CVBF - Earnings call transcript Q1 2024

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Operator

Good morning, ladies and gentlemen, and welcome to the first 2024 CVB Financial Corporation and its subsidiary Citizens Business Bank Earnings Conference Call. My name is [ Cherie ], and I'm your operator for today. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference 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

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

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

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

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

see harbor complete For version more please this with in a earnings company's call. of safe release connection issued disclosure, the the company's

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

David Brager

good everyone. Thank and morning, Christina, you,

For $X.XX the a our dividend share, to our XXXth the of paying cash first shareholders. consecutive of net previously a XXXth per We of first dividend quarter our profitability. representing of $X.XX $XX.X million per we XXXX, representing earnings declared reported of quarter share quarter or for XXXX, consecutive quarter

return a assets $XX.X average million ago share for share. fourth first average common Our net return produced the and to year for earnings of and $X.XX of for million quarter XX.X% tangible $X.XX quarter X.XX% the compared $XX.X million of on per XXXX. a equity share $X.XX $XX.X on XXXX or We the of quarter of or or per per

addition of by XXXX. of in income income compared was in result the the of by of $X.X the year's The million This the initial fourth accrual the the interest million estimate FDIC of special last assessment. revising addition was failures losses fourth million XXXX. increase expense net declined for quarter the FDIC first when from $X.X is to XX%. Net in the impacted bank accrued $X.X by in Our the accrued of its quarter quarter to up

[indiscernible] were our our but borrowings, over net X that interest the X.XX% average had For fourth million. of $XXX the margin a and the basis cost of funds cost the deposits decreased past XX point broker by this the for net million to XX year. in of from stable decrease assets fourth XXXX, X.X% points $XXX quarter quarters, by average The of X.X%. first increase of quarter margin compared of declined borrowings interest Average quarter quarter in our primarily resulted to basis addition from increased grew funds. Cost higher while due a cost total primarily first the approximately which deposits to had by a for approximately

XXXX. deposits Our total greater average for average to noninterest-bearing continue the than our XX% of first quarter of be deposits

At more increase included million of deposits call, billion, As we from December in between in during were was the March deposits deposits $XXX nonmaturity February the December we XXXX. than our an in reached million of XXXX, followed total also broker largest in million, addition $XX.X of experienced This of XX, end the and the at our end outflow and a low deposits we which approximately $XXX depositor XXXX, in level $XXX of added March. The deposits February highlighted bank's March our of in earnings of $XXX XX, seasonally March. increase as included January growth by million, last increase XX, from total XXXX. occurred growth

of the of Although fourth of quarter, represented XX% deposits the noninterest-bearing quarter. the total approximately end from the first still end noninterest-bearing by declined deposits deposits $XX million at

quarter points, of XXXX, cost year. of Federal through points to rate increased deposits of for point was XX tightening points has to the basis fourth first XXXX, of our first the Fed quarter deposit XX the basis cost compared the a of of quarter XX by of representing first From points and XXX the and in which the quarter deposits compares increase the of average XXXX Our last first the for during XX% Reserve's basis beta basis cycle. funds XXXX on quarter XX basis for

Over XX, we loans remained We line of March increased loans higher to XX%. in was XX, at XXXX, construction quarters. Now March approximately from less decrease in million. million XX, by by at line $XX to and million, majority the March March to at March million declined XX% & XXXX, This of over The have livestock from and growth in real both XX%. XXXX, the let's new generally $X.X consumer a same XXXX, XX, reflects of X C&I comparison experienced respectively. rate than the C&I were million year-end, $XX that see period, X.X% flat December livestock which real utilization XX, have multiple the and balances end $XX of balances loans discuss in The XX, loans loans fourth period in XX, decrease dairy million continues continuation last estate growth decline decline loans and utilization remain average which of seen The December declined although Livestock decreased at or XXXX. C&I XX% a line is December reflected the XX, relationships $XXX as million decline loans a billion, the utilization but $XX Commercial $XXX quarters. In commercial the experienced a also for estate trend a million we quarter. by XXXX. XXXX, March quarter-over-quarter included period at at loans, be from this utilization a XXXX, $XXX at loans. & by $XXX $XX the decrease utilization comparing loans. Dairy rate relatively XXXX. XX, from in Total and flat on when million end declined to we rate over loans Dairy

