CVB FINANCIAL CORP

For the year ended December 31, 2025, we reported net earnings of $209.3 million, compared with $200.7 million for 2024, a $8.6 million, or 4.28%, increase from the prior year. Diluted earnings per share of $1.52 for 2025, increased by $0.08, or 5.61%, when compared to $1.44 for 2024. Market interest rates stayed elevated throughout the first eight months of 2024 until the Federal Reserve initiated a series of rate cuts in September 2024. This shift in the interest rate environment materially affected the Company's net interest income and overall earnings during 2025. Net earnings benefited from higher net interest income, driven primarily by the expansion in net interest margin. The improvement reflected a reduction in overall cost of funds, particularly on borrowings, as a result of the Company's balance sheet deleveraging efforts in late 2024. Net earnings of $209.3 million produced a return on average equity (“ROAE”) of 9.26%, a return on average tangible common equity (“ROATCE”) of 14.28% and a return on average assets (“ROAA”) of 1.36%. Our net interest margin, tax equivalent (“NIM”), was 3.36% for 2025, while our efficiency ratio was 46.0%.

Net interest income of $460.3 million for the year ended December 31, 2025, increased $12.9 million, or 2.89%, compared to the same period of 2024. Interest income decreased by $36.8 million, or 5.84%, in 2025, while interest expense decreased $49.8 million year-over-year. Cost of funds for 2025 decreased by 29 basis points over 2024, while the earning asset yield decreased by two basis points. Average earning assets declined by $798.3 million year-over-year.

Noninterest income of $55.2 million for the year ended December 31, 2025, increased by $0.7 million, or 1.28%, compared to the same period of 2024. Trust and investment income for 2025 grew by $1.3 million, or 9.50%, from the prior year. Noninterest income in 2025 included a $11.0 million in losses on the sale of AFS investment securities, a $6.0 million legal settlement, and a $2.3 million gain in OREO, while 2024 included a total pre-tax loss of $28.3 million from the sale of $467 million of AFS securities partially offset by a pre-tax gain of $25.9 million from the sale-leaseback of four buildings.

Noninterest expense increased from $233.6 million in 2024 to $237.3 million in 2025. The $3.7 million increase in noninterest expense was primarily driven by higher software related costs associated with the continued investments in technology and infrastructure. In addition, noninterest expense included $1.6 million of acquisition related costs to the announced merger with Heritage.

At December 31, 2025, total assets of $15.63 billion increased by $477.4 million, or 3.15%, from total assets of $15.15 billion at December 31, 2024. Interest-earning assets of $13.99 billion at December 31, 2025 increased by $463.0 million, or 3.42%, when compared with $13.53 billion at December 31, 2024. The increase in interest-earning assets was primarily due to a $218.1 million increase in interest-earning balances due from the Federal Reserve, a $162.8 million increase in total loans, and a $31.7 million increase in investment securities.

Total investment securities were $4.95 billion at December 31, 2025, an increase of $31.7 million, or 0.64%, from $4.92 billion at December 31, 2024. At December 31, 2025, investment securities HTM totaled $2.27 billion. HTM securities decreased by $109.3 million, or 4.59% from $2.38 billion at December 31, 2024. At December 31, 2025, investment securities AFS totaled $2.68 billion, inclusive of a pre-tax net unrealized loss of $299.2 million. AFS securities increased by $141.0 million, or 5.54%, from $2.54 billion at December 31, 2024, driven primarily by $482.5 million in purchases of AFS securities and an improvement of $128.9 million in AFS investment securities mark-to-market unrealized loss, partially offset by principal payments and maturities, as well as sales of securities of $92.9 million during the year, which resulted in a pre-tax loss of $11.0 million. The securities sold had an average yield of less than three percent. Our tax equivalent yield on our investment portfolio remained the same at 2.65% for 2024 and 2025.

Fair value hedging transactions with $700 million notional pay-fixed interest rate swaps, had a fair value which totaled $8.7 million and was reflected as a liability at December 31, 2025. The fair value of these instruments totaled $7.2 million and were reflected as a asset at December 31, 2024. These instruments generated interest income of $4.3 million for 2025, a decrease of $10.1 million from interest income of $14.4 million for 2024. Refer to Note 18 –Derivative Financial Instruments of the notes to the consolidated financial statements of this report for additional information.

