Business Wire | Jul 22, 2020 04:45PM EDT

CVB Financial Corp. Reports Earnings for the Second Quarter of 2020

Jul. 22, 2020

ONTARIO, Calif.--(BUSINESS WIRE)--Jul. 22, 2020--CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (the "Company"), announced earnings for the quarter ended June 30, 2020.

CVB Financial Corp. reported net income of $41.6 million for the quarter ended June 30, 2020, compared with $38.0 million for the first quarter of 2020 and $54.5 million for the second quarter of 2019. Diluted earnings per share were $0.31 for the second quarter, compared to $0.27 for the prior quarter and $0.39 for the same period last year. The Company recorded $11.5 million in provision for credit losses during the quarter as a result of the further deterioration in the forecasted economic impact from the coronavirus pandemic. During the second quarter of 2020, the Company originated, under the SBA Paycheck Protection Program, approximately 4,100 loans, of which $1.1 billion was outstanding at June 30, 2020.

David Brager, Chief Executive Officer of Citizens Business Bank, commented: "Citizens Business Bank remains well positioned to succeed with strong capital, consistent earnings, solid credit, and excellent liquidity. We will continue to focus on these key attributes that continue to make our Bank a high performer. I am exceptionally proud of the commitment and effort of our associates who have provided outstanding service to our customers during these unprecedented times and supported our customers by originating more than 4,000 PPP loans."

Net income of $41.6 million for the second quarter of 2020 produced an annualized return on average equity ("ROAE") of 8.51% and an annualized return on average tangible common equity ("ROATCE") of 13.80%. ROAE and ROATCE for the first quarter of 2020 were 7.61% and 12.27 %, respectively, and 11.38% and 18.81%, respectively, for the second quarter of 2019. Annualized return on average assets ("ROAA") was 1.33% for the second quarter, compared to 1.34% for the first quarter of 2020 and 1.95% for the second quarter of 2019. The efficiency ratio for the second quarter of 2020 was 39.75%, compared to 42.69% for the first quarter of 2020 and 39.09% for the second quarter of 2019.

Net income totaled $79.6 million for the six months ended June 30, 2020. This represented a $26.5 million, or 24.98%, decrease from the prior year, as the provision for credit losses increased by $20 million. Diluted earnings per share were $0.58 for the six months ended June 30, 2020, compared to $0.76 for the same period of 2019. Net income for the six months ended June 30, 2020 produced an annualized ROAE of 8.06%, an ROATCE of 13.03% and an ROAA of 1.33%. This compares to ROAE of 11.26%, ROATCE of 18.78% and ROAA of 1.89% for the first six months of 2019. The efficiency ratio for the six months ended June 30, 2020 was 41.20%, compared to 40.04% for the first six months of 2019.

Net interest income before provision for credit losses was $104.6 million for the second quarter of 2020. This represented a $2.3 million, or 2.21%, increase from the first quarter of 2020, and a $6.5 million, or 5.84%, decrease from the second quarter of 2019. Total interest income was $108.0 million for the second quarter of 2020, which was $849,000, or 0.79%, higher than the first quarter of 2020 and $8.8 million, or 7.56%, lower than the same period last year. Total interest income and fees on loans for the second quarter of 2020 of $95.4 million increased $3.2 million, or 3.51%, from the first quarter of 2020, and decreased $6.5 million, or 6.37%, from the second quarter of 2019. Total investment income of $12.1 million decreased $1.9 million, or 13.80%, from the first quarter of 2020 and decreased $2.4 million, or 16.74%, from the second quarter of 2019. Interest expense decreased $1.4 million, or 29.44%, from the prior quarter and decreased $2.3 million, or 40.83%, compared to the second quarter of 2019.

The Company adopted ASU 2016-13, commonly referred to as CECL which replaces the "incurred loss" approach with an "expected loss" model over the life of the loan, effective on January 1, 2020. An $11.5 million provision for credit losses was recorded for the second quarter of 2020, due to the continued economic disruption resulting from COVID-19. The additional provision for credit losses reflect a more severe economic downturn compared to the forecast at the end of the prior quarter. A $12.0 million provision for credit losses was recorded in the first quarter of 2020, due to the forecast of an economic recession that developed at the end of that quarter. In comparison to the prior year, a $2.0 million loan loss provision was incurred for the second quarter of 2019. During the second quarter of 2020, we experienced minimal credit charge-offs of $167,000 and total recoveries of $9,000, resulting in net charge-offs of $158,000.

Noninterest income was $12.2 million for the second quarter of 2020, compared with $11.6 million for the first quarter of 2020 and $18.2 million for the second quarter of 2019. The second quarter of 2020 included higher swap fee income of $1.8 million compared to both the prior quarter and the second quarter of 2019. The year-over-year decrease of $6.0 million reflects a $5.7 million net gain in the second quarter of 2019 from the legal settlement of an eminent domain condemnation of one of our banking center buildings located in Bakersfield.

Noninterest expense for the second quarter of 2020 was $46.4 million, compared to $48.6 million for the first quarter of 2020 and $50.5 million for the second quarter of 2019. There were no merger related expenses related to the Community Bank acquisition for the second quarter of 2020 and the first quarter of 2020, compared to $2.6 million for the second quarter of 2019. The $2.2 million quarter-over-quarter decrease was primarily due to a $2.2 million decrease in salaries and employee benefits, including a decrease in payroll taxes of approximately $1.1 million and $1.2 million in higher net deferred loan costs (contra account) primarily due to PPP loan origination costs. The year-over-year decrease also included a $568,000 decrease in regulatory assessments, a $396,000 decrease in occupancy and equipment expense primarily due to the consolidation of banking centers, and a $388,000 decrease in Core Deposit Intangible amortization. As a percentage of average assets, noninterest expense was 1.48% for the second quarter of 2020, compared to 1.72% for the first quarter of 2020 and 1.81% for the second quarter of 2019.

