CVBF - Earnings call transcript Q1 2018

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Operator

Good morning, ladies and gentlemen. And welcome to the First Quarter 2018 CVB Financial Corporation and its subsidiary, Citizens Business Bank Earnings Conference Call. My name is Phil and I’m your operator for today. At this time, all participants are in a listen-only mode. [Operator Instructions] Please also note this event is being recorded. to call, presentation Christina like host to now today’s for Carrabino. would turn over the your I

You may proceed.

Christina Carrabino

financial first Thank you, us our joining Thank you for Phil, and good today morning to of XXXX. quarter everyone. for results the review

President morning Allen Officer, Vice and Myers, Executive Officer. Chief Chief Executive Joining me Financial Chris and this President are and Nicholson,

www.cbbank.com To comments and our the earnings in today was that included visit Investors the will Our on please released click refer obtain yesterday. tab. information website copy, to at the financial a announcement

Before uncertainties, call financial we may among that events get statements statements. today’s started, expectations, let me trends and to, remind will These affect call XXXX. you Act claim the contained that protection other relate Harbor forward-looking plans, industry statements activities conference things, from Company’s in current include Securities future risks future some the materially and differ results Safe Reform forward-looking Such and the operating this expectations. of may involve The on Private provisions these and and of the speakers results position. Litigation

year on XXXX, may in XX-K complete information Item see more that therein. and the uncertainties Factors, statements, differ actual annual forth our results the and to Company’s in report risks particular, a discussion materially the please XX, of for from For ended set cause December forward-looking Form the XA Risk

to Myers. call Chris I will turn over the Now,

Chris Myers

this quarter. his Allen an Good everyone is XXst for have morning, us and I Christina. today. you, again announcement you birthday Thank celebrating and to thank important is Nicholson that make joining

$XX.X Allen. with for all the for $XX.X the the quarter. that kidding extra first net earnings for and questions. with of million year-ago anyway, of the him Yesterday, quarter ask on reported go in I so, compared XXXX, quarter million you we And aside, fourth $XX.X happy birthday, million But tough

quarter and quarterly $X.XX Our the $X.XX for Earnings fourth CVBF quarter. year-ago compared for first share with quarter first the the earnings history. in were were the quarter earnings highest per $X.XX for

fourth Excluding XXXX adjustment, tax $X.XX. the the asset of quarter the for share of were valuation impact deferred earnings per

were million first and last $X.X a earnings loan provision recapture. remaining gain quarter’s the The of positively on by our OREO loss property $X sale impacted million net

$XXX,XXX $XXX,XXX payroll were we taxes expenses earnings in negatively in experience acquisition-related first each in higher higher and typically taxes year. impacted quarter by the as quarter of First payroll

profitability into The merger first entered consecutive quarter Community which of will quarter to merge agreement dividend paying announced pursuant Bank we quarter our our Citizens a we of and represented Business shareholders. a In Bank, with consecutive XXXth into to February, Bank. cash XXXth that Community

excited are years. with the a strong our We market Orange Angeles to two XXXX. depth California of companies businesses merger fuel County the to combination and for and to of XX be that greater joining of share but quarter only is successful also The Los closing Southern serves The in expansion customer our help individuals in occur personnel the forces will not add bank the areas, business third increase in the it past anticipated future.

Moving back to some numbers.

was and X.XX% quarter X.XX% fourth compared the the for margin X.XX% for interest net the quarter a equivalent quarter tax Our ago. first first year for with

investment in X.XX%. increase $X.XX in interest our declined billion the $XX.X of the in by loan to yields. first of quarter million or increased fourth net about quarter interest, loans due Excluding the primarily margin to quarter the Total to XXXX, tax-exempt impact XXXX, the X.XX% of X.XX% our nominal and for first

year. loan $XX.X first portfolio declined agribusiness due of seasonal which dairy by livestock million, and paydowns primarily quarter to the historically calendar occur and Our in the

