CVBF - Earnings call transcript Q1 2021

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Operator

Good morning, ladies and gentlemen, and welcome to the First Quarter of 2021 CVB Financial Corporation and its subsidiary, Citizens Business Bank, Earnings Conference Call. My name is Samantha, and I am your operator for today. [Operator Instructions] Please note this call is being recorded. I would now like to turn the presentation over to your host for today’s call, Christina Carrabino.

You may proceed.

Christina Carrabino

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

Joining President Dave Allen are me Executive this and Officer; Brager, Nicholson, Chief and Chief Vice Financial Officer. Executive morning

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

our uncertain and results on customers taken business actions Securities Litigation protection Reform to this effectiveness highly government call contained the and Private and of provisions financial predicted, some forward-looking we plans, economy, affect the prospects. today’s include and including Before in the The and trends started, the and COVID-XX on which meeting be duration to, vaccines; claim the relate results other position. and the remind partners; will future business the scope The risks, developments, our uncertainties, impact differ the the let expectations, affect involve business our future company’s COVID-XX company’s Act industry speakers distribution of depend XXXX. the and impact expectations. future current and These that you statements. authorities response pandemic among may cannot Among the are pandemic; pandemic. get me and on that and banking financial results things, ongoing statements may in Such operating of by the the forward-looking industry significantly on will safe activities other events and materially statements harbor risks ultimate may from these of

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

I to over Brager. Dave turn Now will Dave? the call

Dave Brager

consecutive reported Good of our joining Thank million XXXX the you, We for declared you earnings net representing consecutive morning, quarter. cash first per of of an dividend which this previously Thank of the represented share $XX.X quarter for our for quarter profitability. share, $X.XX quarter XXXth shareholders. dividend Christina. everyone. XXXX, paying quarter XXXth $X.XX our or to us of We per again first a

net XXXX. fourth XXXX unemployment. comparison, credit recorded variables, and compares credit first growth with $X.XX of quarter we decreasing improving $XX.X provision the for of of XXXX. $XX.X First quarter year for The of first forecast of for for losses and XXXX million with compares In recapture quarter a did the quarter. of credit quarter for in quarter. have for of including quarter for provision a primarily of macroeconomic per ago quarter the losses our million provision the of recorded was GDP $XX.X million quarter the losses fourth provision year-ago and of fourth first million the $XX million share $X.XX Earnings $X.XX for of earnings of result not $XX and the a the for recapture We the for

at our for XX, the like excuse quarter billion and quarter quarter. quarter $X.XX the first and of year-ago Non-interest-bearing March the were total totaled compared the – the and deposits quarter. deposits At $X.XX I billion deposits with net non-interest-bearing XX.X% year-ago end compared XX.X% our interest-bearing XXXX, prior for with Now XX.X% of our billion deposits discuss would loans. for for $X.XX me, the prior to deposits

quarter were $XX.X $X.X at increased $X.X deposits quarter billion and of XX, compared by $X.X Average first ago. the or $XX.X repurchase the $X.X the March year-ago the period total non-interest-bearing first XXXX. year repurchase XXXX, as billion agreements quarter billion deposit customer deposits billion for XXXX for We compared billion see XX, end quarter. for At prior agreements X.X% strong our continue the deposits to for a million growth $XXX for were and total the and from XXXX, with of December and same with billion customer

quarter. billion average Our repurchase or agreements of customer from and deposits total grew the the million X.X% by $XX.X first quarter for $XXX fourth

Now from million by XXXX. moving on $XX to loans, end total of loans the decreased

the nearly and the Program loans, However, X% in and livestock the which increase for quarter. Paycheck loans loan the seasonal and in rate during dairy our annualized grew $XX agribusiness first million adjusting when loans, or fourth have growth Protection quarter; by

current relatively quarter, the was production loan strong loan first in our Our pipeline. as is

of continue related to we of impact the fourth loans exclusive dairy in XXXX, the we decline the remain the of that experience mostly XXXX and grow we optimistic can as temporary PPP as the increase each in million. first livestock seasonal was of in $XXX of from quarter pay-downs and each to quarter year. decline We experience The end calendar year This agribusiness was in fourth result loans. quarter a of loans the