declining banking of strategy are and new and a last products medium-sized small- sourcing XX%. our either in XX% our percentage that relationships new the loans loans growing a suite XX% owner-occupied and from real has the in or to with loans. XX% estate We've use modest Our resulted seen of owners our over higher of C&I to change C&I focus on mix full to of businesses their that loans from investor best year

pipeline compete on loans growth loans. even over years, selectively, on new We though been asset loans than well is this have new of we C&I loan have We experienced charge-offs which than quality slower optimistic net Although greater since demand the crisis. our we Yields remains believe strong quarter our past about also great production. X%. very impacted we is are financial from loan

the for decreased largest the in which allowance participation loan that The estate to credit loss were of X reserves XXXX. in loan net we merger. previously acquired established approximately for commercial loan majority [ of a vast charge-offs real in was was on million. charge-offs have Our million write-down during specific $XX ] Suncrest and $X losses borrowers the due related the quarter The to to March XX first

charge-offs We be quarter the in will charge-offs of $XXX,XXX net charge-offs are successful. $X first first quarter The and million compares net XXXX. aggressively for for XXXX of of and pursuing recovery we with the from quarter net $XX,XXX of these of optimistic borrowers fourth the

at loans million with were turn sheet. first compared were as Allen? million $XX over Allen $XX.X call At The quarter loans $X losses quarter aspects plus other or total ago our the $XXX real with X the and compared quarter estate loans for defined discuss quarter and end, in owned, loans million a and balance the loans credit of allowance year quarter. [indiscernible] of for year nonperforming was $XXX the million million, assets. million total million end. I as for now $XX will of nonaccrual nonperforming the to for the ago basis points assets, percentage additional for the for prior $XX.X quarter. to quarter Classified prior X.XX%

E. Nicholson

everyone. morning, Good

As X.XX% total $XX.X of compares or XXXX, of X.XX% March at XX, or December our million XXXX, which X.XX% $XX.X XX, March or loans loans, loans million to for at and of XX, total credit $XX.X was losses of and million allowance total XXXX.

last a collective $XX.X allowance forecast a well credit that on $XX.X in the pool few performing Our have XXXX. our to for changes $X.X million increase as over those primarily collective charge-offs. as $X quarters in of as in the loans record established at economic in loans. We been reserves first net changes loans million million is million provision are to evaluated basis grew from reduction basis that XX, from reserves XXXX, The on on $X.X established did for in losses the the offset our December not the the allowance were and XX, specific for due March at specific impact allowance million by quarter pool net of XXXX a

the the included we $X million $X.X of recapture XXXX, a a have provision December recorded losses, quarter credit For ended first quarter XX, million for while XXXX provision.

by continues multiple forecasts be Moody's. Our economic of to a produced blend forecast

real XXXX waiting X.X% first continue in until rate have before to of through to slowly in individual to We fourth lowest XXXX. Commercial to returning forecast XXXX. in Unemployment before XXXX. third XXXX. of multiple resulted and growth forecasted XXXX. among growth We the X% X% largest weighted peaking in values real and is stay forecast GDP Moody's reaching XXXX resulting The in scenario decline below in third around their is to quarter the downside forecasts. The rising X% quarter declining is forecasted on rise risks the of in baseline to level are the economic XXXX, for be continue unemployment between elevated their forecasted quarters with forecasted estate GDP

XXXX, Our by XXXX. as March XX, billion investment to XX, from December total $X.X $XXX declined portfolio of million

in the derivatives at generated during quarter, a not value AFS AFS hedge was in partially million. The in increase in As in flows $XX The declined March of to compared AFS and first million for portfolio X.XX% our the XXXX. XX, increased million equivalent on from our loss offset The portfolio. XXXX. of from the quarter. was $XXX totaled million the securities value or and March for securities. that $XX the from securities of of investment totaled increase net were to approximately year investment or maturity unrealized decline million AFS loss was a due the securities quarter, first by securities of available end billion held million. Investment fair by value billion of at $XXX $XXX the the portfolio the by for entire our securities primarily the in $XX in to quarter The XXXX change securities yield decrease prior approximately unrealized reinvested X.XX% our sale million investment the tax HTM quarter $XX HTM inclusive XX, pretax $X.XX portfolio fair a cash AFS portfolio $X.X first prior

