60 basis point decline in earning asset yield. The decrease in earning asset yield was impacted by a change in asset mix with loan balances declining to 53.14% of earning assets on average for the fourth quarter of 2021, compared to 65.59% for the fourth quarter of 2020, as well as lower loan and investment yields. The decline in interest rates since the start of the pandemic has had a negative impact on loan yields, which, after excluding discount accretion, nonaccrual interest income and the impact from PPP loans (“core loan yield”), declined by 30 basis points compared to the fourth quarter of 2020. Additionally, interest and fee income from PPP loans declined by $6.3 million from $10.5 million in the fourth quarter of 2020. Of the $339.7 million quarter-over-quarter increase in earning assets, $733.4 million represented an increase in average investment securities while average loans declined by $82.7 million. Compared to the fourth quarter of 2020, average investments increased by $2.04 billion, while balances at the Federal Reserve grew on average by $512.1 million. Average loans declined by $513.5 million from the fourth quarter of 2020, which included a $778.6 million decrease in PPP loans on average. Total cost of funds declined to 0.03% for the fourth quarter of 2021 from 0.04% for the third quarter of 2021 and 0.09% for the year ago quarter. Noninterest-bearing deposits grew on average by $334.6 million, or 4.19%, from the third quarter of 2021, while interest-bearing deposits and customer repurchase agreements grew on average by $43.1 million during the fourth quarter of 2021, compared to the third quarter of 2021. Compared to the fourth quarter of 2020, our overall cost of funds decreased by 6 basis points, as average noninterest-bearing deposits grew by $1.39 billion, compared to average growth of $355.0 million in interest-bearing deposits. On average, noninterest-bearing deposits were 63.80% of total deposits during the current quarter.

  Three Months Ended
SELECTED FINANCIAL HIGHLIGHTSDecember 31, 2021 September 30, 2021 December 31, 2020
  (Dollars in thousands, except per share amounts)
Yield on average investment securities (TE) 1.52%    1.54%    1.81%  
Yield on average loans 4.29%    4.43%    4.56%  
Core Loan Yield [1] 4.08%    4.14%    4.38%  
Yield on average earning assets (TE) 2.82%    2.92%    3.41%  
Cost of funds 0.03%    0.04%    0.09%  
Net interest margin (TE) 2.79%    2.89%    3.33%  
             
Average Earning Asset MixAvg % of Total Avg % of Total Avg % of Total
 Total investment securities$4,845,498  32.87% $4,112,147  28.55% $2,810,205  22.08%
 Interest-earning deposits with other institutions 2,045,124  13.87%  2,356,121  16.36%  1,550,325  12.18%
 Loans 7,833,741  53.14%  7,916,443  54.97%  8,347,260  65.59%
 Total interest-earning assets 14,742,051    $14,402,399     12,725,478   
             
 [1] Represents yield on average loans excluding the impact of discount accretion, nonaccrual interest income and PPP loans.  

Provision for Credit Losses
No recapture of provision for credit losses was recorded in the fourth quarter of 2021, compared to a recapture of $4.0 million of provision for credit losses in the third quarter of 2021. A $25.5 million recapture of provision for credit losses was recorded for the year ended December 31, 2021, resulting from improvements in our economic forecast of certain macroeconomic variables. In comparison, $23.5 million in provision for credit losses was recorded for the year ended December 31, 2020 due to the severe economic forecast at that time as a result of the onset of the COVID-19 pandemic.

Noninterest Income
Noninterest income was $12.4 million for the fourth quarter of 2021, compared with $10.5 million for the third quarter of 2021 and $12.9 million for the fourth quarter of 2020. Trust and investment services income increased by $431,000 in the fourth quarter of 2021, compared to the third quarter of 2021 and grew by $436,000 year-over-year. Swap fee income decreased $167,000 quarter-over-quarter and declined by $876,000 year-over-year. The fourth quarter of 2021 included $890,000 for recovery of an acquired loan charged off prior to a previous acquisition and a $700,000 net gain on the sale of an OREO property. The fourth quarter of 2020 included a $365,000 net gain on the sale of two OREO properties.

For the year ended December 31, 2021, noninterest income was $47.4 million, compared to $49.9 million for 2020. Swap fee income decreased $4.6 million year-over-year, while Trust and investment services income grew by $1.6 million for 2021 when compared to 2020, and service charges on deposit accounts increased by approximately $590,000 year-over-year. Noninterest income for 2021 also included $1.2 million in net gain on the sale of three OREO properties, while 2020 included $1.7 million net gain on the sale of one of our owned buildings and a $365,000 net gain on the sale of two OREO properties.

