- Earnings call transcript Q3 2022

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Operator

Good morning, ladies and gentlemen, and welcome to the Third Quarter of 2022 CVB Financial Corporation and its subsidiary Citizens Business Bank Earnings Conference Call. My name is Sawada, and I am your operator for today. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer period. Please note that this call is being recorded. to presentation like host to now today. for would turn over the your I

today Brager. is for speaker Your Dave

You may begin.

Dave Brager

and it Good morning, going off, is the delay. he'll everybody, and I to apologize start Thank to me. over for Allen then you. turn us

Allen Nicholson

morning, Good joining for reviewing Thanks to third quarter today. for financial results everyone. the going of be right. All We're our XXXX.

website to released at in Reform Act was Litigation included please earnings announcement of yesterday. Our the obtain The that visit and Investors comments protection provisions Securities in speakers call www.cbbank.com, information the our today click on on contained XXXX. the financial safe harbor Private will claim copy, To refer of a tab. the the the this

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

more to version to issued please release company's the the this see Dave? complete Brager. back of safe earnings disclosure, connection call over I'm the harbor now company's turn with call. going Dave in a For

Dave Brager

good morning, Thank you, Allen, and everyone.

shareholders. cash second compared consecutive our dividend quarter XXXnd per reported dividend third payout XXXnd XXXX, which per $X.XX $XX.X the represented this share, to previously for the consecutive This We a of net representing the X% quarter of dividend quarter of For share XXXX, million of a of quarter earnings. ratio a to paying we declared our of third earnings quarter or increase of an $X.XX dividend of represented of XX% year profitability. our

$X.XX million, or with quarter, per $X.XX first we $X.XX $XX.X share, share, $XX.X and earned for million Third per million, XXXX, $XXX.X nine months million, compared or or second share, ago of the first for $XX.X or the of per the $X.XX net with quarter the $XXX.X $X.XX per quarter nine share. of XXXX, of share, earnings for year Through million per or compared months XXXX.

For million was $XX.X the $XX.X year million pre-provision third million ago for and for pre-tax compared $XX.X prior the our the quarter quarter. XXXX, quarter with income of

margin basis the quarter. XX points interest grew net Our by to second compared

assets earning increase Our point in rates, and a in the basis yields basis benefited a point interest from increase on XX yield general in loan including investment the portfolio. XX our increase

basis second of result, We experiencing from X to for overall only As our in the provision quarter, X.XX% while grew a X.X% point an X the yield earning in second million $X a quarter basis for compared increase credit of our share losses the this third recorded ago asset points. February cost for to and in the a of for of provision year million $X quarter losses million repurchase quarter to authorized In program. $X.X quarter. our year, for million board third $XX the credit recapture a funds

in the the share repurchased addition approximately X we quarter, shares of plan shares through is XX, XXXX. X.X the our repurchase shares, through repurchased first program. our September million third to XXbX-X under we the repurchase total During accelerated half to year during This bringing XXX,XXX the million

in more loans discuss let's detail. Now

loan strong to new XXXX. remain for Our continued production

quarter, were primarily by decline in $X.X on The the commercial million million third and or weighing uncertainty the rates line quarter X.X% from for $XX.X were estate C&I annualized. the loans small million utilization loan when real second utilization third loan approximately end the XX% with quarter to growth XX% or the increased of by Dairy rate which originations was approximately end commitments $XXX or by approximately quarter the million billion livestock However, the quarter. second loans increase third and end growth third due is approximately rate new X% loan the with and annualized. the million the annualized. a second The grew C&I third in to borrowers. was second or due quarter the the of by Total which loans, in X% in in loan and $XXX PPP $XX.X loans XX% of quarter. a of the $XX.X continued higher the to quarter end in at quarter, loan prior third quarter, from The X.X% new forgiveness, end million $XX.X same compared million at line about quarter. was the growth at approximately the increase led excluding compared $XXX our core from as quarter. After economic in second loans increased the quarter

other $XX the At the real OREO quarter. remaining Continued million assets, quarter in non-performing end, $XX.X quarter. PPP properties million second in X $XX.X non-accrual owned, PPP non-performing loans quarter $XX.X basis the the in loan At estate forgiveness plus resulted loans assets. million with for year-ago million At $XX a for loans. defined and we prior total end, decline had the compared of in to $X.X of for points comparison the third we million as quarter, and of quarter loans end were no represented million had

