The following is a summary of the CVB Financial Corp. (CVBF) Q1 2024 Earnings Call Transcript:
Financial Performance:
CVB Financial reported Q1 2024 net earnings of $48.6 million or $0.35 per share.
The quarter's net income was impacted by a $2.3 million special assessment expense from FDIC.
Net interest income declined by $6.9 million and the net interest margin shrank by 16 basis points compared to Q4 2023.
Cost of funds increased due to higher average borrowings and the addition of broker deposits.
Deposits declined by about $517 million compared to Q4 2023 but still totaled $11.9 billion by the end of Q1 2024.
The cost of deposits averaged 74 basis points in Q1 2024, higher than Q4 2023 (62 basis points) and Q1 2023 (17 basis points).
The provision for loan losses was $82.8 million, against $86.8 million at the close of Q4 2023.
Operating noninterest expense was $59.8 million, lower than the previous quarter's $66 million but higher than Q1 2023's $54.9 million.
Business Progress:
Most new loans in Q1 2024 were owner-occupied or C&I loans since the bank focuses on best small-to-medium-sized businesses and their owners.
Although loan demand has been slower, CVB expects growth from their C&I loans pipeline and maintains strong asset quality despite increased net charge-offs.
The bank is planning to offset bank term funding program borrowings through cash holdings, income from securities, deposit growth, and alternate funding sources.
Trust and wealth management fees have risen by $310,000 on a year-over-year basis, and BOLI income also improved.
The bank is open to M&A opportunities, especially with companies within a $1 billion - $10 billion asset size range.
CVB has maintained its profitability for 188 consecutive quarters and paid dividends for 138 consecutive quarters, reflecting consistent financial performance.
Despite minor setbacks due to interest rate changes, the bank is focusing on maintaining a robust regulatory capital position and enhancing TCE.
CVB is optimistic about future deposit growth, thanks to its existing business relationships and a robust pipeline.
More details: CVB Financial IR
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