Noninterest Expense
Noninterest expense for the fourth quarter of 2021 was $48.0 million, compared to $48.1 million for the third quarter of 2021 and $48.3 million for the fourth quarter of 2020. Acquisition expense related to the merger of Suncrest Bank was $153,000 for the fourth quarter of 2021, compared to $809,000 in the third quarter of 2021. As a percentage of average assets, noninterest expense was 1.19% for the fourth quarter of 2021, compared to 1.22% for the third quarter of 2021 and 1.37% for the fourth quarter of 2020.   The efficiency ratio for the fourth quarter of 2021 was 41.80%, compared to 42.27% for the third quarter of 2021 and 40.64% for the fourth quarter of 2020.  

Noninterest expense of $189.8 million for the year ended December 31, 2021 was $3.1 million lower than the prior year. The year-over-year decrease of $3.1 million included a $1.9 million decrease in salaries and employee benefits, partially due to a $1.1 million in additional bonus expense for “Thank You Awards” paid to all Bank employees during the third quarter of 2020. The year-over-year decrease also included a $1.5 million decrease in professional services expense, a $1.1 million decrease in CDI amortization, a $1.2 million decrease in OREO expense primarily due to a $700,000 write-down of one OREO property in 2020, and a $1.0 million recapture of provision for unfunded loan commitments recorded in 2021 compared to no recapture of provision in 2020. These decreases were partially offset by a $2.3 million increase in regulatory assessment expense compared to the prior year, resulting from the final application of assessment credits provided by the FDIC at the end of the second quarter of 2020. Additionally, there were $962,000 in acquisition related expenses for the year ended December 31, 2021, compared to no merger related expenses for 2020. As a percentage of average assets, noninterest expense was 1.24% for 2021, compared to 1.49% for 2020. The efficiency ratio for the year ended December 31, 2021 was 41.09%, compared to 41.40% for 2020.

Income Taxes

Our effective tax rate for the fourth quarter and the year ended December 31, 2021 was 28.6%, compared with 29.0% for the same periods of 2020, respectively.   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 $15.88 billion at December 31, 2021. This represented a decrease of $371.9 million, or 1.96%, from total assets of $16.20 billion at September 30, 2021. Interest-earning assets of $14.68 billion at December 31, 2021 decreased $248.4 million, or 1.66%, when compared with $14.93 billion at September 30, 2021. The decrease in interest-earning assets was primarily due to a $759.3 million decrease in interest-earning balance due from the Federal Reserve, partially offset by a $473.9 million increase in investment securities and a $38.2 million increase in total loans.

Total assets at December 31, 2021 increased by $1.46 billion, or 10.16%, from total assets of $14.42 billion at December 31, 2020. Interest-earning assets increased $1.46 billion, or 11.04%, when compared with $13.22 billion at December 31, 2020. The increase in interest-earning assets includes a $2.13 billion increase in investment securities, partially offset by a $461.1 million decrease in total loans and a $193.3 million decrease in interest-earning balances due from the Federal Reserve. The decrease in total loans was due to a $696.4 million decrease in PPP loans with a remaining outstanding balance totaling $186.6 million as of December 31, 2021. Excluding PPP loans, total loans increased by $235.3 million from December 31, 2020.

Investment Securities
Total investment securities were $5.11 billion at December 31, 2021, an increase of $473.9 million, or 10.22%, from $4.64 billion at September 30, 2021 and an increase of $2.13 billion, or 71.61%, from $2.98 billion at December 31, 2020.  

At December 31, 2021, investment securities held-to-maturity (“HTM”) totaled $1.93 billion, an increase of $215.0 million, or 12.57%, from September 30, 2021 and a $1.35 billion increase, or 232.85%, from December 31, 2020.

At December 31, 2021, investment securities available-for-sale (“AFS”) totaled $3.18 billion, inclusive of a pre-tax net unrealized loss of $1.3 million. AFS securities increased by $258.9 million, or 8.85%, from $2.93 billion at September 30, 2021 and increased by $785.0 million, or 32.72%, from December 31, 2020.  

Combined, the AFS and HTM investments in mortgage backed securities (“MBS”) and collateralized mortgage obligations (“CMO”) totaled $4.29 billion or approximately 84% of the total investment securities at December 31, 2021. 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 $576.9 million of Government Agency securities (HTM) at December 31, 2021, that represent approximately 11% of the total investment securities.

Our combined AFS and HTM municipal securities totaled $240.5 million as of December 31, 2021, or approximately 5% of our total investment portfolio. These securities are located in 28 states. Our largest concentrations of holdings by state, as a percentage of total municipal bonds, are located in Minnesota at 20.91%, Texas at 10.46%, Massachusetts at 10.40%, Ohio at 8.08%, and Connecticut at 5.79%.