$XXX,XXX net of and charge-offs second During the of XXXX. $XXX,XXX, quarter experienced third $XXX,XXX $XX,XXX net the $X,XXX compared of recoveries of recoveries of total resulting in total we of $XXX,XXX, of resulting charge-offs recoveries in recoveries for and credit quarter, with

resulting recoveries quarter million year ago $XX third the of we Classified the million of million $XX.X $XXX,XXX. net and the for first for $XX,XXX loans quarter $XX compared and months the prior of with were nine For experienced for XXXX, quarter. of $XXX,XXX charge-offs recoveries total in

include loans of As XXXX, $XX.X from September classified loans XX, Suncrest. acquired in million

discuss Now, deposits. our like I to would

Non-interest-bearing the deposits higher on third deposits XXXX, than repurchase average average billion the were average the of year We for be the Alan? $XX.X deposits accounts. compared turn billion four to period XXXX. quarter relationships the to quarter, third $XX.X focus a an to and $X.X core the at deposits customer the customer in were quarter. September to deposits the call level points both XXXX from third a deposits XXXX $XX.X XX, increase billion points essentially five total During quarter in allowance XXXX. ago quarter $X.X same increase $X billion balance third XXXX, billion had non-interest-bearing $X.X basis for basis rates billion prior balance agreements combined year billion credit XX, losses the and investments, on XX, quarter. billion quarter prior purely quarter XXXX. I XX.X% the for repos, which billion and funding compared This and compares funds point cost Alan compared At points cost of quarter and non-interest-bearing a and manage Total approximately for The in basis second customer quarter, closely million and of just our for were the third in million $XX.X agreements for prior flat of average from were $X.X at on the to deposits the compared continuing ago. over quarter. with with capital. the $XX.X is the deposits XX% a our average quarter of four transactional of third our total and customer core quarter repurchase deposits with $X ago and the discuss the and September our entirely third five bank's will the the and on our now prior year to from At from not basis of quarter June granular with

Allen Nicholson

morning Thanks, Dave. again everyone. Good

securities unrealized net inclusive which at The securities with yields represents billion portfolio in quarter Our the third securities market billion, value growth investment or We X%. of $XXX to of billion Compared HTM investment the second decline the AFS more million million of XXXX, third in was year quarter million of $XXX decline $XXX AFS totaled last end in of HTM market of Investment the increase the billion $XXX $XXX on or increasing million. including as by second end in in portfolio of million. to approximately the the resulted XX% the our earning approximately at securities quarter. securities, XX% average the investment million during securities declined prior XX, quarter, to held-to-maturity the third of to September investments $X.X AFS securities. increasing a securities totaled and loss of purchased XXXX $X.XX percentage by quarter over $X.X new the from than quarter from $X.X of XXXX. a assets in value $XXX due the from quarter, available-for-sale in pre-tax average

XXXX tax and to the X.XX% increase equivalent the grew on the to the in the in quarter quarter to third now second in our addition of quarter. X.XX% the XXXX size of portfolio, securities of third in the portfolio from yield X.XX% In

Fed $XXX XX, total for X.XX% total the allowance at $XX.X June ending X.XX% second to credit averaged compared was quarter loans, $XXX Our million $XX.X compares which quarter million year. balance XXXX, or in the our approximately September of XXXX. or third for loans At XX, million for this million to losses of

the that purchase basis decrease expected of a in in rates credit was the and acquisition credit million as The provision provision quarter at of a growth and an For two XXXX on PPP quarter. commercial evaluated identified which lower values compared as we million an ended losses loss ended quarter of $X.X the in September both the estate individually forecast losses as ago XX, well unemployment loss economic of the of provision driven for third loss were X% in in life loan deteriorated, which loan quarter loans a was in for million our the June an or million $X XXXX. recorded time credit a combination credit projected for XX, real over lower approximately loans, growth, $X of rates. assumes XXXX, The and losses increase to was year when excluding loans XXXX of in Suncrest, PCD $XXX by for and recapture GDP, the increase point rate

