The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Matthew Clark - Piper Sandler - Analyst
: On your interest-bearing deposit costs up a few basis points this quarter caused your beta cycle to date to slow a little bit to, I think, 28%. How
should we think about the beta through the cycle from here and maybe remind us what portion of your deposit base do you feel like you can be
more aggressive with?
Question: Matthew Clark - Piper Sandler - Analyst
: Since we're limited to two, I'm just going to jump to M&A. Any increase in dialog there on the M&A front? I guess where do we stand?
Question: Gary Tenner - DA Davidson & Co - Analyst
: I wanted to ask on the loan side, it looks like you had a little earlier than typical increase in dairy and livestock line utilization. So just as we're thinking
about the fourth-quarter and what's usually a pretty large spike there, is that spike muted a bit because you had some drawdown here in the
third-quarter?
Question: Gary Tenner - DA Davidson & Co - Analyst
: Great. And then just a question about the $700 million of interest rate swaps that you kind of updated back in May. I think the kind of outlook for
short-term rates is probably points to more lowering over the next 12 months or so than maybe what was contemplated back in May. So any
thoughts about that swap arrangement and making any changes there?
Question: Liam Coohill - Raymond James - Analyst
: It's Liam on for David. You guys have highlighted the intense rate competition on the lending side. You called out that one regional competitor
offering the four handle on the equipment loan. Is that who you're seeing the most competition from on both the loan and deposit side today?
And how difficult is deposit gathering given this intense loan growth?
Question: Liam Coohill - Raymond James - Analyst
: I appreciate the color there. And I'm excited to hear about the team lift out. What lending verticals do you expect them to focus on? And what are
some of the opportunities that you see in that particular market?
Question: Charles Driscoll - KBW - Analyst
: This is Charlie on for Kelly. You guys continue to build cash balances again this quarter. Just wondering if there's any updated message there
regarding any potential areas to deploy that? Are you kind of viewing it as dry powder for a seasonally strong Q4? Just any color on how you're
thinking of utilizing it?
E. Allen Nicholson - CVB Financial Corp - Executive Vice President, Chief Financial Officer of CVB Financial Corp and Citizens Business Bank
A couple of quick things. One, you're right. In the fourth-quarter, we'll see a fairly large increase in the dairy. We also see end of the quarter more
year-end versus quarterly average impact, but we do see deposit outflows for tax reasons and bonuses, et cetera. So we prepare for that.
But we will -- especially if the Fed continues to cut, we do evaluate where bond yields are. They're down from where we were buying early in the
quarter. But we may put some of that to work depending on how we look at the bond market in the quarter.
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