CVB Financial
Annual Report 2019

Plain-text annual report

2019 ANNUAL REPORT BEST BANK IN AMERICA on Forbes America’s Best Banks $207.8 Million Net Income 171 Consecutive Quarters of Profitability 121 Consecutive Quarters of Cash Dividends Paid Highest in Company History Over 42 Years Over 30 Years “W” Winning Company Corporate Partner of the Year Five-Star “Superior” Rating 2020 Women on Boards Hope through Housing Foundation BauerFinancial Citizens Business Bank 2019 | 1 Since 1974, Citizens Business Bank has been creating banking relationships by focusing on our customer and helping them achieve more for their business, their employees, and the communities they serve. Our founder, George A. Borba Sr., was an enterprising dairy farmer and small business owner from Southern California. George saw a need to support other business owners in his community by helping them preserve and enhance the value of their companies. He shared his vision with a group of local business leaders who cared deeply about their community, and together they set out to design a new banking experience. Chino Valley Bank was established in August of 1974. 45 years later, Citizens Business Bank has grown to $11.3 billion in assets with 58 banking locations and 3 trust offices throughout California. We changed our name to Citizens Business Bank along the way, but we still hold true to our original vision. We are proud to be in the position to assist entrepreneurs with opportunities to foster and grow their businesses. Our customers’ success is our success. We are able to build long-standing relationships with each customer by treating them the same way we would want to be treated. In fact, many of our customers have banked with us for decades. Our unwavering commitment to personal service is the reason we are consistently recognized as one of the top-performing banks in the nation. 2 | Citizens Business Bank 2019 Board of Directors 2019 in Review Financial Highlights Valued Customers Services Community Commitment Leadership Team Financial Summary Locations Corporate Information 4 5 7 11 23 28 32 35 40 42 Citizens Business Bank 2019 | 3 Board of Directors Raymond V. O’Brien III Chairman David A. Brager Chief Executive Officer George A. Borba Vice Chairman Kristina M. Leslie Director Stephen A. Del Guercio Director Hal W. Oswalt Director Anna Kan Director Rodrigo Guerra Jr. Director Marshall V. Laitsch Director 4 | Citizens Business Bank 2019 4 | Citizens Business Bank 2019To our Shareholders, Customers, and Associates As we go to press with our 2019 Annual Report this year, the entire world and our nation is being affected by the COVID-19 pandemic. While all of us are at this point still coming to grips in dealing with this issue, it is clear that the impact on many industries, including the financial services sector, will be felt in a significant way in 2020. However, whatever uncertainties will come along in 2020, it is still worth pointing out that 2019 was an exceptional year for Citizens Business Bank. We produced record earnings of $207.8 million, a 37% increase over 2018. Also, we recorded our 171st consecutive quarter of profitability and our 121st consecutive quarter of paying a cash dividend to our shareholders. In addition, during 2019, we completed our integration of the former Community Bank Centers and systems while receiving accolades from those that follow the banking industry. Bank Director Magazine ranked this merger as the fifth most transformative bank deal in the nation, and the Orange County Chapter of the Association for Corporate Growth recognized CVB Financial Corp. with the Spotlight Deal of the Year Award. Notably, we were ranked as the #1 Bank in America by Forbes 2020 Best Banks in America for the second time in five years. S&P Global ranked us as one of the Best-Performing Banks in the Nation for the year. Fitch Ratings upgraded CVB Financial Corp. from a BBB rating to a BBB+ rating. And BauerFinancial awarded the Bank its Five-Star Superior rating. We once again maintained The Findley Reports designation as a “Super Premier” Performing Bank. In July 2019, the Bank announced the retirement of Christopher D. Myers as the President & CEO of CVB Financial Corp. and Citizens Business Bank. His retirement became effective March 15, 2020. The Board of Directors would like to thank Chris for his 13-plus years leading Citizens Business Bank. The Bank has accomplished many milestones during his tenure, and he will be missed. In February, the Bank announced the appointment of David A. Brager as CEO of CVB Financial Corp. and Citizens Business Bank, effective March 16, 2020. Dave has been with Citizens Business Bank for the past 17 years, with the past nine years as Executive Vice President overseeing the Sales Division of the Bank. We are the 9th largest bank headquartered in California. As Citizens Business Bank looks toward the future, we