CVB Financial
Annual Report 2020

Plain-text annual report

2020 ANNUAL REPORT #1 Best Bank in America¹ 2nd Consecutive Year $177.2 Million Annual Net Earnings 175 Consecutive Quarters of Profitability 125 Consecutive Quarters of Cash Dividends Paid Citizens Business Bank 2020 | 1 1CVB Financial Corp. is the holding company for Citizens Business Bank ©2021 Forbes Media LLC. Used with permission 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. 46 years later, Citizens Business Bank has grown to $14.4 billion in assets with 57 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 2020 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. Table of Contents Board of Directors 2020 in Review Financial Highlights Valued Partners Services Community Commitment Leadership Team Financial Summary Locations Corporate Information 4 5 7 11 25 30 34 37 42 44 Citizens Business Bank 2020 | 3 Board of Directors Raymond V. O’Brien III Chairman David A. Brager Chief Executive Officer George A. Borba Vice Chairman Stephen A. Del Guercio Director Rodrigo Guerra Jr. Director Anna Kan Director Marshall V. Laitsch Director Kristina M. Leslie Director Jane Olvera Director Hal W. Oswalt Director 4 | Citizens Business Bank 2020 4 | Citizens Business Bank 2020To our Shareholders, Customers, and Associates 2020 in Review 2020 was a year of uncertainty and understandable apprehension, but also one of strength and accomplishment for CVBF and Citizens Business Bank. We have had to adapt, along with many of our customers, to a changing and challenging business landscape in order to accommodate the numerous unforeseen circumstances, new rules, regulations, and government orders brought about by COVID-19. The worldwide pandemic, the accompanying stay-at-home orders and business shut-downs, and a near-zero interest rate environment, all combined to create a challenging operating environment for many financial institutions and their customers. However, and now more than a year into the COVID-19 pandemic, Citizens Business Bank remains a fundamentally safe, sound, and secure financial services company. As the world and our nation deal with the COVID-19 pandemic, we continue to deploy our substantial resources to stand by our valued customers and to provide support to the many California communities we serve. Our Bank remains well positioned to succeed with strong capital levels, consistent earnings, solid credit quality, and excellent liquidity. Total assets at December 31, 2020 increased by $3.14 billion, or 27.80%, from total assets of $11.28 billion at December 31, 2019. Interest-earning assets increased by $3.20 billion, or 31.88%, when compared with $10.03 billion at December 31, 2019. Net earnings were $177.2 million for the year ended 2020, compared with $207.8 million for the year ended 2019, due primarily to the near-zero interest rates and prudent additions to our loan loss reserves. We maintained our enviable record of success by marking our 175th consecutive quarter of profitability and our 125th consecutive quarter of paying a cash dividend to our shareholders. Our strong financial position has allowed our Bank to provide support to many of the customers and communities most impacted by COVID-19. We originated more than 4,000 Paycheck Protection Program loans in 2020, totaling over $1.1 billion, and we participated in the Federal Reserve’s Main Street Lending program. To support the communities that need our help the most, we provided nearly $1,100,000 to local nonprofit organizations in Southern and Central California. Also, at an individual level, our associates demonstrated their personal support and involvement as well by contributing their own money to local food banks in a month-long virtual food drive that we conducted during the month of November. We enter 2021 ranked as the #1 Bank in America by Forbes 2021 Best Banks in America for the second consecutive year and for the third time in the past five years, and we are especially pleased to have earned this honor in both good and difficult times. Furthermore, we have maintained our BBB+ rating from Fitch Ratings, our Five-Star Superior rating from BauerFinancial, and The Findley Reports designation as a “Super Premier” Performing Bank. Continued on next page Citizens Business Bank 2020 | 5 To our Shareholders, Customers, and Associates In closing, we are proud of our accomplishments in 2020, as we successfully navigated through the COVID-19 pandemic, and we believe we are well positioned for future growth as 2021 unfolds. We remain committed to growing the Bank in a balanced way, utilizing all three of our growth initiatives: increasing same-store sales, opening de novo