Loans
Total loans and leases, at amortized cost, of $7.89 billion at December 31, 2021 increased by $38.2 million, or 0.49%, from September 30, 2021. After adjusting for seasonality and forgiveness of PPP loans, our loans grew by $75.9 million, or approximately 1%, from the end of the third quarter, or 4% annualized. The $38.2 million increase in total loans included increases of $106.6 million in dairy & livestock and agribusiness loans, $55.0 million in commercial real estate loans, $43.1 million in commercial and industrial loans, $9.3 million in SFR mortgage loans, and $2.6 million in other loans, partially offset by decreases of $144.4 million in PPP loans, $18.9 million in SBA loans, and $15.1 million in construction loans. The majority of the year-end growth in dairy & livestock and agribusiness loans was seasonal.

Total loans and leases, at amortized cost, of $7.89 billion at December 31, 2021 decreased by $461.1 million, or 5.52%, from December 31, 2020. The $461.1 million decrease in total loans included decreases of $696.4 million in PPP loans, $29.9 million in SFR mortgage loans, $22.9 million in construction loans, $15.3 million in SBA loans, and $11.3 million in consumer and other loans. Partially offsetting these declines were increases in commercial real estate loans of $288.2 million and $25.1 million in dairy & livestock and agribusiness loans. Our core loans, excluding PPP loans, grew by $235.3 million, or 3.2%, from the end of the fourth quarter of 2020.  

Asset Quality
During the fourth quarter of 2021, we experienced credit charge-offs of $375,000 and total recoveries of $30,000, resulting in net charge-offs of $345,000. The allowance for credit losses (“ACL”) totaled $65.0 million at December 31, 2021, compared to $65.4 million at September 30, 2021 and $93.7 million at December 31, 2020. The allowance for credit losses was decreased by $25.5 million in 2021, due to the improved outlook in our forecast of certain macroeconomic variables that were influenced by the economic impact of the pandemic and government stimulus, and by $3.2 million in year-to-date net charge-offs. At December 31, 2021, ACL as a percentage of total loans and leases outstanding was 0.82%. This compares to 0.83% and 1.12% at September 30, 2021 and December 31, 2020, respectively. When PPP loans are excluded, the ACL as a percentage of total loans and leases outstanding was 0.84% at December 31, 2021, compared to 0.87% at September 30, 2021 and 1.25% at December 31, 2020.

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 TrendsDecember 31, September 30, December 31,
 2021 2021 2020
Nonperforming loans     
Commercial real estate$3,607  $4,073  $7,563 
SBA 1,034   1,513   2,273 
Commercial and industrial 1,714   2,038   3,129 
Dairy & livestock and agribusiness -   118   785 
SFR mortgage 380   399   430 
Consumer and other loans 158   305   167 
Total$ 6,893  $ 8,446  $ 14,347 
% of Total loans 0.09%  0.11%  0.17%
      
OREO     
Commercial real estate$-  $-  $1,575 
SFR mortgage -   -   1,817 
Total$ -  $ -  $ 3,392 
      
Total nonperforming assets$ 6,893  $ 8,446  $ 17,739 
% of Nonperforming assets to total assets 0.04%  0.05%  0.12%
      
Past due 30-89 days     
Commercial real estate$438  $-  $- 
SBA 979   -   1,965 
Commercial and industrial -   122   1,101 
Dairy & livestock and agribusiness -   1,000   - 
SFR mortgage 1,040   -   - 
Total$ 2,457  $ 1,122  $ 3,066 
% of Total loans 0.03%  0.01%  0.04%
      
Classified Loans$ 56,102  $ 49,755  $ 78,819 

Classified loans are loans that are graded “substandard” or worse. Classified loans increased $6.3 million quarter-over-quarter and included a $10.8 million increase in classified commercial real estate loans, partially offset by a $1.7 million decrease in classified commercial and industrial loans and a $2.1 million decrease in classified dairy & livestock and agribusiness loans.

Deposits & Customer Repurchase Agreements
Deposits of $12.98 billion and customer repurchase agreements of $642.4 million totaled $13.62 billion at December 31, 2021. This represented an increase of $29.0 million, or 0.21%, when compared with $13.59 billion at September 30, 2021. Total deposits and customer repurchase agreements increased $1.44 billion, or 11.85% when compared with $12.18 billion at December 31, 2020.

Noninterest-bearing deposits were $8.10 billion at December 31, 2021, a decrease of $206.7 million, or 2.49%, when compared to $8.31 billion at September 30, 2021 and an increase of $648.7 million, or 8.70%, when compared to $7.46 billion at December 31, 2020. At December 31, 2021, noninterest-bearing deposits were 62.45% of total deposits, compared to 64.27% at September 30, 2021 and 63.52% at December 31, 2020.

Capital
The Company’s total equity was $2.08 billion at December 31, 2021. This represented an increase of $73.5 million from total equity of $2.01 billion at December 31, 2020. The increase was primarily due to net earnings of $212.5 million, partially offset by $97.8 million in cash dividends and a $39.3 million decrease in other comprehensive income from the tax effected impact of the decline in market value of available-for-sale securities. During the third quarter of 2021, we repurchased 390,336 shares of common stock for $7.4 million, or an average repurchase price of $18.97. Our tangible book value per share at December 31, 2021 was $10.27.