least with where March compared or where quarter loans -- quarter a loans below total X.XX% to $XX.X X.XX% significantly we were for the XXXX, X% categories the annual rate, XXXX. loans quarter million, had prior the for be in prior over for quarter-over-quarter. take million the XXXX. decrease XX all or dairy The from $X.XX XX, first real XX-Q. fourth were primarily in X.XX% was and combined decrease relatively million $X.X were value dairy first the losses out for at loss growth. we remaining quarter-over-quarter, more $XX.X fair When of estate the million assets and loans quarter livestock X.XX%. for available December loan was and We’ll March ratio about loans allowance at total XX, loans first XXXX, Average total $X.X year-ago to quarter. loans compared $XX.X or of X.XX% the for due and the loans with classified X.XX% of information estate our of below XXXX, loan X.XX% $X.X the of decrease flat prior recoveries of livestock loans and loss our loans March XXXX quarter agribusiness total other real for Commercial the as run quarter ago you about about the XX, Net million million or have March yields of quarter. or with while X.XX% loans from quarter for fourth $XX.X million a million by delinquent at of prior little positive or allowances were were assets the but in quarter. days first $XX.X allowance XX million million want defined $XXX,XXX a XX, and a to Form Loan X.XX% compared our nonperforming acquisitions, up million total $XXX,XXX we X.XX% decrease with commercial nonaccrual compared year the for XXXX. of the Classified of $XX.X is X.XX% discounts or $XX.X for XXXX the loan and on X.XX% -- X.XX% At XXXX of If was market loans. with on lease the dairy with compared by first quarter quarter other assets loans of and million At for increased total real or for $XX.X the lease increased of quarter and loans the estate quarter-end, XXXX, detailed XXXX, loan X.XX% At or for actually owned $XX.X plus loans. as first quarter million were assets [ph] XX,

Now, to discuss I’d like deposits.

for quarter. non-interest-bearing our first $X.XX totaled quarter quarter $X.XX fourth quarter XXXX of billion XXXX, $X.X non-interest-bearing XX% for the quarter XXXX. with for $X deposits Average billion total compared year-ago $X.XX about for the for first and non-interest-bearing deposits our the the the and For XXXX, of billion billion of quarter. quarter were $X.XX first the first deposits compared billion Average the of with represented for billion prior deposits

quarter points cost XXXX. XX Our quarter compared for points toXX XX quarter points first customer basis and basis of the basis the for deposits for was repurchase of agreements and prior first the

same same XXXX total and $X.X year-ago. was basis X $X.X the a the of XXXX the deposits billion points, Our XX, XX, and were compared of At our repurchase and first as funds with total December the basis-point cost period XXXX, March customer quarter XX agreements billion than fourth for billion $X.X quarter. at higher

interest and $XX.X branch. assets first for $X.X with of for XXXX The compared with The loans million period the quarter for $XX.X earning quarter increases was decrease result loan quarter X.XX% quarter. average was of was for interest the from same first decline condemnation tax in Noninterest million of million our benefit $XXX,XXX to was Bank the to increase million The By a first income X.XX% from quarter the totaled in compared of and prior yield income the days million income Interest the $XXX,XXX the X.XX% eminent quarter-over-quarter average earning quarter compared of quarter a comparison, increase quarter for for yields. for for maintaining million acquisition loan debt stable for life on increase XXXX was of the $X.X the and a quarter million of the a $XX achieve income. the in insurance loan securities. year-ago of from first assets. on our with in $X.X recovery and a first sale $XXX,XXX $XX.X and of the XXXX income XXXX. compared charged a net during a decline Business in million net a income sale $X.X earning The million objective a of fourth fewer prior $XX.X off on the OREO continue result a for XX two offset cost, the of gain XXXX a and the low quarter source on Valley This in Bank a equivalent Valley by former quarter a $XXX,XXX yield fourth gain of on quarter, We prior to increase for $XXX Interest in earning assets quarter fourth the domain the banking $X.X center the basis-point the in assets. and and investment million a our included quarter. bank-owned of $XX.X million was million the from gain interest Business year-ago. result the net funding

quarter and million for expense $XX.X for with the XXXX Noninterest for year-ago $XX.X quarter. quarter million $XX.X first expenses. was the Now million fourth compared the of