Total loans and leases, at amortized cost, were $8.70 billion at December 31, 2025, an increase of $162.8 million, or 1.91%, from $8.54 billion at December 31, 2024. The $162.8 million increase included $66.9 million in commercial real estate loans, $48.5 million in commercial and industrial loans, and $21.7 million in construction loans. Our loan yields were 5.29% for the year ended December 31, 2025, compared to 5.26% for 2024.

The allowance for credit losses totaled $77.2 million at December 31, 2025, compared to $80.1 million at December 31, 2024. At December 31, 2025, ACL as a percentage of total loans and leases outstanding was 0.89%. This compares to 0.94% at December 31, 2024. The decrease in the allowance was primarily the result of the successful resolution of certain nonperforming loans, with nonaccrual loans declining by $23.1 million and positive credit migration resulting in a $36.8 million decrease in classified loans. The allowance was not materially impacted by changes in our economic forecast as of December 31, 2025. Our economic forecast continues to be a blend of multiple forecasts produced by Moody’s. The resulting economic forecast reflects GDP growth of less than 2% for 2026 though 2028. Commercial Real Estate values are forecasted to continue their decline in 2026, with growth in values returning in 2027. Unemployment is forecasted to exceed 5% from early 2026 until the second half of 2028.

Noninterest-bearing deposits were $6.80 billion at December 31, 2025, a decrease of $236.4 million, or 3.36% when compared to $7.04 billion at December 31, 2024. At December 31, 2025, noninterest-bearing deposits were 56.33% of total deposits, compared to 58.90% at December 31, 2024.

Interest-bearing deposits were $5.27 billion at December 31, 2025, an increase of $360.0 million, or 7.33%, when compared to $4.91 billion at December 31, 2024. Customer repurchase agreements totaled $490.6 million at December 31, 2025, compared to $261.9 million at December 31, 2024. Our average cost of total deposits including customer repurchase agreements for 2025 was 0.88%, compared to 0.90% for 2024.

At December 31, 2025, total borrowings of $500.0 million consisted of Federal Home Loan Bank (“FHLB”) advances, at an average cost of approximately 4.6%. Borrowings remained the same from $500.0 million at December 31, 2024. On average, borrowings decreased by more than $1.01 billion between 2024 and 2025, as the Company completed a deleveraging strategy during the later part of 2024. As a result of this deleveraging, cost of funds decreased by 29 basis points from 1.32% for 2024 to 1.03% for 2025 due to the decrease in the higher-cost short-term borrowings.

The Company’s total equity was $2.30 billion at December 31, 2025. This represented an overall increase of $108.9 million from total equity of $2.19 billion at December 31, 2024. Increases to equity included $209.3 million in net earnings and a $84.4 million increase in other comprehensive income, that were partially offset by $110.3 million in cash dividends. For the year ended December 31, 2025, we repurchased, under our stock repurchase plan, 4,321,777 shares at an average price of $18.60, totaling $80.4 million. We did not repurchase any stock during 2024. Our tangible book value per share at December 31, 2025 was $11.24, compared to $10.10 at December 31, 2024, an 11.29% increase.

Our capital ratios under the capital framework referred to as Basel III remain well above regulatory requirements. As of December 31, 2025, the Company’s Tier 1 leverage capital ratio totaled 11.62%, our common equity Tier 1 ratio totaled 15.89%, our Tier 1 risk-based capital ratio totaled 15.89%, and our total risk-based capital ratio totaled 16.66%. Refer to our Analysis of Financial Condition — Capital Resources.

Acquisition Related

On December 17, 2025, the Company announced that it entered into a Merger Agreement with Heritage, headquartered in San Jose, California. pursuant to which the Company will acquire Heritage in an all-stock transaction.

For the year ended December 31, 2025, the Company incurred non-recurring merger related expenses associated with the Heritage acquisition of $1.6 million.