Our forecasts well to economic forecast by Moody's. produced as forecast forecast. multiple a economic blend baseline continues downside as of a U.S. be forecasts include These

largest to among baseline the weighting on with forecasts. forecast continue have risk scenario downside weighted We multiple the individual

a for to due higher forecast XX, September inflationary economy. the weighting resulting included the of in continued scenario stagflation pressures As observed the

in XXXX and XXXX. Our to XXXX then to in in unemployment X.X% The decline XXXX, will increase weighted for for X.X% be GDP X.X% by grow in forecasted XXXX. rate is by and forecast assumes X.X% X.X% then XXXX, X%

combination, reduced and the income. $XXX of year-to-date and securities the shareholders' increased XXXX. XX, by available-for-sale an our Equity our as September stock Now $XXX.X comprehensive former million, increased $XX.X share rates also approximately position. of to increased the the million million. in year-to-date. to end shares income $XX.XX, quarter, million the shares the which dividends, offset by end average of the to a year-to-date million $XXX at quarter-over-quarter decrease was million to in for stock ASR repurchase shareholders of of the issuance the an $XXX $XXX.X the which payout resulting resulted price looking unrealized In the equity billion of decreased XX% ratio in equity Suncrest. X.X representing by X.X XXbX-X XXXX, through repurchase of in a of due have loss from on in common Equity capital plan associated XXXX due by From decline other at increase Interest dividend third of our end in $X.X million million

During the $XX.XX. price the share of quarter, we third an repurchased shares at average early of part XXX,XXX

very continues position to be capital overall strong. Our

and ratio company's equity of our total turn September I'll common X%. requirements was our capitalized now Our XX majority XX.X% at and to third XX.X%. Dave be regulatory further peers. considered regulatory September equity well the well Tier earnings. capital ratio call capital of The for ratio capital above XXXX, ratios our risk-based At was X our are XX, above to tangible was discussion the back quarter common

Dave Brager

for million and Allen. $XXX.X you, before the credit with second $XXX.X quarter year income for million provision compared Thank third the losses $XXX.X quarter the for million ago for quarter. interest Net was

to earning funds a decreased due quarter Reserve. $XXX quarter $XXX.X of million average Third by on the million in Federal from assets average deposit decrease at on the second

in basis Federal earning XX basis was average to and Reserve investment while with declined at our in our yields shift yield earning XX.X% a the compared earning the amount a from increase quarter. in assets, earning XX.X% to growing asset in average basis earning of increased of increase The X% the prior a average assets funds composition Our from of of the of loan to XX loans assets. increase X% asset point result XX yield by yields, point points

for to on continues to the with Our Reserve. rates fewer balance rising sheet in be dollars sensitive although less interest interest change well-positioned at rates, Federal deposit

Our from our XX% quarter the loan-to-deposit approximately be continued we investment flows which with to anticipate end, per cash are future $XXX million loan quarter. at funding ratio and growth portfolio,

for Our Loan loans low margin Fed in migrated basis tax quarter increased quarter. X.XX% period XXXX, net third and XXXX. basis were from was million with quarter, the rate second approximately of interest quarter with to the result for the X.XX% second funds X.XX% quarter. by interest our interest yield, points. of our in the $X that net third of our during X.XX% basis the while for Reserve second compared in and that the margin X cost ago the for in income Federal Total quarter funds compared from third million of the in quarter, equivalent quarter year third XXX X.XX% third very fee the the increase and increase for The the for of quarter quarter the asset compared with points the earning was yields second time X.XX% a points the X maintaining was $X.X PPP in