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
 December 31,
2021
 September 30,
2021
 December 31,
2020
         
Tier 1 leverage capital ratio 4.0% 9.2% 9.2% 9.9%
Common equity Tier 1 capital ratio 7.0% 14.9% 14.9% 14.8%
Tier 1 risk-based capital ratio 8.5% 14.9% 14.9% 15.1%
Total risk-based capital ratio 10.5% 15.6% 15.7% 16.2%

CitizensTrust
As of December 31, 2021 CitizensTrust had approximately $3.45 billion in assets under management and administration, including $2.50 billion in assets under management. Revenues were $3.1 million for the fourth quarter of 2021 and $11.6 million for 2021, compared to $2.7 million and $10.0 million, respectively, for the same periods of 2020. CitizensTrust provides trust, investment and brokerage related services, as well as financial, estate and business succession planning.

Merger Update
On January 7, 2022, the Company completed the previously announced merger (the “Merger”) transaction whereby Suncrest Bank (“Suncrest”) merged with and into the Company’s wholly-owned subsidiary Citizens Business Bank (“Citizens”), in accordance with the terms and conditions of that certain Agreement and Plan of Reorganization and Merger (“Merger Agreement”), dated as of July 27, 2021, by and among the Company, Citizens and Suncrest, in a stock and cash transaction valued at approximately $237 million in aggregate, or $18.63 per Suncrest share based on CVB Financial Corp.’s closing stock price of $22.87 on January 7, 2022. Under the terms of the Merger Agreement, the Company issued approximately 8.6 million shares of Company common stock and approximately $39.6 million in aggregate cash consideration, including cash paid out in settlement of outstanding incentive stock option awards at Suncrest.

Suncrest Bank, headquartered in Visalia, California, had approximately $1.4 billion in total assets, $0.8 billion in net loans, $1.2 billion in total deposits and $179.0 million in total equity as of December 31, 2021. Tangible book value per share was $11.16 at December 31, 2021. Suncrest’s seven branch locations and two loan production offices in California’s Central Valley and the Sacramento area opened as Citizens Business Bank locations on January 10, 2022.

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 the Inland Empire, Los Angeles County, Orange County San Diego County, Ventura County, Santa Barbara County, and Central 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. PST/10:30 a.m. EST on Thursday, January 27, 2022 to discuss the Company’s fourth quarter and year ended 2021 financial results.

To listen to the conference call, please dial (833) 301-1161, participant passcode 5190385. A taped replay will be made available approximately one hour after the conclusion of the call and will remain available through February 3, 2022 at 6:00 a.m. PST/9:00 a.m. EST. To access the replay, please dial (855) 859-2056, participant passcode 5190385.

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 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 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, 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 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 threats and the cost 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; 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 2020 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.

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
      
  December 31, September 30, December 31,
   2021   2021   2020 
Assets      
Cash and due from banks $90,012  $159,563  $122,305 
Interest-earning balances due from Federal Reserve  1,642,536   2,401,800   1,835,855 
Total cash and cash equivalents  1,732,548   2,561,363   1,958,160 
Interest-earning balances due from depository institutions  25,999   27,260   43,563 
Investment securities available-for-sale  3,183,923   2,925,060   2,398,923 
Investment securities held-to-maturity  1,925,970   1,710,938   578,626 
Total investment securities  5,109,893   4,635,998   2,977,549 
Investment in stock of Federal Home Loan Bank (FHLB)  17,688   17,688   17,688 
Loans and lease finance receivables  7,887,713   7,849,520   8,348,808 
Allowance for credit losses  (65,019)  (65,364)  (93,692)
   Net loans and lease finance receivables  7,822,694   7,784,156   8,255,116 
Premises and equipment, net  49,096   49,812   51,144 
Bank owned life insurance (BOLI)  251,570   251,781   226,818 
Intangibles  25,394   27,286   33,634 
Goodwill  663,707   663,707   663,707 
Other assets  185,108   182,547   191,935 
      Total assets $15,883,697  $16,201,598  $14,419,314 
Liabilities and Stockholders' Equity      
Liabilities:      
Deposits:      
Noninterest-bearing $8,104,056  $8,310,709  $7,455,387 
Investment checking  655,333   594,347   517,976 
Savings and money market  3,889,371   3,680,721   3,361,444 
Time deposits  327,682   344,439   401,694 
 Total deposits  12,976,442   12,930,216   11,736,501 
Customer repurchase agreements  642,388   659,579   439,406 
Other borrowings  2,281   -   5,000 
Junior subordinated debentures  -   -   25,774 
Payable for securities purchased  50,340   421,751   60,113 
Other liabilities  130,743   126,132   144,530 
   Total liabilities  13,802,194   14,137,678   12,411,324 
Stockholders' Equity      
Stockholders' equity  2,085,471   2,060,842   1,972,641 
Accumulated other comprehensive (loss) income, net of tax  (3,968)  3,078   35,349 
   Total stockholders' equity  2,081,503   2,063,920   2,007,990 
      Total liabilities and stockholders' equity $15,883,697  $16,201,598  $14,419,314 
       


CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
           
           
  Three Months Ended  Year Ended
  December 31,
2021
 September 30,
2021
 December 31,
2020
  2021   2020 
Assets          
Cash and due from banks $159,086  $156,575  $181,117  $155,926  $161,223 
Interest-earning balances due from Federal Reserve  2,018,516   2,328,745   1,506,385   1,922,513   1,065,039 
Total cash and cash equivalents  2,177,602   2,485,320   1,687,502   2,078,439   1,226,262 
Interest-earning balances due from depository institutions  26,608   27,376   43,940   30,696   33,775 
Investment securities available-for-sale  3,034,487   2,942,255   2,242,017   2,849,905   1,892,074 
Investment securities held-to-maturity  1,811,011   1,169,892   568,188   1,208,554   611,946 
Total investment securities  4,845,498   4,112,147   2,810,205   4,058,459   2,504,020 
Investment in stock of FHLB  17,688   17,688   17,688   17,688   17,688 
Loans and lease finance receivables  7,833,741   7,916,443   8,347,260   8,065,877   8,066,483 
Allowance for credit losses  (65,304)  (69,309)  (93,799)  (74,871)  (85,362)
   Net loans and lease finance receivables  7,768,437   7,847,134   8,253,461   7,991,006   7,981,121 
Premises and equipment, net  49,711   50,105   51,501   50,188   52,487 
Bank owned life insurance (BOLI)  252,210   251,099   228,753   242,432   226,848 
Intangibles  26,216   28,240   34,711   29,328   38,203 
Goodwill  663,707   663,707   663,707   663,707   663,707 
Other assets  184,258   190,445   193,398   188,578   185,702 
      Total assets $16,011,935  $15,673,261  $13,984,866  $15,350,521  $12,929,813 
Liabilities and Stockholders' Equity          
Liabilities:          
Deposits:          
Noninterest-bearing $8,326,073  $7,991,462  $6,932,797  $7,817,627  $6,281,989 
Interest-bearing  4,723,759   4,704,976   4,368,786   4,625,045   3,976,568 
   Total deposits  13,049,832   12,696,438   11,301,583   12,442,672   10,258,557 
Customer repurchase agreements  660,734   636,393   494,410   610,479   479,956 
Other borrowings  81   4   8,181   2,008   5,674 
Junior subordinated debentures  -   -   25,774   11,581   25,774 
Payable for securities purchased  103,635   151,866   19,162   111,152   44,966 
Other liabilities  106,907   108,322   128,116   109,269   123,222 
     Total liabilities  13,921,189   13,593,023   11,977,226   13,287,161   10,938,149 
Stockholders' Equity          
Stockholders' equity  2,087,716   2,067,072   1,971,726   2,048,876   1,960,459 
Accumulated other comprehensive income, net of tax  3,030   13,166   35,914   14,484   31,205 
     Total stockholders' equity  2,090,746   2,080,238   2,007,640   2,063,360   1,991,664 
        Total liabilities and stockholders' equity $16,011,935  $15,673,261  $13,984,866  $15,350,521  $12,929,813 
           


CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
           
           
  Three Months Ended  Year Ended
  December 31,
2021
 September 30,
2021
 December 31,
2020
  2021   2020 
Interest income:          
Loans and leases, including fees $84,683  $88,390  $95,733  $356,594  $377,402 
Investment securities:          
Investment securities available-for-sale  9,891   9,813   9,107   38,273   36,052 
Investment securities held-to-maturity  7,917   5,188   3,190   22,175   14,223 
Total investment income  17,808   15,001   12,297   60,448   50,275 
Dividends from FHLB stock  261   258   217   1,019   978 
Interest-earning deposits with other institutions  779   898   397   2,569   1,682 
Total interest income  103,531   104,547   108,644   420,630   430,337 
Interest expense:          
Deposits  996   1,113   2,525   5,346   12,602 
Borrowings and junior subordinated debentures  140   135   266   734   1,682 
Total interest expense  1,136   1,248   2,791   6,080   14,284 
Net interest income before (recapture of) provision for credit losses  102,395   103,299   105,853   414,550   416,053 
(Recapture of) provision for credit losses  -   (4,000)  -   (25,500)  23,500 
Net interest income after (recapture of) provision for credit losses  102,395   107,299   105,853   440,050   392,553 
Noninterest income:          
Service charges on deposit accounts  4,485   4,513   4,006   17,152   16,561 
Trust and investment services  3,112   2,681   2,676   11,571   9,978 
Gain on OREO, net  700   -   365   1,177   388 
Gain on sale of building, net  -   -   -   -   1,680 
Other  4,088   3,289   5,878   17,485   21,263 
Total noninterest income   12,385   10,483   12,925   47,385   49,870 
Noninterest expense:          
Salaries and employee benefits  29,588   29,741   29,142   117,871   119,759 
Occupancy and equipment  4,822   5,122   5,479   19,756   20,622 
Professional services  1,925   1,626   2,817   7,967   9,460 
Computer software expense  3,063   3,020   2,895   11,584   11,302 
Marketing and promotion  1,242   857   950   4,623   4,488 
Amortization of intangible assets  1,892   2,014   2,170   8,240   9,352 
(Recapture of) provision for unfunded loan commitments  -   -   -   (1,000)  - 
Acquisition related expenses  153   809   -   962   - 
Other  5,295   4,910   4,823   19,784   17,920 
Total noninterest expense  47,980   48,099   48,276   189,787   192,903 
Earnings before income taxes  66,800   69,683   70,502   297,648   249,520 
Income taxes  19,104   19,930   20,446   85,127   72,361 
Net earnings $47,696  $49,753  $50,056  $212,521  $177,159 
           