will continue to prioritize our customers first with continued emphasis on high-quality service and customized banking solutions. Our strategy will remain the same as we deliver on our five core values: financial strength, superior people, customer focus, cost-effective operation, and having fun. On behalf of our Board of Directors, we thank our customers for their ongoing loyalty, our associates for their dedication and hard work, and our shareholders for their continued support and trust. We believe that these attributes will be even more important to our Bank as we collectively face the uncertain financial and business environment created by the evolving COVID-19 pandemic. Please stay safe and healthy, and remember that our Bank continues to be financially sound and has been a stable and prudent business partner over a variety of circumstances and economic cycles during the past 45 years. Raymond V. O’Brien III Chairman of the Board David A. Brager Chief Executive Officer Citizens Business Bank 2019 | 5 Our Vision Citizens Business Bank will strive to become the premier financial services company operating throughout the state of California, serving the comprehensive financial needs of successful small to medium-sized businesses and their owners. Our Mission The mission of Citizens Business Bank is to achieve superior performance and rank in the top ten percent of all financial institutions in the nation in return on equity and return on assets. This will be achieved by delivering the finest in financial products and services through relationship banking commitments with businesses and professionals in the Inland Empire, Los Angeles County, Orange County, San Diego County, Ventura County, Santa Barbara County, and the Central Valley area of California. It will be supported by an unqualified commitment to our five core values of financial strength, superior people, customer focus, cost-effective operation, and having fun. 6 | Citizens Business Bank 2019 FINANCIAL HIGHLIGHTS Citizens Business Bank produced record earnings for 2019. At year end, we reported our 171st consecutive quarter of profitability and paid our 121st consecutive quarterly cash dividend to shareholders. We will continue to focus on improving key financial metrics, including profitability and asset quality. Citizens Business Bank 2019 | 7 Citizens Business Bank 2019 | 7Total Assets (Dollars in Billions) 2019 2018 2017 2016 2015 $11.3 $7.7 $100.9 $1.48 $2.0 $0.93 $51.0 $0.9 2015 16 17 18 19 2015 16 17 18 19 2015 16 17 18 19 Dividends Declared (Dollars in Millions) Shareholders’ Equity (Dollars in Billions) Diluted Earnings Per Share Total Deposits1 (Dollars in Billions) $6.6 $9.1 2015 2016 2017 2018 2019 1Includes customer repurchase agreements. 8 | Citizens Business Bank 2019 $5.2 $7.6 $48.6 $3.3 $33.7 $4.0 2015 16 17 18 19 2015 16 17 18 19 2015 16 17 18 19 Noninterest Bearing Deposits (Dollars in Billions) Noninterest Income 2 (Dollars in Millions) Total Loans (Dollars in Billions) 2 Excludes gain on sale of loans, securities, branches, and gain on eminent domain, as well as FDIC loss sharing asset changes. Efficiency Ratio 3 46.72% 43.84% 45.83% 40.16% 2016 2017 2018 2019 3 Noninterest expense, excluding debt termination expense, divided by net interest income before provision for loan losses plus noninterest income. Net Earnings (Dollars in Millions) 2019 2018 2017 2016 2015 $99.1 $207.8 Citizens Business Bank 2019 | 9 10 | Citizens Business Bank 2019 10 | Citizens Business Bank 2019VALUED CUSTOMERS Our customers are always our top priority. We strive to build long- term relationships by providing businesses and professionals with the personal service of a small bank, while delivering all the capabilities of a big bank. Our customer-focused model helps our customers achieve their financial goals. Our approach to relationship banking continues to captivate new and old customers alike, many of whom have banked with us for decades. Citizens Business Bank 2019 | 11 Citizens Business Bank 2019 | 11VALUED CUSTOMER SINCE 2010 Sequoia Surgery Center Dean Levitan, MD Alex Lechtman, MD, FACS Running the only multi-specialty surgery center in the county is no easy feat. Sequoia Surgery Center started in 1994 as a partnership of 12 private physicians and their local hospital in Visalia, CA. The staff sees over 5,000 cases a year, and between managing a medical facility and serving the community, Dr. Levitan and Dr. Lechtman still find the time to meet with patients. The doctors pride themselves on ensuring that visitors to their surgery center experience the extra measure of personal touch that can be so difficult for big hospitals to provide; the same level of customer care that they look for in a financial services company. “Citizens Business Bank has always taken care of us.” More than a decade ago, Dr. Levitan and Dr. Lechtman began searching for a new bank that could handle their ambitious expansion plans for Sequoia Surgery Center. “We’re actively involved in the local community, so we appreciate a bank with a local presence,” says Dr. Levitan, President of Real Estate & Chief of Medical Staff, “as opposed to the big guys.” Dr. Lechtman, President of Sequoia Surgery Center, knew that the center could use the expertise and personal touch of a local bank, but was also aware that the scope of their expansion plans called for a bank with considerable lending capabilities. 