CVB Financial Corp. Reports Third Quarter Earnings.ONTARIO, Calif. -- CVB CVB Convention and Visitors Bureau CVB College Van Bestuur (Dutch: Managing Council) CVB Camper Van Beethoven (band) CVB Common Vision Blox CVB Center for Veterinary Biologics Financial Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CVBF CVBF Central Valley Business Forms CVBF Carrier Battle Force ) and its subsidiary, Citizens Business Bank ("the Company"), announced the results for the third quarter of 2006. Net Income CVB Financial Corp. reported net income of $18.5 million for the third quarter ending September 30, 2006. This represents an increase of $188,000, or 1.03%, when compared with the $18.3 million in net earnings reported for the third quarter of 2005. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.24 for the third quarter of 2006 and 2005. Net income for the third quarter of 2006 produced a return on beginning equity of 21.65%, a return on average equity of 20.71% and a return on average assets of 1.23%. The efficiency ratio for the third quarter was 45.63%, and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. as a percentage of average assets were 1.51%. Net income for the nine months ending September 30, 2006 was $55.6 million. This represents an increase of $2.2 million, or 4.05%, when compared with net earnings of $53.4 million for the same period of 2005. Diluted earnings per share were $0.72. This was up $0.03, or 4.35%, from diluted earnings per share of $0.69 for the same period last year. As previously reported, the Company recorded the reversal of a reserve of $2.6 million in the first quarter of 2005. This reserve had been established for a possible robbery loss that did not materialize. This reversal added $1.7 million to net income after taxes for the period. Without this extraordinary item, the net income for the first nine months ending September 30, 2005 would have been $51.7 million. Net earnings of $55.6 million for the first nine months of 2006 would represent an increase of $3.9 million, or 7.50%, when compared to the $51.7 million for the same period in 2005. Net income for the nine months ending September 30, 2006 produced a return on beginning equity of 21.69%, a return on average equity of 21.03% and a return on average assets of 1.31%. The efficiency ratio for the nine-month period was 46.52%, and operating expenses as a percentage of average assets was 1.66%. Net Interest Income and Net Interest Margin Net interest income after provision for credit losses totaled $40.7 million for the third quarter of 2006. This represented a decrease of $1.9 million, or 4.37%, from net interest income after provision for credit losses of $42.6 million for the third quarter of 2005. This decrease resulted from a $19.9 million increase in interest income, offset by a $20.5 million increase in interest expense and a $1.3 million increase in the provision for credit losses. Net interest income before the provision for credit losses decreased $612,000, or 1.44%, in the third quarter of 2006. The increases in interest income were primarily due to the growth in average earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin and an increase in interest rates. The increases in interest expense were due to the increases in deposits and borrowed funds and the increase in interest rates on these funding instruments. The net interest margin (tax equivalent) declined from 3.82% for the third quarter of 2005 to 3.22% for the third quarter of 2006. Total average earning asset Earning asset An asset that generates income, e.g., income from rental property. yields have increased from 5.57% for the third quarter of 2005 to 6.15% for the third quarter of 2006. The cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. has increased from 2.55% for the third quarter of 2005 to 3.90%, for the third quarter of 2006. The higher increase in cost of funds is due to the short-term liability sensitivity of the Company. This decline in net interest margin has been mitigated by the strong growth in the balance sheet. The Company has approximately $1.29 billion, or 36.57%, of its deposits in interest free demand deposits. Net interest income after provision for credit losses totaled $126.6 million for the nine months ending September 30, 2006. This represents an increase of $1.5 million, or 1.17%, over the net interest income after provision for credit losses of $125.1 million for the same period in 2005. This increase resulted from a $53.6 million increase in interest income, which was partially offset by a $49.7 million increase in interest expense and a $2.4 million increase in the provision for credit losses. Net interest income before the provision for credit losses increased $3.9 million, or 3.09%, for the first nine months of 2006. The increases in interest income were primarily due to the growth in average earning assets and an increase in interest rates. The increases in interest expense were due to the increases in interest rates on deposits and borrowed funds. The net interest margin (tax equivalent) decreased from 3.90% for the first nine months of 2005 to 3.42% for the first nine months of 2006. Total average earning asset yields have increased from 5.48% for the first nine months of 2005 to 6.00% for the first nine months of 2006. The cost of funds has increased from 2.34% for the first nine months of 2005 to 3.51% for the first nine months of 2006. The credit quality of the loan portfolio continues to be strong. The allowance for credit losses increased from $24.2 million as of September 30, 2005 to $26.9 million as of September 30, 2006. During the first nine months of 2006, the Company experienced net recoveries of $1.3 million and made a provision for credit losses of $2.4 million. During the first nine months of 2005, the Company had net recoveries of $987,000. In addition, $756,000 was added to the allowance from the acquisition of Granite State Bank. The allowance for credit losses is 0.92% and 1.02% of the total loans and leases outstanding as of September 30, 2006 and 2005, respectively. Balance Sheet The Company reported total assets of $5.97 billion at September 30, 2006. This represented an increase of $954.5 million, or 19.01%, over total assets of $5.02 billion on September 30, 2005. Earning assets totaling $5.61 billion were up $923.6 million, or 19.71%, when compared with