centers, and seeking strategic and financially sound acquisitions. Our strategy will remain the same as we seek to continue to 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. Please stay safe and healthy, and rest assured that our Bank is committed to remaining financially sound and a stable and prudent business partner over a variety of circumstances and economic cycles, just as we have done throughout the course of our past 46 years in business. Raymond V. O’Brien III Chairman of the Board David A. Brager Chief Executive Officer 6 | Citizens Business Bank 2020 Financial Highlights At year end, we reported our 175th consecutive quarter of profitability and paid our 125th consecutive quarterly cash dividend to shareholders. We will continue to focus on improving key financial metrics, including profitability and asset quality. Citizens Business Bank 2020 | 7 Citizens Business Bank 2020 | 7Total Assets (Dollars in Billions) 2020 2019 2018 2017 2016 $14.4 $8.1 $97.7 $2.0 $1.30 $0.94 $51.8 $1.0 2016 17 18 19 20 2016 17 18 19 20 2016 17 18 19 20 Dividends Declared (Dollars in Millions) Shareholders’ Equity (Dollars in Billions) Diluted Earnings Per Share Total Deposits1 (Dollars in Billions) $6.9 $12.2 2016 2017 2018 2019 2020 1Includes customer repurchase agreements. 8 | Citizens Business Bank 2020 $7.5 $48.2 $8.3 $3.7 $34.2 $4.3 2016 17 18 19 20 2016 17 18 19 20 2016 17 18 19 20 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. Efficiency Ratio 3 46.72% 43.84% 45.83% 40.16% 41.40% 2016 2017 2018 2019 2020 3 Noninterest expense divided by net interest income before provision for credit losses plus noninterest income. Net Earnings (Dollars in Millions) 2020 2019 2018 2017 2016 $177.2 $101.4 Citizens Business Bank 2020 | 9 10 | Citizens Business Bank 2020 10 | Citizens Business Bank 2020Valued Partners Our founders understood that building long-lasting, genuine relationships with our customers would lead to successful outcomes for the customer and the Bank. For over 46 years, we have focused on the power of relationship banking to help set us apart from other financial services companies. We strive to build long-term relationships by getting to personally know our customers and providing consistent superior financial solutions to help guide their business to success. Citizens Business Bank 2020 | 11 Citizens Business Bank 2020 | 11Bolton & Company Steve Brockmeyer, Chief Executive Officer and President Julie Bowman, Chief Financial Officer Bolton & Company is one of the largest independent full-service insurance brokers in California. For their Chief Executive Officer and President, Steve Brockmeyer, the business is about building and maintaining relationships. Founded in 1931, Bolton & Company had partnered with a local community bank for years, until a large national bank acquired it and the service noticeably changed. “We lost that smaller, personal feel with the acquisition,” explains Steve. In 2008, Steve embraced the opportunity to return to a bank with the capabilities and relationship- focused approach that aligned with Bolton & Company’s own values. “We are focused on running our business,” says Julie Bowman, Chief Financial Officer. “If something happens and we need help, we call our Citizens Business Bank Relationship Manager. It’s just the fact that we can call a person and not a bank, and speak with someone we can trust.” Steve adds, “A big part of it is the personal connection. When I go into the Bank, everyone knows who I am. They all come out and greet me.” “They made us feel like their only customer. The service really is that good.” 12 | Citizens Business Bank 2020 Valued Customer Since 2008 When Bolton & Company planned to relocate their offices in 2010, Steve knew they would need a Line of Credit and Commercial Real Estate Loan to make tenant improvements, so he placed a call. “Our Relationship Manager was on it. They made us feel like their only customer. The service really is that good,” says Steve. In addition to the myriad of financial services they utilize, Bolton & Company also depends on the Wealth Management team at CitizensTrust to help coordinate their Employee Stock Ownership Plan, which gives their employees ownership interest in the company. “There’s a lot of money moving around, and to know we have the people and Citizens Business Bank looking out for it all is reassuring. I even recently moved my personal banking over and it’s been amazing.” “A big part of it is the personal connection.” Citizens Business Bank 2020 | 13 Valued Customer Since 2016 Buccola Landscape Services and Citizens Business Bank share the same commitment to personal service that reinforces long-lasting