have carry value in weighted a to of XXXX. on X.X%. late average swaps [indiscernible] We the rate approximately continue silver positive have executed hedges fair on fixed these of June We which received daily we

million rate that resulted $XXX Our combined program in to of January mature cash was the the XXXX at with the more grew XX deposits billion Reserve $XXX in the term every May a end advances of XXXX. that deposits. fixed this broker cash million in at XX, of of mature Federal deposit of days, to partly mature by which $XXX hedges, were funding Borrowings which attributable issuance from year bank growth end in of on approximately March the million advances the at quarter of cash $X.X first X.X%. from included in of These than flow XXXX. This

existing borrowings principal funding borrowings repaid wholesale and funding term our bank average combination rate and/or bank and payments core additional of anticipate sources, which that new a of X.XX%. deposits. approximately borrowings future a Our through will from interest program of additional had the funding security borrowing portfolio, program broker consist We growth weighted term deposit be cash, may

million XXXX compared fourth approximately X.XX% $X.X The to million was March The $XX company's $XX turning our quarter position. increased million December payout in of at XX%. of dividends. XX, common Now the ratio billion. Retained XX, shareholders' ratio ratio March XX, XXXX XXXX, year-to-date by XXXX, year-to-date of increased offset dividend capital in tangible earnings resulting XXXX X.XX%. by At with from $X.X was was as income our equity equity

XXXX. decreased OCI Our end from million $XX by of the

continue XX, ratios risk-based our majority and capital regulatory XXXX, March of Our capital ratio above ratio common the to At our Tier equity capital was XX.X%. be X our peers. was XX.X%, total

quarter first back earnings. Dave call of discussion turn further to now the for I'll our

David Brager

income for before $XXX.X for quarter. ago fourth $XXX.X quarter first interest year million million for Net quarter provision with the credit for million the and the compared was losses $XXX.X

net Interest XXXX for interest over than equivalent X.X% decreased by For prior by quarter X.XX% the for fourth income by compared loans than securities tax was of more while the income interest $XXX,XXX declined interest quarter with as first quarter $XXX,XXX. and on margin the increased revenue on of XXXX. more $XXX,XXX on investment

increased The the earning in decrease our point interest assets. security yields quarter the first basis the the basis $XXX in interest prior of with in quarter in $XXX yields XXXX. Loan of a decline declined basis yields XXXX a basis X.X% yields. by margin expense The first borrowings, to $X.X quarter Investment million first while quarter-over-quarter decline year-over-year XXXX. net basis X.XX% the quarter were XX on asset deposits point income by as net increased increase margin average of swaps XX funds $XX to fourth fourth $XXX cost The first million. Average million by by prior million by earning in X.XX% XXXX. quarter borrowings from the quarter XX the on the the quarter X.X% increase points the carry earning point yields X.XX quarter prior in from to increased however, million XXXX. Interest decline due in ago year the by XXXX X.X% Our million. XX of increased borrowings $X.X our from from quarter prior and of in was XX quarter interest yielded compared from ago million of for earning increased quarter. Interest a of result in in an in investment quarter of approximately increased first the of year pay of cost expense to interest-bearing of cost compared asset funds, increased in quarter including to by first deposits higher the basis points million. the average interest-bearing positive for in yield loan by expense of compared on assets the was X.XX% increase resulted cost the and the and XX quarter X.XX% of $X.X for a XXXX the from Interest quarter points. The of over XXXX fixed $X offsetting and first as of year deposits the declined net

Moving Noninterest the for and on million quarter $XX.X compared to prior noninterest quarter million the income. year for quarter. income first of $XX.X for was ago $XX.X million with XXXX the

banking same international services, quarter were of the of by $XXX,XXX fourth to customer-related deposit XXXX. first the quarter essentially and fees, declined merchant compared the when but including compared Our bankcard to XXXX

