CVB Financial Corporation

Good morning, ladies and gentlemen, and welcome to the first quarter of 2026 Earnings Conference Call for CVB Financial Corporation and its subsidiary, Citizens Business Bank. My name is Cherie, and I'm your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer period. Please note that this call is being recorded. I would now like to turn the presentation over to your host for today's call. Alan Nicholson, Executive Vice President and Chief Financial Officer. You may proceed.

Thank you, Cherie, and good morning, everyone. Thank you for joining us today to review our financial results for the first quarter of 2026. Joining me this morning is our Chief Executive Officer, Dave Rager, and our President, Clay Jones. Our comments today will refer to the financial information that was included in the earnings announcement released yesterday. To obtain a copy, please visit our website at www.cbbank.com and click on the Investors tab. The speakers on this call claim the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. For more complete discussion of the risks and uncertainties that may cause actual results to differ materially from our forward-looking statements, please see the company's annual report on Form 10-K for the year ended December 31st, 2025. And in particular, the information set forth in Item 1-A, risk factors therein. For a more complete version of the company's safe harbor disclosure, please see the company's earnings release issued in connection with this call. I'll now turn the call over to Dave Greger. Dave? Thank you, Alan.

Good morning, everyone. For the first quarter of 2026, we reported net earnings of $51 million, or 38 cents per share, representing our 196th consecutive quarter of profitability, which is every quarter for 49 years. We previously declared a 20 cents per share dividend for the first quarter of 2026, representing our 146th consecutive quarter of paying a cash dividend to our shareholders. We produced a return on average tangible common equity of 13.4% and a return on average assets of 1.33% for the first quarter of 2026. Our net earnings of $51 million, or 38 cents per share, compares with $55 million for the fourth quarter of 2025, or 40 cents per share, and $51.1 million, or 36 cents per share, for the prior year quarter. Results of the first quarter of 2026 reflect solid growth year-over-year across several financial metrics, including pre-tax, pre-provision income growth, net interest margin expansion, loan growth, and growth in deposits and customer repurchase agreements. Pre-tax, pre-provision income grew by $4 million, or 6%, over the first quarter of 2025. Our net interest margin expanded by 13 basis points over the prior year quarter to 3.44% as our earning asset yields increased by 7 basis points, while our cost of funds decreased by 7 basis points. Average loans grew by $157 million, or approximately 2%, from the first quarter of 2025. We also increased our average total deposits and customer repurchase agreements by $288 million or 2.4% from the first quarter of 2025. Now, let's discuss loans further. Total loans at March 31st, 2026 were $8.64 billion, a $280 million or 3.3% increase from the end of the first quarter of 2025. This increase was driven primarily by growth in commercial real estate loans of $141 million, a $62 million increase in dairy and livestock and agribusiness loans, and a $43 million increase in construction loans. We also had $34 million of growth in SBA 504 loans and CNI loan outstandings increased by $10 million over the prior year. Total loans declined by $56 million from the end of 2025, as dairy and livestock and agribusiness loans declined by $117 million due to the seasonal peak in line usage that occurs every calendar year end. This seasonal decline is evident by the decrease in line utilization rate from 78% at the end of 2025 to 69% at March 31, 2026. CNI loans decreased quarter over quarter by $21 million as line utilization decreased from 32% at the end of 2025 to 30% at the end of the first quarter of 2026. Partially offsetting the decline in line usage from the end of 2025 was commercial real estate loan growth of $57 million, SBA 504 loan growth of $13 million, and construction loans increasing by $22 million. Loan originations have started off the year at a strong pace, as originations for the first quarter of 2026 were approximately 90% higher than the first quarter of 2025 and 15% higher than the fourth quarter of 2025. Our loan pipelines remain relatively strong, although rate competition for high-quality loans continues to be intense. CNI loan originations have stayed relatively consistent over the past five quarters, but commercial real estate loan originations have been strengthening. Loan originations in the first quarter had average yields of approximately 6%, which was roughly 25 basis points lower than the prior quarter. Our average loan yield was 5.32% for the first quarter of 2026 compared to 5.47% for the fourth quarter of 2025 and 5.22% for the first quarter of 2025. During the fourth quarter of 2025, we collected $3.2 million of interest on a non-performing loan. Excluding this additional interest income, our loan yield would have been 5.32% for the fourth quarter of 2025. We experienced $9,000 of net recoveries during the first quarter of 2026 compared to $325,000 of net recoveries for the fourth quarter of 2025. Total non-performing loans increased by $1.5 million to $6.1 million at March 31, 2026, which represents 0.07% of total loans. The increase is primarily due to the downgrade of a $2.9 million CNI loan for which we established a specific reserve in our allowance for credit losses. Classified loans were $83.1 million at March 31, 2026, compared to $52.7 million at December 31, 2025, and $94.2 million at March 31, 2025. Classified loans as a percentage of total loans were less than 1% at March 31, 2026. Now, on to deposits. Our average total deposits and customer repurchase agreements for the first quarter of 2026 were $12.5 billion, which compares to $12.2 billion for the first quarter of 2025 and $12.6 billion during the fourth quarter of 2025. our non-interest bearing deposits declined on average by $112 million compared to the first quarter of 2025 and by $107 million compared to the fourth quarter of 2025. On average, non-interest bearing deposits were 58% of total deposits for both the first quarter of 2026 and the fourth quarter of 2025 compared to 59% for the first quarter of 2025. Interest-bearing non-maturity deposits and customer repurchase agreements grew on average by $400 million from the first quarter of 2025. Our cost of deposits and repos was 82 basis points for the first quarter of 2026 compared to 86 basis points for the fourth quarter of 2025 and 87 basis points for the year-ago quarter. I will now turn the call over to Alan to further discuss additional aspects of our balance sheet and income.