agribusiness XXXX, $XX PPP. originated SBA end real loan a peak million end. increased first loans by grew loans were the year Commercial rate. annualized loans the dairy is As the fourth of PPP the million a the for end $XX by for during livestock as by new partially offset originations at usage of round and and level line result, of quarter X% from PPP which from its almost declined forgiveness from loans from estate

million the declined rates million decline in loans mortgage by construction quarter. by quarter. to the at XX% end fourth The from X/XX/XXXX. million quarter. the $XXX utilization declined and compared the by utilization overall quarter million by $XX and year Additionally, utilization while fourth declined primarily quarter. by of rate was quarter XX% single-family decreased the Average grew C&I Overall from loans industrial to million, with $XX the ago compared loans X/XX/XXXX from for with XX% at line loan prior $XX XXXX, from year-ago Commercial loans to due to that first XX% compared of the increasing declined $XX

the the XXXX. PPP fourth for loans had to During of $X of quarter first billion of average balance quarter $XXX compared XXXX, an million

As of X,XXX representing round completely the customers’ forgiveness To borrowers, than March originated forgiveness greater X, SBA. our by received million loans based PPP our have forgiveness processed PPP XX, from approximately of the during borrowers’ in we that forgiveness received the been date, the $XXX X,XXX loans, have than XX% more SBA application. of have on requests XXXX,

interest more $XXX million $XXX.X quarter. we $XXX.X compared from million million provision and X,XXX on have of the $XXX.X quarter growth the for the As an increase quarter, quarter credit in first before the recapture than round for $XXX XX, in grew balances for from Net for fourth XXXX, $XXX the outstanding by with approximately fourth from PPP loans year-ago end. million X originated at income Earning or quarter with coming was million losses of million in assets March investment average securities.

Our on agreements XX the expense Interest-bearing by earning basis repurchase quarter. customer repos from average $XXX X deposits fourth of the customer asset the quarter. million decreased yield and deposits by basis decreased points. as declined by increased interest-bearing to interest and cost points compared prior But

X.XX% compared margin quarter, was net quarter paid for loans, X.XX% of quarter When quarter adjusted impact year-ago with interest tax for the and the XXXX. for from net first for interest fourth the XXXX equivalent discount quarter tax X.XX% nonaccrual margin and loans of excluded, acquired first on first of X.XX% for quarter. our for was the X.XX% the is Our equivalent the the X.XX% and down interest accretion prior PPP

impacted be excess to net by interest negatively margin continued Our liquidity.

Reserve XXXX the decrease that $XX.X increased fourth During fourth quarter originations quarter. the X.XX% Federal at points of the were first well and yields the the $X.X for from the of $X.X in we due X.XX% average on compared The to lower The loan yields yields interest quarter fees was the billion without average The Reserve. and the XX PPP for from loans. fee portfolio the $XX.X the in fourth acquired in interest in X.XX% accretion the quarter the to million the have from points. prepayment from and in impact yields. are million the as the income overall the XX new basis primarily prior was had quarter. due XXXX of discount approximately year-over-year year-ago Federal first loan year-ago quarter first been quarter increase current PPP accelerated X.X% rate decrease the for forgiveness. loan prior X.XX% in in recognition to decreases loans first on rates from billion as decline for the of compared to Federal in with due for below deposit Total quarter, income penalties to Loan quarter yield Reserve quarter net earning at was XXXX of approximately quarter margin higher deposits would basis on

PPP the discount XXXX. impact were X.XX% quarter XXXX, and X.XX% first quarter non-accrual of X.XX% Excluding quarter for XXXX for the loans, of first of paid, accretion purchase income fourth to the interest interest of loan related and the yields

for and X deposits funds our was points, repos of was cost customer cost basis Our and quarter first the of basis X points.

year. a cost $XX.X by quarter by Our this to points year. which end redeem cost million quarter, We the second had declined of the over plan the the of of during has subordinated XX our last funds junior basis debentures, current of X.X%

for first the quarter million of income, quarter and prior non-interest for $XX.X year-ago $XX.X to million XXXX compared the Moving non-interest quarter. income $XX.X the million with was for

sale The gain yield rate income by was of quarter, comparison, service that from million account our almost policies death Deposit quarter floating properties. during charges essentially on $XXX,XXX a the the fixed prior less compared the customers’ $XXX,XXX rate policies The lower and million sale lower XXXX rate credits of fees asset and loans has non-interest-bearing in We by OREO for fourth increases property. curve than than $XXX,XXX the $XXX,XXX net checking of generated our prior benefits first it interest OREO of instruments exceeded the into convert quarter quarter included to In quarter loan. the rate that enter than XXXX. in $XXX,XXX from to approximately value first the benefits XXXX generated to attractive included death steepening fixed which but less made quarter net BOLI an first a $X.X quarter significant of the BOLI the in swaps and unchanged in $X.X first interest the gain of customers certain a of the $XXX,XXX to conventionally X from were higher rate balances. the swaps the earnings due on were