12 | Citizens Business Bank 2019 Citizens Business Bank has been their sole source of financing and financial services over the 10-year banking relationship. “We rely on them for everything from Payroll for more than 50 staff members, to the Real Estate Loans that have made it possible for us to not only renovate our center, but expand as a business.” The doctors knew they had made the right choice when they discovered several years ago that their facility was in need of urgent structural renovations. “The other banks we were looking at would not have had sufficient capital for a loan of that size,” comments Dr. Levitan. Today, the team at Citizens Business Bank is trusted to attend Sequoia Surgery Center board meetings where they provide the doctors with advice and consultation for future growth opportunities. Dr. Lechtman shares that, “Citizens Business Bank has always been there. We completed a major repair that we otherwise couldn’t have without Citizens Business Bank, and we’ve managed to remain profitable. They’ve made things easy for us.” Citizens Business Bank 2019 | 13 Brad Turner, Vice President & General Manager, concluded it would benefit their long-term strategy to invest some of their funds outside of the business. “After we generated a significant amount of cash, we tried to work with a multi-national bank,” says Brad. “It was impersonal, administrative bureaucracy. They didn’t have the time for us.” After a lengthy search for a more suitable financial services company and guidance from their Citizens Business Bank Relationship Manager, Datatronics found the solutions they needed with CitizensTrust, a division of Citizens Business Bank. Advisors from CitizensTrust worked closely with Brad and his team to help plan for the company’s future. CitizensTrust started with a customized Wealth Management plan that included a viable investment strategy. Pleased by the investing experience they had with CitizensTrust, Brad considered implementing banking services to support their transition to a completely digital banking process. Brad set up Citizens 14 | Citizens Business Bank 2019 VALUED CUSTOMER SINCE 1997 Datatronics Brad Turner, Vice President & General Manager Datatronics makes complex electromagnet components for lifesaving medical devices, missiles and defense equipment, and high-tech spacecraft and aircraft. As operations have expanded since Datatronics opened the doors in 1989, management has directed efforts to capitalize on the growing high reliability and military marketplace. As a result of these efforts, Datatronics created an enviable financial position. “We can see that we are important to the Bank. They have our best interest in mind.” Sweep Manager to help protect and grow the company’s assets, and he spoke to their Relationship Manager about Business Wire Transfer and Fraud Solutions for secure and convenient transactions. “Citizens Business Bank gives us prompt and personal attention. We are very happy with our banking and investing relationship,” says Brad. Partnerships like these are shining examples of the level of service the Bank strives for with every valued customer. Citizens Business Bank 2019 | 15 VALUED CUSTOMER SINCE 1997 Occidental College Amos Himmelstein, Vice President & Chief Operating Officer Teresa Williams, Assistant Controller/General Ledger Barbara Valiente, Associate Vice President of Finance/Controller Lupe Salmeron, Assistant Controller/Disbursements Nestled in the heart of Los Angeles, CA is a liberal arts college with a storied history. Occidental College, one of the top liberal arts colleges in the country, has produced a diverse list of influential and impactful alumni. Founded in 1887, Occidental combines the cultural and intellectual resources of a global city, providing a springboard for putting theory into practice and ideas into action. As their campus and curriculum have evolved through the years, so too has their need for more advanced financial services. “Love, love, love Remote Deposit Capture for processing checks from donors!” Occidental College has successfully implemented an array of products and services over the course of their long-term banking relationship with Citizens Business Bank, each one tailored to their unique financial needs. The school routinely collects tuition for about 2,000 students, and they handle a regular influx of donation checks from their generous