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CVB Financial Corp. Reports Earnings for the Third Quarter 2024
Source: Nasdaq GlobeNewswire / 23 Oct 2024 15:45:10 America/Chicago
Third Quarter 2024
- Net Earnings of $51 million, or $0.37 per share
- Return on Average Assets of 1.23%
- Return on Average Tangible Common Equity of 14.93%
- Net Interest Margin of 3.05%
Ontario, CA, Oct. 23, 2024 (GLOBE NEWSWIRE) -- CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (the “Company”), announced earnings for the quarter ended September 30, 2024.
CVB Financial Corp. reported net income of $51.2 million for the quarter ended September 30, 2024, compared with $50.0 million for the second quarter of 2024 and $57.9 million for the third quarter of 2023. Diluted earnings per share were $0.37 for the third quarter, compared to $0.36 for the prior quarter and $0.42 for the same period last year. Net income of $51.2 million for the third quarter of 2024 produced an annualized return on average equity (“ROAE”) of 9.40%, an annualized return on average tangible common equity (“ROATCE”) of 14.93%, and an annualized return on average assets (“ROAA”) of 1.23%.
David Brager, President and Chief Executive Officer of Citizens Business Bank, commented, “We are pleased with our third quarter results. The Bank continues to execute on our strategy of banking the best small to medium sized businesses in the markets we serve. The results in the third quarter represent our 190th consecutive quarter of profitability. I am very proud of the commitment of our associates to our mission and the loyalty of our customers to our shared vision of success.“
Highlights for the Third Quarter of 2024
- Net interest margin of 3.05%
- Efficiency Ratio of 46.5%
- TCE Ratio = 9.7% & CET1 Ratio > 15%
- Net income grew by 2.4%, compared to the second quarter of 2024
- Deposits and customer repurchase agreements increased $408 million compared to the end of the second quarter of 2024
- Noninterest-bearing deposits were 59% of total deposits
- Early redemption of $1.3 billion of Bank Term Funding Program borrowings
- Sold $312 million in AFS securities for a loss of $11.6 million
- Executed the sale and leaseback of two buildings generating gains of $9.1 million
- Loans declined by $109 million, or 1.3% from the end of the second quarter of 2024
- Net recoveries were $156,000 for the third quarter of 2024
INCOME STATEMENT HIGHLIGHTS
Three Months Ended Nine Months Ended September 30,
2024June 30,
2024September 30,
2023September 30,
2024September 30,
2023(Dollars in thousands, except per share amounts) Net interest income $ 113,619 $ 110,849 $ 123,371 $ 336,929 $ 368,634 Recapure of (provision for) credit losses - - (2,000 ) - (4,000 ) Noninterest income 12,834 14,424 14,309 41,371 40,167 Noninterest expense (58,835 ) (56,497 ) (55,058 ) (175,103 ) (163,956 ) Income taxes (16,394 ) (18,741 ) (22,735 ) (53,339 ) (67,918 ) Net earnings $ 51,224 $ 50,035 $ 57,887 $ 149,858 $ 172,927 Earnings per common share: Basic $ 0.37 $ 0.36 $ 0.42 $ 1.07 $ 1.24 Diluted $ 0.37 $ 0.36 $ 0.42 $ 1.07 $ 1.24 NIM 3.05 % 3.05 % 3.31 % 3.06 % 3.32 % ROAA 1.23 % 1.24 % 1.40 % 1.23 % 1.41 % ROAE 9.40 % 9.57 % 11.33 % 9.43 % 11.50 % ROATCE 14.93 % 15.51 % 18.82 % 15.19 % 19.24 % Efficiency ratio 46.53 % 45.10 % 39.99 % 46.29 % 40.11 % Net Interest Income
Net interest income was $113.6 million for the third quarter of 2024. This represented a $2.8 million, or 2.50%, increase from the second quarter of 2024, and a $9.8 million, or 7.90%, decrease from the third quarter of 2023. The quarter-over-quarter increase in net interest income was primarily due to a $7.0 million increase in interest income resulting from a $513 million average increase in our interest-earning balances due from the Federal Reserve, partially offset by a $3.8 million increase in interest on deposits. The decline in net interest income compared to the third quarter of 2023 was primarily due to a 26 basis point decline in net interest margin.Net Interest Margin
Our tax equivalent net interest margin was 3.05% for both the second and third quarters of 2024, compared to 3.31% for the third quarter of 2023. Our cost of funds compared to the second quarter of 2024 increased nine basis points, which was offset by a six basis point increase in our interest-earning asset yield. The six basis point increase in our interest-earning asset yield was due to a five basis point increase in loan yields and funds on deposit at the Federal Reserve increasing as a percentage of earnings assets to 8.2%, from 4.8% in the prior quarter. Average funds held at the Federal Reserve of $1.22 billion, grew by $513 million from the second quarter of 2024, earning 5.4% on average for the third quarter. Our cost of funds increased in the third quarter to 1.47%, as our cost of deposits and customer repurchase agreements increased by 14 basis points to 1.01%. The cost of interest-bearing non-maturity deposits increased from the prior quarter by 22 basis points. On average, borrowings decreased by $121 million compared to the second quarter, while continuing to have an average cost of 4.77%. The 26 basis point decrease in net interest margin compared to the third quarter of 2023, was primarily the result of a 55 basis point increase in cost of funds. This increase in cost of funds from the prior year quarter was the result of a 46 basis point increase in the cost of deposits and an increase in the level of borrowings, which grew on average by $411 million. A 25 basis point increase in earning asset yields over the prior year quarter partially offset the increase in funding costs. The higher earning asset yields, included higher loan yields, which grew from 5.07% for the third quarter of 2023 to 5.31% for the third quarter of 2024. The higher earning asset yield was also the result of the increase in average funds held at the Federal Reserve, which grew from 3.1% of earning assets in the third quarter of 2023 to 8.2% in the third quarter of 2024.Earning Assets and Deposits