XXXX million $X.X expense and and salary taxes. Total $XX.X benefit million the million loans in benefit are Salary in compared the including from the and to expense expenses, quarter-over-quarter. due every taxes first more of origination $X.X the increase a $XXX,XXX of XXXX. million PPP are by increased non-interest decreased than quarter quarter professional typical increased year-ago year. by million by expenses origination from first for of fourth which fourth was first for declined the million compared and more loan quarter, quarter. equipment the costs, $XX.X $X the X,XXX a to service expense Occupancy Now, payroll as deferred quarter contra quarter expense payroll than a XXXX to Higher $XX.X of million first $X.X for the of by expense, primarily quarter and combined

the and the for totaled first fourth XXXX, for compared first by respectively. Additionally, with X.XX% declined of and expense and for of quarters $XXX,XXX XXXX promotion X.XX% of quarter XXXX. XXXX expense the quarter Non-interest $XXX,XXX first and quarter the compared average of to of assets fourth X.XX% marketing

first Our first the efficiency ratio quarter for the XX.XX% quarter with the was XXXX. XXXX of quarter prior XX.XX% and for XX.X% of for compared

charge-offs At year-ago at asset our XXXX was loan with had includes $X.X charge-offs net to quarter quality loans quarter. the million, quarter. current million XXXX, defined for we substandard-rated quarter at that delinquent loan net charged off plus the compared million. no XXXX. prior $X March million prior $XXX,XXX the were days assets, million for fourth XX, the Classified $X.X XX other with the loans XX, from decrease had for with compared March as we turning and quarter quarter The Now non-accrual $XX.X were $X.X quarter end, million XX, million of At quarter, million fully owned, a and compared a loan previously million the loans real nonperforming to XXXX. approximately XX $X.X during industrial estate matrix, first of commercial $XX.X of for for December $XX.X $XX.X

tax to will We and Allen turn I Nicholson discuss available detailed more credit rate, over on quarter allowance loans effective have investments levels. first in our to information our Form classified will call our losses, the now capital Allen? for XX-Q.

Allen Nicholson

morning, everyone. Good Dave. Thanks,

and quarter tax quarter the the Our of for fourth XX.X% year-ago for XX% for the first was quarter. XXXX rate compared to effective XX.XX%

tax-advantaged tax rate vary on as effective Our income credits. as can tax level of well depending the the available

$XX.X Our of of credit provision the $XX.X for which recorded fourth half the to of losses key macroeconomic allowance the on of of a losses, by resulted government December loans, credit the allowance XX, was credit loans. XXXX economy from of to a net stimulus and the forecast total When credit $XX.X for million estimated at million availability the end recapture and losses losses magnitude of on At the resulting We our XXXX $XX.X losses X.XX% our provision period in X.XX%, economic in the our March charge-offs allowance as quarter lower in million million of $X.X for due XX, ending loan or and economic $XXX million. a significant result percentage losses. allowance XXXX, of a the downturn for XXXX. pre-pandemic in is losses first latest loan our Based in in loan vaccines, from a the improvements the X.XX% of impact as decrease projected decreased COVID-XX for million pandemic. economic variables therefore, from of which previously the reflects remaining wide compares of excluding loans credit forecast PPP

losses, acquisitions. we fair in $XX the allowance million remaining from In addition discounts to value credit for have

in upside be a significantly the weighting continues the downside economic include average, being of forecasts. national to upside greater a as With to the unemployment forecast Our U.S. multiple for our forecast. rate and higher by These economic baseline Moody’s. forecast forecast blend forecasts as weighting forecasts on the well of than included produced economic California’s X.X% forecast a comparison downside

grow increase XXXX before assumes weighted by approximately to The at XXXX and forecast X.X% in both is Our rate in GDP XXXX then than X% X% than in X% XXXX. higher both more to XXXX. forecasted will unemployment be XXXX and and in declining

approximately total million by Our increased the investment of end from $XXX securities XXXX.