alumni. Amos Himmelstein, Vice President & Chief Operating Officer, has found comfort in relying on the financial solutions offered by the Bank. Amos and 16 | Citizens Business Bank 2019 his team realize the enormous value of the Bank’s Treasury Management solutions, specifically Remote Deposit Capture, Zero Balance Accounts, and Automated Clearing House (ACH) payment services, which are crucial to paying their vendors and processing donation checks. “We appreciate the reliability and prompt service,” comments Barbara Valiente, Associate Vice President of Finance/Controller. When asked which services they find the most beneficial, Barbara answers confidently that Check Positive Pay and ACH Positive Pay are at the top of their list. Protecting customers from fraud is one of the Bank’s highest priorities, and the team at Occidental is on board with the right products to help keep their assets – and their school’s reputation – safe. “Positive Pay helps us ensure we are protecting the College from fraud,” explains Barbara. As banking technology continues to advance, Citizens Business Bank will continue to develop alongside it to help protect our customers like Occidental College. Citizens Business Bank 2019 | 17 “Citizens Business Bank has a good understanding of our business.” The Teunissens started operations with 300 cows on an 80-acre dairy farm, but less than two years later they had hit a roadblock to growth: their bank. Frank and Leslie determined that the lender they were using was not working for them. “They couldn’t see our vision of growth,” says Leslie. Another dairy farmer and Citizens Business Bank customer suggested that the Teunissens look back to their roots in Chino, CA and consider a bank with a good reputation among the Dairy & Livestock Industry. They were eager to expand operations, and so they met with Citizens Business Bank’s Dairy & Livestock Group to go over their growth plans. The Teunissens took out Dairy Herd Lines of Credit and Dairy Feed Lines of Credit to get their business off the ground. Real Estate Term Loans and Equipment Financing were 18 | Citizens Business Bank 2019 VALUED CUSTOMER SINCE 1997 Teunissen Dairy Leslie Teunissen, Owner Frank Teunissen, Owner Brooke Teunissen Breelayne Naher Bridgette Van Lith Frank and Leslie Teunissen had originally planned to stay in their hometown of Chino, CA to build a dairy farm while raising their family. However, increasing land prices and rising costs made it difficult for them to achieve their dream. So, in 1995, the family left California for Idaho, where affordable farmland was abundant and production costs were more profitable. crucial to expanding their operations and facilities. “Larry Zivelonghi, the Dairy & Livestock Industries Group Manager, is intuitive on what we need even before we know it. He has a good understanding of what it takes and can forecast our needs,” says Frank. Today, Teunissen Dairy covers approximately 1,500 acres of farmland across several facilities in Idaho and Oregon. Frank and Leslie’s decision to choose Citizens Business Bank as their partner has proven to be rewarding for Teunissen Dairy. Currently, their farm has ten times the number of milking cows than when they first moved to Idaho, which is far more than their family could handle alone. Roles have changed. “It used to be, we did most of the work,” says Frank. “Today, we’re the ones managing the great team of workers we have,” Leslie adds. As their farm has grown, so have their financing needs. “The Bank stuck with us through it all, they believed in us, even when it has been volatile and other dairies were closing,” says Leslie. The Teunissens, like so many other Bank customers, found success through hard work and support from a solid banking relationship. Citizens Business Bank 2019 | 19 “We’re staged for growth, thanks to Citizens Business Bank.” Relationships at Citizens Business Bank are not about selling products and services, but working together with our customers to help them successfully build their businesses. Considerable expansion plans over the last decade have made Garry realize that Western Metropolitan Industries would require more extensive banking services. “Up until recently, the Bank never really heard from me,” says Garry. Luckily, Garry has an experienced banking team he can call on when the need arises. “Citizens Business Bank is doing a good job of maintaining that local flavor,” says Garry. “My Relationship Manager is the local contact for day-to-day banking, and if I need a 9-1-1, I get fast, prompt, sincere, thorough, and courteous service from the Regional Manager. They know business.” 