Basic earnings per common share $0.35  $0.37  $0.37  $1.57  $1.30 
Diluted earnings per common share $0.35  $0.37  $0.37  $1.56  $1.30 
Cash dividends declared per common share $0.18  $0.18  $0.18  $0.72  $0.72 
           


CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
           
  Three Months Ended Year Ended
  December 31,
2021
 September 30,
2021
 December 31,
2020
  2021   2020 
Interest income - tax equivalent (TE) $103,795  $104,812  $108,959  $421,704  $431,691 
Interest expense  1,136   1,248   2,791   6,080   14,284 
Net interest income - (TE) $102,659  $103,564  $106,168  $415,624  $417,407 
           
Return on average assets, annualized  1.18%  1.26%  1.42%  1.38%  1.37%
Return on average equity, annualized  9.05%  9.49%  9.92%  10.30%  8.90%
Efficiency ratio [1]  41.80%  42.27%  40.64%  41.09%  41.40%
Noninterest expense to average assets, annualized  1.19%  1.22%  1.37%  1.24%  1.49%
Yield on average loans  4.29%  4.43%  4.56%  4.42%  4.68%
Yield on average earning assets (TE)  2.82%  2.92%  3.41%  3.02%  3.71%
Cost of deposits  0.03%  0.03%  0.09%  0.04%  0.12%
Cost of deposits and customer repurchase agreements  0.03%  0.04%  0.09%  0.05%  0.13%
Cost of funds  0.03%  0.04%  0.09%  0.05%  0.13%
Net interest margin (TE)  2.79%  2.89%  3.33%  2.97%  3.59%
[1] Noninterest expense divided by net interest income before provision for credit losses plus noninterest income.    
           
Weighted average shares outstanding          
Basic  134,955,690   135,200,249   135,063,751   135,164,972   136,030,613 
Diluted  135,183,895   135,383,614   135,281,882   135,381,867   136,206,210 
Dividends declared $24,401  $24,421  $24,413  $97,814  $97,665 
Dividend payout ratio [2]  51.16%  49.08%  48.77%  46.03%  55.13%
[2] Dividends declared on common stock divided by net earnings.    
           
Number of shares outstanding - (end of period)  135,526,025   135,516,404   135,600,501     
Book value per share $15.36  $15.23  $14.81     
Tangible book value per share $10.27  $10.13  $9.67     
           
  December 31, September 30, December 31,    
   2021   2021   2020     
Nonperforming assets:          
Nonaccrual loans $6,893  $8,446  $14,347     
Loans past due 90 days or more and still accruing interest  -   -   -     
Troubled debt restructured loans (nonperforming)  -   -   -     
Other real estate owned (OREO), net  -   -   3,392     
Total nonperforming assets $6,893  $8,446  $17,739     
Troubled debt restructured performing loans $5,293  $7,975  $2,159     
           
Percentage of nonperforming assets to total loans outstanding and OREO  0.09%  0.11%  0.21%    
Percentage of nonperforming assets to total assets  0.04%  0.05%  0.12%    
Allowance for credit losses to nonperforming assets  943.26%  773.90%  528.17%    
           
  Three Months Ended Year Ended
  December 31,
2021
 September 30,
2021
 December 31,
2020
  2021   2020 
Allowance for credit losses:          
Beginning balance $65,364  $69,342  $93,869  $93,692  $68,660 
Impact of adopting ASU 2016-13  -   -   -   -   1,840 
Total charge-offs  (375)  (11)  (182)  (3,371)  (666)
Total recoveries on loans previously charged-off  30   33   5   198   358 
Net charge-offs  (345)  22   (177)  (3,173)  (308)
(Recapture of) provision for credit losses  -   (4,000)  -   (25,500)  23,500 
Allowance for credit losses at end of period $65,019  $65,364  $93,692  $65,019  $93,692 
           
