CVB Financial Corp. (CVBF) Earnings

Management highlights

Net earnings of $51 million or $0.38 per share for Q1 2026, 196th consecutive quarter of profitability. $0.20 per share dividend declared, 146th consecutive quarter of paying cash dividend. Return on average tangible common equity 13.4% and return on average assets 1.33% for Q1 2026. Pretax pre-provision income grew by $4 million or 6% y-o-y. Net interest margin expanded by 13 basis points to 3.44%. Average loans grew by $157 million or ~2% y-o-y, total loans at Mar 31, 2026 up $280 million or 3.3% from Q1 2025. Average total deposits and customer repurchase agreements up $288 million or 2.4% y-o-y. Loan originations in Q1 2026 ~90% higher than Q1 2025 and 15% higher than Q4 2025. Nonperforming loans increased to $6.1 million at Mar 31, 2026, classified loans $83.1 million. Noninterest expense $60.6 million in Q1 2026, efficiency ratio 45.8%

Guidance

Still too early to give precise margin guidance as balance sheet repositioning is ongoing. Will evaluate capital management including buybacks going forward after balance sheet setup. Pro forma capital is already very strong but visibility into capital management increases in later quarters

Segment performance

Net earnings for Q1 2026 were $51 million or $0.38 per share. Return on average tangible common equity was 13.4% and return on average assets was 1.33%. Pretax pre-provision income grew by $4 million or 6% y-o-y. Net interest margin expanded by 13 basis points to 3.44%. Average loans grew by $157 million or ~2% y-o-y, total loans at Mar 31, 2026 were $8.64 billion, up $280 million or 3.3% from Q1 2025. Average total deposits and customer repurchase agreements were $12.5 billion, up $288 million or 2.4% y-o-y. Net interest income was $117.8 million in Q1 2026, compared to $122.7 million in Q4 2025 and $110.4 million in Q1 2025

Risks & headwinds

Risks and uncertainties that may cause actual results to differ materially from forward-looking statements, detailed in company's annual report on Form 10-K and earnings release. Competition for high-quality loans is intense. Economic forecast with real GDP forecasted to be below 1% in second half of 2026 and stay below 2% through 2027, unemployment rate forecasted to reach 5% by mid-2026 and remain above 5% through 2028, commercial real estate prices forecasted to continue decline through end of 2026 before growth in back half of 2027

Analyst Q&A

• Q: I wanted to start on the deal and welcome to the call, Clay. How has it gone thus far? What are top priorities initially after deal closed?

  A: Initially, acclimating new associates, training, setting up accounts, structuring relationships. Clay and team are drinking through a firehose with training and information. Focus on acclimating new associates, setting up accounts, structuring relationships, and educating on bank culture.

• Q: The commentary on the origination activity is extremely encouraging. How much of the improvement is gaining share vs improving demand?

  A: Initially, more opportunity out there. Over last couple of quarters, liquidity, market position, and combined organization capacity provide opportunities. Pipelines holding up, but competition exists and loan origination yields affected by need to compete for deals.

• Q: Building upon David's question, in your markets if you're seeing any increased competitive dynamics?

  A: Always extremely competitive, especially for target relationships. No noticeable shift, but some banks like Wells Fargo, Pat Premier, Colombia, Fifth Third, BMO are more active. Our bankers successful in new customer origination with high service level and product array.

• Q: Turning to capital, your level levels should still be quite robust pro forma for the merger just closed. Any updated thoughts on capital management, buybacks, future deals?

  A: Focused on integrating Heritage appropriately. Will evaluate capital management including buybacks going forward after balance sheet setup. Pro forma capital is strong, but visibility increases in later quarters.

• Q: I want to start on the C&I credit that you assigned some specific reserves to. What happened there and plans for resolution?

  A: C&I loan impacted by customer bankruptcy, collateral position shored up, specific reserve established. Classified loans centered in two C&I relationships with good collateral positions, one in sale process, both within collateral guidelines.

• Q: Do you plan to do the CECL double count here in 2Q?

  A: Elected new accounting, so no double count.

• Q: Accretion expectations?

  A: Too early, better answers next quarter.

• Q: Special FHLB dividend. Can you just quantify that this quarter?

  A: About $400,000.

• Q: With the merger closed in the second quarter, any kind of guardrails you could put around margin expectations?

  A: Too early, pro forma loans and deposits for combined organization (excluding mortgages sold) on Page 31 of investor presentation, but balance sheet repositioning still ongoing.

• Q: When we talked some in the past just about maybe some of the opportunity to upsize some of the legacy Heritage relationships and maybe that some of that was already occurring pre deal close. Just can you remind us general kind of opportunity set there?

  A: At deal announcement, mantra to capture clients reaching upper limits at Heritage, now expanded capacity, great opportunities with largest clients, additional synergies in ag, dairy, lending, mortgage origination, trust, wealth services, international services