CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (“the Company”), announced record earnings for the second quarter of 2013.
CVB Financial Corp. reported net income of $24.5 million for the second quarter of 2013, compared with net income of $23.6 million for the second quarter of 2012. Diluted earnings per share were $0.23 for the second quarter of 2013 and 2012. Net income for the second quarter of 2013 included a $6.2 million recapture of loan loss provision and a net pre-tax gain of $2.5 million on the sale of other real estate owned property (“OREO”).
During the second quarter of 2013, the Company elected to redeem $20.6 million in junior subordinated debentures bearing interest at the time of redemption at 3.15%, or 2.85% above the 90-day LIBOR. Year-to-date redemptions of CVB Statutory Trust II preferred securities totaled $41.2 million. These repayments were made to reduce future funding costs. It is estimated that annualized net savings will be $1.2 million for the $41.2 million in total trust preferred redemptions.
As a result of improved credit quality of the loan portfolio and better economic conditions, the allowance for loan losses was reduced by $6.2 million for the second quarter of 2013. This compares with zero provision for loan losses for the previous eight fiscal quarters.Chris Myers, President and CEO, commented: “We achieved the highest net earnings in company history for the second quarter of 2013. Improved credit quality and low cost funding continued to bolster our bottom line results. As we look forward, we remain focused on quality loan growth, as we believe this will be a key earnings driver for the future.” Net income for the second quarter of 2013 produced a return on beginning equity of 12.77%, a return on average equity of 12.58%, and a return on average assets of 1.56%. The efficiency ratio for the second quarter of 2013 was 46.85%, compared to 50.21% for the first quarter of 2013.