is a first included XXXX and the in expense for $XXX,XXX in X.XX% year. in of $XXX,XXX quarter in the or to employee compared Salary of quarter of payroll the Noninterest first total of for average benefit increase benefit the approximately quarter of $XXX,XXX for prior assets and XXXX. offset acquisition fourth quarter totaled with expenses taxes, related X.X%. the which in XXXX. expenses first expense resulting salary increase expense benefit $XX,XXX and quarter X.XX% the first quarter compared by quarter the The for first Modest for $XXX,XXX with compensation of X.XX% decreases and and payroll for taxes, typical the net increased

Allen call I turn Nicholson our position. Now, to tax CFO discuss rate, overall like the effective our investment our and capital to would to Allen? over portfolio,

Allen Nicholson

morning, Good Chris. everyone. Thanks,

year excluded, Reform the with rate quarter. asset reduction XX% revaluation the XXXX. rate of the tax due end federal $XX.X our our first rate quarter was for decrease compared XX% effective the of in tax quarter as was the of Tax XX%, for from XX% last result deferred fourth the When to the effective net to The tax of tax a Our XX.X% at was first million Act. for the

depending tax upon Our effective vary items compensation. discrete such stock of tax tax-advantaged income, can the rate amount and as credits

our to Now, investment portfolio. looking

quarter situations Reserve earning balances financial million. first the of XXXX, and $XXX average at other totaled the Federal During our interest

billion, of $X.XX from During than quarter. and totaled a payments decrease from which XX, first the totaled earning held combined assets. securities At securities fourth not a in quarter, flow XX% $XX.X X% assets We maturity quarter, investment first from principal million the Investment the average the unrealized of did first our the any portfolio $XXX available-for-sale of these quarter. the cash our included of represented our during earning average less which $X.XX quarter. investment million. prior compared during to March balances investment loss reinvest XXXX, securities to XX% billion, pretax quarter-end At available-for-sale represented the

had addition, securities had portfolio to and with held The was quarter yield fourth rate for compared million. basis, fourth the equivalent with reduction a quarter in totaling X.XX% X.XX% in quarter we impact first with maturity $XXX the in XXXX. security the on on XXXX. federal quarter the the of first nominal quarter, for of investment increased X.XX% security first the in X.XX% modestly yields The for securities, tax of XXXX. quarter X.XX% yield the lowering of In a in first effective total tax tax compared investment X.XX% to On and comparison our XXXX yield a

end for $X.XX offset in the turn earnings in our market back quarter-over-quarter compensation $XX.X $XXX,XXX due by Now, from equity to turning net The quarter. other remarks. now $X.X to tax a position. the impact other in of with comprehensive available capital to of the million $XX.X securities. of items, the in $XX.X call and million and Chris decreased I decrease will first sale was value Shareholders’ billion stock-based for million dividends at decline effected income million to cash some decline closing the various

Chris Myers

Thanks Allen.

Let’s economic talk conditions. about

its gained January to in a in X.X% was according million expansion February this XXXX. California economic to XXXX, keep to unemployment X.X of industries. now unemployment growth to Turning began wages economic and in February gains of XXXX. to February its various job terms is expansion, rate low X.X% rate California’s improvements expected and of back growth California the outlooks, the California workers. fueled all many has outpaced strengths Throughout compared since all and much rate, nation in of the X.X% state and economic jobs XXXX economy, total states has nearly for the in and in Steady many unemployment key in job increase by

in With these The both slightly help are local drive and and housing modest homes California existing costs. has increase continues to demand economic is driving supply There construction to communities. lean continued increased a financial California, expected home growth well-being, of new gains purchase but pace. households in in for up remains their at in

focused first of of under closing, in continuing to the first are of growing the flat In way. cost Feed XXXX. an on be bank of the first they terms a for industry, projected balanced remain due In the oversupply, fell were prices for in strategy quarter we prices the slightly dairy milk the relatively quarter. half our production to and

on sales, de bank. presentation. and merger very and our Bank We geographies, our opening challenge That and for capable opportunity its novo concludes acquisitions today’s locations and exciting a to same-store Company rely great and with people. will is build Community The new provides

will I be any take you question that and Allen to have. might Now, happy

Operator

question from Aaron go with First Please Instructions] Deer comes Sandler O’Neill. [Operator ahead.