XXXX, inclusive gain million totaled securities, December of million. held-to-maturity, securities XX, XXXX. unrealized $X.XX AFS billion, or or pretax March available-for-sale, investment of $XXX Investment million increased XXXX. securities, approximately $XX.X from $XXX $X.XX a HTM billion, AFS totaled securities of XX, XX, by As from securities net December a increase

approximately $X.X During were average in yield that years, of which billion than securities tax securities quarter, million new the of an in X.X%. first mortgage-backed purchased expected approximately X less expected comprised yield X.X%. with we are an securities equivalent $XXX These to purchases of with AFS included lives

XX these that, rate of in a fixed purchased exceed approximately yield we a with that comprised equivalent million on average, agency securities $XXX municipal X.X%. will and of generate HTM Additionally, longer maturities were years. bonds basis, On non-tax securities

end The million, increase of by in Now, $XX.X primarily at the decrease offset capital in tax-affected due turning million income cash to in of to and the comprehensive million dividends. by $XX other first from increased the was shareholders’ billion of million value securities to market $XX.X $X.XX earnings impact the equity of net our a available-for-sale $XX.X decrease position, quarter.

capital very overall continues strong. Our position be to

be to Our the are our the equity X.X% Tier to now ratio was remarks. and was will ratios at risk-based above call ratio XX.X%. equity At and March well total some the regulatory common back capital capital capitalized. first Dave considered ratio quarter, was our regulatory requirements I capital XX.X%, XX, closing tangible of turn our end X for common well

Dave Brager

Thanks, Allen.

continues and liquidity. today, excellent levels, capital consistent discussed solid to maintain produce quality earnings, the have credit strong bank we As

We to the during are have our remained shareholders our and on year. to associates, pandemic past commitment the challenges customers caused focused the by proud COVID-XX over

associates, to business customers prioritize the our relationships. health continue We and our of safety other and

reopen markets a Most We’re that on throughout indoor And increase of XX% front, beginning cases. to and as COVID-XX June business vaccine one, California be more up fully the inoculated; available. to see the Vaccine to average supplies in and that XX in number who and two, meaning have into positive rates appointments state. occupancy. the for vaccination daily governor trends economy if are continues the economy, to become and California as hospitalization lower will wish serve can blueprint moved to up X more safer XX, we if is our optimistic stable Californians positivity open some distribution cautiously such we lower announced are remain Tier operations with if supply Number rates and older that sufficient continue for two met: its low. on criteria vaccine We increase see years

businesses. to most Also, the are in to of the Mauntel on will lending support starts groups reinvest sound acquisitions. balanced management in our utilizing our de remain safe. ahead. all history and be abate, to concludes including of Please I suggest seeking XX. centers in and their sales, financially we are Bank. In opening Brian as stay business fronts experience we XX wealth for good believe of committed our one rebound, to for bank, his like our healthy and their He economy financial to XXXX. in responsible new on banking well for President California that a The We and division today’s quality appears And three COVID-XX success commercial business years April contributions and the are As will centers, sales same-store Increasing positioned customers are and economic welcome the over confidence presentation. growth novo initiatives: we optimistic Brian that bank XX focused the through our navigating Citizens sales U.S. Brian growth multiple cautiously way, banking. Citizens and growing closing, of times periods of strategic look poised would disruptive successfully a the has division, We and news groups, we better forward Business regain overseeing specialty effective pandemic, to Trust. welcome

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

Operator

of the [Operator Instructions] And from Rabatin our line Brett Hovde first comes question with Group.

Brett Rabatin

morning good Hi, everyone.

Dave Brager

Hi, Brett.