business relationships. “They’re a bigger bank with a small bank feel,” says Dennis. “When I walk in, people come out from their offices to greet me. It’s a feeling where I belong. That’s a big value for me.” Dennis has relied on the Bank for Commercial Real Estate Financing to further grow his business, and Deposit Accounts for business and personal use. In 2019, the Bank helped finance a new facility for Buccola Landscape Services. “Pre-establishing Lines of Credit and having them available when we need them is really important. I called my Relationship 14 | Citizens Business Bank 2020 Buccola Landscape Services Dennis Buccola, President Dennis Buccola, President of Buccola Landscape Services, started in landscaping by working summers at his father’s business in the 1970s. By the early 1980s, he saw an opportunity to start his own landscaping company, and within a few years his business was thriving. Dennis and his father’s companies eventually merged to form Buccola Landscape Services as they’re known today, which includes Pacific Coast Nursery, the landscape business, and B Management Services, Inc., a management company to oversee it all. Dennis credits a focus on long-term customer loyalty and employee dedication as a major factor in their continuing success. “What stands out most is the confidence that Citizens Business Bank has in me as an operator of the business.” Manager about borrowing a large amount, and he had enough information to know that the decision could be made quickly.” As Dennis continues to build his family of businesses, he knows he has support from a solid banking relationship to keep everything running smoothly. Citizens Business Bank 2020 | 15 Valued Customer Since 2007 “The Bank advocated for us to get started and helped set up a platform for future growth.” When Jeff and Kiki first assumed the management of the company, the siblings were unsure how they might be viewed as new business owners. “Citizens Business Bank was ready to give my brother and I a chance,” says Kiki. “Our parents had already proved themselves with the Bank and our company. The Bank advocated for us to get started and helped set up a platform for future growth.” One of Jeff’s first actions as President of C.D. Lyon, Inc. was to request a Line of Credit with the Bank. The business went 16 | Citizens Business Bank 2020 C.D. Lyon, Inc. Jeff Lyon, President Kiki Lyon, Vice President In 1983, the Lyon family formed C.D. Lyon, Inc. as a construction company specializing in heavy industrial and energy projects. After many years of success, their clients also started to look to C.D. Lyon, Inc. for ongoing maintenance services well after the construction projects were complete. In 2007, the Lyons opened a banking relationship with Citizens Business Bank, which grew even stronger in 2011 after Jeff Lyon and Kiki Lyon took over their parents’ company. on to add Remote Deposit Capture services to process incoming checks from their customers, and Automated Clearing House (ACH) for making electronic payments. “Not long ago, we were finalizing a Commercial Real Estate Loan,” says Kiki. “Due to our schedules we weren’t able to make it to the bank during their office hours. Our Relationship Manager had a notary here at our office first thing in the morning, before we had even arrived.” Jeff adds, “The Citizens Business Bank team is great! We’re truly happy with our working relationship, both personally and professionally. We also appreciate Citizens Business Bank helping us navigate the hard pandemic times through advice and loans.” Citizens Business Bank 2020 | 17 Valued Customer Since 2007 “Citizens Business Bank is always willing to go beyond what a normal bank does.” “We want to keep our group local, keep our employees local. We don’t want to outsource,” explains Dr. Rahul Nayyar, Chief Medical Officer and Chief Operating Officer. Dr. Manmohan Nayyar selected their prior bank in 2007 by finding a local company that put an emphasis on relationship banking. When Citizens Business Bank purchased their primary bank in 2009, the Choice Physicians Network team were so pleased with the Bank team, services, and products that they started referring their new doctors to 18 | Citizens Business Bank 2020 Choice Physicians Network Manmohan Nayyar, MD, Founder and President Margherita Leone, Controller Rahul Nayyar, MD, Chief Medical Officer and Chief Operating Officer Dr. Manmohan Nayyar has run Choice Medical Group/Horizon Valley Medical Group/Choice Physicians Network in Apple Valley, California for more than 30 years. With the support of his sons, Dr. Samir Nayyar and Dr. Rahul Nayyar, they saw an urgent need in the region for