Aaron Deer

paydowns point to start of here? mostly would I obviously, or second the seasonal headwind like a little see the in bit Chris, the this could about trends, done little quarter more dairy that talking just this from at that Is the we quarter. a loan

Chris Myers

-- the operating I the in we quarter. are having of because million kind $XX a And of It’s million more expected little more. in think $XX million are million quarter tougher that because lower think bit little or environment I a the about dairy. $XX in But, done. $XX decline result that bit is We the prices, first of milk a tough the actually dairies borrowings pretty expected much

more, So, I don’t see much no.

Aaron Deer

as you And the year. than that you’d then, across weaker this hope guess said, that, a seems that look year, areas focus -- and out absent shaping pretty your you you’re common little of as to up, be to expectations to for, the on remainder you I looking that here the industry quarter are are growth of look any grow was the what book? the particular and But, how first to

Chris Myers

Yes.

be from first grew perspective, want our I real give is. it When That That’s think. our look is X%. quarter, was out We X/XX/XX which we take annualized X.XX%, to not it to is agribusiness, X.XX%. be. closer as you organic and we me rate, growth rate. In But if and X/XX/XX, some it we we year-over-year we to the to Let just loans growth what being as X%. where livestock dairy at organic look want

and because loan first slow deposits First the year-end quarter of and that. a also lot February is always taxes very quarter are tough growth January, things a of like

end but nicely. rebounded So, the little the quarter soft of a first the at average deposits the were bit in they quarter,

kind forward X annual So, rate. organic aspiration X% growth, our that to looking on is of loan growth in

are a interview is the XXX lot there no distracted about it. got do. of little acquisition; work We’ve their of We question We all employees. to with

it We’re $XXX treating this million like was acquisition.

the doing the sure best want the same thing results. We’re to we because best with people we make get

will the year. be the that So, be Do I in think growth may loan impacted growth first No. loan half of for negative?

an I know. may X% to stick be annualized may now. just X% run we’re kind think, will right positive. I running that not closer it it It of be rate, don’t

sure that’s we’re we’ve bring C&I Bank positioning efficiently. to division, the of -- and relationship are the terms the got decisions pretty half of all-star my personnel everything kick is people sales set Because in my of for on and think resources, with the of Bank growth really the all bonded, in But, post-merger you, in the be skill rate. Community my running of people when a head our lot a terms candid they we’ve teams good. we’ll second us to that that good organic Community -- out and making right managers, that banking. one year keeping regional I team lending so with Our expect everybody in that’s so ourselves good are got are pipeline And I making my my and April, own we’re together, team,

-- We’re Beach our South going office Orange that almost to very in deposits. really as that banks combine that our million, And are and mean, million million, with set $XXX really, and Newport we’re our office our Bay loans are offices, these we will like like efficient. and with offices consolidate Pasadena have skill within we office that’s office going $XXX offices the mini North have $XXX to I County and and our bank.

in aspire fourth think cylinders, the and XXXX. $XX I to going going I and in Community and take continue beta our we terms I X.XX%, I year, risk on and XX.XX%, average first think type So, quarter, in the be an middle I on And average we’re XX.X%. a by I have of But, of think and numbers are three we’re rambling of if this consolidated, that proud million of was what want mean, our return on all is get one for very third of on make the I things on my was ratio of here. profitability I of but I’m trend I of our -- quarter sorry, return on assets things efficiency to the was really Company, quarter months the one for that are focused going in a of on people acquisition, we we’re keep this things was equity Bank can to these hitting the phenomenal. -- lot that our running

Aaron Deer

Thank great you, update. Okay. Chris. That’s

the last update -- point. have this planned Any on one question of Just a working conversion on in efforts you cost related Do integration already. can terms like any at sounds pretty of provide you’re you to sort update or it deal. saves hard that date

Chris Myers

announced mean, on have don’t save I anything we’ve them I issue. the cost XX%. at

So, that’s where in are we that.