Brett Rabatin

just I reach an here you’ve that like going margin. margin. wanted the on would hopefully, with in that point to securities the seems the on made first to inflection you’ve forward. around to, moving book, least going seem the year, you It at investments NII it And on move like unfolding noise? excluding and how some there and pieces Can bit the see little both NII should color up us give the you PPP margin just the maybe a ask this

Dave Brager

Yes, I’ll on then that, any and can has. thoughts start Allen add he

think we’ve reached securities, the I investment on challenged. but the maybe still inflection were loans point So

We’re loans loan still lower at yield. originating overall than the

been That’s And assets. earning So be growing. continue obviously, might sheet. to opportunity positive higher in challenged is, total with that gains think liquidity loans remaining headwinds percentage for our every time make us have the The try there, that’s keep deposits there. our a of on I there and balance loans, do think we to the to making quality excess more some we’re

significant so to in the growth did loans amount. quality quarter, and at loan need invest amount that is a we last higher And grow to a in that we focus but where really originating

headwinds. some is there think I

don’t add I to getting anything to have I I yet. we’re don’t to think know, we’re there that that. Allen, we know you the have inflection if if just do – point.

Allen Nicholson

on could continue could Certainly, security to a of see certainly you’re help better And asset drag. lines right. earning Yes. we somewhat us. for I utilization the that mix portfolio, be mean, if

advantage little half would the I an in we quarter. the equilibrium. have where are sort bit below think conditions latter Currently, But I say, there. is we market of better did reached bonds a of first of, take may

buy when try opportunistic we we continue So securities, – and be very when to are buy yields them will up. popping at to

Brett Rabatin

then to to a utilization – quarters the would you pickup this as point, talk PP that had And ball even Would the I you could this in quarter. Okay. use like quarter, what you growth PPP are PPP. around the year, can Obviously, crystal portfolio although, the loan than that obviously, last growth better optimism i.e., your down? it many including the grow comes XQ loan about few get guys growth? some pretty loan some around rates I know tried next atrophy including to And low. seem the in was you have industry to expect

Dave Brager

Yes.

over only As around We’ve million we round PPP two. of still mentioned, $XXX little million $XXX in round one. remaining we have boarded PPP a

We to PPP forgiveness continue see round one. on the

So that’s headwind. to a going be

to If headwind be think start thinking the you am on – wanted significant to again, to a that utilization pick do loan that lines, overall include that, it I all up. with together, going pretty to the I growth. will that’s

sense, they having tick as do will start their is in As everybody it’s And lines. mentioned, XX% invest are customers use loans $XXX I at believe now, see to liquidity available I they our right utilization to going million. to C&I that much their think about be able XX% business, so compared going is utilization to not But to again. the on sitting that to the year-ago reopens, up are economy line in that that on utilization and we quarter, you’re make down when

estate they again, grow the it to if can real to that’s But we better start. that, to that customers invest way when to think be if a they commercial still our in off. get will that believe I quarter, question we and grown the start we’ve as using can So continue it’s that money and we start first going

has strong. think Our last – that’s a The been quarter year, mean, I that, outstanding our in of first pipelines loan are production loan beat our growth We I quarter. the first positive. so

wait just have to everybody’s and to going sheets. on that’s see liquidity and balance about that We’re utilization excess

Brett Rabatin

in could be an you’re I a do generally speak. California if Are seeing to whatever as deals M&A We’ve And perspective? from so more this one you one. thinking Okay. And M&A how there just seen want, growth you sneak you effort to about your what few guys? able about currency, year. far you out do potential color. feel for so Good here you’d with a last Dave, And obviously,

Dave Brager

strategic happening. I utilized believe growth. are imminent, a been There we’ve sure selling, to have price. We make but targets. a think lot in as want a of conversations. good have will value, that potential Yes. option make able They There I But a always that sure a are right we criteria will is some mean, are financial want a currency, our of one of of take agree most there we to are our you areas that we there with and conversations We There lot but M&A deal. hoping of of that with is have talking is forward. to a on bank. to it’s the partner considering yes, lot – that value, strategic are whether look to I right utilize. do of the opportunities we’re at be now, going people nothing we find it’s

Brett Rabatin

all Okay, color. appreciate the

Operator

Your next with Bohlen of question Jackie line KBW. comes from the

Jackie Bohlen

everyone. good morning Hi,

Dave Brager

Jackie. morning, Good

Jackie Bohlen

a the little it, And I I’m XX wanted basis excluding looking at PPP. into that just reserve bit. points, dive to

remarks it think prepared the just like heavily the scenario, for used you adverse Moody’s understand past as I which I if well. weighted the did in that correctly, sounds you weightings more you the So the forecast, based on

basis points still that ratio. XX in there conservative at calculations, is amount X. you a I And started just good if of framework, at look within on January obviously my So that

XXXX? than at January starting end basically, the at pandemic? the apologize, think once be you of my, question lower it X, up point So Could how I you about do that could we’re long-winded is where wind

Allen Nicholson

that see predict, CECL excluding hasn’t The pretty a PPP associated that reserve, It’s Jackie, accounting don’t but been do if obviously, point; really at portfolio the and the outlook loans, hard risk for we began portfolio I has where with existed economic you underlying and fact which positive have changed. the the think, to that stable.