Net Interest Income and Net Interest Margin

Net interest income, before provision for credit losses, was $104.6 million for the second quarter of 2020, compared to $102.3 million for the first quarter of 2020 and $111.1 million for the second quarter of 2019. Our net interest margin (tax equivalent) was 3.70% for the second quarter of 2020, compared to 4.08% for the first quarter of 2020 and 4.49% for the second quarter of 2019. Total average earning asset yields (tax equivalent) were 3.82% for the second quarter of 2020, compared to 4.27% for the first quarter of 2020 and 4.72% for the second quarter of 2019. The decrease in earning asset yield from the prior quarter was due to a combination of an 18 basis point decrease in average loan yields, a 23 basis point decrease in investment yields and a change in asset mix with average balances at the Federal Reserve growing to 9.2% of earning assets for the second quarter of 2020, compared to 2.4% for the first quarter of 2020. The decrease in earning asset yield compared to the second quarter of 2019 was primarily due to a 63 basis point decrease in loan yields from 5.40% in the year ago quarter to 4.77% for the second quarter of 2020, a 31 basis point decline in investment yields, as well as a change in asset mix resulting from a $1.0 billion increase in average balances at the Federal Reserve. Discount accretion on acquired loans decreased by $672,000 quarter-over-quarter and decreased by $3.9 million compared to the second quarter of 2019. The significant decline in interest rates over the past four quarters had a negative impact on loan yields, which after excluding discount accretion, nonaccrual interest income, and the impact from PPP loans, declined by 23 basis points compared to the prior quarter and 42 basis points from the second quarter of 2019. The significant decline in interest rates also impacted the tax equivalent yield on investments, which decreased by 23 basis points from the first quarter of 2020 and decreased 31 basis points from the second quarter of 2019. Average earning assets increased from the first quarter of 2020 by $1.27 billion to $11.39 billion for the second quarter of 2020. Average loans grew by $564.2 million quarter-over-quarter and investment securities declined on average by $112.9 million from the first quarter. Average earning assets increased by $1.43 billion from the second quarter of 2019, as loans grew by $488.6 million and investments decreased by $118.5 million, while balances at the Federal Reserve grew on average by $1.04 billion compared to the second quarter of 2019. PPP loan balances were about $670 million, on average, during the second quarter of 2020.

Total cost of funds declined to 0.13% for the second quarter of 2020 from 0.21% for the first quarter of 2020 and 0.25% in the year ago quarter. On average, noninterest-bearing deposits were 62% of total deposits during the current quarter. Noninterest-bearing deposits grew on average by $957.3 million, or 18.24%, from the first quarter of 2020. Interest-bearing deposits and customer repurchase agreements grew on average by $306.1 million during the second quarter of 2020, compared to the first quarter of 2020. The cost of interest-bearing deposits and customer repurchase agreements declined from 0.46% for the prior quarter to 0.31% for the second quarter of 2020. In comparison to the second quarter of 2019, our overall cost of funds decreased by 12 basis points, as noninterest-bearing deposits grew by $1.11 billion and short-term borrowings decreased by $129.6 million. Interest-bearing deposits increased by $324.9 million compared to the second quarter of 2019, while the cost of interest-bearing deposits decreased by 16 basis points.

Income Taxes

Our effective tax rate for the six months ended June 30, 2020 was 29.00%, compared with 29.00% for the six months ended June 30, 2019. Our estimated annual effective tax rate can vary depending upon the level of tax-advantaged income as well as available tax credits.

Assets

The Company reported total assets of $13.75 billion at June 30, 2020. This represented an increase of $2.14 billion, or 18.48%, from total assets of $11.61 billion at March 31, 2020. Interest-earning assets of $12.52 billion at June 30, 2020 increased $2.12 billion, or 20.39%, when compared with $10.40 billion at March 31, 2020. The increase in interest-earning assets was primarily due to a $1.20 billion increase in interest-earning balances due from the Federal Reserve and a $936.4 million increase in total loans, partially offset by a $32.8 million decrease in investment securities. The increase in total loans was due to the origination of approximately 4,100 PPP loans, totaling $1.10 billion at June 30, 2020. Excluding PPP loans, total loans declined by $160.8 million from March 31, 2020.

The Company reported total assets of $13.75 billion at June 30, 2020. This represented an increase of $2.47 billion, or 21.88%, from total assets of $11.28 billion at December 31, 2019. Interest-earning assets of $12.52 billion at June 30, 2020 increased $2.49 billion, or 24.83%, when compared with $10.03 billion at December 31, 2019. The increase in interest-earning assets was primarily due to a $1.74 billion increase in interest-earning balances due from the Federal Reserve and an $838.0 million increase in total loans, partially offset by a $125.5 million decrease in investment securities. Excluding PPP loans, total loans declined by $259.2 million from December 31, 2019.

Total assets of $13.75 billion at June 30, 2020 increased $2.58 billion, or 23.09%, from total assets of $11.17 billion at June 30, 2019. Interest-earning assets totaled $12.52 billion at June 30, 2020, an increase of $2.62 billion, or 26.52%, when compared with earning assets of $9.89 billion at June 30, 2019. The increase in interest-earning assets was primarily due to a $1.76 billion increase in interest-earning balances due from the Federal Reserve and an $866.8 million increase in total loans. This was partially offset by a $38.9 million decrease in investment securities. Excluding PPP loans, total loans declined by $230.3 million from June 30, 2019.

Investment Securities

Total investment securities were $2.29 billion at June 30, 2020, a decrease of $32.8 million, or 1.41%, from $2.32 billion at March 31, 2020, a decrease of $125.5 million, or 5.20%, from $2.41 billion at December 31, 2019, and a decrease of $38.9 million, or 1.67%, from $2.33 billion at June 30, 2019.

At June 30, 2020, investment securities held-to-maturity ("HTM") totaled $613.2 million, a $61.3 million decrease, or 9.09%, from December 31, 2019 and a $114.9 million decrease, or 15.79%, from June 30, 2019.

At June 30, 2020, investment securities available-for-sale ("AFS") totaled $1.68 billion, inclusive of a pre-tax net unrealized gain of $57.3 million. AFS securities decreased by $64.2 million, or 3.69%, from December 31, 2019, and increased by $76.0 million, or 4.75%, from June 30, 2019.

Combined, the AFS and HTM investments in mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMO") totaled $1.97 billion at June 30, 2020, compared to $2.06 billion at December 31, 2019 and $1.94 billion at June 30, 2019. 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 the second quarter of 2020, we purchased $162 million of MBS securities with an average yield of approximately 1.25%.

Our combined AFS and HTM municipal securities totaled $206.6 million as of June 30, 2020. These securities are located in 27 states. Our largest concentrations of holdings are located in Minnesota at 28.78%, Massachusetts at 14.05%, Connecticut at 7.25%, Texas at 7.03%, and Wisconsin at 6.54%.

