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CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (“the Company”), announced record earnings for the quarter ended March 31, 2014.
CVB Financial Corp. reported net income of $28.7 million for the first quarter of 2014, compared with $21.6 million for the first quarter of 2013. This represents a year-over-year increase of $7.0 million, or 32.6%. Diluted earnings per share were $0.27 for the first quarter of 2014, compared to $0.21 for the same period last year.
The allowance for loan losses was reduced by $7.5 million, and included $990,000 in net recoveries for the first quarter of 2014. This was primarily the result of a decrease in total loans and leases and improved credit quality. This compares with a reduction of $6.8 million for the fourth quarter of 2013, $3.8 million for the third quarter of 2013, $6.2 million for the second quarter of 2013, and zero provision for loan losses for the previous eight fiscal quarters.
Chris Myers, President and CEO, commented, “We are pleased to report record earnings for the first quarter. Credit quality improvement and our continued emphasis on collecting non-performing and charged off loans allowed us to release $7.5 million in loan loss reserves. Although loan demand for the first quarter was slow, I am somewhat encouraged by the strengthening of our current loan pipeline. Our funding remains strong as we continued to organically grow core deposits.”
Net income of $28.7 million for the first quarter of 2014 produced a return on beginning equity of 15.06%, a return on average equity of 14.74% and a return on average assets of 1.72%. The efficiency ratio for the first quarter of 2014 was 45.52%, compared to 50.21% for the first quarter of 2013.
Interest income and fees on loans for the first quarter of 2014 totaled $44.7 million, which included $1.7 million of discount accretion from accelerated principal reductions, payoffs and improved credit loss experienced on covered loans acquired from San Joaquin Bank (“SJB”). This represented an increase of $700,000, or 1.59%, when compared to total interest income on loans of $44.0 million for the fourth quarter of 2013, which included $2.1 million of discount accretion, and a decrease of $1.4 million, or 3.02%, from the year ago quarter, which included $4.4 million of discount accretion.