July Assuming pipeline. we’re do. we stuff got applications got close the our to August, and We’ve that in filed; hard the deal we’ve pushing very all which in

to Assuming is over November. our convert date conversion in the that operating happens, systems

whether branch consolidation should into be we December if correctly. -- And So, their do but may from this converted of our branch the into branch, the year will their into through branches be March, will or end year-end, happens before XXXX. our first that the branch quarter of we that and the April it’s of primarily go in

Operator

Matthew with Please The next from Piper Clark question go ahead. comes Jaffray.

Matthew Clark

on First one that just the margins? the to How accretion quarter. in contributed much has

Allen Nicholson

the accretion to referring loans. You’re [Ph] of our

Matthew Clark

purchase I about accretion that was XXX,XXX. The think accounting running

Allen Nicholson

I $X a think, a tad a million. just it over about million, was $X bit

Matthew Clark

out then, it loan look And loan looking not you just you and yields competition of a or -- speak our that Okay. is in else? relatively more in yields, the strip if lift quarter. your something Can the seeing might is at stable it at you why core core be to

Chris Myers

are lower Well, into seasonality February. some the The from of we the, that we now. yearend dairies dairy January, linger right our what and yields happens typically borrowings a part of little get loan side -- is too,

some current their because are forward. yields going higher loan yields We Although going going should variable see up. are rate loan up, loan yields

rate seeing finally positive up The for more variable is of loan great is trend are yields the some the for as also rate yields though not fixed go and think up. we’re us loan flattening us. curve I going

more of a we’re yield. the loan As going more the curve, to flat flatten have

give anticipate are and the our the I yields information go me with could to in what fed rate what loan more to does it’s Tell XX-year you treasury do. so, on going I funds And do going up. lockstep

Matthew Clark

Okay.

excess core work of -- quarter. that beginning the you too, at feel sounds feel like end pretty that So, put at able the margin in to you the outlook, least good to here growth about with near-term deposit

Chris Myers

pressure to the our all in year I the mean the X be on absolutely of that’s the have XXXX. there do. we being XX a same cost but I way had think on deposit of -- more of with basis last funds funds cost And side, cost the deposits points, sitting o and we because is deposits deposit I we institutions, here us, for weathered is I deposits same of of ago. we the first cost had year mean quarter Cost basis;

to shows have able we’re deposits think do to a far that So, the going we that do lot so The that concept be able to really not business line perfectly forward. hold going have and fact of relationship that we’ve banking we good a that sticky. it been are I

included the presidents on this of doing in year and we One bigger incentive program and have our our is are emphasis things a deposits. that club

us focusing really but important. And deposits. important start on so now. that so, focus right you’re right this more know out going to deposits is The world wants the funding on And see loans, to now for there I extremely is war

have we the these the to and competing have area. clients, in that great and business infrastructure, you service, we’re job doing a So, accommodate everything And to technology do. the all

going pure, I’m about think have a going have funding to Community when with. to billion we’re funding. $X close that pure Bank deal don’t we And deal it’s I in So, to the

borrowings, all $X to funds that more with fed about more FHLB I tied it’s do finding, you -- it’s agree a think kinds number? rates, it’s price-sensitive billion. it’s that it’s Is stuff; of

Allen Nicholson

Correct.

Chris Myers

I line for X% over points that And that well of I So, price right them and think that turn do of is funding. what can I do XX is bottom which us. which replace funding fed I portion and to if -- $X that’s their want brings that want that, sensitive don’t boy money to I is into of dollars a very now, is the -- my lot costing basis

modeling put for So not that’s right? something economic in that that Is we synergies. really have our

Allen Nicholson

Correct.