Loans

Total loans and leases, net of deferred fees and discounts, of $8.40 billion at June 30, 2020 increased by $936.4 million, or 12.54%, from March 31, 2020. The increase in total loans included $1.10 billion in PPP loans. Excluding PPP loans, total loans declined by $160.8 million, or 2.15%. The $160.8 million decrease in loans included decreases of $120.0 million in commercial and industrial loans, $20.3 million in dairy & livestock and agribusiness loans, $12.9 million in other SBA loans, and $28.9 million in consumer and other loans, partially offset by a $17.2 million increase in commercial real estate loans.

Total loans and leases, net of deferred fees and discounts, of $8.40 billion at June 30, 2020 increased by $838.0 million, or 11.08%, from December 31, 2019. The increase in total loans included $1.10 billion in PPP loans and a $131.9 million decline in dairy & livestock and agribusiness loans primarily due to seasonal pay downs, which historically occur in the first quarter of each calendar year. Excluding PPP loans and dairy & livestock and agribusiness loans, total loans declined by $127.3 million, or 1.77%. The $127.3 million decrease in loans included decreases of $94.4 million in commercial and industrial loans, $31.0 million in consumer and other loans, and $9.5 million in commercial real estate loans, and collectively $4.4 million in other loan segments. Partially offsetting these declines were increases in construction loans and SFR mortgage loans of $8.9 million and $3.1 million, respectively.

Total loans and leases, net of deferred fees and discounts, of $8.40 billion at June 30, 2020 increased by $866.8 million, or 11.50%, from June 30, 2019. Excluding $1.10 billion in PPP loans, loans declined by $230.3 million including decreases of $77.2 million in commercial and industrial loans, $52.2 million in commercial real estate loans, $49.9 million in dairy & livestock and agribusiness loans, $35.4 million in consumer and other loans, $27.5 million in other SBA loans, and $10.1 million in municipal lease finance, partially offset by a $9.4 million increase in construction loans and a $8.2 million increase in SFR mortgage loans.

Asset Quality

The allowance for credit losses ("ACL") totaled $94.0 million at June 30, 2020, compared to $82.6 million at March 31, 2020, $68.7 million at December 31, 2019 and $67.1 million at June 30, 2019. The allowance for credit losses for the second quarter of 2020 was increased by $11.5 million in provision for credit losses due to the severe economic disruption forecasted as a result of the coronavirus pandemic. At June 30, 2020, ACL as a percentage of total loans and leases outstanding was 1.12%, or 1.29% when PPP loans are excluded. This compares to 1.11%, 0.91%, and 0.89% at March, 31, 2020, December 31, 2019, and June 30, 2019, respectively.

Nonperforming loans, defined as nonaccrual loans and loans 90 days past due accruing interest plus nonperforming TDR loans, were $6.8 million at June 30, 2020, or 0.08% of total loans. Total nonperforming loans at June 30, 2020 included $4.3 million of nonperforming loans acquired with the acquisition of Community Bank in the third quarter of 2018. This compares to nonperforming loans of $6.4 million, or 0.09% of total loans, at March 31, 2020, $5.3 million, or 0.07% of total loans, at December 31, 2019 and $11.3 million, or 0.15% of total loans, at June 30, 2019. The $6.8 million in nonperforming loans at June 30, 2020 are summarized as follows: $2.6 million in commercial real estate loans, $1.6 million in SBA loans, $1.2 million in commercial and industrial loans, $1.1 million in SFR mortgage loans, and $289,000 in consumer and other loans.

As of June 30, 2020, we had $4.9 million in OREO compared to $4.9 million at December 31, 2019 and $2.3 million at June 30, 2019.

At June 30, 2020, we had loans delinquent 30 to 89 days of $2.6 million. This compares to $4.4 million at March 31, 2020, $1.7 million at December 31, 2019 and $332,000 at June 30, 2019. As a percentage of total loans, delinquencies, excluding nonaccruals, were 0.03% at June 30, 2020, 0.06% at March 31, 2020, 0.02% at December 31, 2019, and 0.004% at June 30, 2019.

At June 30, 2020, we had $2.8 million in performing TDR loans, compared to $3.1 million in performing TDR loans at December 31, 2019 and $3.2 million in performing TDR loans at June 30, 2019. Through July 10, 2020, we have temporary payment deferments (primarily 90 day deferments of principal and interest) in response to the CARES Act for loans totaling $1.27 billion, or 15% of total loans. As of July 10, 2020, 6% of the initial deferments have requested and been granted a second deferment.

Nonperforming assets, defined as nonaccrual loans and loans 90 days past due accruing interest plus OREO, totaled $11.7 million at June 30, 2020, $10.2 million at December 31, 2019, and $13.6 million at June 30, 2019. As a percentage of total assets, nonperforming assets were 0.09% at June 30, 2020, 0.09% at December 31, 2019, and 0.12% at June 30, 2019.

Classified loans are loans that are graded "substandard" or worse. At June 30, 2020, classified loans totaled $86.3 million, compared to $83.6 million at March 31, 2020, $73.4 million at December 31, 2019 and $49.4 million at June 30, 2019. Total classified loans at June 30, 2020 included $40.6 million of classified loans acquired from Community Bank in the third quarter of 2018. Classified loans increased $2.8 million quarter-over-quarter and included a $5.8 million increase in classified commercial and industrial loans, partially offset by a $1.3 million decrease in classified SBA loans, a $793,000 decrease in classified commercial real estate loans, and a $739,000 decrease in classified dairy & livestock and agribusiness loans.

Deposits & Customer Repurchase Agreements

Deposits of $10.98 billion and customer repurchase agreements of $468.2 million totaled $11.45 billion at June 30, 2020. This represented an increase of $1.97 billion, or 20.77%, when compared with $9.48 billion at March 31, 2020. Total deposits and customer repurchase agreements increased $2.32 billion, or 25.38% when compared with $9.13 billion at December 31, 2019 and increased $2.37 billion, or 26.06%, when compared with $9.08 billion at June 30, 2019.

Noninterest-bearing deposits were $6.90 billion at June 30, 2020, an increase of $1.33 billion, or 23.84%, when compared to $5.57 billion at March 31, 2020, an increase of $1.66 billion, or 31.57%, when compared to $5.25 billion at December 31, 2019, and an increase of $1.65 billion, or 31.45%, when compared to June 30, 2019. At June 30, 2020, noninterest-bearing deposits were 62.83% of total deposits, compared to 61.15% at March 31, 2020, 60.26% at December 31, 2019 and 60.61% at June 30, 2019.