On average, total earning assets grew by $262 million, or 1.79%, quarter-over-quarter. This growth includes the $513 million increase in average funds on deposit at the Federal Reserve. Investment securities and loans declined on average by $126.9 million and $126.3 million, respectively, when compared to the second quarter of 2024. The decline in investment securities includes the impact of selling approximately $300 million of AFS securities during the third quarter. Compared to the third quarter of 2023, the mix of assets changed modestly, with the average balance of investment securities decreasing by $462.6 million, declining from 37% to 34% of total earning assets. Conversely, the average amount of funds held at the Federal Reserve increased by $748.8 million, growing from 3.1% of total earning assets in the third quarter of 2023 to 8.2% for the third quarter of 2024. Noninterest-bearing deposits declined on average by $28.4 million, or 0.40%, from the second quarter of 2024 and interest-bearing deposits and customer repurchase agreements increased on average by $279.2 million. Compared to the third quarter of 2023, total deposits and customer repurchase agreements declined on average by $503.7 million, or 3.90%, including a decline of $688 million, or 8.8%, in noninterest-bearing deposits. Non-maturity interest-bearing deposits and customer repurchase agreements decreased by $247.5 million on average, while time deposits grew on average by $431.9 million. On average, noninterest-bearing deposits were 59.10% of total deposits during the most recent quarter, compared to 60.20% for the second quarter of 2024 and 62.09% for the third quarter of 2023.Three Months Ended SELECTED FINANCIAL HIGHLIGHTS September 30, 2024 June 30, 2024 September 30, 2023 (Dollars in thousands) Yield on average investment securities (TE) 2.67 % 2.71 % 2.64 % Yield on average loans 5.31 % 5.26 % 5.07 % Yield on average earning assets (TE) 4.43 % 4.37 % 4.18 % Cost of deposits 0.98 % 0.88 % 0.52 % Cost of funds 1.47 % 1.38 % 0.92 % Net interest margin (TE) 3.05 % 3.05 % 3.31 % Average Earning Asset Mix Avg % of Total Avg % of Total Avg % of Total Total investment securities $ 5,080,033 34.01 % $ 5,206,959 35.49 % $ 5,542,590 37.20 % Interest-earning deposits with other institutions 1,232,551 8.25 % 716,916 4.89 % 473,391 3.18 % Loans 8,605,270 57.61 % 8,731,587 59.51 % 8,862,462 59.48 % Total interest-earning assets 14,935,866 14,673,474 14,900,003 Provision for Credit Losses
There was no provision for credit losses in the third and second quarter of 2024, compared to $2.0 million in provision in the third quarter of 2023. Net recoveries for the third quarter of 2024 were $156,000, compared to net charge-offs $31,000 in the prior quarter. Allowance for credit losses represented 0.97% of gross loans at September 30, 2024, compared to 0.95% at June 30, 2024.Noninterest Income
Noninterest income was $12.8 million for the third quarter of 2024, compared with $14.4 million for the second quarter of 2024 and $14.3 million for the third quarter of 2023. During the third quarter of 2024, the Bank executed sale-leaseback transactions with the sale of two buildings, which operate as Banking Centers, and were simultaneously leased back, resulting in a pre-tax net gain of $9.1 million. The gains on selling the buildings were offset by realizing a pre-tax net loss of $11.6 million on the sale of $312 million of AFS securities. Third quarter income from Bank Owned Life Insurance (“BOLI”) increased by $557,000 from the second quarter of 2024 and increased by $2 million compared to the third quarter of 2023. We experienced $320,000 in death benefits that exceeded the asset value on certain policies in the third quarter of 2024, compared to no death benefits in the second quarter of 2024 and no death benefits in the third quarter of 2023. The year-over-year increase of $2 million in BOLI income was primarily due to the restructuring and enhancements in BOLI policies during the fourth quarter of 2023. Trust and investment service fees grew by 4.0% or $137,000 compared to the prior quarter and by 9.8% or $319,000 compared to the third quarter of 2023.Noninterest Expense
Noninterest expense for the third quarter of 2024 was $58.8 million, compared to $56.5 million for the second quarter of 2024 and $55.0 million for the third quarter of 2023. The $2.3 million quarter-over-quarter increase included a $1.2 million increase in staff related expense, as annual salary increases took effect in July. The $690,000 quarter-over-quarter increase in regulatory assessments was due to the $700,000 accrual adjustment in the second quarter of 2024 related the FDIC special assessment. There was a $750,000 recapture of provision for unfunded loan commitments in the third quarter of 2024, compared to a $500,000 recapture of provision in the second quarter of 2024 and $900,000 recaptured in the third quarter of 2023. Occupancy and equipment expense grew by $432,000 or 7%, compared to the prior quarter, including the impact of the two buildings that were sold and leased back during the third quarter.The $3.8 million increase in noninterest expense year-over-year included increased staff related expenses of $1.9 million, or 5.48%. Professional services increased $738,000, including a $627,000 increase in legal expense year-over-year. Occupancy and equipment expense increased by $586,000, or 10.43% and software expense increased $258,000, or 7% year-over-year. As a percentage of average assets, noninterest expense was 1.42% for the third quarter of 2024, compared to 1.40% for the second quarter of 2024 and 1.33% for the third quarter of 2023. The efficiency ratio for the third quarter of 2024 was 46.53%, compared to 45.10% for the second quarter of 2024 and 39.99% for the third quarter of 2023.
Income Taxes
Our effective tax rate for the nine months ended September 30, 2024 was 26.25%, compared with 28.20% for the same period of 2023. Our estimated annual effective tax rate can vary depending upon the level of tax-advantaged income from municipal securities and BOLI, as well as available tax credits.BALANCE SHEET HIGHLIGHTS
Assets
The Company reported total assets of $15.4 billion at September 30, 2024. This represented a decrease of $748.3 million, or 4.63%, from total assets of $16.15 billion at June 30, 2024. The decrease in assets included a $416.9 million decrease in interest-earning balances due from the Federal Reserve, a $304.8 million decrease in investment securities, and a $109.4 million decrease in net loans.Total assets decreased by $617.8 million, or 3.86%, from total assets of $16.02 billion at December 31, 2023. The decrease in assets included a $549.9 million decrease in investment securities, and a $328.4 million decrease in net loans, partially offset by a $142.9 million increase in interest-earning balances due from the Federal Reserve.
Total assets at September 30, 2024 decreased by $499.8 million, or 3.14%, from total assets of $15.90 billion at September 30, 2023. The decrease in assets was primarily due to a $491.8 million decrease in investment securities and a $299.0 million decrease in net loans, partially offset by an increase of $188.6 million in interest-earning balances due from the Federal Reserve and a $57.1 million increase in the cash surrender value of BOLI.
