CVB Financial Corp Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Matthew Clark - Piper Jaffray Inc - Analyst : Sounds like the pre-pays and line utilization weight on your loan yields this quarter. Can you quantify the pre-pay income this quarter versus last, how that compares to kind of a typical quarter and then to pick up an activity you're seeing in July, whether or not you've seen some increase in line utilization to date. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 2:30PM, CVBF.OQ - Q2 2025 CVB Financial Corp Earnings Call

Question: Matthew Clark - Piper Jaffray Inc - Analyst : Okay. And on the repurchase agreements that were up, I think on an ended period basis, can you just remind us of the cost of those and the outlook there, whether or not there was anything unusual. E. Allen Nicholson - CVB Financial Corp - Executive Vice President, Chief Financial Officer of CVB Financial Corp and Citizens Business Bank Are you referring to our customer repos?

Question: Gary Tenner - D.A. Davidson & Co - Analyst : Thanks. Good morning. I wanted to go back to the C&I comments you made on the non-dairy and livestock loans. You've always talked about, how your customers are, the best business owners and operators, and you kind of reiterated that in your comments a few minutes ago. I'm just curious, it seems like the headwind there maybe remains a little bit higher than what we've seen through this earnings season. The commentary has generally been a bit more positive. Do you think that some of kind of a lag perhaps is more customer specific, or do you think it is a little more regional in terms of California business opportunities?

Question: Gary Tenner - D.A. Davidson & Co - Analyst : Thank you for that color. Certainly a high class problem for your customers at this point. Just on the deposit side, real quickly, I think your interest bearing deposit beta through the first 100 basis points sits right around 30%. Without knowing when you know the next or series of additional rate cuts will come. Do you think you could continue that kind of pace or given how low your funding costs already are, do you think it, kind of the next leg is a little bit lighter from a data perspective? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 2:30PM, CVBF.OQ - Q2 2025 CVB Financial Corp Earnings Call

Question: David Feaster - Raymond James - Analyst : Maybe just kind of staying on the competitive side, first off, where are you seeing the most competition from? Is it the larger banks, is it non-banks? Just kind of curious where this competition is coming from and then maybe given a bit more competitive pricing on your side, do you think originations can start out pacing these elevated payoffs and pay downs kind of in the back half of the year?

Question: David Feaster - Raymond James - Analyst : And we've talked in the past about the success that your specialty banking groups had, I'm curious kind of how that groups contributed maybe this quarter to some of the solid deposit trends that you're seeing and maybe more broadly the competitive side for funding, right? I mean, just curious what you're seeing there, especially as industry growth seems to be improving. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 2:30PM, CVBF.OQ - Q2 2025 CVB Financial Corp Earnings Call

Question: David Feaster - Raymond James - Analyst : And maybe just last one for me. Just always interested to hear your thoughts on the M&A side. I mean, we've seen some more maybe transactions happening, stronger currencies, curious how conversations are going and just kind of what you're seeing on the M&A front?

Question: Kelly Motta - Keefe Bruyette & Woods Inc - Analyst : Maybe piggybacking on, that last point. The economic environment in California has had some headwinds, you are a California-based bank and, banks the best businesses in your footprint. But wondering, just given the macro challenges, would you consider going out of state or have you started to have those discussions, more now relative to maybe a couple of years ago? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 2:30PM, CVBF.OQ - Q2 2025 CVB Financial Corp Earnings Call

Question: Kelly Motta - Keefe Bruyette & Woods Inc - Analyst : Maybe last question from me. Your expenses are really well controlled and it seems like, the growth environment, there's been a couple of things that have been working in the wrong direction, even though your clients remain really healthy and you've been able to control expenses very well. In light of that, wondering, given the step down this quarter, if there's any nuances around that, that we should be mindful of when thinking about the run rate ahead and any flex there. Thank you. E. Allen Nicholson - CVB Financial Corp - Executive Vice President, Chief Financial Officer of CVB Financial Corp and Citizens Business Bank I mean, I would think about run rate a couple ways. Dave mentioned, Q1 to Q2 is always a little noisy because payroll taxes are always higher in the first quarter. As you get into the second half of the year, we do mid-year salary increases for our associates in July. And so, staff expense should grow a little bit from that perspective. But we have done a really good job of, I think utilizing technology to automate things and it's allowed us to manage expenses on the staff side pretty well. We'll continue to see, I would say probably double digit, 10% growth in our technology side, that would be the one area that should continue to grow. But overall expense growth should still be low single digits as it typically is for us. And we'll continue to be obviously we monitor that very closely.