FHLB Advance, Other Borrowings and Debentures

At June 30, 2020, we had $10.0 million in FHLB borrowings, with a cost of 0.0%.

At June 30, 2020, we had $25.8 million of junior subordinated debentures, unchanged from December 31, 2019. These debentures bear interest at three-month LIBOR plus 1.38% and mature in 2036.

Capital

For the first six months of 2020, shareholders' equity decreased by $35.0 million to $1.96 billion. The decrease was primarily due to $91.7 million in stock repurchases and $48.8 million in cash dividends, offset by net earnings of $79.6 million and a $24.9 million increase in other comprehensive income from the tax effected impact of the increase in market value of available-for-sale securities. Our tangible common equity ratio was 9.6% at June 30, 2020.

Our capital ratios under the revised capital framework referred to as Basel III remain well-above regulatory standards. At June 30, 2020, the Company's Tier 1 leverage capital ratio totaled 10.6%, common equity Tier 1 ratio totaled 14.5%, Tier 1 risk-based capital ratio totaled 14.8%, and total risk-based capital ratio totaled 16%.

CitizensTrust

As of June 30, 2020 CitizensTrust had approximately $2.83 billion in assets under management and administration, including $2.02 billion in assets under management. Revenues were $2.5 million for the second quarter of 2020 and $4.9 million for the first six months of 2020, compared to $2.4 million and $4.6 million, respectively, for the same periods of 2019. 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 over $13 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 through 58 banking centers and 3 trust office locations serving the Inland Empire, Los Angeles County, Orange County, San Diego County, Ventura County, Santa Barbara County, and the Central Valley area of 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, July 23, 2020 to discuss the Company's second quarter 2020 financial results.

To listen to the conference call, please dial (877) 506-3368. A taped replay will be made available approximately one hour after the conclusion of the call and will remain available through August 6, 2020 at 6:00 a.m. PDT/9:00 a.m. EDT. To access the replay, please dial (877) 344-7529, passcode 10145516.

The 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 matters set forth herein (including the exhibits hereto) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company's current business plans and expectations and our future financial position and operating results. 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. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance and/or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, local, regional, national and international economic and market conditions and political events and the impact they may have on us, our customers and our assets and liabilities; our ability to attract deposits and other sources of funding or liquidity; supply and demand for commercial or residential real estate and periodic deterioration in real estate prices and/or values in California or other states where we lend; a sharp or prolonged slowdown or decline in real estate construction, sales or leasing activities; changes in the financial performance and/or condition of our borrowers, depositors, key vendors or counterparties; changes in our levels of delinquent loans, nonperforming assets, allowance forcredit losses and charge-offs; the costs or effects of mergers, acquisitions or dispositions we may make, whether we are able to obtain any required governmental approvals in connection with any such mergers, acquisitions or dispositions, and/or our ability to realize the contemplated financial or business benefits associated with any such mergers, acquisitions or dispositions; the effects of new laws, regulations and/or government programs, including those laws, regulations and programs enacted by federal, state or local governments in the geographic jurisdictions in which we do business in response to the recent national emergency declared in connection with the COVID-19 pandemic; the impact of the federal CARES Act and the significant additional lending activities undertaken by the Company in connection with the Small Business Administration's Paycheck Protection Program enacted thereunder, including risks to the Company with respect to the uncertain application by the Small Business Administration of new borrower and loan eligibility, forgiveness and audit criteria; the effects of the Company's participation in one or more of the new lending programs recently established by the Federal Reserve, including the Main Street New Loan Facility, the Main Street Priority Loan Facility and the Nonprofit Organization New Loan Facility, and the impact of any related actions or decisions by the Federal Reserve Bank of Boston and its special purpose vehicle established pursuant to such lending programs; the effect of changes in other pertinent laws, regulations and applicable judicial decisions (including laws, regulations and judicial decisions concerning financial reforms, taxes, bank capital levels, allowance for credit losses, consumer, commercial or secured lending, securities and securities trading and hedging, bank operations, compliance, fair lending, the Community Reinvestment Act, employment, executive compensation, insurance, cybersecurity, vendor management and information security technology) with which we and our subsidiaries must comply or believe we should comply or which may otherwise impact us; changes in estimates of future reserve requirements and minimum capital requirements, based upon the periodic review thereof under relevant regulatory and accounting standards, including changes in the Basel Committee framework establishing capital standards for bank credit, operations and market risks; the accuracy of the assumptions and estimates and the absence of technical error in implementation or calibration of models used to estimate the fair value of financial instruments or currently expected credit losses or delinquencies; inflation, changes in market interest rates, securities market and monetary fluctuations; changes in government-established interest rates, reference rates or monetary policies, including the possible imposition of negative interest rates on bank reserves; the impact of the anticipated phase-out of the London Interbank Offered Rate (LIBOR) on interest rate indexes specified in certain of our customer loan agreements and in our interest rate swap arrangements, including any economic and compliance effects related to the expected change from LIBOR to an alternative reference rate; changes in the amount, cost and availability of deposit insurance; disruptions in the infrastructure that supports our business and the communities where we are located, which are concentrated in California, involving or related to physical site access and/or communication facilities; cyber incidents, attacks, infiltrations, exfiltrations, or theft or loss of Company, customer or employee data or money; political developments, uncertainties or instability, catastrophic events, acts of war or terrorism, or natural disasters, such as earthquakes, drought, the effects of pandemic diseases, climate change or extreme weather events, that affect electrical, environmental and communications or other services, computer services or facilities we use, or that affect our assets, customers, employees or third parties with whom we conduct business; our timely development and implementation of new banking products and services and the perceived overall value of these products and services by our customers and potential customers; the Company's relationships with and reliance upon outside vendors with respect to certain of the Company's key internal and external systems, applications and controls; changes in commercial or consumer spending, borrowing and savings preferences or behaviors; technological changes and the expanding use of technology in banking and financial services (including the adoption of mobile banking, funds transfer applications, electronic marketplaces for loans, block-chain technology and other banking products, systems or services); our ability to retain and increase market share, to retain and grow customers and to control expenses; changes in the competitive environment among banks and other financial services and technology providers; competition and innovation with respect to financial products and services by banks, financial institutions and non-traditional providers including retail businesses and technology companies; volatility in the credit and equity markets and its effect on the general economy or local or regional business conditions or on the Company's capital, assets or customers; fluctuations in the price of the Company's common stock or other securities, and the resulting impact on the Company's ability to raise capital or to make acquisitions; the effect of changes in accounting policies and practices, as may be adopted from time-to-time by the principal regulatory agencies with jurisdiction over the Company, as well as by the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard-setters; changes in our organization, management, compensation and benefit plans, and our ability to recruit and retain or expand or contract our workforce, management team, key executive positions and/or our board of directors; our ability to identify suitable and qualified replacements for any of our executive officers who may leave their employment with us, including our Chief Executive Officer; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (including any securities, bank operations, financial product or service, data privacy, consumer or employee class action litigation); regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews; our ongoing relations with our various federal and state regulators, including the SEC, Federal Reserve Board, FDIC and California DBO; our success at managing the risks involved in the foregoing items and all other factors set forth in the Company's public reports, including our Annual Report on Form 10-K for the year ended December 31, 2019, and particularly the discussion of risk factors within that document. Among other risks, the ongoing COVID-19 pandemic may significantly affect the banking industry and the Company's business prospects. The ultimate impact on our business and financial results will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic, the impact on the economy, our customers and our business partners, and actions taken by governmental authorities in response to the pandemic. 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.