Sale-Leaseback Transaction
During the third quarter of 2024, the Bank executed sale-leaseback transactions and sold two buildings, that are utilized as Banking Centers, for an aggregate sale price of $17 million. The Bank simultaneously entered into lease agreements with the respective purchasers for initial terms of 15 and 18 years. These sale-leaseback transactions resulted in a pre-tax net gain of $9.1 million for the third quarter of 2024. The Bank also recorded Right of Use (“ROU”) assets and corresponding operating lease liabilities each totaling $11.2 million.Investment Securities and BOLI
Total investment securities were $4.87 billion at September 30, 2024, a decrease of $549.9 million, or 10.14% from December 31, 2023, and a decrease of $491.8 million, or 9.17%, from $5.36 billion at September 30, 2023.At September 30, 2024, investment securities available-for-sale (“AFS”) totaled $2.47 billion, inclusive of a pre-tax net unrealized loss of $367.7 million. AFS securities decreased by $280.2 million from the prior quarter end, by $490.5 million, or 16.59%, from December 31, 2023 and decreased by $407.6 million, or 14.19%, from $2.87 billion at September 30, 2023. Pre-tax unrealized loss decreased by $120.2 million from the end of the prior quarter, and declined by $82.1 million from December 31, 2023 and by $260.7 million from September 30, 2023.
Concurrent with the sale-leaseback transactions during the third quarter of 2024, the Bank sold AFS securities with a book value of $312 million, resulting in a net pre-tax loss of $11.6 million.
At September 30, 2024, investment securities held-to-maturity (“HTM”) totaled $2.41 billion, a decrease of $24.6 million from the prior quarter end, a $59.4 million, or 2.41% decline from December 31, 2023, and a decrease of $84.2 million, or 3.38%, from September 30, 2023.
Combined, the AFS and HTM investments in mortgage backed securities (“MBS”) and collateralized mortgage obligations (“CMO”) totaled $3.82 billion or approximately 78% of the total investment securities at September 30, 2024. Virtually all of our MBS and CMO are issued or guaranteed by government or government sponsored enterprises, which have the implied guarantee of the U.S. Government. In addition, at September 30, 2024, we had $552.6 million of Government Agency securities that represent approximately 11.3% of the total investment securities.
Our combined AFS and HTM municipal securities totaled $485.7 million as of September 30, 2024, or 10% of our total investment portfolio. These securities are located in 35 states. Our largest concentrations of holdings by state, as a percentage of total municipal bonds, are located in Texas at 16.09%, Minnesota at 11.07%, and California at 9.71%.
At September 30, 2024, the Company had $316.6 million of Bank Owned Life insurance (“BOLI”), compared to $308.7 million at December 31, 2023 and $259.5 million at September 30, 2023. The $57.1 million increase in value of BOLI, when compared to September 30, 2023, was primarily due to a restructuring of the Company’s life insurance policies at the end of 2023, including a $4.5 million write-down in value on surrender policies that was offset by a $10.9 million enhancement to cash surrender values, as well as additional policy purchases totaling $41 million. This restructuring has increased returns on our BOLI policies resulting in additional non-taxable noninterest income in 2024.
Loans
Total loans and leases, at amortized cost, of $8.57 billion at September 30, 2024 decreased by $109.3 million, or 1.26%, from June 30, 2024. The quarter-over quarter decrease in loans included decreases of $46.3 million in commercial real estate loans, $37.5 million in construction loans, $19.7 million in commercial and industrial loans, and $8.1 million in dairy & livestock and agribusiness loans.Total loans and leases, at amortized cost, decreased by $332.3 million, or 3.73%, from December 31, 2023. The decrease in total loans included decreases of $165.9 million in commercial real estate loans, $70.5 million in dairy & livestock and agribusiness loans, $52.0 million in construction loans, and $33.4 million in commercial and industrial loans.
Total loans and leases, at amortized cost, decreased by $305.1 million, or 3.44%, from September 30, 2023. The $305.1 million decrease included decreases of $224.4 million in commercial real estate loans, $48.3 million in construction loans, $13.1 million in SBA loans, $9.0 million in dairy & livestock and agribusiness loans, and $8.0 million in municipal lease financings.
Asset Quality
During the third quarter of 2024, we experienced credit charge-offs of $26,000 and total recoveries of $182,000, resulting in net recoveries of $156,000. The allowance for credit losses (“ACL”) totaled $82.9 million at September 30, 2024, compared to $82.8 million at June 30, 2024 and $89.0 million at September 30, 2023. At September 30, 2024, ACL as a percentage of total loans and leases outstanding was 0.97%. This compares to 0.95% at June 30, 2024 and 0.98% at December 31, 2023 and 1.00% at September 30, 2023.Nonperforming loans, defined as nonaccrual loans, including modified loans on nonaccrual, plus loans 90 days past due and accruing interest, and nonperforming assets, defined as nonperforming plus OREO, are highlighted below.
Nonperforming Assets and Delinquency Trends September 30,
2024June 30,
2024September 30,
2023Nonperforming loans (Dollars in thousands) Commercial real estate $ 18,794 $ 21,908 $ 3,655 SBA 151 337 1,050 Commercial and industrial 2,825 2,712 4,672 Dairy & livestock and agribusiness 143 - 243 SFR mortgage - - 339 Consumer and other loans - - 4 Total $ 21,913 $ 24,957 $ 9,963 [1] % of Total loans 0.26 % 0.29 % 0.11 % OREO Commercial real estate $ - $ - $ - Commercial and industrial 647 647 - SFR mortgage - - - Total $ 647 $ 647 $ - Total nonperforming assets $ 22,560 $ 25,604 $ 9,963 % of Nonperforming assets to total assets 0.15 % 0.16 % 0.06 % Past due 30-89 days (accruing) Commercial real estate $ 30,701 $ 43 $ 136 SBA - - - Commercial and industrial 64 103 - Dairy & livestock and agribusiness - - - SFR mortgage - - - Consumer and other loans - - - Total $ 30,765 $ 146 $ 136 % of Total loans 0.36 % 0.00 % 0.00 % Classified Loans $ 124,606 $ 124,728 $ 92,246 [1] Includes $2.6 million of nonaccrual loans past due 30-89 days. The $3.0 million decrease in nonperforming loans from June 30, 2024 was primarily due to the payoff of one nonperforming commercial real estate loans totaling $2.3 million and $1.4 million in paydowns of nonperforming commercial real estate loans associated with two relationships. Past due loans grew to more than $30 million on September 30, 2024. Classified loans are loans that are graded “substandard” or worse. Classified loans decreased $122,000 quarter-over-quarter, primarily due to a $668,000 net decrease in classified commercial real estate loans, which included the payoff of 4 loans totaling $11.5 million that were partially offset by the addition of six classified commercial real estate loans in the third quarter of 2024. Classified dairy & livestock and agribusiness loans declined by $3.5 million due to paydowns and classified commercial and industrial loans increased $3.5 million primarily due to the addition of one classified commercial and industrial loan.