And management wealth trust $XXX,XXX. fees and Our the year-over-year, prior $XXX,XXX compared increased by grew fees by quarter. to these

quarter million XXXX. the $X.X by the quarter restructuring decreased in million first to fourth and the XXXX, enhancements policies $X.X of income XXXX by BOLI to quarter increased compared from due and BOLI of the in quarter fourth First of primarily

quarter expenses. quarter resulting assessment in as the the $X.X additional first decrease and million on of primarily special XXXX total, for which bonus XXXX. million $XXX,XXX payroll for quarter was employee fourth in million payroll and quarter Now Total $XXX,XXX the annual to a by by $X.X the million the for provision $X.X fourth quarter first quarter prior for FDIC result fourth caps expense commitments $X.X the of provision reflected increased quarter. of $XX.X loan quarter year increased quarter from compared for offset was compared initial and taxes with the of an special was employee of to of unfunded $XXX,XXX $X.X X.X%. There benefits XXXX. In ago or quarter-over-quarter the the expense the the in assessment, $XXX,XXX assets includes a on to prior recapture XXXX million increase as of expense for and $XX by taxes paid of expense of totaled salary provision the the and $X.X $XX.X compared first due the recapture increase taxes was as million estimate the million of increase FDIC's X.XX% quarter costs XX% first was X.XX% $X.X was with annual million XXXX. for increase in Noninterest first with of the loss of quarter XXXX. assessment, regulatory decrease XXXX. quarter first from of the no of for and The of reset This salary year fourth for or million a in year-over-year benefit first the included to $X.X in grew decrease compared and in for million first associated the salaries compared quarter quarter Noninterest with million payment bonuses. The X.XX% average XXXX XXXX, the loan accrual reflected of for FDIC Salaries the expense a $X.X accruals from quarter-over-quarter. quarter quarter commitments higher unfunded payroll in XXXX XXXX fourth a the million

and XXXX special the XX% ratio quarter for excluding XX.X% of the concludes XX.X% when XX.X% or today's Our special for presentation. the FDIC the efficiency excluded. assessment This prior was first quarter of quarter XX.XX% with compares first expenses for XXXX. This FDIC or the assessment

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

Operator

will KBW. line from come of the [Operator with Motta first question Kelly Instructions] Our

Kelly Motta

to of due more how comes hoping that a on, all in the like you're on took the pay chunk May. off seems you around base. color might we funding appreciate thinking broker could BTF I it you with was take slug start the I the about

liquidity saw thinking of BTFP the be bit of how to built quite levels, as approaching payoff. it should prefund a this any I helpful. that overall color quarter. EOP you're we would some as is borrowings about the how I'm assuming cash wondering well that to contribution Just as But be

E. Nicholson

Kelly. Sure,

do paydown correct. comes did that brokered You're that support the May. CDs in some to of BTP We to start

of the sheet. going think I think dramatically want balance the cash goes as may I be at first levels bit little some end the on. the to year different. We keep a so it's always may elevated But on don't be quarter, down they cash to come

the year is mix of I think through us go the the biggest for we thing we as how the rest funding.

Our pipeline, now. core pretty deposits as alluded to Dave are right good on

we anticipate some we'll to mix that that. deposits to optimistic funding So we overall feel that do about bank billion need replace term But program. in wholesale in $X

So cost it lowest as both we'll to risk manage interest from well funding. perspective trying an rate the get as

Kelly Motta

Maybe that talk we pipeline. could about

of You just ] spoke deposits pretty of that's core now. [ strong

wondering, for you I customers deposits, support, guys your base? such from existing of a new client competitive already penetration Just do environment job a it's prospects. with know fantastic that the is you

] siding [ what's that provide pipeline? incentives? you change Any Any could wondering there. Just in color