20 | Citizens Business Bank 2019 VALUED PARTNER SINCE 2011 Western Metropolitan Industries Garry Fishman, President Garry Fishman, President of Western Metropolitan Industries, is an independent owner of 11 stores within the Johnstone Supply Cooperative, a national wholesale distributor to the Heating, Ventilation, Air Conditioning, and Refrigeration industry. Garry started his first independently owned and operated branch 35 years ago in Ventura, CA, and has been building the company ever since. As his business expands, Garry has worked closely with his Relationship Manager to secure multiple Commercial Real Estate Loans, which helped his company open new stores across Southern California. To mitigate operational and financial risk, the Bank equipped Western Metropolitan Industries with a full suite of Treasury Management products, including Automated Clearing House (ACH) Origination and Armored Car services. Garry called in a “9-1-1” when he set his sights on purchasing three additional Johnstone Supply stores. “Acquisition of a business is a different experience than buying real estate. The Bank’s experts got involved and explained the lay of the land. They had our back,” says Garry. A Term Loan was essential to adding those stores to his network. “We’re busier than we’ve ever been. I have bankers barking at my heels. Many other financial institutions have contacted me for a meeting, but I partner with Citizens Business Bank because of the total relationship.” Citizens Business Bank 2019 | 21 22 | Citizens Business Bank 2019 22 | Citizens Business Bank 2019SERVICES The Power of Relationship Banking Our founders believed in the power of building long-lasting and genuine relationships with our customers. This belief is what still drives our success today. In fact, our financial experts devote considerable time to learning about our customers and their business goals. When we get to know our customers, we are able to offer them the solutions they need to successfully grow their business. Throughout the years, we have learned that a one-size-fits-all approach to banking rarely produces the best result. Every business has their own unique set of needs. In response, we have assembled an extensive array of banking, lending, and investment services for a wide range of industries. This way we are able to determine the best path for our customers. We offer a personalized banking experience tailored to their individual business needs. Citizens Business Bank 2019 | 23 Citizens Business Bank 2019 | 23Business Banking LIQUIDITY Business Checking Premium Money Market Attorney Client Trust Investment Checking Certificate of Deposit Business Sweep1 Analysis Business Plan Zero Balance Account Business Savings CDARS® FRAUD PREVENTION Positive Pay Check Reverse Positive Pay Check CardValet® Positive Pay Payee Match Positive Pay ACH Safe Deposit Box PAYABLES Bill Pay Debit Card Wire Transfer Credit Card Commercial Card Apple Pay® ACH Origination Tax Payment Services RECEIVABLES ACH Origination Merchant Services Lockbox Smart Safe Advanced Credit Image Cash Letter Remote Deposit Capture Bill Pay Consolidation Cash Vault Services DATA MANAGEMENT eStatements Image Services Business Online Banking Disbursement Reporting Mobile Banking Account Reconcilement Electronic Data Interchange Mobile Deposit Information Reporting 1 Personal Banking ONLINE & CARDS Online Banking & Bill Pay Mobile Banking/Mobile App Debit Card Moneypass® Credit Card CardValet® Popmoney® CHECKING Personal Checking Investment Checking 55 Checking Preferred Choice Checking DEPOSIT Premium Money Market CDARS® Individual Retirement Account Personal Savings Certificate of Deposit Health Savings Account Minor Trust Savings CDARS is a registered service mark of Promontory Interfinancial Network, LLC. Popmoney is a registered trademark of Fiserv, Inc. MoneyPass is a registered trademark of Fiserv, Inc. CardValet is a registered trademark of Fiserv, Inc. Member FDIC 24 | Citizens Business Bank 2019 Not FDIC InsuredNot Bank GuaranteedMay Lose ValueNot Insured by Any Government AgencyNot a Bank Deposit or Obligation of the BankBusiness Lending REVOLVING LINES OF CREDIT COMMERCIAL REAL ESTATE LENDING TERM LENDING SMALL BUSINESS ADMINISTRATION EQUIPMENT FINANCING Personal Lending CONSTRUCTION LENDING AGRICULTURAL LENDING ASSET-BASED LENDING DAIRY & LIVESTOCK HOME PURCHASE HOME REFINANCE HOME EQUITY LINE OF CREDIT AUTO FINANCING Equal Housing Lender | NMLS# 417441 Member FDIC Citizens Business Bank 2019 | 25 Investing 3 For more than 100 years, business owners and families in California have depended on the conscientious and disciplined wealth management strategies and seasoned experience available from CitizensTrust. CITIZENSTRUST WEALTH MANAGEMENT1 Asset Management Charitable Services Estate Planning CITIZENSTRUST INVESTMENT SERVICES2 Business & Succession Planning Financial Planning Personal Investing Retirement Planning 1 2 Citizens Business Bank is not a registered broker/dealer. Trust and Wealth Management are provided by CitizensTrust Wealth Management. Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Citizens Business Bank and CitizensTrust Investment Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using CitizensTrust Investment Services, and may also be employees of Citizens Business Bank. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Citizens Business Bank or CitizensTrust Investment Services. Securities and insurance offered through LPL or its affiliates are: 26 | Citizens Business Bank 2019 Not FDIC InsuredNot Bank GuaranteedMay Lose ValueNot Insured by Any Government AgencyNot a Bank Deposit or Obligation of the BankIndustry Expertise Every industry is different, with unique needs and goals. At Citizens Business Bank, we have the financial expertise, successful track record, and powerful products and services for a wide range of industries, including Industrial & Manufacturing, Title & Escrow, Government, Nonprofit, Medical, Agriculture, and so much more. INDUSTRIAL & MANUFACTURING PROPERTY MANAGEMENT TITLE & ESCROW AGRICULTURE NONPROFIT MEDICAL FIDUCIARY SERVICES INTERNATIONAL SERVICES PROFESSIONAL SERVICES LABOR MANAGEMENT DAIRY & LIVESTOCK GOVERNMENT Member FDIC Citizens Business Bank 2019 | 27 Community Commitment Making a Positive Difference Citizens Business Bank has been serving the people and businesses of California since our founding 45 years ago. Along the way we’ve learned a lot, and our Bank has grown exponentially, but we will never forget our roots in community banking. To us, a community goes beyond the group of people who happen to share a hometown. We believe that community is about improving the quality of life for our neighbors. 102nd Rose Queen® Coronation Presenting Sponsor Orange County Charity Golf Classic $80,000 raised Hope through Housing Corporate Partner of the Year Los Angeles Charity Golf Classic $55,000 raised 28 | Citizens Business Bank 2019 At Citizens Business Bank, we are passionate about the communities we serve, and it shows. We are com- mitted to strengthening our communities by offering superior financial services, establishing partnerships with local organizations, and consistently encour- aging volunteerism at every level of the Bank. Each year, our associates dedicate thousands of hours of their own time to local organizations and charitable causes. Our goal is to make a positive difference in the places we live and work, so current generations can experience a higher quality of life, and future generations can inherit a better world. Citizens Business Bank 2019 | 29 JVS SoCal BankWork$ We support JVS SoCal, in partnership with BankWork$, to offer career training programs to prepare unemployed indi- viduals and young adults in low-income communities for employment in the banking industry. The Citizens Experience is the difference between simply meeting our customers’ needs and ensuring we have exceeded their expectations. It is our way of recognizing the associates who go above and beyond to deliver exceptional service. As part of the Citizens Experience program, the prestigious Borba Cup is awarded annually to an associate who exemplifies our core values and demonstrates a deep commitment to high-quality customer service. For 2019, the Borba Cup was awarded to Maria Sierra, Vice President & Regional Service Manager. 30 | Citizens Business Bank 2019 WHW Citizens Business Bank announced a partnership in 2019 with WHW as part of a commitment to assist job seekers in finding employment success. The partnership has benefited local unemployed and underemployed individuals, helping them to make great first impressions with potential employers. We organized a bank-wide donation drive to gather everything from suits, dresses, and jewelry, to new beauty products, shampoo, and toothbrushes. At the end of the drive, the final count of donated clothing filled 125 45-gallon bags. Associates also volunteered to use their experience and career knowledge to lead Employment Readiness Workshops to help candidates build the skills needed to successfully market themselves to employers and conduct an effective job search. Hope through Housing Foundation | National CORE Our associates want to improve the quality of life for our neighbors. We accomplish this by joining together with Hope through Housing to finance local low and moderate-income apartments. Associates volunteer to lead after-school programs on financial education. We also contribute to Women of Hope, a Hope through Housing program. Throughout the year, volunteers from the Bank help children and teens from low-income families to overcome the obstacles preventing them from reaching their full potential. Our volunteers also guide local disadvantaged youth to opportunities for lasting success with career development classes. Our dedication to breaking the cycle of generational poverty has inspired Hope through Housing to name us their 2019 Corporate Partner of the Year. Citizens Business Bank 2019 | 31 LEADERSHIP TEAM With an average banking experience of more than 34 years, Citizens