CVB Financial Corp. Q3 FY2025 earnings call

• Reported 194th consecutive quarter of profitability with net earnings of $52.6 million ($0.38 per share).
• Declared a $0.20 per share dividend for Q3 2025, 144th consecutive quarter of paying a cash dividend.
• Pretax, preprovision income in Q3 2025 was $70 million, up from prior quarters.
• Received a $6 million legal settlement but had an $8.2 million loss on sale of $65 million of low-yielding AFS securities.
• Loan originations in Q3 2025 were ~55% higher than Q3 2024, with loan pipelines remaining strong.
• Nonperforming and delinquent loans decreased to $28.5 million at September 30, 2025.

For the third quarter of 2025, CVB Financial Corporation reported net earnings of $52.6 million, or $0.38 per share. Net interest income was $115.6 million in Q3 2025, compared to $111.6 million in Q2 2025 and $113.6 million in Q3 2024. Total loans at September 30, 2025, were $8.47 billion, a $112 million (5% annualized) increase from Q2 2025. Total deposits and customer repurchase agreements totaled $12.6 billion, a $170 million increase from Q2 2025. Return on average tangible common equity was 14.11% and return on average assets was 1.35% for Q3 2025.

• Dave Brager expressed confidence in low single-digit loan growth for the year, citing strong loan pipelines.
• Anticipates expense management to continue with low single-digit growth, particularly in technology investment.
• Expects benefit from deposit cost going down as the Fed continues to lower rates.

• Referenced the company's annual report on Form 10-K for detailed risk factors, including those in Item 1A, Risk Factors.

Q: On your interest-bearing deposit costs up a few basis points this quarter caused your beta cycle to date to slow a little bit to, I think, 28%. How should we think about the beta through the cycle from here and maybe remind us what portion of your deposit base do you feel like you can be more aggressive with?

A: Dave Brager and E. Nicholson discussed deposit mix, rate reductions following Fed actions, and plans to reduce rates as the Fed goes down.

Q: Since we're limited to 2, I'm just going to jump to M&A. Any increase in dialog there on the M&A front? I guess where do we stand?

A: David Brager mentioned ongoing dialogs, hired 4 bankers from City National Bank to open a de novo office in the Temecula, Murrieta area, with continued M&A conversations.

Q: I wanted to start just on loan growth. You guys had a really good quarter. Dave, it sounded like in your prepared remarks, obviously, originations are up a lot this year. It sounds like the pipeline is still pretty strong. I just wanted to get -- I know you've got a seasonal benefit in the fourth quarter, but just expectations on loan growth over the near term. Do you think you can continue at this mid-single-digit pace?

A: David Brager said confident in low single-digit loan growth for the year, citing strong pipelines and ongoing opportunities.

Q: You referenced just pricing competition in the market. And it sounds like your new origination yields came down a little bit this quarter relative to the first half of the year and rates have obviously come down, so that will influence it. But I'm curious, are you willing to be a little more competitive on the pricing front now, just given where the market is at today? Or has your approach to new loan pricing not really changed much?

A: David Brager said willing to compete on price for the right relationship, while holding the line on credit quality.

Q: I wanted to ask on the loan side, it looks like you had a little earlier than typical increase in dairy and livestock line utilization. So just as we're thinking about the fourth quarter and what's usually a pretty large spike there, is that spike muted a bit because you had some drawdown here in the third quarter?

A: David Brager said new dairy relationships impacted utilization, expecting a normal fourth quarter spike.

Q: A question about the $700 million of interest rate swaps that you kind of updated back in May. I think the kind of outlook for short-term rates is probably points to more lowering over the next 12 months or so than maybe what was contemplated back in May. So any thoughts about that swap arrangement and making any changes there?

A: David Brager said swaps are fair value hedges, no immediate plans to change them.

Q: It's Liam on for David. You guys have highlighted the intense rate competition on the lending side. You called out that one regional competitor offering the 4 handle on the equipment loan. Is that who you're seeing the most competition from on both the loan and deposit side today? And how difficult is deposit gathering given this intense loan growth?

A: David Brager discussed competition from larger banks, focus on operating companies, and deposit gathering related to relationships with higher noninterest-bearing percentages.

Q: I wanted to ask on the loan side, it looks like you had a little earlier than typical increase in dairy and livestock line utilization. So just as we're thinking about the fourth quarter and what's usually a pretty large spike there, is that spike muted a bit because you had some drawdown here in the third quarter?

A: David Brager said new dairy relationships impacted utilization, still expecting a normal fourth quarter spike.

Q: This is Charlie on for Kelly. You guys continue to build cash balances again this quarter. Just wondering if there's any updated message there regarding any potential areas to deploy that? Are you kind of viewing it as dry powder for a seasonally strong Q4? Just any color on how you're thinking of utilizing it?

A: E. Nicholson discussed preparing for deposit outflows in Q4 and evaluating bond market for deployment.

Q: And then if you guys could just touch on expenses, they've been really well controlled. Just looking forward here, if we do get a little bit of growth and with the team lift out, how are you thinking about expense management heading into 2026?

A: E. Nicholson said expense management will continue with low single-digit growth, focusing on technology investment.