improved access to healthcare. Today, with over 30 physicians and 100 specialists on staff, Choice Medical Group/Choice Physicians Network covers more than 40,000 lives as the largest medical group in the High Desert and Central California. Citizens Business Bank as well. “We couldn’t grow at our current pace if it wasn’t for Citizens Business Bank pushing it along,” says Rahul. “The difference I have seen is Citizens Business Bank is always willing to go beyond what a normal bank does,” says Margherita Leone, Controller. “Our experience has been an easy- going relationship, never any hesitation. We formed a friendship, rather than a normal business relationship.” In 2019, the doctors started a relationship with CitizensTrust Wealth Management to accommodate their long-term planning. “The Bank goes the extra mile,” says Rahul. “CitizensTrust answered all of our questions. Your advisors are knowledgeable and really explain everything, very transparent. They want to help and guide you. I even moved my personal accounts to the Bank, and they’ve been aware and sensitive of our busy schedules as doctors.” Citizens Business Bank 2020 | 19 “There is no way a big bank could respond the way Citizens Business Bank did.” David and his team found reassurance with the high level of customer service they received and the Bank’s proactive approach to customer needs. David shares his perspective, “Is a good waiter the one that pours you water when you want water? No, they’re the ones anticipating your needs and are already pouring water for you.” Building genuine relationships with our customers helps us learn the products and services that are best suited to their business. Citizens Business Bank regularly hosts small business luncheons to show appreciation to customers and provide an added avenue to share feedback and their experiences directly with the Bank’s 20 | Citizens Business Bank 2020 Valued Customer Since 1999 Parkview Community Hospital Medical Center David Batista, MHA, Chief Executive Officer Julie Curtis, MSN, RN, CENP, Chief Nursing Officer Parkview Community Hospital Medical Center has been a valued customer of Citizens Business Bank since 1999. When Doctors Hospital of Riverside acquired Parkview Community Hospital in 2019, it was an easy decision for David Batista, the new Chief Executive Officer, to keep the 20-year banking relationship in place. leaders. “I was impressed to see the CEO of a bank in an open forum interacting with businesses in the community,” says David after attending a luncheon. “He listened to their concerns and took the time to learn about challenges they face in today’s business environment.” In a similar way, Parkview Community Hospital Medical Center actively works to build relationships within their community. Treasury Management Services and Deposit Accounts are just a few of the Bank services that the hospital utilizes to support their mission of providing high-quality, patient-centered healthcare services to the diverse population they serve. “Our hospital relies on being able to bill insurance companies and agencies, which creates a significant source of cash flow for us,” explains David. “During the acquisition of Parkview Community Hospital, our Relationship Manager worked tirelessly to ensure that funds were moved without interruption. Her efforts helped to make the ownership transition as seamless as possible. There is no way a big bank could respond the way Citizens Business Bank did.” Citizens Business Bank 2020 | 21 “The Bank is there when you need it.” They met with their local bank in Washington, but left after learning that the small institution was incapable of meeting the significant financial needs of Countryside Dairy, LLC. Mike and Deanne began looking at the other options for supporting the growth of their dairy business, and all signs pointed back to Southern California. Mike’s brother was a long-time customer of Citizens Business Bank and he provided a glowing recommendation for the Bank’s Dairy & Livestock Group. “Citizens Business Bank has a great reputation in 22 | Citizens Business Bank 2020 Valued Customer Since 2008Countryside Dairy, LLC Mike Schoneveld, Owner Deanne Schoneveld, Owner In 1996, Mike and Deanne Schoneveld packed up their dairy in Chino, California, in search of new opportunities. The Schonevelds moved to Ferndale, Washington, where they established a new dairy farm and began to successfully grow their operations. By 2008, Mike and Deanne were looking to expand the Countryside Dairy ranch, facilities, and herd simultaneously, which would be a considerable undertaking. the dairy and livestock industry. The Bank understands dairy,” says Mike