earning assets of $4.69 billion as of September 30, 2005. Deposits of $3.52 billion grew $310.1 million, or 9.65%, from $3.21 billion for the same period of the prior year. Gross loans and leases of $2.92 billion on September 30, 2006 rose $541.8 million, or 22.81%, from $2.38 billion on September 30, 2005. Total assets of $5.97 billion as of September 30, 2006 reflect an increase of $551.7 million, or 10.17%, over total assets of $5.42 billion on December 31, 2005. Earning assets of $5.61 billion were up $525.4 million, or 10.34%, over the total earning assets of $5.08 billion on December 31, 2005. Deposits of $3.52 billion on September 30, 2006 grew $99.4 million, or 2.90%, from $3.42 billion as of December 31, 2005. Gross loans and leases of $2.92 billion increased $253.2 million, or 9.50%, from $2.66 billion on December 31, 2005. Total equity of $382.9 million on September 30, 2006 was up by $40.0 million, or 11.67%, from $342.9 million as of December 31, 2005. Investment Securities Investment securities totaled $2.64 billion as of September 30, 2006. This represents an increase of $387.9 million, or 17.20%, when compared with the $2.26 billion in securities as of September 30, 2005. It represents an increase of $273.2 million, or 11.53%, when compared with $2.37 billion in investment securities as of December 31, 2005. In June 2006, the Company purchased $250.0 million in mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. funded by a repurchase agreement Repurchase agreement An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. with a double cap. This was done to protect against increased interest rates while providing a potential benefit in the event rates decline. The life of the repurchase agreement is two years. Financial Advisory Services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal The Financial Advisory Services Group has over $3.0 billion in assets under administration. They provide trust, investment and brokerage related services, as well as financial, estate and business succession planning Management Succession Planning In organizational development, succession planning is the process of identifying and preparing suitable employees through mentoring, training and job rotation, to replace key players — such as the chief executive officer (CEO) — . Loan and Lease Quality CVB Financial Corp reported no non-performing assets as of September 30, 2006 and December 31, 2005. The allowance for credit losses was $26.9 million as of September 30, 2006. This represents 0.92% of gross loans and leases. It compares with an allowance for credit losses of $23.2 million, or 0.87% of gross loans and leases on December 31, 2005. The increase was primarily due to a provision for credit losses of $2.4 million and recoveries of $1.5 million, offset by loan charge-offs of $145,000 during the first nine months of 2006. Other Items in 2006 Corporate Overview CVB Financial Corp. is the holding company for Citizens Business Bank. The Bank is the largest financial institution headquartered in the Inland Empire In·land Empire A region of the northwest United States between the Cascade Range and the Rocky Mountains, comprising eastern Washington, eastern Oregon, northern Idaho, and western Montana. Farming, lumbering, and mining are important to the area. region of Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, . It serves 33 cities with 39 business financial centers in the Inland Empire, Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. County, Orange County and the Central Valley areas of California. Its leasing division, Golden West Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , provides vehicle leasing Vehicle leasing refers to leasing the use of a motor vehicle for a fixed or indefinite period of time. It is commonly offered by dealers as an alternative to vehicle purchase. , equipment leasing Equipment Leasing is a financing option to lease equipment for a certain amount of time. Leasing Benefits
On August 1, 2006, Christopher D. Myers joined the Company as President and Chief Executive Officer of CVB Financial Corp. and its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Citizens Business Bank. Myers also joined the Board of Directors of both CVB Financial Corp. and Citizens Business Bank at that time. During the second quarter of 2006, the two Arcadia business financial centers were consolidated and moved into a new location within the city of Arcadia, California. The new address is 101 West Huntington Drive, Arcadia, California 91007. For the fourth consecutive year, CVB Financial Corp. received the KBW KBW Kommunistischer Bund Westdeutschlands (Communist Union of West Germany) KBW Keefe, Bruyette and Woods, Inc. (investment firm) KBW Knowledge-Based Warfare Honor Roll award at the Annual Community Bank Investor Conference hosted by Keefe, Bruyette & Woods, Inc. in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of on August 1 - 2, 2006. The Company was also recognized as a SmAll-Star by Sandler O'Neill, and named on the FPK FPK Fast Packet Keying FPK Fallen Peace Keepers (gaming clan) FPK Free Pascal Kit Honor Roll by Fox-Pitt, Kelton. Shares of CVB Financial Corp. common stock are listed on the NASDAQ under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors of CVBF. For investor information on CVB Financial Corp., visit our Citizens Business Bank website at www.cbbank.com and click on the CVB Investor tab. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. This document contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from the projected. In addition, these forward-looking statements relate to the Company's current expectations regarding future operating results. Such issues and uncertainties include impact of changes in interest rates, a decline in economic conditions and increased competition among financial services providers. For a discussion of other factors that could cause actual results to differ, please see the publicly available Securities and Exchange Commission filings of CVB Financial Corp., including its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005, and particularly the discussion on risk factors within that document. The Company does not undertake any, 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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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