XXXX. and third new Excluding of has accretion, loan second production exceeded greater Yields yields, of the the the PPP income loan and during third quarter for overall X.X% for were XXXX, on interest yields X.XX% related the of quarter the and purchase impact than discount X%. recent third most production for quarter quarter the the loans X.XX% to averaged

$XX.X cost our for grew quarter of the Our funds deposits cost non-interest-bearing by by repos X million basis quarter, on customer points. as $XX total well average second the deposits third repos deposits from and on decreased and customer as Interest-bearing approximately of million while was average.

pressure to increases experience some We to increase rates. due in are deposit rates beginning to market the recent

from During the rising cycle, pace during a of increased by short-term to while period. by rate gradual X basis XXXX, XXXX that points only points basis last same grew rates at our cost funds XXX

rates Over raised interest cost has by Fed four funds the basis the our has basis X quarters, of short-term last increased point. XXX while by points,

$XX.X year quarter $XX.X million Now income. income moving to the compared XXXX, non-interest million quarter for for third on of Non-interest prior was million quarter. $XX.X and with ago the the for

Merchant Our including these third when increased BankCard quarters the services comparing fees deposit essentially customer-related XX% fees, and XXXX. or were the flat approximately and international quarter to services, second third but compared of of $XXX,XXX XXXX, by

Our trust continue but management under prior Market income. the by fees X% year-over-year. compared negatively $XXX,XXX quarter, to management to conditions trust $XX,XXX declined and or assets impact and by fee wealth increased

our in or Revenue $XXX,XXX this of California. transitioned the market realized on by Insurance, and the year impact $X separate year. the million was year, $XXX,XXX BOLI decreasing debt more due assets variances offset non-interest quarter a related account driven in fixed in relationship both the by to CRA our in with outside we of value the XXXX. The of relating of distribution from Reinvestment of institution income sale decrease Act As in the Income a are is earlier this a returns a our made financial decline the by million second quarter. Life of Community valuation trust in large to have under end $X.X discussed a the Bank-Owned and $X.X be of has gain declined million investments overall million than Bank-Owned to assets from as and the $X.X compared by was plans. Life during quarter second the quarter recently third trust $XXX next $X.X completed from on on to by the that on our million in The a fees deferred income second to investments approximately benefits expected increase transition Insurance gain will second by changes quarter policies increased million one those insurance to compensation investments life

was expense for and of $XX.X X.XX% second X.X% expense totaled year for XXXX. with for assets average quarter quarter Non-interest second the third ago $XX.X for million the and This the of for third X.XX% expenses. the million compared quarter Non-interest million for with quarter Now quarter $XX the third compares XXXX. the quarter. of

million expenses Our XX.XX% the by compared $X.X of for and for of quarter improved to XX.XX% was at our XXXX. efficiency quarter grew beginning Staff-related and prior of for third million rate effective the were the approximately Salary ratio at XXXX. modestly. XXXX second the X% or salary or XX.XX% the the quarter vacancy X% annual quarter compared as increases $X.X of with quarter increased third expense

Although further continue bank, scale and of processes we automate we continue the within and to pressures mindful to technology invest to be in turnover. inflationary associate

loan expense including Suncrest. as from Additionally, employee of expense of $X.X impact includes and in growth for from expense impact to which increased and the salary quarter expense of non-interest centers loan the the million Suncrest expense of prior over more The of equipment the The due as for from remaining adding and acquiring – XXXX at increase banking stock lower Occupancy the in salary million, than contra originations. costs the expense the beginning $XXX,XXX grants. increase associates an five the quarter $X.X net the grew origination Suncrest well contributed by includes XXXX. of increases addition was third $XXX,XXX, the

more and implementations. than and in quarter by expenses expense, including pandemic the recruiting over upgrades in $XXX,XXX system of new $XXX,XXX, by $XXX,XXX receding, $XXX,XXX XXXX. increased services supporting a Professional fees grew consulting third technology With the employee marketing increase increase

last to year. by pressures, business expense environment. $XXX,XXX market, supply uncertain economy quarter grew for which overall the chain contributed challenges inflationary related to issues, face California labor inflation software The or continues a tight addition, to same wage and X% In an have

have excited the and and optimistic quarterly income, and strong about our focus on supporting record future. third million Despite times, from in the X% increase earnings quarter. pre-provision in while impacted, and customers, remaining our results is those thankful reported and We we record a growth quarter $XX.X continue challenging third the bank which customers been associates shareholders. in to quarterly for customers, Our pretax we about loan will cautiously the quarter, the second the produced are

basis we continue margin the in interest expenses manage efficiencies points and to by searching through second net processes Our increased quarter, our from XX by for technology.