Schoneveld. Deanne adds, “From time to time in the dairy business, needs arise. The Bank is there when you need it. I know we have a good partner.” For the Schonevelds, a Revolving Operating Line of Credit is absolutely vital because many dairies require increased availability of funds at certain times of the year. “Real Estate Loans have been essential to purchase neighboring land. Our dairy has 750 acres now, triple the land from when we first moved to Washington,” says Mike. They also utilize the Bank’s Fraud Protection services for extra peace of mind. “Every now and then we get a call from the Bank asking to review a check we wrote or to sign off on a large amount. No matter who I talk to, it’s a family atmosphere, very friendly,” says Deanne. Citizens Business Bank 2020 | 23 24 | Citizens Business Bank 2020 24 | Citizens Business Bank 2020Services Every business has their own unique set of needs, which is why a one-size-fits-all approach to banking rarely produces the best results. We take the time to learn about our customers, their businesses, and their long-term goals. Then, we identify the most relevant banking, lending, and investing solutions that would best fit their unique needs. Our approach allows us to offer our customers a customized banking experience tailored to their individual needs. Citizens Business Bank 2020 | 25 Citizens Business Bank 2020 | 25Business Banking Liquidity Business Checking Business Savings Zero Balance Account Attorney Client Trust Investment Checking Premium Money Market CDARS® Business Sweep1 Analysis Business Plan Certificate of Deposit Fraud Prevention Positive Pay Check Reverse Positive Pay Check CardValet® Safe Deposit Box Positive Pay Payee Match Positive Pay ACH Payables Bill Pay Debit Card $ Receivables ACH Origination Wire Transfer Credit Card Commercial Card Tax Payment Services Apple Pay® Remote Deposit Capture Merchant Services Lockbox Cash Vault Services ACH Origination Bill Pay Consolidation Image Cash Letter Smart Safe Advanced Credit Data Management Business Online Banking Mobile Banking Disbursement Reporting Information Reporting eStatements Image Services Mobile Deposit Account Reconcilement Electronic Data Interchange Personal Banking Online & Cards Online Banking and Bill Pay Mobile Banking/Mobile App Debit Card Moneypass® Credit Card CardValet® Popmoney® Checking Personal Checking 55 Checking Deposit Investment Checking Preferred Choice Checking Premium Money Market CDARS® Personal Savings Minor Trust Savings Certificate of Deposit Individual Retirement Account Health Savings Account Equal Housing Lender | Member FDIC | NMLS# 417441 1 Not Insured by FDIC or Any Other Government Agency Not Bank Guaranteed Not Bank Deposits or Obligations May Lose Value 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 Elan Financial Services. CardValet is a registered trademark of Fiserv, Inc. 26 | Citizens Business Bank 2020 Business Lending Revolving Lines of Credit Commercial Real Estate Lending Dairy & Livestock Asset-Based Lending Term Lending Equipment Financing Agricultural Lending Construction Lending Small Business Administration Personal Lending Citizens Home Lending Home Purchase Home Refinance Home Equity Line of Credit Auto Financing Equal Housing Lender | Member FDIC | NMLS# 417441 Citizens Business Bank 2020 | 27 Investing 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 services 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: Not Insured by FDIC or Any Other Government Agency Not Bank Guaranteed Not Bank Deposits or Obligations May Lose Value 28 | Citizens Business Bank 2020 Industry Expertise At Citizens Business Bank, we have the financial expertise and a wide array of products and services for a wide range of industries. Our teams specialize in providing financial solutions relevant to our customers’ business needs. Industrial & Manufacturing Property Management Title & Escrow Agriculture Nonprofit Professional Services Medical Labor Management Fiduciary Services Dairy & Livestock International Services Government Citizens Business Bank 2020 | 29 Community Commitment At Citizens Business Bank, we are passionate about the communities we serve, and it shows. Each year, our associates dedicate thousands of hours of their own time to local organizations and charitable causes in their communities. We are committed to Second Harvest Food Bank Orange County strengthening our communities by offering superior financial services, establishing partnerships with local organizations, and consistently encouraging volunteerism at every level of the Bank. 