David Brager

in noninterest-bearing size pretty doing much Xx isn't There operating XXXX changed -- loan any deposits in is of deposits, incentive We mean of to of change incentives. the really Yes. as equivalent same the as really that make I December the back concerned. far

companies place So obviously and of 'XX really all on those that. operating 'XX that's focus into with and the been calling in driving for continuing

about of I'll pieces here, few a them. talk there's all think of the I and puzzle

the So strong. is pipeline

We that hired are some good other some that. people, driving have of from organizations

that full I commercial company, enthusiasm C&I evidenced modest the commercial the either renewed think investor or in been from investor always that a lending sort by out there's lending, right to with the after estate going relative think we've the relationships the just doing side, a loans. And a a operating from in now, think estate perspective. for on lead are of the from perspective loans we those pricing I real mix deals credit interested real there as not the but of of lot those I focused there's salespeople

on And companies. to so they focus really have had those operating

excluding the and we've in quarter historically, it, everybody because our part say, normal X% And of the back to the second about first just X% the of of we quarter. was fourth towards -- build end fourth sort say, XXXX. deposit that the a third of second see in But this in first in deposits and our XXXX first is normally base. XXXX, I'll have then quarter. about talked start quarter and it growing would and sort the past, excluding we And second The we to decline really down the quarters in build seasonality the the of quarter, quarter more I then

if a naturally, have things in as So stronger we'll growth with our time, relationships I long think some existing the they see coupled pipeline. true just hold for

helped. should should, at we'll next couple sort on think deposit the that that the say, create I go quarters as of hope buildup we I I least. of side through

Operator

And the with Raymond line next question David will come of from the Feaster James.

David Feaster

the think out landscape the start just touching from the landscape? bit hearing maybe the both what What's clients I curious, a this on then Maybe is kind deposit you how you little loan for your how mean about on your loan trending? how is I at just do -- side. appetite? just want point? to competitive are And on competitive touched from growth and I'm you demand perspective But side. of And your

David Brager

Yes.

will owner-occupied that loans. But I focused of loans we're estate-related quality better year this mean, We that. And whether there. it pipeline do is we're at was competitive had think or point side. our or the before be definitely is the either commercial the C&I quarters more same the it of at So would do we this the interested year growth. time I been loans year whereas loan I sticking X than than it both. loan, still normally landscape are last investor single-digit in loans. to last just would we have doing loans, the X The still we're funding on frame. the real in or low majority the interested operating company look, funded slower majority have real We really we a say we're a that's a always C&I are. in And estate

can bit relationships a accomplish of in we nice some little very throughout to them. borrow C&I I yet facilities that lull. on the provided booked year. We're We've started that side the the on a we haven't that think

a bit in objective, objective. of we're there, not sticking that to single-digit of on get I we're little still low relationship. focused think I all the guidance but am but So kind whole growth And

rates. probably that that done job And think it on believe we up. of underwrite there really out that's competitive bankers lending sure And we're credit redoubling I've at going back full getting out of we'll aggressive will good have pricing type that on first, you, We're at the landscape though sort are make But to low too stuff their see I think us. just into of especially then we I pricing towards right, given rates starting so some get a at efforts making loan tell comes the I on we the for the institutions. somewhat be X-year that normally, mid-Xs even And if side, down been the that's sure shocked driving business. But potentially is funding challenges for and relationship. price want there to

compete that call, And said well we're over booking I just as going to rate. not X% recently. So in we're loans the at

David Feaster

there's just ag on specifically. touching in some challenges space. that maybe then Obviously, And

that your You going book stresses? and that. you're input costs what just commodity about And and managing you're I'm from any to specifically hearing forward? seeing alluded prices, how from do you where seeing that curious think clients all

David Brager

portfolio, of in basket lot a country at California, important are A counties Central the the the in are Yes. it's of look, part I which largest which producing Valley, an portfolio. our of it's smaller our the world, part Valley. located really. but our Central overall in mean the I the of bread is mean, offices

shouldn't what little part stabilized cautious over is or a little worry pop have some last an been foreseeable lot that the of rain down futures of it. we're better. the up bit had costs thing the things in starting production just are water. at We've challenged. maybe the recently news of lot or to least prices, ag a that But out The very side when Dairy about, looking we be have mill input cases, years. to of So gone have do. to Livestock a & in We future it's we important have at even There's some bit. comes area. One of couple a of have gotten

a the industries business. just like remains bank that's So mean best I a We challenging. of But want that everything in specific to business each do it it's we good we the thing. hard with.