Business Bank’s leaders form the foundations of success for the entire company. As individuals, each member of the leadership team contributes distinct perspectives and decades of unmatched business and financial experience to the Bank. As a team, they’re at the forefront of driving organizational growth, and their focus is on the long- term success of the Bank, our customers, our associates, and the communities we serve. David A. Brager Chief Executive Officer E. Allen Nicholson Executive Vice President Chief Financial Officer David C. Harvey Executive Vice President Chief Operations Officer David F. Farnsworth Executive Vice President Chief Credit Officer R. Daniel Banis Executive Vice President CitizensTrust Yamynn De Angelis Executive Vice President Chief Risk Officer Ted J. Dondanville Executive Vice President Senior Lender Hector G. Gutierrez, Esq. Executive Vice President Deputy Chief Credit Officer Timothy B. Noone Executive Vice President Specialty Banking Richard H. Wohl Executive Vice President General Counsel Elsa I. Zavala Executive Vice President Chief Information Security Officer G. Larry Zivelonghi Executive Vice President Dairy & Livestock Industries 32 | Citizens Business Bank 2019 Jeffrey S. Boyer Senior Vice President Los Angeles Region-North Gilbert W. Estrada Senior Vice President Inland Empire Region Donald E. Evenson Senior Vice President Chief Investment Officer CitizensTrust Richard M. Favor Senior Vice President Central Coast Region Deborah G. Gallagher Senior Vice President Small Business Administration David R. Klatt Senior Vice President Chief Information Officer Joyce Y. Kwon Senior Vice President Director of Human Resources Daniel Limon Senior Vice President Real Estate Banking Michael B. Mulcahy Senior Vice President Los Angeles Region-Metro Mark C. Richardson Senior Vice President Real Estate Banking LaVon Short Senior Vice President Sales and Marketing David S. Stong Senior Vice President San Diego Region Michael D. Stain Senior Vice President Central Valley Region Robert E. Zeltner Senior Vice President Orange County Region Citizens Business Bank 2019 | 33 34 | Citizens Business Bank 2019 34 | Citizens Business Bank 2019FINANCIAL SUMMARY Citizens Business Bank 2019 | 35 Citizens Business Bank 2019 | 35CONSOLIDATED BALANCE SHEETS CVB FINANCIAL CORP. AND SUBSIDIARIES (Dollars in thousands, except share amounts) DECEMBER 31, 2019 2018 Assets Cash and due from banks $ 158,310 $ 144,008 Interest-earning balances due from Federal Reserve Total cash and cash equivalents Interest-earning balances due from depository institutions Investment securities available-for-sale, at fair value (with amortized cost of $1,718,357 at December 31, 2019, and 27,208 185,518 2,931 19,940 163,948 7,670 $1,757,666 at December 31, 2018) 1,740,257 1,734,085 Investment securities held-to-maturity (with fair value of $678,948 at December 31, 2019, and $721,537 at December 31, 2018) Total investment securities Investment in stock of Federal Home Loan Bank (FHLB) Loans and lease finance receivables Allowance for loan losses Net loans and lease finance receivables Premises and equipment, net Bank owned life insurance (BOLI) Accrued interest receivable Intangibles Goodwill Other real estate owned (OREO) Income taxes Other assets 674,452 2,414,709 17,688 7,564,577 (68,660) 7,495,917 53,978 226,281 28,122 42,986 663,707 4,889 35,587 110,137 744,440 2,478,525 17,688 7,764,611 (63,613) 7,700,998 58,193 220,758 30,649 53,784 666,539 420 62,174 67,807 Total assets $ 11,282,450 $ 11,529,153 36 | Citizens Business Bank 2019 Liabilities and Stockholders’ Equity Liabilities: Deposits: Noninterest-bearing Interest-bearing Total deposits Customer repurchase agreements Other borrowings Deferred compensation Junior subordinated debentures Other liabilities Total liabilities Commitments and Contingencies Stockholders’ Equity DECEMBER 31, 2019 2018 $ 5,245,517 $ 5,204,787 3,459,411 8,704,928 428,659 - 22,666 25,774 106,325 3,622,703 8,827,490 442,255 280,000 20,033 25,774 82,411 9,288,352 9,677,963 Common stock, authorized, 225,000,000 shares without par; issued and outstanding 140,102,480 at December 31, 2019, and 140,000,017 at December 31, 2018 1,298,792 1,293,669 Retained earnings Accumulated other comprehensive income (loss), net of tax 682,692 12,614 575,805 (18,284) Total stockholders’ equity 1,994,098 1,851,190 Total liabilities and stockholders’ equity $ 11,282,450 $ 11,529,153 Citizens Business Bank 2019 | 37 CONSOLIDATED STATEMENTS OF EARNINGS CVB FINANCIAL CORP. AND SUBSIDIARIES (Dollars in thousands, except per share amounts) Interest income: Loans and leases, including fees Investment securities: Investment securities available-for-sale Investment securities held-to-maturity Total investment income Dividends from FHLB stock Interest-earning deposits with other institutions and federal funds sold YEAR ENDED DECEMBER 31, 2019 2018 $ 