Our supported earnings This third ratio growth quarterly of financial having people, the and core our to cost-effective increase focus, of quarter. a fun. five in X% quarter superior payout in for which approximately the represented today’s XX% committed a strength, We remain operations dividend, concludes customer values our dividend presentation.

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

Operator

first Our Instructions] [Operator question comes of with the from Kelly KBW. you. Thank line Motta

is line Your open.

Kelly Motta

Thanks much quarter. morning. the Great good for question. so Hi,

Dave Brager

Good morning, Kelly.

Kelly Motta

we Could a your loan loan that of how and of Good be was we on remind you margin, start I you morning. and really loans increased I thought kind fixed, maybe basis through floors any the yields basis? versus us think nicely. there which of kind betas go-forward quarter, could got points about this with thinking should expanded float if percentage XX

Allen Nicholson

the or Yes. meaning is reset either And XX% within months. say they three Kelly, or of are fixed. I remaining would XX% immediately loans would adjustable truly our approximately about variable,

those look lot and when most short changed, broken the in a we’ve part And lot of point. not didn’t XX-Q and all terms disclosures a would our – continue our end assets there’s on to probably in at have just the in at through obviously we’ve say point how floors loan so portfolios probably I sheet of majority, optionality to sensitivity. I place in of our the would if this we a of we for has balance the But

Dave Brager

they’re utilization you thing I the on that impact a also unless loans, your to is the borrowing. C&I that Kelly, one rate not XX% Yes. would add have obviously felt is when

So that truly variable. Allen of number low also that’s utilization mentioned that impacts XX% that the

Kelly Motta

Got it.

the out of securities out I the And of going That’s like appreciate you’re flows loan growth really helpful. cash to that comments portfolio. Okay. fund

of costs for and have Just continued plenty sheet size been wondering of obviously outflows, the about the have deposit potential increases balance liquidity the and negligible. you deposit

Just deposits? any wondering for if running of outflow elsewhere? could more to the Or searching earmarked in potentially for be costs there’s higher look kind off you for

Allen Nicholson

something on and Yes. we’re No, prepared think focused mentioned on as the that remarks, in it’s relationships. I definitely we I focused are

non-interest so account bearing bearing world fight burn those have is of deposit to cash interest that’s harder this And deposits deposits all to living we’re us, hard deposits. with we accounts, and to our something of where issue There in just us of customers to have for – both the and keep going existing we’re inflationary for account customers’ the that’s for. that

new We’re relationships the still are and driving bank to that. doing we bring deposit to

flat higher obviously And citizens deposits. so, so is we our those can’t to we for are goal our remain ability those be what’s the much people’s today. rates estimate searching advantage is able going to to slightly to also have have flip up. them that trust to for to of And our group, But advantage trust group to the to I market happen with rates take the

best relationships. we’re focused a on deposit attracting to relationships have we our still of existing the protecting pull, levers So and lot but

good some haven’t but relationships. job increase been There would that the so it’s trust. has rates, to part, So I the been done basis some unprecedented. say. is There in points definitely lost – a some rates. just to we’ve to a period had you’ll start at I impact. far we rising think really starting impact see, pick for has of to of I the up, slipped keeping really we’ve This short an most has deposit that more time But XXX think

Kelly Motta

step the for Got helpful. much I’ll it. so That’s questions. back. Thanks

Allen Nicholson

you. Thank

Operator

for stand Please by you. our question. next Thank

from Feaster Raymond James. comes of David the line question next Our with

is line open. Your

David Feaster

everybody. morning Hey, good

Allen Nicholson

morning, Good David.