CVB FINANCIAL CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)(Dollars in thousands) June 30, December 31, June 30,

2020 2019 2019

AssetsCash and due from banks $ 158,397 $ 158,310 $ 170,387

Interest-earning balances due 1,768,886 27,208 5,453 from Federal ReserveTotal cash and cash 1,927,283 185,518 175,840 equivalentsInterest-earning balances due 38,611 2,931 6,425 from depository institutionsInvestment securities 1,676,067 1,740,257 1,600,020 available-for-saleInvestment securities 613,169 674,452 728,113 held-to-maturityTotal investment securities 2,289,236 2,414,709 2,328,133

Investment in stock of 17,688 17,688 17,688 Federal Home Loan Bank (FHLB)Loans and lease finance 8,402,534 7,564,577 7,535,690 receivablesAllowance for credit losses (93,983 ) (68,660 ) (67,132 )

Net loans and lease finance 8,308,551 7,495,917 7,468,558 receivablesPremises and equipment, net 51,766 53,978 54,163

Bank owned life insurance 226,330 226,281 224,172 (BOLI)Intangibles 38,096 42,986 48,094

Goodwill 663,707 663,707 663,707

Other assets 190,029 178,735 184,803

Total assets $ 13,751,297 $ 11,282,450 $ 11,171,583

Liabilities and Stockholders'EquityLiabilities:Deposits:Noninterest-bearing $ 6,901,368 $ 5,245,517 $ 5,250,235

Investment checking 472,509 454,565 436,090

Savings and money market 3,150,013 2,558,538 2,496,904

Time deposits 459,690 446,308 479,594

Total deposits 10,983,580 8,704,928 8,662,823

Customer repurchase 468,156 428,659 421,271 agreementsOther borrowings 10,000 - -

Junior subordinated 25,774 25,774 25,774 debenturesPayable for securities 162,090 - - purchasedOther liabilities 142,599 128,991 125,038

Total liabilities 11,792,199 9,288,352 9,234,906

Stockholders' EquityStockholders' equity 1,921,594 1,981,484 1,928,397

Accumulated other 37,504 12,614 8,280 comprehensive income, net oftaxTotal stockholders' equity 1,959,098 1,994,098 1,936,677

Total liabilities and $ 13,751,297 $ 11,282,450 $ 11,171,583 stockholders' equity

CVB FINANCIAL CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED AVERAGE BALANCE SHEETS(Unaudited)(Dollars in thousands) Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30, June 30,

2020 2020 2019 2020 2019

AssetsCash and due from $ 140,665 $ 166,816 $ 170,283 $ 153,740 $ 172,807 banksInterest-earning 1,049,430 243,069 11,871 646,249 11,494 balances due fromFederal ReserveTotal cash and cash 1,190,095 409,885 182,154 799,989 184,301 equivalentsInterest-earningbalances due from 31,003 17,972 6,151 24,488 6,862 depositoryinstitutionsInvestment 1,616,907 1,697,480 1,634,678 1,657,185 1,666,513 securitiesavailable-for-saleInvestment 626,557 658,916 727,304 642,745 732,383 securitiesheld-to-maturityTotal investment 2,243,464 2,356,396 2,361,982 2,299,930 2,398,896 securitiesInvestment in stock 17,688 17,688 17,688 17,688 17,688 of FHLBLoans and lease 8,047,054 7,482,805 7,558,483 7,764,930 7,610,241 finance receivablesAllowance for (82,752 ) (70,736 ) (65,239 ) (76,744 ) (64,429 )credit lossesNet loans and lease 7,964,302 7,412,069 7,493,244 7,688,186 7,545,812 finance receivablesPremises and 52,719 53,689 55,204 53,204 56,182 equipment, netBank owned life 225,818 225,463 223,281 225,640 222,232 insurance (BOLI)Intangibles 39,287 41,732 49,615 40,510 51,188

Goodwill 663,707 663,707 666,196 663,707 666,366

Other assets 182,972 177,199 165,252 180,086 164,466

Total assets $ 12,611,055 $ 11,375,800 $ 11,220,767 $ 11,993,428 $ 11,313,993

Liabilities andStockholders'EquityLiabilities:Deposits:Noninterest-bearing $ 6,204,329 $ 5,247,025 $ 5,093,781 $ 5,725,677 $ 5,089,795

Interest-bearing 3,844,025 3,502,174 3,519,171 3,673,100 3,585,547

Total deposits 10,048,354 8,749,199 8,612,952 9,398,777 8,675,342

Customer repurchase 442,580 478,373 426,228 460,476 466,264 agreementsOther borrowings 3,981 438 133,548 2,210 146,425

Junior subordinated 25,774 25,774 25,774 25,774 25,774 debenturesPayable for 2,697 - - 1,348 1,483 securitiespurchasedOther liabilities 121,069 115,552 102,377 118,311 98,807