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. Miracles for Kids Chaffey College Foundation Inland Empire United Way Foothill Family Shelter Feeding America Riverside | San Bernardino 30 | Citizens Business Bank 2020 Community Action Partnership of Kern The Mission at Kern County Big Brothers Big Sisters of Central California Vocational Improvement Program Dress for Success Bakersfield Union Station Homeless Services Fontana Resources at Work Central California Food Bank Citizens Business Bank 2020 | 31 Virtual Food Drive In 2020, food banks throughout California lacked much-needed supplies and were pushed to capacity. To support the communities we serve, the Bank made a $50,000 donation to six local food banks and held a virtual food drive for our associates to make contributions. We raised $11,500, more than triple our original goal, which helped provide over 34,500 meals to the families that need it most. Nonprofit Resilient Leaders and Capacity Building Program Citizens Business Bank partnered with University of Southern California Civic Engagement to create and fund the inaugural Nonprofit Resilient Leaders and Capacity Building Program. We supported the launch with a $20,000 grant to provide community-based nonprofit leaders with operational information, strategies, and tools that directly support the expansion and long-term viability of their nonprofit organizations. The inaugural class, consisting of representatives from 56 nonprofits, learned strategies to strengthen the services they provide to their community and methods to develop their own capacity as leaders. Big Brothers Big Sisters of Orange County and the Inland Empire Through the Big Brothers Big Sisters program, Bank associates volunteered to mentor low- income and moderate-income (LMI) youth to help them develop financial literacy, increase soft skills, and support their college and career readiness. Volunteers worked one-on-one with the LMI students to educate and coach them about banking and the financial industry over the course of the eight-month program. 32 | Citizens Business Bank 2020 Hope through Housing Foundation At the start of the pandemic, low-income seniors were left with few options for food and essential goods. Citizens Business Bank reached out to Hope through Housing Foundation to see how we could assist. More than 90 Bank associates worked together over three days to assemble and donate 600 care bags filled with essential items and food. Along with a $15,000 donation, the care bags were provided to the nonprofit’s COVID-19 Emergency Response and Resilience Fund to assist with the low-income affordable housing communities’ residents. 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 2020, the Borba Cup was awarded to Mary Fraser, Vice President and Service Manager. Citizens Business Bank 2020 | 33 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 unique business and financial experience to the Bank. As a David A. Brager Chief Executive Officer 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. 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 Banking Division Hector G. Gutierrez, Esq. Executive Vice President Deputy Chief Credit Officer Susan M. Mlot Executive Vice President Operations 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 34 | Citizens Business Bank 2020 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 CitizensTrust Richard M. Favor Senior Vice President Central Coast Region Deborah G. Gallagher Senior Vice President Small Business Administration Derrick I. Hong Senior Vice President Internal Audit David R. Klatt Senior Vice President Information Technology Joyce Y. Kwon Senior Vice President Human Resources Daniel Limon Senior Vice President Specialty Lending 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 Support & Marketing Michael D. Stain Senior Vice President Central Valley Region David S. Stong Senior Vice President San Diego Region Robert E. Zeltner Senior Vice President Orange County Region Citizens Business Bank 2020 | 35 36 | Citizens Business Bank 2020 36 | Citizens Business Bank 2020Financial Summary Citizens Business Bank 2020 | 37 Citizens Business Bank 2020 | 37Consolidated Balance Sheets CVB Financial Corp. and Subsidiaries (Dollars in thousands, except share amounts) Assets Cash and due from banks 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 $2,344,174 at December 31, 2020, December 31, 2020 2019 $ 122,305 $ 158,310 1,835,855 1,958,160 43,563 27,208 185,518 2,931 and $1,718,357 at December 31, 2019) 2,398,923 1,740,257 Investment securities held-to-maturity (with fair value of $604,223 at December 31, 2020, and $678,948 at December 31, 2019) Total investment securities Investment in stock of Federal Home Loan Bank (FHLB) Loans and lease