So that, down ratio us continue began. you where predict. we drift that hard beyond it’s to And to to for see could coverage

Jackie Bohlen

on an because value. reserves? Meaning property And property is have lower there assuming increasing value of required impact low I’m – had increasing loan-to-value

on any. that’s what wondering the effect if having methodology, I’m So

Allen Nicholson

current at looks original that LTVs. six methodology not probably there underlying are take theoretically The them LTVs, But metrics, or specifically. some five into but would of including

Jackie Bohlen

Okay.

mentioned was in if quarter. the And Okay. unique remarks, bit little you prepared down you in the the provide quickly. could know a on of too Maybe I I then things charge-off it jotting background just

Dave Brager

a he was It was to contractor, single Yes. unwilling up. to step loan C&I a that

it throughout a that many all We are with a pursue contractor as unique still this of opportunities, prudent situation. This charge-off a situation to things. felt obviously but with of was fashion. of our and by as don’t our in it is, something deal we different impacted not COVID, recovery And going impacted It’s It’s I take see just it customers. was to by think, consistent lot a was that our we portfolio. systematic really that one-off

Jackie Bohlen

Okay, for extra background. great. Thanks the

Dave Brager

Thanks, Jackie.

Operator

comes Your next question Clark from Matthew the line of with Piper Sandler.

Matthew Clark

Hi, guys. good morning

Dave Brager

morning. Good

Matthew Clark

trying margin? do to average on rate an incremental get production, weighted you First, at new the on that? I’m your have

Dave Brager

Yes.

would tenure quarter. loans first just so the in but slightly, on the range. that still still of up loan, We’re X.XX% rates say depending originating to X.XX% in the went range, I the that in that it’s

Matthew Clark

that fees, that’s And Okay. ex is right? –

Dave Brager

That’s excluding fees.

Matthew Clark

Yes.

pin down on you if that I’m correct just but maybe see from and NII, to try the of wrong. securities think NIM me some additional million, $XX core timing thinking we up core about pressure. Do I maybe you then here, NII should And the to core would purchases assume you’ve Okay. –

Dave Brager

Yes.

excluding you So say when that? core PPP from NII, you’re

Matthew Clark

million. $XX the Yes,

Dave Brager

help NII. think, maybe our mean, is hit yields. and the if is offset that core there But goal we is to yields, loan the loans, little still think our inflection loans have on I continue execute a still investment headwind we and generate pressure The There Okay. we on point. to grow that. can bit of

And just we As deposits impacting – Allen start our our can that have. of customers they mentioned using overall some hopefully, will excess that help. earlier, mix

Matthew Clark

rate, growth think bit little expense seasonality PPP. the that’s somewhat your well, expense of relief run Okay. to so distorted of I need year? bouncing quarter, thoughts of the in then that be – savings? investments as I Efficiency around or assets a first kind ratios is there bottom, be additional or your this to some not And by expense average might forward. know there kind made, probably are What but And whether some on going

Allen Nicholson

expense growth there our always we’re keep an can standpoint, trying minor downs. from think I generally or But to flat quarter-over-quarter, minimal. speaking, ups be expense some to be and

as efficiencies, invest find think are that. we I to So trying we additional

really say to would single-digits flat we’re low I to expenses to. is So manage trying

Matthew Clark

each then it does And quarter. income, elevated BOLI within like of some little a benefits, have just bit Okay. fee seem that but you

Dave Brager

Every quarter.

Matthew Clark

one Yes. – I honing and takes trying fee a guess the on income I of to and to I’m – predict. But I there. run tough, puts guess know difficult that’s I’m the it’s rate

Dave Brager

Yes.