Net charge-offs to average loans  -0.004%  0.000%  -0.002%  -0.039%  -0.004%
           


CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in millions)
                   
Allowance for Credit Losses by Loan Type             
                   
  December 31, 2021 September 30, 2021 December 31, 2020
  Allowance
For Credit
Losses
 Allowance
as a % of
Total Loans
by Respective
Loan Type
 Allowance
For Credit
Losses
 Allowance
as a % of
Total Loans
by Respective
Loan Type
 Allowance
For Credit
Losses
 Allowance
as a % of
Total Loans
by Respective
Loan Type
                   
Commercial real estate $50.9  0.9%  $52.3  0.9%  $75.4  1.4% 
Construction  0.8  1.2%   1.1  1.4%   1.9  2.3% 
SBA  2.7  0.9%   2.9  1.0%   3.0  1.0% 
SBA - PPP  -  -    -  -    -  -  
Commercial and industrial  6.7  0.8%   4.9  0.6%   7.1  0.9% 
Dairy & livestock and agribusiness  3.0  0.8%   3.2  1.1%   4.0  1.1% 
Municipal lease finance receivables  0.1  0.2%   0.1  0.2%   0.1  0.2% 
SFR mortgage  0.2  0.1%   0.2  0.1%   0.4  0.1% 
Consumer and other loans  0.6  0.8%   0.7  1.0%   1.8  2.1% 
                   
Total $65.0  0.8%  $65.4  0.8%  $93.7  1.1% 
                   


CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
             
Quarterly Common Stock Price                        
             
   2021   2020   2019 
Quarter End High Low High Low High Low
March 31, $25.00  $19.15  $22.01  $14.92  $23.18  $19.94 
June 30, $22.98  $20.50  $22.22  $15.97  $22.22  $20.40 
September 30, $20.86  $18.72  $19.87  $15.57  $22.23  $20.00 
December 31, $21.85  $19.00  $21.34  $16.26  $22.18  $19.83 
             
Quarterly Consolidated Statements of Earnings                        
             
    Q4 Q3 Q2 Q1 Q4
     2021   2021   2021   2021   2020 
Interest income            
Loans and leases, including fees   $84,683  $88,390  $91,726  $91,795  $95,733 
Investment securities and other    18,848   16,157   15,302   13,729   12,911 
Total interest income    103,531   104,547   107,028   105,524   108,644 
Interest expense            
Deposits    996   1,113   1,425   1,812   2,525 
Other borrowings    140   135   215   244   266 
Total interest expense    1,136   1,248   1,640   2,056   2,791 
Net interest income before (recapture of) provision for credit losses    102,395   103,299   105,388   103,468   105,853 
(Recapture of) provision for credit losses      -   (4,000)  (2,000)  (19,500)  - 
Net interest income after (recapture of) provision for credit losses    102,395   107,299   107,388   122,968   105,853 
             
Noninterest income    12,385   10,483   10,836   13,681   12,925 
Noninterest expense    47,980   48,099   46,545   47,163   48,276 
Earnings before income taxes    66,800   69,683   71,679   89,486   70,502 
Income taxes    19,104   19,930   20,500   25,593   20,446 
Net earnings   $47,696  $49,753  $51,179  $63,893  $50,056 
             
Effective tax rate    28.60%  28.60%  28.60%  28.60%  29.00%
             
Basic earnings per common share  $0.35  $0.37  $0.38  $0.47  $0.37 
Diluted earnings per common share     $0.35  $0.37  $0.38  $0.47  $0.37 
             
Cash dividends declared per common share     $0.18  $0.18  $0.18  $0.18  $0.18 
             
Cash dividends declared   $24,401  $24,421  $24,497  $24,495  $24,413 
             


CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)
           
Loan Portfolio by Type
  December 31, September 30, June 30, March 31, December 31,
   2021   2021   2021   2021   2020 
           
Commercial real estate $5,789,730  $5,734,699  $5,670,696  $5,596,781  $5,501,509 
Construction  62,264   77,398   88,280   96,356   85,145 
SBA  288,600   307,533   291,778   307,727   303,896 
SBA - PPP  186,585   330,960   657,815   897,724   882,986 
Commercial and industrial  813,063   769,977   749,117   753,708   812,062 
Dairy & livestock and agribusiness  386,219   279,584   257,781   261,088   361,146 
Municipal lease finance receivables  45,933   47,305   44,657   42,349   45,547 
SFR mortgage  240,654   231,323   237,124   255,400   270,511 
Consumer and other loans  74,665   70,741   74,062   81,924   86,006 
Gross loans, net of deferred loan fees and discounts  7,887,713   7,849,520   8,071,310   8,293,057   8,348,808 
Allowance for credit losses  (65,019)  (65,364)  (69,342)  (71,805)  (93,692)
Net loans $7,822,694  $7,784,156  $8,001,968  $8,221,252  $8,255,116 
           