Total liabilities 10,644,455 9,369,336 9,300,879 10,006,896 9,414,095

Stockholders'EquityStockholders' 1,928,210 1,993,560 1,925,212 1,960,885 1,911,767 equityAccumulated othercomprehensive 38,390 12,904 (5,324 ) 25,647 (11,869 )income (loss), netof taxTotal stockholders' 1,966,600 2,006,464 1,919,888 1,986,532 1,899,898 equityTotal liabilitiesand stockholders' $ 12,611,055 $ 11,375,800 $ 11,220,767 $ 11,993,428 $ 11,313,993 equity



CVB FINANCIAL CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF EARNINGS(Unaudited)(Dollars in thousands, except per share amounts) Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30, June 30,

2020 2020 2019 2020 2019

Interest income:Loans and leases, $ 95,352 $ 92,117 $ 101,843 $ 187,469 $ 201,530including feesInvestmentsecurities:Investment 8,449 10,049 10,118 18,498 20,763securitiesavailable-for-saleInvestment 3,660 3,998 4,426 7,658 8,951securitiesheld-to-maturityTotal investment 12,109 14,047 14,544 26,156 29,714incomeDividends from FHLB 214 332 298 546 630stockInterest-earning 283 613 100 896 194deposits with otherinstitutionsTotal interest 107,958 107,109 116,785 215,067 232,068incomeInterest expense:Deposits 2,995 4,124 4,093 7,119 7,964

Borrowings and 394 679 1,635 1,073 3,511junior subordinateddebenturesTotal interest 3,389 4,803 5,728 8,192 11,475expenseNet interest income 104,569 102,306 111,057 206,875 220,593before provision forcredit lossesProvision for credit 11,500 12,000 2,000 23,500 3,500lossesNet interest income 93,069 90,306 109,057 183,375 217,093after provision forcredit lossesNoninterest income:Service charges on 3,809 4,776 5,065 8,585 10,206deposit accountsTrust and investment 2,477 2,420 2,452 4,897 4,634servicesGain on OREO, net - 10 24 10 129

Gain on sale of - - - - 4,545building, netGain on eminent - - 5,685 - 5,685domain condemnation,netOther 5,866 4,434 4,979 10,300 9,309

Total noninterest 12,152 11,640 18,205 23,792 34,508incomeNoninterest expense:Salaries and 28,706 30,877 28,862 59,583 58,164employee benefitsOccupancy and 5,031 4,837 5,427 9,868 10,851equipmentProfessional 2,368 2,256 2,040 4,624 3,965servicesComputer software 2,754 2,816 2,756 5,570 5,369expenseMarketing and 1,255 1,555 1,238 2,810 2,632promotionAmortization of 2,445 2,445 2,833 4,890 5,690intangible assetsAcquisition related - - 2,612 - 5,761expensesOther 3,839 3,855 4,760 7,694 9,700

Total noninterest 46,398 48,641 50,528 95,039 102,132expenseEarnings before 58,823 53,305 76,734 112,128 149,469income taxesIncome taxes 17,192 15,325 22,253 32,517 43,346

Net earnings $ 41,631 $ 37,980 $ 54,481 $ 79,611 $ 106,123

Basic earnings per $ 0.31 $ 0.27 $ 0.39 $ 0.58 $ 0.76common shareDiluted earnings per $ 0.31 $ 0.27 $ 0.39 $ 0.58 $ 0.76common shareCash dividends $ 0.18 $ 0.18 $ 0.18 $ 0.36 $ 0.36declared per commonshare

CVB FINANCIAL CORP. AND SUBSIDIARIESSELECTED FINANCIAL HIGHLIGHTS(Unaudited)(Dollars in thousands, except per share amounts) Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30, June 30,

2020 2020 2019 2020 2019

Interest income $ 108,305 $ 107,477 $ 117,210 $ 215,782 $ 232,948 - taxequivalent (TE)Interest 3,389 4,803 5,728 8,192 11,475 expenseNet interest $ 104,916 $ 102,674 $ 111,482 $ 207,590 $ 221,473 income - (TE) Return on 1.33 % 1.34 % 1.95 % 1.33 % 1.89 %average assets,annualizedReturn on 8.51 % 7.61 % 11.38 % 8.06 % 11.26 %average equity,annualizedEfficiency 39.75 % 42.69 % 39.09 % 41.20 % 40.04 %ratio [1]Noninterestexpense to 1.48 % 1.72 % 1.81 % 1.59 % 1.82 %average assets,annualizedYield on 4.77 % 4.95 % 5.40 % 4.85 % 5.34 %average loansYield on 3.82 % 4.27 % 4.72 % 4.03 % 4.67 %average earningassets (TE)Cost of 0.12 % 0.19 % 0.19 % 0.15 % 0.19 %depositsCost ofdeposits and 0.12 % 0.20 % 0.20 % 0.16 % 0.20 %customerrepurchaseagreementsCost of funds 0.13 % 0.21 % 0.25 % 0.17 % 0.25 %

Net interest 3.70 % 4.08 % 4.49 % 3.88 % 4.44 %margin (TE)[1] Noninterest expense divided by net interest income before provision forcredit losses plus noninterest income. Weightedaverage sharesoutstandingBasic 134,998,440 139,106,596 139,747,934 137,052,180 139,681,931

Diluted 135,154,479 139,315,514 139,896,655 137,227,984 139,861,253

Dividends $ 24,417 $ 24,416 $ 25,248 $ 48,833 $ 50,416 declaredDividend payout 58.65 % 64.29 % 46.34 % 61.34 % 47.51 %ratio [2][2] Dividends declared on common stock divided by net earnings. Number ofshares 135,516,316 135,510,960 140,141,680 outstanding -(end of period)Book value per $ 14.46 $ 14.33 $ 13.82 shareTangible book $ 9.28 $ 9.13 $ 8.74 value per share June 30, December 31, June 30,

2020 2019 2019

Nonperformingassets:Nonaccrual $ 6,792 $ 5,033 $ 11,024 loansLoans past due90 days or more 25 - - and stillaccruinginterestTroubled debtrestructured - 244 263 loans(nonperforming)Other real 4,889 4,889 2,275 estate owned(OREO), netTotal $ 11,706 $ 10,166 $ 13,562 nonperformingassetsTroubled debtrestructured $ 2,771 $ 3,112 $ 3,219 performingloans Percentage ofnonperformingassets to total 0.14 % 0.13 % 0.18 %loansoutstanding andOREOPercentage ofnonperforming 0.09 % 0.09 % 0.12 %assets to totalassetsAllowance forcredit losses 802.86 % 675.39 % 495.00 %tononperformingassets Six Months Ended

