Net income: $51 million, or $0.37 per share, in the third quarter of 2024.
Return on average tangible common equity: 14.93% in Q3 2024.
Return on average assets: 1.23% in Q3 2024.
Total revenue increase: 2.9% or $3.7 million increase compared to Q2 2024.
Net interest income increase: $2.8 million sequentially.
Core non-interest expense increase: 3.8% or $2 million compared to the prior quarter.
Total assets: decreased approximately $750 million from end of Q2 2024.
Net interest margin: 3.05% in Q3 2024, unchanged from the previous quarter.
Deposits and customer repos: Increased $408 million from the end of the second quarter through September 30, 2024.
Total financing: $8.6 billion, down $109 million or 1% from end of Q2 2024.
Allowance for credit losses: $83 million as of September 30, 2024.
Nonperforming assets: $22.6 million, or 15 basis points of total assets.
Interest income increase: $6.7 million sequentially.
Increase in interest expense: $3.9 million sequentially.
Non-interest income: $12.8 million in Q3 2024.
Noninterest expense: $58.8 million in the third quarter of 2024.
Efficiency rate: 46.53% in Q3 2024.
Release date: October 24, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
CVB Financial Corp (NASDAQ:CVBF) reported third-quarter 2024 net income of $51 million, or $0.37 per share, marking its 190th consecutive quarter of profitability.
The company announced a dividend of $0.20 per share in the third quarter, continuing its 140th consecutive quarter of cash dividends.
Return on average tangible common equity for the quarter was strong at 14.93% and return on average assets was 1.23%.
Total revenue, excluding gains and losses, increased 2.9% compared to the second quarter of 2024 due to an increase in net interest income of $2.8 million.
Bad loans decreased by $3 million and the allowance for credit losses remained stable at approximately $83 million, indicating strong asset quality.
Total assets decreased by approximately $750 million from the end of the second quarter of 2024 due to the early redemption of the Bank’s Term Funding Program borrowings.
Core non-interest expenses increased 3.8% or $2 million compared to the prior quarter, impacting overall profitability.
Demand for loans, particularly in the commercial real estate and construction sectors, continues to be weak, with total loans down $109 million, or 1%, from the end of the second quarter.
Interest expense increased $3.9 million sequentially, reflecting a 9 basis point increase in cost of funds.
The company sold more than $300 million in available-for-sale investment securities and recorded cumulative losses of $11.6 million, impacting its financial results.
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Q: Can you elaborate on the repayments of BTFP and the impact on net interest margin (NIM)? A: The book yield of the securities sold was less than 3%. Repayments included cash and marketable securities, and additional cash was generated from increased deposits. Deposit costs are stable, and future rate cuts are likely to push the downside closer to 100% beta.
Q: What is the outlook for mergers and acquisitions (M&A) and share buybacks? A: M&A is a priority and efforts continue to properly structure deals. Share buybacks are also being considered as a form of capital management and may be announced soon.
Q: What do you see as opportunities for growth given the current competitive environment? A: Loan demand is low, competition is fierce, and some deals have interest rates below 6%. While maintaining a selective approach to loan pricing, we continue to focus on strengthening relationships, particularly with C&I operating companies.
Q: Can you talk about trends in credit quality and the pressures customers face? A: Credit quality remains stable and recent issues are isolated and unrelated to interest rates. Agricultural lending is improving, with no significant borrower issues related to rate hikes.
Q: What are the factors behind the increase in interest-free deposit balances this fiscal year? A: This increase was driven by new relationships across a variety of industries, including government services and title escrow. Although existing customer deposit levels have declined due to market conditions, new customer acquisition continues to be strong.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.