Dave Brager

Good morning.

David Feaster

growth think really your I projects as as just just mean, see going forward, maybe you some demand touch have don’t wanted to in solid. look on rates. you and a But to about growth slowing been on mean with started pipeline at higher pencil CRE I I curious, has growth.

on given how where Just curious growth, are things in overall economic just cycle the and thoughts we trending? are

Dave Brager

are for more the some quite as first we far, an into in -- prepared No, but if that the what But investments seen definitely anticipated. a least in quarter, our in we today my time the at But I is sheet first I it’s is I arena. growing, from have is going the but but than in we’re again. sort our still mean to question. five six asked is have and mix pipeline here be most would have slowdown, the to I haven’t middle will me seeing higher-yielding so that some be quarter, X% balance for. that would I think and and that X% of time month, part, kind doesn’t great loans. remarks, a do a the -- growth mentioned early shooting move loans saw Yes. handle of be state there’s that the a assets to slowdown. are I even would enormous loan the this That you five there’s goal mid-single-digit And necessarily this think maybe of been And we And definitely goal we to slowdown, in can definitely for stronger the of

David Feaster

interested large And do think you Would more in rate or some obviously, you strength the you some just rate sensitivity maybe I synthetic do do do consider point curious And about how guess, it. core managing franchise. and rate at and start what just lending -- look that, you at of would think then right, look about part if taking we Just to to you you’re how to the about look And off talked due potentially table? it? Okay. your in some deposit about, your rate fixed is extremely are you when thinking how sensitivity? sensitive, options?

Allen Nicholson

Q, our you pretty our if modest look positioned. David, last I would -- So now. is say at we’re sensitivity I And think model-wise, well fairly

go But down our our we’ll in think going that address you I I slightly if next structure previously. very investment the was rates at better we position we’re you be we a Q. our tried portfolio when obviously, positioned. through well of while, and a think to mean, risk, biggest look likely most back

anything ability see back-to-back So, we the really loan where the on variable we’re I very sense on made create that. to you more And positioned, derivative that us. We really next to or synthetic where like do but or loans and I standpoint, from in do year for like side start economically we have doing us a swaps think putting if any derivatives think well positioned now, I don’t thing we’re the later, see balanced. that that’s only might but I feel comfortable we’re right more

David Feaster

But there you you just that’s anything head guys at managing -- as the the have an extremely seeing? Okay. there approach. coming your That Or backdrop curious, quality got makes that Is is market sense. of has causing kind look that and credit, desk and you thinking And then watching maybe or you’ve always the what are conservative asset a across from competitive good loans closely? -- just on pulse rational? about I relatively mean, more concern that anything scratching you is landscape, are or a are remained and

Dave Brager

just more are That’s but bank do a would would we not fixed the example, describe would I’m that’s And give I’ll question. deal rational. an the be. XX-year on people There than from understand, it. so I a from overall still market understand the where well, not a XXX said, lost doing just you credit sure basis at that structure say, that much, perspective. we us, points pricing things don’t larger I X.X%. below I perspective, a as not great I I

David. to kind things, But – we’re the of think So, of going not I a combination compete. it’s

customers So they’re definitely are and cautious. I think, uncertain more

I the already classified I with rising had that up, the was, couldn’t tick had obviously, quarter to begin to well up as could Last our our impact wish earnings that we up say held rates kind think, and I to our solved one numbers. by mentioned, of that’s the I more. we deal I that I going in evidenced pipelines that got, go everything by really that. loans causes is but couldn’t that call, we we but had have time –

going – And about have and believe for it’s optimistic just And believe small lending, still credit. we’ve by it’s which drives then death the the what modified feeling I say which rising sizes more that, say so, care but are thousand cuts. about. with impactful, I is pretty I our loan and we consumer. commercial bit of be rates lot a cautiously business, debt I’d estate up a a don’t we little to we to our us C&I real macro, yields because a consumer, where flow it I’d that’s the like I lower, on feel just cash mean,