Deposits & Customer Repurchase Agreements
Deposits of $12.07 billion and customer repurchase agreements of $394.5 million totaled $12.47 billion at September 30, 2024. This represented a net increase of $407.9 million compared to June 30, 2024. Total deposits at September 30, 2024 included $400 million in brokered time deposits. Total deposits and customer repurchase agreements increased $761.7 million, or 6.51%, when compared to $11.71 billion at December 31, 2023 partially due to the growth in brokered deposits, and decreased $161.3 million, or 1.28% when compared to $12.63 billion at September 30, 2023.Noninterest-bearing deposits were $7.14 billion at September 30, 2024, an increase of $46.7 million, or 0.66%, when compared to $7.09 billion at June 30, 2024. Noninterest-bearing deposits decreased by $69.4 million, or 0.96% when compared to $7.21 billion at December 31, 2023, and decreased by $449.8 million, or 5.93% when compared to $7.59 billion at September 30, 2023. At September 30, 2024, noninterest-bearing deposits were 59.12% of total deposits, compared to 60.13% at June 30, 2024, 63.03% at December 31, 2023, and 61.39% at September 30, 2023.
Borrowings
As of September 30, 2024, total borrowings consisted of $500 million of FHLB advances. The FHLB advances include maturities of $300 million, at an average cost of approximately 4.73%, maturing in May of 2026, and $200 million, at a cost of 4.27% maturing in May of 2027. During the third quarter of 2024, we repaid the $1.3 billion of borrowings from the Federal Reserve’s Bank Term Funding Program, with a cost of 4.76%, that were scheduled to mature in January of 2025.Capital
The Company’s total equity was $2.20 billion at September 30, 2024. This represented an overall increase of $119.9 million from total equity of $2.08 billion at December 31, 2023. Increases to equity included $149.9 million in net earnings and a $48.7 million increase in other comprehensive income, that were partially offset by $83.9 million in cash dividends. We engaged in no stock repurchases during the first nine months of 2024. Our tangible book value per share at September 30, 2024 was $10.17.Our capital ratios under the revised capital framework referred to as Basel III remain well-above regulatory standards.
CVB Financial Corp. Consolidated Capital Ratios Minimum Required Plus Capital Conservation Buffer September 30, 2024 December 31, 2023 September 30, 2023 Tier 1 leverage capital ratio 4.0 % 10.6 % 10.3 % 10.0 % Common equity Tier 1 capital ratio 7.0 % 15.8 % 14.6 % 14.4 % Tier 1 risk-based capital ratio 8.5 % 15.8 % 14.6 % 14.4 % Total risk-based capital ratio 10.5 % 16.6 % 15.5 % 15.3 % Tangible common equity ratio 9.7 % 8.5 % 7.7 % CitizensTrust
As of September 30, 2024, CitizensTrust had approximately $4.7 billion in assets under management and administration, including $3.3 billion in assets under management. Revenues were $3.6 million for the third quarter of 2024, compared to $3.2 million for the same period of 2023. CitizensTrust provides trust, investment and brokerage related services, as well as financial, estate and business succession planning.
Corporate Overview
CVB Financial Corp. (“CVBF”) is the holding company for Citizens Business Bank. CVBF is one of the 10 largest bank holding companies headquartered in California with more than $15 billion in total assets. Citizens Business Bank is consistently recognized as one of the top performing banks in the nation and offers a wide array of banking, lending and investing services with more than 60 banking centers and three trust office locations serving California.Shares of CVB Financial Corp. common stock are listed on the NASDAQ under the ticker symbol “CVBF”. For investor information on CVB Financial Corp., visit our Citizens Business Bank website at www.cbbank.com and click on the “Investors” tab.
Conference Call
Management will hold a conference call at 7:30 a.m. PDT/10:30 a.m. EDT on Thursday, October 24, 2024 to discuss the Company’s third quarter 2024 financial results. The conference call can be accessed live by registering at: https://register.vevent.com/register/BI6b56a1a5e9bf45efa402c04252b87308The conference call will also be simultaneously webcast over the Internet; please visit our Citizens Business Bank website at www.cbbank.com and click on the “Investors” tab to access the call from the site. Please access the website 15 minutes prior to the call to download any necessary audio software. This webcast will be recorded and available for replay on the Company’s website approximately two hours after the conclusion of the conference call and will be available on the website for approximately 12 months.