June 30, June 30,

2020 2019

Allowance forcredit losses:Beginning $ 68,660 $ 63,613 balanceImpact of 1,840 - adopting ASU2016-13Total (253 ) (360 )charge-offsTotalrecoveries on 236 379 loanspreviouslycharged-offNet (17 ) 19 (charge-offs)recoveriesProvision for 23,500 3,500 credit lossesAllowance forcredit losses $ 93,983 $ 67,132 at end ofperiod Net(charge-offs) -0.0002 % 0.0002 %recoveries toaverage loans

CVB FINANCIAL CORP. AND SUBSIDIARIESSELECTED FINANCIAL HIGHLIGHTS(Unaudited)(Dollars in millions) Allowance for Credit Losses by Loan Type June 30, 2020 March 31, 2020 December 31, 2019

Allowance Allowance Allowance

as a % of as a % of as a % of Allowance Allowance Allowance Total Total Total For Loans For Loans For Loan Loans Credit Credit by by Losses by Losses Losses Respective Respective Respective

Loan Type Loan Type Loan Type

Commercial $ 8.0 1.0 % $ 9.4 1.0 % $ 8.9 0.9 %andindustrialSBA 3.7 1.2 % 3.9 1.3 % 1.5 0.5 %

SBA - PPP - 0.0 % - - - -

Real estate:Commercial 74.9 1.4 % 58.4 1.1 % 48.6 0.9 %real estateConstruction 2.3 1.8 % 4.6 3.6 % 0.9 0.7 %

SFR mortgage 0.2 0.1 % 0.3 0.1 % 2.3 0.8 %

Dairy &livestock 3.4 1.3 % 4.3 1.6 % 5.3 1.4 %andagribusinessMunicipallease 0.3 0.6 % 0.3 0.5 % 0.6 1.2 %financereceivablesConsumer and 1.2 1.4 % 1.4 1.2 % 0.6 0.5 %other loans Total $ 94.0 1.1 % $ 82.6 1.1 % $ 68.7 0.9 %



CVB FINANCIAL CORP. AND SUBSIDIARIESSELECTED FINANCIAL HIGHLIGHTS(Unaudited)(Dollars in thousands, except per share amounts) Quarterly Common Stock Price 2020 2019 2018

Quarter End High Low High Low High LowMarch 31, $ 22.01 $ 14.92 $ 23.18 $ 19.94 $ 25.14 $ 21.64

June 30, $ 22.22 $ 15.97 $ 22.22 $ 20.40 $ 24.11 $ 21.92

September $ 22.23 $ 20.00 $ 24.97 $ 22.19 30,December $ 22.18 $ 19.83 $ 23.51 $ 19.21 31, Quarterly Consolidated Statements of Earnings Q2 Q1 Q4 Q3 Q2

2020 2020 2019 2019 2019

InterestincomeLoans andleases, $ 95,352 $ 92,117 $ 97,302 $ 98,796 $ 101,843 includingfeesInvestment 12,606 14,992 14,917 14,767 14,942 securitiesand otherTotal 107,958 107,109 112,219 113,563 116,785 interestincomeInterestexpenseDeposits 2,995 4,124 4,567 4,589 4,093

Other 394 679 632 815 1,635 borrowingsTotal 3,389 4,803 5,199 5,404 5,728 interestexpenseNetinterestincome 104,569 102,306 107,020 108,159 111,057 beforeprovisionfor creditlossesProvision 11,500 12,000 - 1,500 2,000 for creditlossesNetinterestincome 93,069 90,306 107,020 106,659 109,057 afterprovisionfor creditlosses Noninterest 12,152 11,640 12,640 11,894 18,205 incomeNoninterest 46,398 48,641 49,073 47,535 50,528 expenseEarningsbefore 58,823 53,305 70,587 71,018 76,734 incometaxesIncome 17,192 15,325 19,306 20,595 22,253 taxesNet $ 41,631 $ 37,980 $ 51,281 $ 50,423 $ 54,481 earnings Effective 29.23 % 28.75 % 27.35 % 29.00 % 29.00 %tax rate Basicearnings $ 0.31 $ 0.27 $ 0.37 $ 0.36 $ 0.39 per commonshareDilutedearnings $ 0.31 $ 0.27 $ 0.37 $ 0.36 $ 0.39 per commonshare Cashdividends $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.18 declaredper commonshare Cash $ 24,417 $ 24,416 $ 25,248 $ 25,276 $ 25,248 dividendsdeclared

CVB FINANCIAL CORP. AND SUBSIDIARIESSELECTED FINANCIAL HIGHLIGHTS(Unaudited)(Dollars in thousands) Loan Portfolio by Type June 30, March 31, December 31, September 30, June 30,

2020 2020 2019 2019 2019

Commercial and $ 840,738 $ 960,761 $ 935,127 $ 921,678 $ 917,953 industrialSBA 300,156 313,071 305,008 319,571 327,606

SBA - PPP 1,097,150 - - - -

Real estate:Commercial real 5,365,120 5,347,925 5,374,617 5,375,668 5,417,351 estateConstruction 125,815 128,045 116,925 119,931 116,457

SFR mortgage 286,526 278,743 283,468 278,644 278,285

Dairy & livestock 251,821 272,114 383,709 311,229 301,752 and agribusinessMunicipal lease 49,876 51,287 53,146 54,468 59,985 finance receivablesConsumer and other 85,332 114,206 116,319 117,128 120,779 loansGross loans 8,402,534 7,466,152 7,568,319 7,498,317 7,540,168

Less:Deferred loan fees, - - (3,742 ) (3,866 ) (4,478 )net [1]Gross loans, net of 8,402,534 7,466,152 7,564,577 7,494,451 7,535,690 deferred loan feesand discountsAllowance for (93,983 ) (82,641 ) (68,660 ) (68,672 ) (67,132 )credit lossesNet loans $ 8,308,551 $ 7,383,511 $ 7,495,917 $ 7,425,779 $ 7,468,558

[1] Beginning with March 31, 2020, gross loans are presented net of deferredloan fees by respective class of financing receivables. Deposit Composition by Type and Customer Repurchase Agreements June 30, March 31, December 31, September 30, June 30,