Chris Myers

need saying yet. have hey, what that we going that we’re is That’s build. modeled after, We to something know you this not want,

or job. Community we’re actually real does it group. a do -- So, at big banking group They with their our separate we’re conceptual have specialty tremendous in Bank. They groups, having deposit and least that They in group Community about $XXX meetings occupied Bank real million that estate a plus with have commercial do they non-owner a with estate. having meeting in

us a but do begun a there think to They’ve of can that amount in that opportunity I to think, program. go program is I after group. tremendous we for deposits accelerate that

So, a deposit. I’m focused lot on this

I us economic greater really shift us over fourth but we’re core a third, and already and to couple seen loans synergies accelerate to success is going that, transition quarter XXXX, think help the dictate that million some where of of our also that the driving more you’ve is think will of that deposits good forward going our asset I I And a last securities. shift. years, percentage mix slow of vis-à-vis more. to of be, a going going magic the come plus maybe want $XX to quarter get that’s from And

Matthew Clark

last Got for me. And one then, it, great.

you about your in deposit that the a I markets, acquisition on hiring lenders hold know acquisition? here, seasoned and hiring the opportunities think size. got gatherers beyond or obviously How at Are this pending stage. pretty you entertaining all pending on the you decent dislocation Just or is above

Chris Myers

to and we now, to bank. because would say for right at and our talking most people would out our hold little want sell forth, part, say services lot and how value to a bit like and growth everybody. they on talented can and the to The than do. we’re for is Community products part them more integrating to there to see remember, so attention Bank. Company And And paying we we we’re them they got of add have I sure to a make we I hustling

educated, their we be they that their clients, sell money cross -- into their team, team if And I can become sure in Bank. we We think a done is join with I of customer people them. clients. to their understand base their really can building more their organically Community make there commend I of I to more can made over I fundamentally get the with base. for really and lot the them. can management job more So, that’s that We clients. more our quality to get how good And They’ve employees do that. us years, want can know deposit mean, that do a

So, that’s that’s the I going short or going where spend on, between so, so we for a these where to -- the that’s to two we’ve energy year our Because run, outside. we’re got, teams for be. to think more magic than is where we’re lot and talent next spending have time choose recruiting of and

Operator

Bohlen ahead. [Operator next The question with from Jackie KBW. comes go Instructions] Please

Jackie Bohlen

that, let that securities a meaning of Chris, quarter, continuing might that off on with the question little then a came some decline sheet of same that to let that $ I bit? funding in see trickledown run referenced, saw securities of a down and funding from bit in the that we would you look some line you and the billion balance in effect

Chris Myers

Potentially, is the yes, cash but now more reason for right accumulating two we’re reasons.

if $XXX close; money, all, million at second to of that got that is we’ve funds over fed we pay First start is XXX. borrowing rate is,

four basis XX money XXX funding go XX sure I mortgage-backed, getting XX-year out in something a basis you’re four-year, heck year… they want XXX. XXX, like and as at three-year, to points, when right to security borrow with and invest go a points, at half So, now, do we’re to And a

Allen Nicholson

A little over XXX.

Chris Myers

A little over XXX.

up. I and not rather rate loans just that variable would our -- loans mean, it’s booking be or I X.XX X% X.X%, So,

want and of deposits funding could focused asset would be that. that’s the but Jackie, I have here, there some layer the side, why do real side, to get I doing asset that out I avoid you’re shrink if I want to can so in to. good in if $X billion where see but that’s on. some take deposits our the So, dollars so that need $X going, we boy, rolling There we’re that get to funding, numbers in don’t going we I can the like keep to that. I to

Jackie Bohlen

the new NIM? effect XQ the some XQ the tax from had impact rate of then, first apples-to-apples municipal you thinking or just interest the securities. And the about tax lower the to rate an have NIM and Allen, the had quarter’s on net Do that on margin

Allen Nicholson

you X it so If -- X.XX, on be basis think will this at look X.XX basis-point would up. is a and nominal a to pick I

Jackie Bohlen

Okay.