things discipline, And conservative some sales people say say people our done in and conservative, discipline. credit so, we’ve

that things down, feeling throughout that they going go be which sure the have drive a to a I we organization problem in discipline will. So if to to make we’re continue not

see answered your question, it. that’s So of I sort but hope that where I

David Feaster

color. I no, guys. appreciate it. great Yes, that’s Thanks,

Dave Brager

you. Thank

Operator

for next by stand Thank you. question. Please our

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

is Your open. line

Dave Brager

morning. Good Matthew. Hi,

Matthew? have We

Operator

see to is you’re Matthew. on line Matthew, Check open. your mute if

issues. I phone having think he’s

Dave Brager

to on one come him. move can We and the next to back

Operator

moment, please Okay. question. next our One standby for

D.A. question Davidson. the of Our from comes Gary Tenner line next with

open. Your line is

Unidentified Analyst

into one, morning. lot regard? a just in is This you up do where of and ag on shaping my your answered. XQ, Tenner But terms of kind questions on of that were had Gary heading in seasonality outlook I see there. for business Clark Hi, right this

Dave Brager

little in I some new to deferrals. slightly number we pretty in really be increase anticipate increased a Yes, very that's so, We relationships specific did should couple quarter costs this that see, fourth we end quarter But could area. so last it year. due I maybe always would but probably, But quarter. again And higher similar say in we dairy they’re say bring loans have will similar fourth which we a to due and that a that an would we dairy relationships, and to on quarter up. it’s type fourth where – We our anticipated guide to of I & that to we growth – this just year impact the strong bit. I livestock would last have we don’t say agribusiness, in would it experienced year to in or

Allen Nicholson

And run impacts keep ups sheet that I balances balance mean than say, change, year I'd don't Clark, mind time that so really the in because anything our at year-end the point so... average that meaningfully more late

Dave Brager

in away first goes as it year. the weeks following And the couple

Allen Nicholson

separate. Very yes. Yes,

Unidentified Analyst

color. Got Thank that Appreciate it. for you it. additional

Dave Brager

welcome. You're

Operator

next our for Thank you. stand Please question. by

comes of the Our next Montgomery. from line with Tim Coffey Janney question

line is open. Your

Tim Coffey

Thank morning you. Good gentlemen.

Dave Brager

Good morning, Tim.

Tim Coffey

kind non-interest could on forward. you've mean indicated question going know, as pulling that you that expenses expenses growth a level XQ? all had similar back this be the score, I as of a If loan seen does does pull is back, already, to you've

Dave Brager

directly know Well, I tied. was because would obviously our unusual, deferrals I QX increases But the that are I of salary mid-year those mean, certainly declining. don't QX and [indiscernible] say to

rate, growing think I low long-term. at still to manage continue technology the to we be in to and a continue want we very invest for but expenses

Tim. being that question, us the flat, foresee don't was I So

Tim Coffey

Yes.

Okay.

Okay. that's helpful. That is,

Dave Brager

Yes. And within consolidating one but we are our of will that Friday will miles. well an haven't be that's one at Tim, said yet, offices Tim consolidating that as thing into next three say office we I anywhere

will opportunities that's fourth but savings, consolidating in on customer to but efficient everything, not offices be should huge. doing. one something not, reporting some provide and happen manner an to that which And had of but to be so something notifications our in be we send not so quarter we will and as look at streamline and well, that the knowledge. out all We definitely operate the we we to is going public just time, that's that's This continue will

Tim Coffey

Okay.