just to choose And choosing it's customers say but that right But so we less it's I much loan what that we do. and of remain X-ish sort as part to still of the total and they're going us, an portfolio, in try and picking would as is. pick or percent of important our

David Feaster

I question I'm the with cash managing restructuring flows kind how And Other on there's then that of balance policies, great. moves about Kelly's you're That's upcoming some Okay. managing using of did what think touched you've implications balance about swap, curious, whether moving we and longer sheet. maybe the be And the a that. curious think a bit But and did securities point? to you the mean this maturities. that? BTFP how cash lot But of considering impacts the balance on a obviously, higher of BOLI with do at curious sheet you book outlook for we from just parts fund in the the sheet right I'm now.

E. Nicholson

asset as become Well, of the little trying possible. fund David, more derivatives put both is our interest bank these balancing, which a look liquidity we obviously, ultimately way a risk, a in act. and sensitive lot balancing mean I to cheapest at we on rate it's definitely the are we balancing measurements

we all sometimes and tweaks of lot a there's X So of decisions against those. make balancing

agree In not mind. probably my a rates interest that long a time. fairly elevated in some that's So I stay ways, for will thing bad really do

funding long think the to term, loans well I continue the mix into and change put on so And we as X%.

will that long think time. I be positive us for a

David Feaster

any bullet restructuring? And that on Okay. details

E. Nicholson

Well, successfully. we completed it

what saw happy and we wanted you It's income, more you think look the doing quarter, this year-over-year, we're with significantly if I do. impact to it.

David Feaster

fully it's this quarter. it. reflected Got in So

E. Nicholson

yes. is, It

Operator

will that of the line Tenner from with Davidson. D.A. And Gary come

Gary Tenner

and of answered, bigger my a asked curious A but in M&A. terms from lot just of perspective questions picture

kind I been there Obviously, and time discussion maybe a position around perspective. a NYCB, think capital from we of great valuation last suggested spoke, you're a post a or M&A. in you have bit conversations little more

So be topic? the salary who that kind terms on spectrum end more a smaller in gone it of Is size of and has terms curious the conversations? kind of to thoughts willing in the be how tended broad of as might of trend your more today

David Brager

would say are mean conversations of Yes. a I still lot there's I active. conversations.

do. the think -- us, sort at they're there a I look partner asset and again, the -- that -- billion size. conversations of are think recent all in math willing but you the the the all when or driven are you was of marks really like combination billion always are. can there's part of conversations in talking good And to going and look, that the these we're your $X a to preliminary, of and really we're imminent, still nothing that wants challenging bank. conversations becomes challenges what lot on, going really having the find you But need on mean, whatever be some somebody to a all banks with between I down the really we are. it are with question and having $XX get are we're rates to selective about and size spot. We're I to all of to be always We

factors you be have of the you today. ago get. of get, would been could think factors, couple than regulatory pushback larger I years I the a there mean, some might there's maybe more a potentially lot there more

sure that you're can way to really quickly. it and the picking in too a you that just earn your don't and right shareholders partners So have make that do relatively choosing you much, you it dilute and back existing

buy So we're I we don't something say that to love really but still having they get conversations. to would banks, want sell. we done,

what So we're to we're kind to willing agree have they of do. to

are. of sort where So that's we

Gary Tenner

of deal? to of has give announced to And them? scenario deals, communicated on seems kind you've I on a potentially been the they your visibility mean out any topic kind I in or of where communication to curious with you been as what to you the I'm pushback be appreciate uncertainty in broached that. guidance there. able regulatory there Have lot expect you? have since of been regulators the you what

David Brager

that had Yes. of or relationship thing But fruition. The we our given do to proposed guys around what here's I'll that do regulators an of sort been what a any asked say, we number haven't upfront historically. checklist looking from of haven't something always come as but have continue they maybe out those looking around, good them add and [ if haven't that, And of good outside would process. I relationship there's opportunity, something with the think, to that, a I say ] as at getting that really which you we're look, conversations specific does we we've FDIC, specific hey, well complexity but think mean, things rules C of some specific any their number the a have at. any very had added, there's they're closer We're been today. I to questions only with

so we closer just And that take looking we're getting to consideration, into something. at