2020 2020 2019 2019 2019

Noninterest-bearing $ 6,901,368 $ 5,572,649 $ 5,245,517 $ 5,385,104 $ 5,250,235

Investment checking 472,509 454,153 454,565 433,615 436,090

Savings and money 3,150,013 2,635,364 2,558,538 2,513,888 2,496,904 marketTime deposits 459,690 451,438 446,308 461,723 479,594

Total deposits 10,983,580 9,113,604 8,704,928 8,794,330 8,662,823

Customer repurchase 468,156 368,915 428,659 407,850 421,271 agreementsTotal deposits and $ 11,451,736 $ 9,482,519 $ 9,133,587 $ 9,202,180 $ 9,084,094 customer repurchaseagreements

CVB FINANCIAL CORP. AND SUBSIDIARIESSELECTED FINANCIAL HIGHLIGHTS(Unaudited)(Dollars in thousands) Nonperforming Assets and Delinquency Trends June 30, March 31, December September June 30, 31, 30,

2020 2020 2019 2019 2019

Nonperformingloans [1]:Commercial and $ 1,222 $ 1,703 $ 1,266 $ 1,550 $ 1,993 industrialSBA 1,598 2,748 2,032 2,706 5,082

Real estate:Commercial real 2,628 947 724 1,083 1,095 estateConstruction - - - - -

SFR mortgage 1,080 864 878 888 2,720

Dairy & - - - - - livestock andagribusinessConsumer and 289 166 377 385 397 other loansTotal $ 6,817 $ 6,428 $ 5,277 $ 6,612 $ 11,287

% of Total 0.08 % 0.09 % 0.07 % 0.09 % 0.15 %gross loans Past due 30-89days:Commercial and $ 630 $ 665 $ 2 $ 756 $ 310 industrialSBA 214 3,086 1,402 303 -

Real estate:Commercial real 4 210 - 368 - estateConstruction - - - - -

SFR mortgage 446 233 249 - -

Dairy & 882 166 - - - livestock andagribusinessConsumer and 413 - - - 22 other loansTotal $ 2,589 $ 4,360 $ 1,653 $ 1,427 $ 332

% of Total 0.03 % 0.06 % 0.02 % 0.02 % 0.004 %gross loans OREO:SBA $ 797 $ 797 $ 797 $ 444 $ -

Real estate:Commercial real 2,275 2,275 2,275 2,275 2,275 estateSFR mortgage 1,817 1,817 1,817 6,731 -

Total $ 4,889 $ 4,889 $ 4,889 $ 9,450 $ 2,275

Totalnonperforming, $ 14,295 $ 15,677 $ 11,819 $ 17,489 $ 13,894 past due, andOREO% of Total 0.17 % 0.21 % 0.16 % 0.23 % 0.18 %gross loans [1] As of June 30, 2020, nonperforming loans included $25,000 of commercial andindustrial loans past due 90 days or more and still accruing.

CVB FINANCIAL CORP. AND SUBSIDIARIESSELECTED FINANCIAL HIGHLIGHTS(Unaudited) Regulatory Capital Ratios CVB Financial Corp. Consolidated

Minimum Required June March December Plus 30, 31, 31,

Capital Ratios Capital Conservation 2020 2020 2019 Buffer

Tier 1 leverage capital 4.0% 10.6% 11.6% 12.3%ratio

Common equity Tier 1 7.0% 14.5% 14.1% 14.8%capital ratio

Tier 1 risk-based capital 8.5% 14.8% 14.4% 15.1%ratio

Total risk-based capital 10.5% 16.0% 15.5% 16.0%ratio



Tangible common equity 9.6% 11.3% 12.2%ratio



Tangible Book Value Reconciliations (Non-GAAP)

The tangible book value per share is a Non-GAAP disclosure. The Company usescertain non-GAAP financial measures to provide supplemental informationregarding the Company's performance. The following is a reconciliation oftangible book value to the Company stockholders' equity computed in accordancewith GAAP, as well as a calculation of tangible book value per share as of June30, 2020, December 31, 2019 and June 30, 2019.

June 30, December 31, June 30,

2020 2019 2019

(Dollars in thousands, except per share amounts)

Stockholders' equity $ 1,959,098 $ 1,994,098 $ 1,936,677

Less: Goodwill (663,707 ) (663,707 ) (663,707 )

Less: Intangible assets (38,096 ) (42,986 ) (48,094 )

Tangible book value $ 1,257,295 $ 1,287,405 $ 1,224,876

Common shares issued and 135,516,316 140,102,480 140,141,680 outstandingTangible book value per share $ 9.28 $ 9.19 $ 8.74



Return on Average Tangible Common Equity Reconciliations (Non-GAAP)

The return on average tangible common equity is a non-GAAP disclosure. TheCompany uses certain non-GAAP financial measures to provide supplementalinformation regarding the Company's performance. The following is areconciliation of net income, adjusted for tax-effected amortization ofintangibles, to net income computed in accordance with GAAP; areconciliation of average tangible common equity to the Company's averagestockholders' equity computed in accordance with GAAP; as well as acalculation of return on average tangible common equity.

Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30, June 30,

2020 2020 2019 2020 2019

(Dollars in thousands) Net Income $ 41,631 $ 37,980 $ 54,481 $ 79,611 $ 106,123

Add:Amortization 2,445 2,445 2,833 4,890 5,690 of intangibleassetsLess: Taxeffect of (723 ) (723 ) (838 ) (1,446 ) (1,682 )amortizationof intangibleassets [1]Tangible net $ 43,353 $ 39,702 $ 56,476 $ 83,055 $ 110,131 income Average $ 1,966,600 $ 2,006,464 $ 1,919,888 $ 1,986,532 $ 1,899,898 stockholders'equityLess: Average (663,707 ) (663,707 ) (666,196 ) (663,707 ) (666,366 )goodwillLess: Average (39,287 ) (41,732 ) (49,615 ) (40,510 ) (51,188 )intangibleassetsAverage $ 1,263,606 $ 1,301,025 $ 1,204,077 $ 1,282,315 $ 1,182,344 tangiblecommon equity Return onaverage 8.51 % 7.61 % 11.38 % 8.06 % 11.26 %equity,annualizedReturn onaveragetangible 13.80 % 12.27 % 18.81 % 13.03 % 18.78 %commonequity,annualized [1] Tax effected at respective statutory rates.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200722005878/en/

CONTACT: David A. Brager Chief Executive Officer (909) 980-4030