Safe Harbor
Certain statements set forth herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “will likely result”, “aims”, “anticipates”, “believes”, “could”, “estimates”, “expects”, “hopes”, “intends”, “may”, “plans”, “projects”, “seeks”, “should”, “will,” “strategy”, “possibility”, and variations of these words and similar expressions help to identify these forward-looking statements, which involve risks and uncertainties that could cause actual results or performance to differ materially from those projected. These forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies, goals and statements about the Company’s outlook regarding revenue and asset growth, financial performance and profitability, capital and liquidity levels, loan and deposit levels, growth and retention, yields and returns, loan diversification and credit management, stockholder value creation, tax rates, the impact of economic developments, and the impact of acquisitions we have made or may make. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company, and there can be no assurance that future developments affecting the Company will be the same as those anticipated by management. The Company cautions readers that a number of important factors, in addition to those set forth below, could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements.General risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct business; the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market and monetary fluctuations; the effect of acquisitions we have made or may make, including, without limitation, the failure to obtain the necessary regulatory approvals, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target, key personnel and customers into our operations; the timely development of competitive products and services and the acceptance of these products and services by new and existing customers; the impact of changes in financial services policies, laws, and regulations, including those concerning banking, taxes, securities, and insurance, and the application thereof by regulatory agencies; the effectiveness of our risk management framework and quantitative models; changes in the level of our nonperforming assets and charge-offs; the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; possible credit related impairments or declines in the fair value of loans and securities held by us; possible impairment charges to goodwill on our balance sheet; changes in customer spending, borrowing, and savings habits; the effects of our lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; periodic fluctuations in commercial or residential real estate prices or values; our ability to attract or retain deposits (including low cost deposits) or to access government or private lending facilities and other sources of liquidity; the possibility that we may reduce or discontinue the payment of dividends on our common stock; changes in the financial performance and/or condition of our borrowers; changes in the competitive environment among financial and bank holding companies and other financial service providers; technological changes in banking and financial services; systemic or non-systemic bank failures or crises; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism, and/or military conflicts, which could impact business and economic conditions in the United States and abroad; catastrophic events or natural disasters, including earthquakes, drought, climate change or extreme weather events that may affect our assets, communications or computer services, customers, employees or third party vendors; public health crises and pandemics, and their effects on our asset credit quality, business operations, and employees, as well as the impact on general economic and financial market conditions; cybersecurity threats and fraud and the costs of defending against them, including the costs of compliance with legislation or regulations to combat fraud and cybersecurity threats; our ability to recruit and retain key executives, board members and other employees, and our ability to comply with federal and state employment laws and regulations; ongoing or unanticipated regulatory or legal proceedings or outcomes; and our ability to manage the risks involved in the foregoing. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's 2023 Annual Report on Form 10-K filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).
The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements, except as required by law. Any statements about future operating results, such as those concerning accretion and dilution to the Company’s earnings or shareholders, are for illustrative purposes only, are not forecasts, and actual results may differ.
Non-GAAP Financial Measures — Certain financial information provided in this earnings release has not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and is presented on a non-GAAP basis. Investors and analysts should refer to the reconciliations included in this earnings release and should consider the Company’s non-GAAP measures in addition to, not as a substitute for or as superior to, measures prepared in accordance with GAAP. These measures may or may not be comparable to similarly titled measures used by other companies.
CVB FINANCIAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands) September 30,
2024December 31,
2023September 30,