finance receivables Allowance for credit 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 Total assets 578,626 2,977,549 17,688 8,348,808 (93,692) 8,255,116 51,144 226,818 31,306 33,634 663,707 3,392 29,540 127,697 674,452 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 $ 14,419,314 $ 11,282,450 38 | Citizens Business Bank 2020 Liabilities and Stockholders’ Equity Liabilities: Deposits: Noninterest-bearing Interest-bearing Total deposits Customer repurchase agreements Other borrowings Deferred compensation Junior subordinated debentures Payable for securities purchased Other liabilities Total liabilities Commitments and Contingencies December 31, 2020 2019 $ 7,455,387 $ 5,245,517 4,281,114 11,736,501 439,406 5,000 21,611 25,774 60,113 3,459,411 8,704,928 428,659 - 22,666 25,774 - 122,919 106,325 12,411,324 9,288,352 Stockholders’ Equity Common stock, authorized, 225,000,000 shares without par; issued and outstanding 135,600,501 at December 31, 2020, and 140,102,480 at December 31, 2019 1,211,780 1,298,792 Retained earnings Accumulated other comprehensive income, net of tax Total stockholders’ equity 760,861 35,349 682,692 12,614 2,007,990 1,994,098 Total liabilities and stockholders’ equity $ 14,419,314 $ 11,282,450 Citizens Business Bank 2020 | 39 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 Total interest income Interest expense: Deposits Borrowings and customer repurchase agreements Junior subordinated debentures Total interest expense Net interest income before provision for credit losses Provision for credit losses Net interest income after provision for credit 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 Year Ended December 31, 2020 2019 $ 377,402 $ 397,628 36,052 14,223 50,275 978 1,682 430,337 12,602 1,131 551 14,284 416,053 23,500 392,553 39,330 17,388 56,718 1,235 2,269 457,850 17,120 3,959 999 22,078 435,772 5,000 430,772 16,561 20,010 9,978 1,886 8,100 388 1,680 - 11,277 49,870 9,525 3,163 5,798 129 4,776 5,685 9,956 59,042 40 | Citizens Business Bank 2020 Noninterest expense: Salaries and employee benefits Occupancy and equipment Professional services Computer software expense Marketing and promotion 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, 2020 2019 119,759 119,475 20,622 9,460 11,302 4,488 9,352 - 17,920 192,903 249,520 72,361 20,457 7,752 10,658 5,890 10,798 6,447 17,263 198,740 291,074 83,247 $ 177,159 $ 207,827 $ 1.30 $ 1.48 $ 1.30 $ 1.48 Cash dividends declared per common share $ 0.72 $ 0.72 Citizens Business Bank 2020 | 41 Locations Citizens Business Bank has 57 Business Financial Centers serving the Inland Empire, Los Angeles County, Orange County, San Diego County, Ventura County, Santa Barbara County, and the Central San Fernando Valley (Encino) 818.905.5760 San Gabriel 626.286.3166 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 San Bernardino (Tri-City) 909.888.6363 Upland 909.946.6921 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 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 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 42 | Citizens Business Bank 2020 Orange County Brea 714.996.8150 Fullerton 714.773.0600 Huntington Beach 714.622.6060 Laguna Beach 949.494.9474 Laguna Hills (Spectrum) 949.581.4444 Laguna Niguel 949.249.0740 Newport Beach 949.440.5200 Orange (Katella) 714.288.5203 Orange (Plaza) 714.288.5300 Santa Ana 714.967.7222 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 Kern County Santa Barbara 805.324.5920 Bakersfield (Rosedale) 661.589.9040 Delano 661.725.8888 Bakersfield (Downtown) 661.281.0300 Bakersfield (Stockdale) 661.281.0325 Madera County Tulare County Madera 559.664.9222 Tulare 559.687.3350 Visalia 559.622.9000 Fresno County San Joaquin County Stanislaus County Fresno 559.261.0222 Stockton 209.851.3740 Modesto Loan Production Office 209.494.8292 CitizensTrust Newport Beach 949.440.5231 Ontario 909.483.4392 Pasadena 626.564.6263 Visit cbbank.com/locations for more information Citizens Business Bank 2020 | 43 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, 2020, there were 135,600,501 shares of common stock outstanding to approximately 13,053 shareholders. Stockholder Information Stockholders may obtain, without charge, Form 10-K of CVB Financial Corp., copies of this annual report, and interim reports by visiting our website at investors.cbbank.com Mailing Address CVB Financial Corp. P O Box 5 1 0 0 0 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 Equal Housing Lender | Member FDIC | NMLS# 417441 44 | Citizens Business Bank 2020 701 N Haven Avenue | Ontario, CA 91764 | 909.980.4030 | cbbank.com 

Continue reading text version or see original annual report in PDF format above