Okay. XX That's thank have Then out you would helpful, deposit less XX grown or about deposits we about that The got X%. last If you. look growth. months, a I think than would deposits more grow that? months, question

Dave Brager

same for those that us be be to less. doesn't not pressures, other for sure. the at I all alternatives would it; burn, think going the we're it my just inflationary think things the It guess headwinds of to level, are mean strive deposits grow would that cash but I that

Tim Coffey

saw growth construction loans; question additional kind of the Okay. And about credits your little talk for can quarter? you then appetite this we construction a that some net on a then bit and color on

Dave Brager

Yes.

of So out industrial. investors some projects, with projects really estate do mean, and are something I multi-family of existing the going although what quarter we developers. larger existing downs was at that growth our And lines. relationships and some not it real to look most of part attract, draw this we're on it's the and infill trying an we is or important

but it an area So something to that drive want to going growth any loan means. it's think our don't that's continue we by is I do, to

Tim Coffey

And point in of pretty that last I portfolio? quarter low for think and terms a us of we're sort

Dave Brager

Correct.

Tim Coffey

Okay. then... Understood and

Dave Brager

we Tim, going are cycle. requests there's the remain I fewer I fit say perspective into the out which is will our seeing think underwriting. box, on will this credit because economic that construction or banks opportunity at our existing But narrow relationships that from we that will do think for more least I of more the focused do deals much mean, there I them

Tim Coffey

Okay. – the but what central that of question up seeing? office can real And last you in tick We've in markets. I necessarily had adjacent commercial districts, on fairly California; you're commercial given Southern business mostly vacancy a kind estate throughout rates or your describe markets in the suburban question footprint And estate. wide is the not seen real then

Dave Brager

that's think time. for I No, this I've And been Yes. saying right. exactly some

we – in don't office have classified – loans I suburban/rural the remained We that are our not portfolio. think has I we're think seeing market office. that I loans that zero stress strong. actually relatively office in

what agree So good you there. seeing. I pretty and in think with we're I just spot your But what stated what – definitely you're a

centers, a Ontario for impactful I large suburban than for money more think more situation is it's or the Francisco, much markets. cities, San Diego Downtown San it L.A.,

Tim Coffey

Yes.

Well, great. are Those you questions. much. thank my very Okay,

Dave Brager

good a Appreciate it. day. Have

Operator

of Our Sandler. Piper Thank the next Instructions] Butler line you. with Adam question comes from [Operator

is open. line Your

Adam Butler

Matthew Adam, This for morning. good calling is in Hey Clark.

Dave Brager

Yes. Hi, Adam how are you?

Adam Butler

Good. How are you?

Dave Brager

Good. Thank you.

Adam Butler

if I on during weighted was? guys you have quarter was new wondering average it, the loans what rate the, the

Dave Brager

Yes.

ever the don't quarter. I were we remarks, the So exact And Xs I we say as average prepared will weighted in low But we throughout high in the the rate. mentioned quote we'll Xs, are some have start the them rates seeing majority vast if to with handles. continue go maybe Xs hopefully, way of even to I'd loans recognize now; they're say the five And going. that,

Adam Butler

it at you have end do of Great. Okay. deposits were the on if And what – also as rate what was September? guys – the the spot well, you

Dave Brager

points? basis five The

Allen Nicholson

obviously deposits earnings? about is our of asking balance, you on the cost which or Are

Adam Butler

The September cost as XX. deposits of at

Allen Nicholson

Not characterize meaningfully the than I'd different quarter how is that.

Adam Butler

forward? thank should will Okay, assume buyback And buying we back stock slowed the going you. you quarter, during the remain active

Dave Brager

place, but Well, the it's trading – we're in a is XXbX-X at pretty multiples. a obviously at priced still significant

what the think, and of in saw So I you at our think price, early the the in press is quarter, mentioned release, $XX.XX buyback. we I average

So that. we're than trading significantly higher

depends share So on But it and assuming is are, stay anticipate just happens. where repurchases. I wouldn't the we market what where we any

Adam Butler

Okay, thank you.

Dave Brager

You’re welcome.

Operator

closing over showing Thank Dave for would in to like queue. you. turn no I'm to the back remarks. now I further call the questions

Dave Brager

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

Operator

concludes Ladies for call. today's conference Thank your gentlemen, and this you participation.

You may now disconnect.

CVB Financial (CVBF) 20 Oct 222022 Q3 Earnings call transcript