2023Cash and due from banks $ 200,651 $ 171,396 $ 176,488 Interest-earning balances due from Federal Reserve 252,809 109,889 64,207 Total cash and cash equivalents 453,460 281,285 240,695 Interest-earning balances due from depository institutions 24,338 8,216 4,108 Investment securities available-for-sale 2,465,585 2,956,125 2,873,163 Investment securities held-to-maturity 2,405,254 2,464,610 2,489,441 Total investment securities 4,870,839 5,420,735 5,362,604 Investment in stock of Federal Home Loan Bank (FHLB) 18,012 18,012 18,012 Loans and lease finance receivables 8,572,565 8,904,910 8,877,632 Allowance for credit losses (82,942 ) (86,842 ) (88,995 ) Net loans and lease finance receivables 8,489,623 8,818,068 8,788,637 Premises and equipment, net 36,275 44,709 44,561 Bank owned life insurance (BOLI) 316,553 308,706 259,468 Intangibles 11,130 15,291 16,736 Goodwill 765,822 765,822 765,822 Other assets 417,164 340,149 402,372 Total assets $ 15,403,216 $ 16,020,993 $ 15,903,015 Liabilities and Stockholders' Equity Liabilities: Deposits: Noninterest-bearing $ 7,136,824 $ 7,206,175 $ 7,586,649 Investment checking 504,028 552,408 560,223 Savings and money market 3,745,707 3,278,664 3,906,187 Time deposits 685,930 396,395 305,727 Total deposits 12,072,489 11,433,642 12,358,786 Customer repurchase agreements 394,515 271,642 269,552 Other borrowings 500,000 2,070,000 1,120,000 Other liabilities 238,381 167,737 203,276 Total liabilities 13,205,385 13,943,021 13,951,614 Stockholders' Equity Stockholders' equity 2,472,660 2,401,541 2,378,539 Accumulated other comprehensive loss, net of tax (274,829 ) (323,569 ) (427,138 ) Total stockholders' equity 2,197,831 2,077,972 1,951,401 Total liabilities and stockholders' equity $ 15,403,216 $ 16,020,993 $ 15,903,015
CVB FINANCIAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited) (Dollars in thousands) Three Months Ended Nine Months Ended September 30,
2024June 30,
2024September 30,
2023September 30,
2024September 30,
2023Assets Cash and due from banks $ 162,383 $ 162,724 $ 176,133 $ 162,385 $ 176,559 Interest-earning balances due from Federal Reserve 1,216,671 704,023 467,873 786,282 285,573 Total cash and cash equivalents 1,379,054 866,747 644,006 948,667 462,132 Interest-earning balances due from depository institutions 15,880 12,893 5,518 13,161 7,630 Investment securities available-for-sale 2,661,990 2,764,096 3,040,965 2,774,981 3,139,369 Investment securities held-to-maturity 2,418,043 2,442,863 2,501,625 2,439,427 2,524,799 Total investment securities 5,080,033 5,206,959 5,542,590 5,214,408 5,664,168 Investment in stock of FHLB 18,012 18,012 21,560 18,012 27,460 Loans and lease finance receivables 8,605,270 8,731,587 8,862,462 8,720,058 8,905,697 Allowance for credit losses (82,810 ) (82,815 ) (86,986 ) (83,788 ) (86,222 ) Net loans and lease finance receivables 8,522,460 8,648,772 8,775,476 8,636,270 8,819,475 Premises and equipment, net 38,906 43,624 45,315 42,291 45,731 Bank owned life insurance (BOLI) 315,435 312,645 258,485 312,574 257,358 Intangibles 11,819 13,258 17,526 13,216 19,256 Goodwill 765,822 765,822 765,822 765,822 765,822 Other assets 365,740 390,834 357,280 368,951 343,782 Total assets $ 16,513,161 $ 16,279,566 $ 16,433,578 $ 16,333,372 $ 16,412,814 Liabilities and Stockholders' Equity Liabilities: Deposits: Noninterest-bearing $ 7,124,952 $ 7,153,315 $ 7,813,120 $ 7,153,557 $ 7,908,749 Interest-bearing 4,931,220 4,728,864 4,769,897 4,705,566 4,624,848 Total deposits 12,056,172 11,882,179 12,583,017 11,859,123 12,533,597 Customer repurchase agreements 363,959 287,128 340,809 320,280 461,478 Other borrowings 1,729,405 1,850,330 1,318,098 1,856,771 1,273,521 Other liabilities 196,832 157,463 164,624 174,328 133,046 Total liabilities 14,346,368 14,177,100 14,406,548 14,210,502 14,401,642 Stockholders' Equity Stockholders' equity 2,479,766 2,456,945 2,383,922 2,456,348 2,357,028 Accumulated other comprehensive loss, net of tax (312,973 ) (354,479 ) (356,892 ) (333,478 ) (345,856 ) Total stockholders' equity 2,166,793 2,102,466 2,027,030 2,122,870 2,011,172 Total liabilities and stockholders' equity $ 16,513,161 $ 16,279,566 $ 16,433,578 $ 16,333,372 $ 16,412,814
CVB FINANCIAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (Dollars in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30,
2024June 30,
2024September 30,
2023September 30,
2024September 30,
2023Interest income: Loans and leases, including fees $ 114,929 $ 114,200 $ 113,190 $ 345,478 $ 332,574 Investment securities: Investment securities available-for-sale 20,178 21,225 22,441 62,849 61,393 Investment securities held-to-maturity 13,284 13,445 13,576 40,131 41,272 Total investment income 33,462 34,670 36,017 102,980 102,665 Dividends from FHLB stock 375 377 598 1,171 1,430 Interest-earning deposits with other institutions 16,986 9,825 6,422 32,884 11,583 Total interest income 165,752 159,072 156,227 482,513 448,252 Interest expense: Deposits 29,821 25,979 16,517 77,166 32,647 Borrowings and customer repurchase agreements 22,312 22,244 16,339 68,418 46,971 Total interest expense 52,133 48,223 32,856 145,584 79,618 Net interest income before provision for (recapture of) credit losses 113,619 110,849 123,371 336,929 368,634 Provision for (recapture of) credit losses - - 2,000 - 4,000 Net interest income after provision for (recapture of) credit losses 113,619 110,849 121,371 336,929 364,634 Noninterest income: Service charges on deposit accounts 5,120 5,117 5,062 15,273 15,244 Trust and investment services 3,565 3,428 3,246 10,217 9,475 Loss on sale of AFS investment securities (11,582 ) - - (11,582 ) - Gain on sale leaseback transactions 9,106 - - 9,106 - Other 6,625 5,879 6,001 18,357 15,448 Total noninterest income 12,834 14,424 14,309 41,371 40,167 Noninterest expense: Salaries and employee benefits 36,647 35,426 34,744 108,474 103,539 Occupancy and equipment 6,204 5,772 5,618 17,541 16,585 Professional services 2,855 2,726 2,117 7,836 6,375 Computer software expense 3,906 3,949 3,648 11,380 10,372 Marketing and promotion 1,964 1,956 1,628 5,550 4,664 Amortization of intangible assets 1,286 1,437 1,567 4,161 5,006 (Recapture of) provision for unfunded loan commitments (750 ) (500 ) (900 ) (1,250 ) - Other 6,723 5,731 6,636 21,411 17,415 Total noninterest expense 58,835 56,497 55,058 175,103 163,956 Earnings before income taxes 67,618 68,776 80,622 203,197 240,845 Income taxes 16,394 18,741 22,735 53,339 67,918 Net earnings $ 51,224 $ 50,035 $ 57,887 $ 149,858 $ 172,927 Basic earnings per common share $ 0.37 $ 0.36 $ 0.42 $ 1.07 $ 1.24 Diluted earnings per common share $ 0.37 $ 0.36 $ 0.42 $ 1.07 $ 1.24 Cash dividends declared per common share $ 0.20 $ 0.20 $ 0.20 $ 0.60 $ 0.60