Our has been service balances. on of service primarily charge our the the income. deposit all just to excess the noninterest side amount, And due charges, fee largest income that’s the deposit impacted

And collect cost so and our rates. sure services. credit managing service to been deposit item And we line those earnings want been that make to managing the we We’ve we’ve of continue products charges.

position I and service decrease, believe better that will I higher some this. charge a deposits, bit So challenge. collection I to of an offset they be a the do in sitting to I bit think, a billion service we that point, saying we collection credits believe of with that’s keep couple collect again, a side. people deposit But have as dollars little goal, will, But balances earning at are goal. when fee extra charges in that start – a to little a on

the will in on better because Citizens a rate be it just as and although little at loans LIBOR that steeping conventional us it’s the rate take plus now, Trust still to driving curve, right of X.XX% in probably a for versus back down focused We’re priced Swaps X.XX% well. XX-day rate X%. area the yield bit, way with are settled revenue

probably challenged a future. other So be will that, of the income lot there swap And that in just it’s the the – is all fee foreseeable a bit variables is, and little then obviously. through BOLI stuff,

Matthew Clark

you. Thank it. Got

Dave Brager

You are welcome.

Operator

with Your James. the Instructions] comes next question Raymond David line [Operator of from Feaster

David Feaster

Hi, everybody. good morning

Dave Brager

Good morning, David.

David Feaster

acquisition client and prepared PPP the on new maybe versus just in that the I appreciate either the are that the or the commentary clients activity. from how was I’m in of hires quarter investing lender program? curious, remarks from new existing expanding much origination

Dave Brager

can new have percentage novo it hires. cautiously optimistic breakdown, is I’m I our things first new new say or last most And projects. year. just generation of We’ve That’s mentioned that, I’d don’t I seeing, previously new or big just number that had and we If I good amount have mentioned either from new some about, previously we that from opened this I why there Modesto. specific about from of believe optimistic de part one loans but RMs of the of quarter production a of it’s existing probably in of to some the different of year the you success with a I RMs. first relationships loan over in guess, new markets. had XX-XX new we’ve a we anecdotally, quarter been the RMs – hired is tell is existing Yes. XX% in hires, office that and legacy expansion do our

David Feaster

I team topic, novo markets any be that And just That’s kind hire, one and look find guess of on got kind priorities? guess? of interested build Where a would are mean, other opening, where I opportunities there expanding in I it, de you’re your we’ve out, Modesto the you to, to if seeing top around that you’re encouraging.

Dave Brager

a of Modesto have opportunity board. on about have member bring geographic It’s don’t huge San that California couple opportunity we that in Well, we’d in would that I San looking person. There it Diego. to presence be that places Diego at. a we the mean, in We’ve getting Valley There people really down new the in. about as right a are had in in County the market looking is in team be County lot And you’re Southern the is L.A. But on other and of so in much places much the interested not other we good hired we Central one. looking depends at. interested

David Feaster

organic capital some priorities, maybe top you is touch obviously, then And growth Okay. just priority. on if could

looks redemption, deployment? kind your You capital reserve like how about just dividend. realm, held touched and that on just It XX% opportunities curious M&A excluding for the the this ratio, and thoughts the you release quarter, on capital payout sub-debt in of the but think curious, is

Dave Brager

Yes.

haven’t – where the we the XXbX-X, but is we in been trading, stock We haven’t stock also repurchased have quarter. obviously, our any last

having with that with for range with conversations. lot comment payout, we’re hopefully, XX% the and your you – find with if We people. now. having this of I imminent, we opportunity we right identify forward is the so And is on us the year. And will There agree able on or with something the but right I opportunity in kind XX% again, a Really, dividend to we’re also of – dividend nothing and plan bank. conversations can is move agree to different our be the the right M&A

David Feaster

for helpful. Thanks color. That’s the Okay.

Dave Brager

Thanks, David.

Operator

time, questions, I [Operator Mr. there turn this to to would so the like back over no call more Instructions] are Brager. At

Dave Brager

want questions. XXXX Great. We speaking for joining to listening. Thank quarter. thank for you Please your thanks forward in earnings interest let second call. to you this a you. I know I July any have and look Have us everybody or for quarter and with appreciate great day, Allen if our

Operator

conclude Ladies this does and conference call. gentlemen, today’s

disconnect may lines. now your You

CVB Financial (CVBF) 23 Apr 212021 Q1 Earnings call transcript