Operator

[Operator Sandler. come Clark from Piper Matthew with will line Instructions] And the of that

Matthew Clark

starts for when the and of the you one a me margin your March, to have at the first think Just rate deposits to you expectation average NIM the bottom and on in what's NIM of NII. the Do the then end and and on then that, follow-up as inflect? March month spot NII for

E. Nicholson

your part can We of question. answer

think of don't We disclose I of terms that. We in our deposits. NIM deck cost there. in investor have don't the rate spot in the the

the and next is As deposits continue funding see second that the be we Matthew, quarter say, Dave quarter. really you don't earlier, going would variable provide grow main alluded to will guidance. forward what in typically to side between naturally that the really we there know, I transpires as

that pipeline execute We plays be extent But see how will to the have a minimize positive. the and able we're that to out. good funds we'll on that wholesale

David Brager

spot interest-bearing Matthew, the deposits cost X.XX% of repos And was and March.

Matthew Clark

up And not the CETX then and AFS portfolio, book. another on restructure XX the mean, bps it. XX.X%. Why to just the Got is I bite just securities bullet

Any move in on clearly appetite can from there? profitability and and the it You change afford improve here?

David Brager

the we'll around I evaluate can it. to we look things a to evaluate do other could different mean options this it will to still it. Yes. other Like continuing not at things restructuring. some I we are anything, relative the decision we do think said, but lot do continue never but yet, to there of we've we made just as we're that decision it. made it, And do to continue to and haven't well. point, it Look, doesn't we evaluate do There's doing At

couple So I what the quarters, quarters, the we as couple We'll what do. happens of through think we'll our as far see next deposits. as see rates next of get

the gotten I deposits we're basically like have, this but say, we historically, of point, think, said, have seen excess some I if historically growth. we rid at I'd

from you of funding continue don't things So there's can do you to and that. have improve want Allen, anything we'll evaluate a lot the that? to I NIM, different we add that if the to side to know,

E. Nicholson

you it's No, we'll to something I nothing before, we and we'll about -- continue don't we've have talked though. and think evaluate, to -- imminent we'll

David Brager

look, And the our making, I it's that say mean not would I of decision customers. math, just all of Yes. right? part perception it's

the relationships Our customers some us very money albeit have been stuff. higher-yielding satisfied the with moved been have deposits, to has stable,

than need lost a But could relationships a anything. more a we that of spark in for restructure haven't fear. loss fears had big We fear if you did and you to the quarter,

evaluate So in headline also that something that risk as that well. is reputational we

Matthew Clark

me. one Got it. for And last

you're this -- buying get some to point it's active is to likely if deal not stock fair back you'll get year? M&A Just at this able assume year, it an

David Brager

have we Yes. have we to do TCE capital. evaluate us make one a of, going that. I to factors really we're that mean, do the solid look, a sure situation, just deal is limiting And if to the TCE. impact to allows a maintain I'd of every as driven it's we're to of want lot but say, sort We that going on

different So of aspects something a we and regularly, XX% are lot do discussed there's pretty that's capital, that CETX. there. also But we and yes, have we mean, building close I

to good well. that managing as But TCE have we're we ratio of capital. also sort So regulatory

in continue it But that's the to And of as movement because year, definitely interest went rates. the bit we something look get down we'll so a through that little at.

Operator

like the further at no turn I questions to would for in Mr. closing queue this to Brager now showing the I'm time. remarks. call back over

David Brager

Great. challenging continues Thank Shri [ CVB to you, consistently in operating environment. perform Bank ]. a

consecutive focused financial you loyalty. all to paying and of customers our dividends. We know I'd and commitment their interest our with thank Thanks of your day. mission highlighted quarters consecutive and performance our again this their I for joining is Allen quarters owners remain of our best We quarter. forward cash you XXX by on the earnings medium-sized quarter profitability let solid July, banking XXXX economic and to second have XXX cycles. our Our for to great if and us any through a businesses small- for speaking appreciate and look associates call. Have in like questions. Please

Operator

participating. This for concludes today's all program. Thank you

disconnect. now may You

CVB Financial (CVBF) 25 Apr 242024 Q1 Earnings call transcript