So tax impact out and all everything the takes else? that

Allen Nicholson

That’s fee. equivalent tax Yes adjusting not for

Jackie Bohlen

then, you would of there Okay. the from -- Was and just lastly in decline expect that unusual income quarter. sort And in it? a anything noticed forward any assets in under there going on I management was impact that an

Chris Myers

attrition one do large neighborhood of where some expect is in have -- that we is with income $XXX,XXX the did there will the we on decrease to $XXX,XXX that. some account We quarter somewhere believe where a be we and runoff

in And embedded quarter that the was first though. so all

from closing we’ve and So, in a feel know a and did home loan that couple say business on I a starting already remember, and But the large most the closed more of side this, impact to did the but process wealth clients, on deal wealth management already. of are these I probably do lot an than we on I’d more I’m us. have have And Bank Community relationship I side. to our already calls on sounding optimistic all homes believe Citizens loans we’re too, they Community us Bank refer of I management optimistic.

be rolling. So that great that we get to is going synergy when

client But I growing. lose expect a a do of impact from and $XXX,XXX $XXX,XXX quarter. to large all rebound think I are systems CitizensTrust, we So, the a did

Operator

Brian ahead. The Group. Hovde comes question Please from Zabora the go from next

Brian Zabora

CRE what but question, impacted did indicate First, if will on you’re ask growth loan sorry, how missed you may much I paydowns this, or paydowns? be just I seeing

Chris Myers

they not expected same really sale it’s surprised it’s haven’t. increased They and We because We to based. modestly at the CRE even quarter-over-quarter. refinancing levels; slow remained based; were by the that, paydowns they

had customers refinance So, and as continue Property money. in couple we’ve for more I the seen -- people seeing we a quarters some and go sales seeing last for we year-ago. else but the few I’m just not were a than an much the quarter properties doing of sell of hopping pressure, something we’re was But, to last maybe think on. sales, seeing which, the cashing in we’re than over our anomaly going not it’s to

Brian Zabora

expense And right. just the then, question you. a on All side. Thank

keeping those floor great you think assets of you You’ve can as rate, assets, averaging billion is have would done kind X.XX rate under to down longer of a or or percentage asset a you that term X.XX maintain? there bring over that levels in percent job expenses it get as a a do of or minimum $XX is to of

Chris Myers

were at objective quarter another think have for our I if quarter, I think at synergies $XX -- think then non-recurring get a that due remains as and little but that I even but the by was look there I the and that the economic for we we acquisitions. way. recurring we you can Well, more [ph] X.XX inflated over some along here as payroll We in billion, were X.XX, doing which expenses, elevated was which think are to $XXX,XXX little about taxes, acquisition keep $XXX,XXX will

be more will there I run. to have we’re but So, do we too. think running I I where on more that pressure opportunities we think think want

there us is positive income going I remember two be sides that side, to help offset think equation and of that is too. and the So,

Brian Zabora

think I recovery quarter, recoveries. guess this just getting lastly you or the nice do we some in end quarters. again quarters a couple, still more maybe to the Are there on is several

Chris Myers

time getting between. few recoveries the it’s of be to going the a I’ve for end I’m down times. in and coming couple XXXX these near the is end have pipeline been but now, and saying do far right near. is We a one long more

fact, I you something that. first a were if million our think X.XXX in millionish, or In net round like around quarter the recoveries up X.X

X.X think loans in we was different client recovered. that I one that of

discounts our of on for getting which pretty California Porterville property and all OREO need get It’s couple mean which hang that, from this. having recession during company what the all these come where the them that. mean, money is at $X.X maker. on we’ve we things that on with times I money and years the that that the charged things is with without I heavily of get Valley we got down, darn beauty Central and was of good our we of back this And things resolve. for that the we’re of that did on then money good And that by is a can to not our multitude just can really that’s think out -- of like is -- like gain close the a now. a we to weather XXXX, we contributing adverse in in of we’re we still backend property, getting impacted there I to to to onto of Realize seven So, storm million XXXX. OREO. back sell XXXX, types sale held but And

Operator

comes [Operator Partners. Coffey next of go ahead. from Instructions] question Please The FIG Tim

Tim Coffey

answered. about you talk talk So, do of management going get capital about to have I my been forward. to questions plans want most --

Community had the I kind dividend of any additional Bank that if potential an for deal. could -- And you post hinted thoughts On call, increased there. wondered we you maybe had