397,628 $ 293,284 39,330 17,388 56,718 1,235 2,269 45,988 18,901 64,889 2,045 1,642 Total interest income 457,850 361,860 Interest expense: Deposits Borrowings and customer repurchase agreements Junior subordinated debentures Total interest expense Net interest income before provision for loan losses Provision for loan losses Net interest income after provision for loan losses Noninterest income: Service charges on deposit accounts Trust and investment services Bankcard services BOLI income Gain on OREO, net Gain on sale of building, net Gain on eminent domain condemnation, net Other Total noninterest income 17,120 3,959 999 22,078 435,772 5,000 430,772 20,010 9,525 3,163 5,798 129 4,776 5,685 9,956 59,042 9,825 2,067 923 12,815 349,045 1,500 347,545 17,070 8,774 3,485 4,018 3,546 - - 6,588 43,481 38 | Citizens Business Bank 2019 Noninterest expense: Salaries and employee benefits Occupancy and equipment Professional services Software licenses and maintenance Marketing and promotion Recapture of provision for unfunded loan commitments Amortization of intangible assets Acquisition related expenses Other Total noninterest expense Earnings before income taxes Income taxes Net earnings Basic earnings per common share Diluted earnings per common share YEAR ENDED DECEMBER 31, 2019 2018 119,475 21,289 7,752 9,826 5,890 - 10,798 6,447 17,263 198,740 291,074 83,247 100,601 20,841 6,477 8,655 5,302 (250) 5,254 16,404 16,627 179,911 211,115 59,112 $ 207,827 $ 152,003 $ 1.48 $ 1.25 $ 1.48 $ 1.24 Cash dividends declared per common share $ 0.72 $ 0.56 Citizens Business Bank 2019 | 39 LOCATIONS Citizens Business Bank has 58 Business Financial Centers serving the Inland Empire, Los Angeles County, Orange County, San Diego County, Ventura County, Santa Barbara County, and the Central Valley area of California. LOS ANGELES COUNTY Arcadia 626.445.7350 Burbank Airport 818.295.3200 Burbank (Toluca Lake) 818.843.0707 Century City 310.436.3480 Commerce 323.832.1820 Covina 626.915.8931 El Segundo 310.322.2222 Glendale 818.550.0400 San Marino 626.281.0083 Santa Clarita 661.295.2840 Santa Fe Springs 562.903.8120 South Bay (Torrance) 310.217.6000 South El Monte 626.442.4470 South Pasadena 626.403.5900 La Cañada Flintridge 818.952.6085 Lancaster 661.723.2000 Manhattan Beach 310.802.4015 Monrovia 626.303.4661 Pasadena 626.405.4915 Pomona 909.629.4151 San Fernando Valley (Encino) 818.905.5760 San Gabriel 626.286.3166 San Bernardino (Tri-City) 909.888.6363 Upland 909.946.6921 SAN BERNARDINO COUNTY Apple Valley 760.961.6900 Chino 909.627.7316 Fontana 909.350.8080 Ontario Airport 909.980.1080 Redlands 909.307.8100 San Bernardino 909.381.5561 RIVERSIDE COUNTY Corona 951.734.6120 Riverside 951.683.2112 40 | Citizens Business Bank 2019 ORANGE COUNTY Brea 714.996.8150 Fullerton 714.773.0600 Huntington Beach 714.622.6060 Laguna Beach 949.494.9474 Orange (Plaza) 714.288.5300 Santa Ana 714.967.7222 Laguna Hills (Spectrum) 949.581.4444 Laguna Niguel 949.249.0740 Newport Beach 949.440.5200 Orange (Katella) 714.288.5203 SAN DIEGO COUNTY VENTURA COUNTY San Diego (Carmel Valley) 858.847.6500 San Diego (Downtown) 858.350.8650 Camarillo 805.482.7600 Oxnard 805.485.7600 Ventura 805.477.7600 Westlake Village 805.557.7600 SANTA BARBARA COUNTY Santa Barbara 805.324.5920 KERN COUNTY Bakersfield (Downtown) 661.281.0300 Bakersfield (Rosedale) 661.589.9040 Bakersfield (Stockdale) 661.281.0325 Delano 661.725.8888 TULARE COUNTY MADERA COUNTY Tulare 559.687.3350 Visalia 559.622.9000 Madera 559.664.9222 SAN JOAQUIN COUNTY Stockton 209.851.3740 FRESNO COUNTY Fresno 559.261.0222 LOAN PRODUCTION OFFICE Modesto Dairy & Livestock 209.576.2402 CITIZENSTRUST Newport Beach 949.440.5231 Ontario 909.483.4342 Pasadena 626.564.6263 Visit cbbank.com/locations for more information Citizens Business Bank 2019 | 41 CORPORATE INFORMATION Transfer Agent Computershare 462 South 4th Street, Suite 1600 Louisville, KY 40202 866.280.0564 computershare.com/investor NASDAQ Listing CVB Financial Corp. stock is listed on the NASDAQ under the symbol of CVBF. The securities listed consist of one class of common stock. As of December 31, 2019, there were 140,102,480 shares of common stock outstanding to approximately 12,655 shareholders. Stockholder Information Stockholders may obtain, without charge, Form 10-K of CVB Financial Corp. on written request to Michelle Edu, Assistant Corporate Secretary. Mailing Address CVB Financial Corp. P. O. Box 51000 Ontario, CA 91761 Street Address 701 N Haven Avenue, Suite 350 Ontario, CA 91764 909.980.4030 Phone: 877.422.2265 Fax: 909.481.2130 cbbank.com Copies of this annual report and interim reports are available upon written request, or by visiting our website at cbbank.com/investors. Equal Housing Lender | NMLS# 417441 | Member FDIC 42 | Citizens Business Bank 2019 701 N Haven Avenue | Ontario, CA 91764 | 909.980.4030 | cbbank.com 

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