           
           
Deposit Composition by Type and Customer Repurchase Agreements
           
  December 31, September 30, June 30, March 31, December 31,
   2021   2021   2021   2021   2020 
           
Noninterest-bearing $8,104,056  $8,310,709  $8,065,400  $7,577,839  $7,455,387 
Investment checking  655,333   594,347   588,831   567,062   517,976 
Savings and money market  3,889,371   3,680,721   3,649,305   3,526,424   3,361,444 
Time deposits  327,682   344,439   365,521   407,330   401,694 
Total deposits  12,976,442   12,930,216   12,669,057   12,078,655   11,736,501 
           
Customer repurchase agreements  642,388   659,579   578,207   506,346   439,406 
Total deposits and customer repurchase agreements $13,618,830  $13,589,795  $13,247,264  $12,585,001  $12,175,907 
           


CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)
           
Nonperforming Assets and Delinquency Trends
  December 31, September 30, June 30, March 31, December 31,
   2021   2021   2021   2021   2020 
Nonperforming loans:          
Commercial real estate $3,607  $4,073  $4,439  $7,395  $7,563 
Construction  -   -   -   -   - 
SBA  1,034   1,513   1,382   2,412   2,273 
Commercial and industrial  1,714   2,038   1,818   2,967   3,129 
Dairy & livestock and agribusiness  -   118   118   259   785 
SFR mortgage  380   399   406   424   430 
Consumer and other loans  158   305   308   312   167 
Total $ 6,893  $ 8,446  $ 8,471  $ 13,769  $ 14,347 
% of Total loans  0.09%  0.11%  0.10%  0.17%  0.17%
           
Past due 30-89 days:          
Commercial real estate $438  $-  $-  $178  $- 
Construction  -   -   -   -   - 
SBA  979   -   -   258   1,965 
Commercial and industrial  -   122   415   952   1,101 
Dairy & livestock and agribusiness  -   1,000   -   -   - 
SFR mortgage  1,040   -   -   266   - 
Consumer and other loans  -   -   -   21   - 
Total $ 2,457  $ 1,122  $ 415  $ 1,675  $ 3,066 
% of Total loans  0.03%  0.01%  0.01%  0.02%  0.04%
           
OREO:          
Commercial real estate $-  $-  $-  $1,575  $1,575 
SBA  -   -   -   -   - 
SFR mortgage  -   -   -   -   1,817 
Total $ -  $ -  $ -  $ 1,575  $ 3,392 
Total nonperforming, past due, and OREO $ 9,350  $ 9,568  $ 8,886  $ 17,019  $ 20,805 
% of Total loans  0.12%  0.12%  0.11%  0.21%  0.25%
           


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 December 31, 2021, September 30, 2021 and December 31, 2020.
        
    December 31,
2021
   September 30,
2021
   December 31,
2020
 
   (Dollars in thousands, except per share amounts)
        
 Stockholders' equity $2,081,503  $2,063,920  $2,007,990 
 Less: Goodwill  (663,707)  (663,707)  (663,707)
 Less: Intangible assets  (25,394)  (27,286)  (33,634)
 Tangible book value $1,392,402  $1,372,927  $1,310,649 
 Common shares issued and outstanding  135,526,025   135,516,404   135,600,501 
 Tangible book value per share $10.27  $10.13  $9.67 
        


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 Year Ended
   December 31, September 30, December 31,    
    2021   2021   2020   2021   2020 
   (Dollars in thousands)
            
 Net Income $47,696  $49,753  $50,056  $212,521  $177,159 
 Add: Amortization of intangible assets  1,892   2,014   2,170   8,240   9,352 
 Less: Tax effect of amortization of intangible assets [1]  (559)  (595)  (642)  (2,436)  (2,765)
 Tangible net income $49,029  $51,172  $51,584  $218,325  $183,746 
            
 Average stockholders' equity $2,090,746  $2,080,238  $2,007,640  $2,063,360  $1,991,664 
 Less: Average goodwill  (663,707)  (663,707)  (663,707)  (663,707)  (663,707)
 Less: Average intangible assets  (26,216)  (28,240)  (34,711)  (29,328)  (38,203)
 Average tangible common equity $1,400,823  $1,388,291  $1,309,222  $1,370,325  $1,289,754 
            
 Return on average equity, annualized  9.05%  9.49%  9.92%  10.30%  8.90%
 Return on average tangible common equity, annualized  13.89%  14.62%  15.67%  15.93%  14.25%
            
            
 [1] Tax effected at respective statutory rates.
            

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


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