$21 MILLION: The Ontario banking company says it improved performance in its loans and controlled expenses.
10:00 PM PDT on Thursday, July 21, 2011
By TIFFANY RAY
CVB Financial Corp. reported record profits of $21 million in the second quarter despite the tough Inland economy.
That’s up 11 percent from $19 million in the same quarter of last year and the highest quarterly earnings in the company’s history.
CVB, the Ontario-based parent company of Citizens Business Bank, attributed the gains to a combination of improved performance in its loan portfolio, an increase in noninterest-bearing deposits and controlled expenses.
Per diluted share, earnings were 20 cents in the second quarter, up from 18 cents a year earlier.
For the first half of the year, earnings totaled $37.6 million, up 7 percent from $35.1 million in the same period last year. Per diluted share, they were 35 cents, up from 33 cents.
In a conference call with analysts Thursday, Chris Myers, CVB’s president and CEO, said the bank has made “tremendous progress” over the last six months, working through problem loans and boosting high-quality loan originations.
The company charged off $4.2 million in bad loans in the second quarter, down from $11.2 million in the first quarter, and reduced its nonperforming assets to $88.8 million at the end of the second quarter, down from $114.4 million on March 31. The provision for credit losses was reduced from $7.1 million in the first quarter to zero in the most recent quarter.
Tim Coffey, a research analyst with FIG Partners in San Francisco, said it was “a really good quarter” for the bank.
Investors have been concerned about the bank’s location in the hard-hit Inland region and its relationship with its largest borrower, Coffey said.
That borrower, a Temecula developer, said last fall he wouldn’t be able to make payments on $82 million in loans. The bank charged off $36 million in connection with those loans and sold six of the seven notes earlier this year to an unrelated third party for $36 million in cash and a $5 million note secured by a lien on an 80,000-square-foot office building.
Coffey said CVB has been aggressive in addressing those issues, and the results were evident in the recent earnings report. “It was impressive,” he said.
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