Chris Myers

to quarter Allen to the that answer Yes. going And answer strategy on the we XXXX. I to third in increasing and it’s making is of easy is will $XX little where or a that part. doing I’m can bit his fourth by and answer is since that going to our dividend that the point that little my bit of And quarter. The executing start birthday. be goal a function getting million

million. we’ll dividend a quarters, making present XXXX that stated $XX times rate $XXX so million with quarter; there, we’re and do XXX X the At quarter talk per XXX with million I Do third, share, of the a think have several times Bank. shares I’ve that of a multiplication million that’s you make If fourth million after $X.XX $X.XX that, now. acquisition, about the year. argument we let’s little come merger $XX out over our Community shares

So, our around to or dividend the payout very XX% ratio will right XXs then now XXs. low the in go we from where low are

million be making and I the we’re reason especially given we the that if fact million, ratio don’t able low we we’re payout our dividend see keep out any wouldn’t in XXs, $XXX very to hard rate that’s loans achieve why in Company in billion of year $XX core So, $XXX dividending to growth million $XX a in a organic at XX% a into the call coming single I deposits, that. year. and what every have that’s capital would assets, Well,

an is X% realistic. think So, more I

out. extra We capital feel we we planning? as no comfortable attrition. very do have anything those to So, capital could to as dividend got that would dollars that Allen, have you far

Allen Nicholson

our Community closely. You have get And will made look potentially we mind once look at because always as at something it it’s completely. acquisitions, always that it through keep answered obviously, But other and very we to well. difficult you Board will in

Chris Myers

this, think of much Beauty about running capital. too been -- we’ve with

over our have XX%. at tier X We commons

with right We’re -- getting is to that’s need to think normalized do bring like we that that a for our little it’s to bit a peer but group, I what X.XX%. probably Even little that, And our within high of We our it. than credit and even lower comfortable feel our think could if and quality the to of the risk with very performance. run beta we consistency loan portfolio. I that wanted

become with to our forward. us that this ROA ROA as important most probably as but important -- ROE to just important think mean with really extremely going this and is is the is thing acquisition going I ROA So, I acquisition

Tim Coffey

don’t your you Right. pretty million if growing and point, dividend, clip. start quick will And $XX rather capital increase making you’re the a quarter you to

Chris Myers

just to a that’s year, still a in right, a at increase And we’re our million we dividend. I brought think the XX% dividend pretend that $XXX let’s million payout XX% from ratio $XX only

I’m is -- that first. -- that you increase the want. that’s three We probably to $X.XX or whatever to X But until or wouldn’t what do to probably going Board $X.XXX but point. we that, any $X.XX bring that’s not close So, dividend accomplish

Board discussion we’re on and Bank supposed direct at think this deal is think people execute on what we I not clients to it like and but I something we’re we do that’s now, this all right something are great and deal all and So meeting watching to integrate going think there, that’s in execute homerun. do we our the in Community great

Tim Coffey

about are million XX the a quarter. are So, timing, or until saying a till million in and dividend you’ll hitting XX you have that potential you talking wait you on increase visibility quarter

Chris Myers

I concept. bit seven other the but Board want the of Missouri conservative, members for speak can’t we Board always that Because I been I say, would would would too. wait. -- we’re a but show little recommend I me little we’ve do that always we’ve that We’d been have to wait first,

Board But conversations the and that over So, time that would discussing years. be more on over something I we change. based the be likely think it’s with the could I’ve had will

Tim Coffey

Allen. Okay. right. were Well, happy And questions. birthday, All those my

Chris Myers

singing. not We’re

Operator

no Instructions] there [Operator more are time, At questions. this

turn call to Myers. the like over Mr. So, I Chris to would back

Chris Myers

Thank our speaking everybody We This again today’s concludes you day. July joining thank presentation. to you to Take very us great with a much. I earnings quarter again just look for quarter. care. want XXXX this call. second for forward Have in

Operator

The Thank concluded. presentation. conference now has you today’s attending for

may now You disconnect.

CVB Financial (CVBF) 19 Apr 182018 Q1 Earnings call transcript