CVB FINANCIAL CORP

For the second quarter of 2025, we reported net earnings of $50.6 million, compared with $51.1 million for the first quarter of 2025 and $50.0 million for the second quarter of 2024. Diluted earnings per share were $0.37 for the second quarter, compared to $0.36 for the prior quarter and $0.36 for the same period last year. Net income of $50.6 million for the second quarter of 2025 produced an annualized return on average equity (“ROAE”) of 9.06%, an annualized return on average tangible common equity (“ROATCE”) of 14.08%, and an annualized return on average assets (“ROAA”) of 1.34%. Our net interest margin, tax equivalent (“NIM”), was 3.31% for the second quarter of 2025, while our efficiency ratio was 45.55%. Year-to-date net earnings for 2025 were $101.7 million, a $3.0 million increase compared to the same period in 2024.

Net interest income was $111.6 million for the second quarter of 2025. This represented a $1.2 million, or 1.05%, increase from the first quarter of 2025, and an $0.8 million, or 0.68%, increase from the second quarter of 2024. The quarter-over-quarter increase in net interest income was due to a $1.2 million increase in interest income, primarily due to one more day of interest during the second quarter. The increase in net interest income compared to the second quarter of 2024 was the net result of a $15.6 million decline in interest expense, that exceeded a $14.9 million decline in interest income. As a result of the Company's deleveraging strategy in the second half of 2024, net interest income increased compared to the second quarter of 2024 as a 26 basis point increase in net interest margin offset a $1.1 billion decrease in earnings assets. Year-to-date net interest income for 2025 was $222.1 million, a $1.3 million decrease compared to the same period in 2024.

Noninterest income was $14.7 million for the second quarter of 2025, compared with $16.2 million for the first quarter of 2025 and $14.4 million for the second quarter of 2024. The quarter-over-quarter decrease was primarily due to a $2.2 million gain on the sale of four OREO properties recognized in the first quarter of 2025. Excluding the OREO gains, noninterest income grew by approximately $700,000, including a $397,000 increase of income from Bank Owned Life Insurance (“BOLI”). Noninterest income for the first six months of 2025 was $31.0 million, a $2.4 million, or 8.54% increase over the same period in 2024.

As set forth in our financial statements under the heading "Subsequent Events", subsequent to the quarter ended June 30, 2025, the Company entered into a settlement agreement in a lawsuit, which will result in the Bank's receipt of payments from the defendant and recognition of noninterest income of $6 million in the third quarter of 2025. Also, subsequent to entering into the legal settlement agreement, the Company sold, at a pre-tax loss of $6 million, available-for-sale investment securities, with book yields below 1.5%, totaling approximately $50 million.

Noninterest expense for the second quarter of 2025 was $57.6 million, compared to $59.1 million for the first quarter of 2025 and $56.5 million for the second quarter of 2024. The $1.5 million quarter-over-quarter decrease was primarily due to a $500,000 provision for unfunded loan commitments in the first quarter of 2025 and a $1.5 million decrease in salaries and benefits. The $1.1 million increase in expense compared to the second quarter of 2024, was due primarily to the impact of a $500,000 expense reduction in the second quarter of 2024 related to a decrease in reserves for unfunded loan commitments, in addition to a $603,000 increase in regulatory assessment expenses. Noninterest expense for the first six months of 2025 was $116.7 million, a $433,000, or .37% increase over the same period in 2024.

At June 30, 2025, total assets of $15.41 billion increased by $260.5 million, or 1.72%, from total assets of $15.15 billion at December 31, 2024. Interest-earning assets of $13.74 billion at June 30, 2025 increased by $217.1 million, or 1.60%, when compared with $13.53 billion at December 31, 2024. The increase in interest-earning assets was primarily due to a $492.8 million increase in interest-earning balances due from the Federal Reserve and a $10.5 million increase in interest-earning balances due from other institutions, offset by a $177.9 million decrease in total loans, and a $108.2 million decrease in investment securities.

Total investment securities were $4.81 billion at June 30, 2025, a decrease of $108.2 million, or 2.20%, from $4.92 billion at December 31, 2024. At June 30, 2025, investment securities held-to-maturity (“HTM”) totaled $2.33 billion, a $52.4 million, or 2.20%, decline from $2.38 billion at December 31, 2024. At June 30, 2025, investment securities available-for-sale (“AFS”) totaled $2.49 billion, inclusive of a pre-tax net unrealized loss of $363.7 million. AFS securities decreased by $55.8 million, or 2.20%, from $2.54 billion at December 31, 2024. The pre-tax unrealized loss decreased by $84 million from December 31, 2024. Our tax equivalent yield on investments was 2.62% for the quarter ended June 30, 2025, compared to 2.63% for the first quarter of 2025 and 2.71% for the second quarter of 2024.

Total loans and leases, at amortized cost, of $8.36 billion at June 30, 2025, decreased by $177.9 million, or 2.08%, from December 31, 2024. The decrease in total loans included decreases of $186.0 million in dairy and livestock loans and $12.8 million in commercial and industrial loans, offset by increases of $19.3 million in SFR mortgage loans and $10.0 million in commercial real estate loans. The decline in dairy & livestock loans primarily relates to the seasonal peak in line utilization at the end of every calendar year, demonstrated by a decline in utilization from 81% at December 31, 2024 to 62% at June 30, 2025. Our yield on loans was 5.22% for the quarter ended June 30, 2025, compared to 5.22% for the quarter ended March 31, 2025 and 5.26% for the second quarter of 2024.

The allowance for credit losses totaled $78.0 million at June 30, 2025, compared to $80.1 million at December 31, 2024. There was no provision for credit losses in the second quarter of 2025 compared to a $2.0 million recapture of credit losses in the first quarter of 2025. The decline in the allowance from December 31, 2024 was due to improved credit ratings for dairy and livestock loans.

Noninterest-bearing deposits were $7.25 billion at June 30, 2025, an increase of $210.0 million, or 2.98%, when compared to $7.04 billion at December 31, 2024. At June 30, 2025, noninterest-bearing deposits were 60.47% of total deposits, compared to 58.90% at December 31, 2024.

Interest-bearing deposits were $4.74 billion at June 30, 2025, a decrease of $173.6 million, or 3.53%, when compared to $4.91 billion at December 31, 2024. Customer repurchase agreements totaled $404.2 million at June 30, 2025, compared to $261.9 million at December 31, 2024. Our average cost of total deposits including customer repurchase agreements was 0.87% for the quarters ended June 30, 2025, March 31, 2025, and June 30, 2024.

At June 30, 2025, total borrowings, consisted of $500.0 million of FHLB advances, at a weighted average cost of approximately 4.6%. The FHLB advances include maturities of $300 million in May 2026 and $200 million in May 2027.

The Company’s total equity was $2.24 billion at June 30, 2025. This represented an overall increase of $54.0 million from total equity of $2.19 billion at December 31, 2024. Increases to equity included $101.7 million in net earnings and a $43.9 million increase in other comprehensive income that were partially offset by $55.6 million in cash dividends. During the first half of 2025, we repurchased, under our stock repurchase plan, 2,063,564 shares at an average price of $18.15, totaling $37.5 million. Our tangible book value per share at June 30, 2025 was $10.64.

Our capital ratios under the revised capital framework referred to as Basel III remain well-above regulatory requirements. As of June 30, 2025, the Company’s Tier 1 leverage capital ratio was 11.84%, common equity Tier 1 ratio was 16.52%, Tier 1 risk-based capital ratio was 16.52%, and total risk-based capital ratio was 17.33%. Refer to our Analysis of Financial Condition – Capital Resources.