CVB FINANCIAL CORP. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30,
2024June 30,
2024September 30,
2023September 30,
2024September 30,
2023Interest income - tax equivalent (TE) $ 166,285 $ 159,607 $ 156,771 $ 484,120 $ 449,888 Interest expense 52,133 48,223 32,856 145,584 79,618 Net interest income - (TE) $ 114,152 $ 111,384 $ 123,915 $ 338,536 $ 370,270 Return on average assets, annualized 1.23 % 1.24 % 1.40 % 1.23 % 1.41 % Return on average equity, annualized 9.40 % 9.57 % 11.33 % 9.43 % 11.50 % Efficiency ratio [1] 46.53 % 45.10 % 39.99 % 46.29 % 40.11 % Noninterest expense to average assets, annualized 1.42 % 1.40 % 1.33 % 1.43 % 1.34 % Yield on average loans 5.31 % 5.26 % 5.07 % 5.29 % 4.99 % Yield on average earning assets (TE) 4.43 % 4.37 % 4.18 % 4.38 % 4.04 % Cost of deposits 0.98 % 0.88 % 0.52 % 0.87 % 0.35 % Cost of deposits and customer repurchase agreements 1.01 % 0.87 % 0.51 % 0.87 % 0.34 % Cost of funds 1.47 % 1.38 % 0.92 % 1.39 % 0.75 % Net interest margin (TE) 3.05 % 3.05 % 3.31 % 3.06 % 3.32 % [1] Noninterest expense divided by net interest income before provision for credit losses plus noninterest income. Tangible Common Equity Ratio (TCE) [2] CVB Financial Corp. Consolidated 9.71 % 8.68 % 7.73 % Citizens Business Bank 9.59 % 8.57 % 7.63 % [2] (Capital - [GW+Intangibles])/(Total Assets - [GW+Intangibles]) Weighted average shares outstanding Basic 138,649,763 138,583,510 138,345,000 138,415,424 138,360,531 Diluted 138,839,499 138,669,058 138,480,633 138,548,651 138,481,462 Dividends declared $ 27,977 $ 28,018 $ 27,901 $ 83,881 $ 83,695 Dividend payout ratio [3] 54.62 % 56.00 % 48.20 % 55.97 % 48.40 % [3] Dividends declared on common stock divided by net earnings. Number of shares outstanding - (end of period) 139,678,314 139,677,162 139,337,699 Book value per share $ 15.73 $ 15.12 $ 14.00 Tangible book value per share $ 10.17 $ 9.55 $ 8.39 September 30,
2024December 31,
2023September 30,
2023Nonperforming assets: Nonaccrual loans $ 21,913 $ 21,302 $ 9,963 Other real estate owned (OREO), net 647 - - Total nonperforming assets $ 22,560 $ 21,302 $ 9,963 Modified loans/performing troubled debt restructured loans (TDR) [4] $ 15,769 $ 9,460 $ 7,304 [4] Effective January 1, 2023, performing and nonperforming TDRs are reflected as Loan Modifications to borrowers experiencing financial difficulty. Percentage of nonperforming assets to total loans outstanding and OREO 0.26 % 0.24 % 0.11 % Percentage of nonperforming assets to total assets 0.15 % 0.13 % 0.06 % Allowance for credit losses to nonperforming assets 367.65 % 407.67 % 893.26 % Three Months Ended Nine Months Ended September 30,
2024June 30,
2024September 30,
2023September 30,
2024September 30,
2023Allowance for credit losses: Beginning balance $ 82,786 $ 82,817 $ 86,967 $ 86,842 $ 85,117 Total charge-offs (26 ) (51 ) (26 ) (4,344 ) (224 ) Total recoveries on loans previously charged-off 182 20 54 444 102 Net recoveries (charge-offs) 156 (31 ) 28 (3,900 ) (122 ) Provision for (recapture of) credit losses - - 2,000 - 4,000 Allowance for credit losses at end of period $ 82,942 $ 82,786 $ 88,995 $ 82,942 $ 88,995 Net recoveries (charge-offs) to average loans 0.002 % -0.000 % 0.000 % -0.045 % -0.001 %
CVB FINANCIAL CORP. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in millions) Allowance for Credit Losses by Loan Type September 30, 2024 December 31, 2023 September 30, 2023 Allowance
For Credit
LossesAllowance
as a % of
Total Loans
by Respective
Loan TypeAllowance
For Credit
LossesAllowance
as a % of
Total Loans
by Respective
Loan TypeAllowance
For Credit
LossesAllowance
as a % of
Total Loans
by Respective
Loan TypeCommercial real estate $ 69.7 1.05 % $ 69.5 1.02 % $ 70.9 1.04 % Construction 0.5 3.07 % 1.3 1.91 % 1.0 1.59 % SBA 2.5 0.92 % 2.7 0.99 % 3.0 1.08 % Commercial and industrial 5.3 0.56 % 9.1 0.94 % 9.3 0.99 % Dairy & livestock and agribusiness 3.8 1.12 % 3.1 0.75 % 3.6 1.01 % Municipal lease finance receivables 0.2 0.28 % 0.2 0.29 % 0.3 0.33 % SFR mortgage 0.4 0.16 % 0.5 0.20 % 0.5 0.20 % Consumer and other loans 0.5 0.99 % 0.4 0.85 % 0.4 0.82 % Total $ 82.9 0.97 % $ 86.8 0.98 % $ 89.0 1.00 %
CVB FINANCIAL CORP. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) Quarterly Common Stock Price 2024 2023 2022 Quarter End High Low High Low High Low March 31, $ 20.45 $ 15.95 $ 25.98 $ 16.34 $ 24.37 $ 21.36 June 30, $ 17.91 $ 15.71 $ 16.89 $ 10.66 $ 25.59 $ 22.37 September 30, $ 20.29 $ 16.08 $ 19.66 $ 12.89 $ 28.14 $ 22.63 December 31, $ - $ - $ 21.77 $ 14.62 $ 29.25 $ 25.26 Quarterly Consolidated Statements of Earnings Q3 Q2 Q1 Q4 Q3 2024 2024 2024 2023 2023 Interest income Loans and leases, including fees $ 114,929 $ 114,200 $ 116,349 $ 115,721 $ 113,190 Investment securities and other 50,823 44,872 41,340 42,357 43,037 Total interest income 165,752 159,072 157,689 158,078 156,227 Interest expense Deposits 29,821 25,979 21,366 18,888 16,517 Borrowings and customer repurchase agreements 22,312 22,244 23,862 19,834 16,339 Total interest expense 52,133 48,223 45,228 38,722 32,856 Net interest income before (recapture of) provision for credit losses 113,619 110,849 112,461 119,356 123,371 (Recapture of) provision for credit losses - - - (2,000 ) 2,000 Net interest income after (recapture of) provision for credit losses 113,619 110,849 112,461 121,356 121,371 Noninterest income 12,834 14,424 14,113 19,163 14,309 Noninterest expense 58,835 56,497 59,771 65,930 55,058 Earnings before income taxes 67,618 68,776 66,803 74,589 80,622 Income taxes 16,394 18,741 18,204 26,081 22,735 Net earnings $ 51,224 $ 50,035 $ 48,599 $ 48,508 $ 57,887 Effective tax rate 24.25 % 27.25 % 27.25 % 34.97 % 28.20 % Basic earnings per common share $ 0.37 $ 0.36 $ 0.35 $ 0.35 $ 0.42 Diluted earnings per common share $ 0.37 $ 0.36 $ 0.35 $ 0.35 $ 0.42 Cash dividends declared per common share $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 Cash dividends declared $ 27,977 $ 28,018 $ 27,886 $ 27,945 $ 27,901
CVB FINANCIAL CORP. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands) Loan Portfolio by Type September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Commercial and industrial $ 6,618,637 $ 6,664,925 $ 6,720,538 $ 6,784,505 $ 6,843,059 Construction 14,755 52,227 58,806 66,734 63,022 SBA 272,001 267,938 268,320 270,619 283,124 SBA - PPP 1,255 1,757 2,249 2,736 3,233 Commercial and industrial 936,489 956,184 963,120 969,895 938,064 Dairy & livestock and agribusiness 342,445 350,562 351,624 412,891 351,463 Municipal lease finance receivables 67,585 70,889 72,032 73,590 75,621 SFR mortgage 267,181 267,593 276,475 269,868 268,171 Consumer and other loans 52,217 49,771 57,549 54,072 51,875 Gross loans, at amortized cost 8,572,565 8,681,846 8,770,713 8,904,910 8,877,632 Allowance for credit losses (82,942 ) (82,786 ) (82,817 ) (86,842 ) (88,995 ) Net loans $ 8,489,623 $ 8,599,060 $ 8,687,896 $ 8,818,068 $ 8,788,637 Deposit Composition by Type and Customer Repurchase Agreements September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Noninterest-bearing $ 7,136,824 $ 7,090,095 $ 7,112,789 $ 7,206,175 $ 7,586,649 Investment checking 504,028 515,930 545,066 552,408 560,223 Savings and money market 3,745,707 3,409,320 3,561,512 3,278,664 3,906,187 Time deposits 685,930 774,980 675,554 396,395 305,727 Total deposits 12,072,489 11,790,325 11,894,921 11,433,642 12,358,786 Customer repurchase agreements 394,515 268,826 275,720 271,642 269,552 Total deposits and customer repurchase agreements $ 12,467,004 $ 12,059,151 $ 12,170,641 $ 11,705,284 $ 12,628,338
CVB FINANCIAL CORP. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands) Nonperforming Assets and Delinquency Trends September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Nonperforming loans: Commercial real estate $ 18,794 $ 21,908 $ 10,661 $ 15,440 $ 3,655 Construction - - - - - SBA 151 337 54 969 1,050 Commercial and industrial 2,825 2,712 2,727 4,509 4,672 Dairy & livestock and agribusiness 143 - 60 60 243 SFR mortgage - - 308 324 339 Consumer and other loans - - - - 4 Total $ 21,913 $ 24,957 $ 13,810 $ 21,302 $ 9,963 [1] % of Total loans 0.26 % 0.29 % 0.16 % 0.24 % 0.11 % Past due 30-89 days (accruing): Commercial real estate $ 30,701 $ 43 $ 19,781 $ 300 $ 136 Construction - - - - - SBA - - 408 108 - Commercial and industrial 64 103 6 12 - Dairy & livestock and agribusiness - - - - - SFR mortgage - - - 201 - Consumer and other loans - - - 18 - Total $ 30,765 $ 146 $ 20,195 $ 639 $ 136 % of Total loans 0.36 % 0.00 % 0.23 % 0.01 % 0.00 % OREO: Commercial real estate $ - $ - $ - $ - $ - SBA - - - - - Commercial and industrial 647 647 647 - - SFR mortgage - - - - - Total $ 647 $ 647 $ 647 $ - $ - Total nonperforming, past due, and OREO $ 53,325 $ 25,750 $ 34,652 $ 21,941 $ 10,099 % of Total loans 0.62 % 0.30 % 0.40 % 0.25 % 0.11 % [1] Includes $2.6 million of nonaccrual loans past due 30-89 days.
CVB FINANCIAL CORP. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) Regulatory Capital Ratios CVB Financial Corp. Consolidated Capital Ratios Minimum Required Plus
Capital Conservation BufferSeptember 30,
2024December 31,
2023September 30,
2023Tier 1 leverage capital ratio 4.0 % 10.6 % 10.3 % 10.0 % Common equity Tier 1 capital ratio 7.0 % 15.8 % 14.6 % 14.4 % Tier 1 risk-based capital ratio 8.5 % 15.8 % 14.6 % 14.4 % Total risk-based capital ratio 10.5 % 16.6 % 15.5 % 15.3 % Tangible common equity ratio 9.7 % 8.5 % 7.7 %
Tangible Book Value Reconciliations (Non-GAAP) The tangible book value per share is a Non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance. The following is a reconciliation of tangible book value to the Company stockholders' equity computed in accordance with GAAP, as well as a calculation of tangible book value per share as of September 30, 2024, December 31, 2023 and September 30, 2023. September 30,
2024December 31,
2023September 30,
2023(Dollars in thousands, except per share amounts) Stockholders' equity $ 2,197,831 $ 2,077,972 $ 1,951,401 Less: Goodwill (765,822 ) (765,822 ) (765,822 ) Less: Intangible assets (11,130 ) (15,291 ) (16,736 ) Tangible book value $ 1,420,879 $ 1,296,859 $ 1,168,843 Common shares issued and outstanding 139,678,314 139,344,981 139,337,699 Tangible book value per share $ 10.17 $ 9.31 $ 8.39
Return on Average Tangible Common Equity Reconciliations (Non-GAAP) The return on average tangible common equity is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance. The following is a reconciliation of net income, adjusted for tax-effected amortization of intangibles, to net income computed in accordance with GAAP; a reconciliation of average tangible common equity to the Company's average stockholders' equity computed in accordance with GAAP; as well as a calculation of return on average tangible common equity. Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2024 2024 2023 2024 2023 (Dollars in thousands) Net Income $ 51,224 $ 50,035 $ 57,887 $ 149,858 $ 172,927 Add: Amortization of intangible assets 1,286 1,437 1,567 4,161 5,006 Less: Tax effect of amortization of intangible assets [1] (380 ) (425 ) (463 ) (1,230 ) (1,480 ) Tangible net income $ 52,130 $ 51,047 $ 58,991 $ 152,789 $ 176,453 Average stockholders' equity $ 2,166,793 $ 2,102,466 $ 2,027,030 $ 2,122,870 $ 2,011,172 Less: Average goodwill (765,822 ) (765,822 ) (765,822 ) (765,822 ) (765,822 ) Less: Average intangible assets (11,819 ) (13,258 ) (17,526 ) (13,216 ) (19,256 ) Average tangible common equity $ 1,389,152 $ 1,323,386 $ 1,243,682 $ 1,343,832 $ 1,226,094 Return on average equity, annualized [2] 9.40 % 9.57 % 11.33 % 9.43 % 11.50 % Return on average tangible common equity, annualized [2] 14.93 % 15.51 % 18.82 % 15.19 % 19.24 % [1] Tax effected at respective statutory rates. [2] Annualized where applicable.
Contact:
David A. Brager
President and Chief Executive Officer
(909) 980-4030