Executive Summary

Q4 delivered stable EPS of $0.36 (vs. $0.37 in Q3, $0.35 in Q4’23) with net interest margin expanding 13 bps sequentially to 3.18% on deliberate balance sheet deleveraging and lower funding costs; efficiency ratio was 47.34% and ROAA 1.30% .
Deposit mix and cost trended favorably: noninterest-bearing deposits were ~59% of total; cost of deposits fell to 0.93% and cost of funds to 1.13%; average deposits and repos rose $150M QoQ, though end-of-period deposits and repos fell $257M from Q3 .
Asset quality mixed: net recoveries continued, but nonperforming assets increased with $19.3M of OREO from foreclosures; management expects no losses on disposition of ~$19M OREO in Q1’25, a potential positive catalyst .
Capital remains a key support (CET1 16.2%, TCE 9.8%); Board authorized a 10 million share repurchase program (10b5-1) to be executed opportunistically alongside potential 2025 M&A .
Estimate comparisons: S&P Global consensus data were unavailable at time of analysis due to rate limits; we will update beat/miss analysis when available.

What Went Well and What Went Wrong

What Went Well

Net interest margin expanded to 3.18% (+13 bps QoQ) driven by a 34 bps decline in cost of funds following early redemption of $1.3B BTFP and lower deposit costs; management highlighted 13 bps NIM lift from deleveraging .
Deposit franchise resilience: noninterest-bearing deposits ~59% of total; average deposits and repos rose $150M QoQ; cost of deposits fell to 0.93% in Q4 from 0.98% in Q3 .
Strategic repositioning largely complete: two Q4 sale-leasebacks (+$16.8M gains) offset by AFS sales (−$16.7M loss); across H2’24, sold $467M of sub-3% AFS and purchased $385M >5% yielding securities, improving earning asset profile .

Management quote: “By redeeming this debt, we deleveraged our balance sheet… reducing interest expense by $15 million per quarter, driving a 13 basis point increase in our net interest margin” .

What Went Wrong

Loan balances continue to drift lower on subdued CRE demand and competitive pricing; loans declined $36M QoQ and $368M YoY, with CRE and construction leading the YoY decline .
Asset quality optics: nonperforming assets rose to $47.1M with $19.3M OREO primarily from foreclosures of previously nonperforming loans (optics negative despite expected no-loss outcome) .
Noninterest income still dampened by securities sale losses and lower BOLI income vs. prior year; Q4 noninterest income $13.1M vs. $19.2M in Q4’23 largely due to BOLI comp in prior-year quarter and restructuring effects .

Financial Results

Note: “Total revenue” computed as Net Interest Income + Noninterest Income from company statements.

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenue ($USD Thousands)	$138,519 (=$119,356+$19,163)	$126,453 (=$113,619+$12,834)	$123,521 (=$110,418+$13,103)
Net Interest Income ($USD Thousands)	$119,356	$113,619	$110,418
Noninterest Income ($USD Thousands)	$19,163	$12,834	$13,103
Noninterest Expense ($USD Thousands)	$65,930	$58,835	$58,480
Provision (Recapture) for Credit Losses ($USD Thousands)	$(2,000)	$0	$(3,000)
Net Earnings ($USD Thousands)	$48,508	$51,224	$50,858
Diluted EPS ($)	$0.35	$0.37	$0.36
Net Interest Margin (TE)	3.26%	3.05%	3.18%
ROAA (annualized)	1.19%	1.23%	1.30%
Efficiency Ratio	47.60%	46.53%	47.34%

KPIs and Balance Sheet

KPI	Q4 2023	Q3 2024	Q4 2024
Cost of Deposits	0.62%	0.98%	0.93%
Cost of Funds	1.09%	1.47%	1.13%
NIB Deposits (% of total)	63.03%	59.12%	58.90%
Deposits + Repos (EOP, $USD Thousands)	$11,705,284 (=$11,433,642+$271,642)	$12,467,004 (=$12,072,489+$394,515)	$12,210,268 (=$11,948,381+$261,887)
Loans EOP ($USD Thousands)	$8,904,910	$8,572,565	$8,536,432
CET1 Ratio	14.6%	15.8%	16.2%
TCE Ratio	8.5%	9.7%	9.8%
ACL / Loans	0.98%	0.97%	0.94%
NPA / Assets	0.13%	0.15%	0.31%
Net Recoveries to Avg Loans	-0.043%	0.002%	0.002%

Loan Mix (EOP balances)

Category	Q4 2023	Q3 2024	Q4 2024
Commercial Real Estate ($)	$6,784,505	$6,618,637	$6,507,452
Construction ($)	$66,734	$14,755	$16,082
SBA ($)	$270,619	$272,001	$273,013
Commercial & Industrial ($)	$969,895	$936,489	$925,178
Dairy & Agribusiness ($)	$412,891	$342,445	$419,904
SFR Mortgage ($)	$269,868	$267,181	$269,172
Gross Loans ($)	$8,904,910	$8,572,565	$8,536,432

Estimates vs. Actuals

S&P Global consensus estimates for Q4 2024 EPS and revenue were unavailable at time of analysis due to API rate limits; we will update beat/miss when accessible.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Deposit costs	Near-term 2025	Not explicitly guided	Expect slight further decline in non-maturity costs over next 1–2 months post-December Fed cut; then level if Fed holds; cost of total deposits ~0.90% in Dec run-rate	Qualitative reduction
Borrowings cost	2025	Not explicitly guided	Remaining $500M FHLB in “low 4s” (~4.25%)	Maintained/clarified
Expense growth (controllable)	2025	Not explicitly guided	Target below ~4%; ongoing tech investment to automate and improve efficiency	New qualitative target
Sale-leasebacks	2025	None stated	No additional sale-leaseback transactions contemplated; H2’24 program complete	Maintained (no further actions)
OREO disposition	Q1 2025	N/A	Expect no losses on sale of ~$19M OREO; multiple assets under contract/closing	New qualitative outlook
Capital deployment	2025	Prior authorization updated Nov-2024	10M share repurchase program (10b5-1) to be used opportunistically; M&A window constructive but disciplined on pricing	Authorization and framework reaffirmed

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Balance sheet deleveraging/BTFP	Q3: Early redemption of $1.3B BTFP in September; deleveraging underway	NIM +13 bps QoQ from lower funding costs; average borrowings −$1.2B QoQ	Improving NIM trajectory
Deposit mix/costs	Q2–Q3: NIB ~60%; cost of deposits rose to 0.88%–0.98%	NIB ~59%; cost of deposits 0.93%; mgmt sees incremental reductions near-term	Slight improvement
Securities/hedging	Q3: Sold $312M AFS (−$11.6M), sale-leaseback gains $9.1M; positive swap carry	Q4: Sold $155M AFS (−$16.7M), gains $16.8M; terminated $300M swap; still earning positive but lower swap carry	Portfolio positioned higher-yield; hedge carry declining
Loan growth and pricing	Q2–Q3: Loans declining; CRE demand soft; competitive pricing	Pipelines improving; new CRE originations ~6.5–6.75%; intense competitive pricing; discipline emphasized	Early signs of recovery, pricing pressure
Asset quality	Q2–Q3: NPLs/NPAs rising from low base; classified loan fluctuations	NPA up to $47.1M with $19.3M OREO; mgmt expects no losses on sales in Q1’25	Stabilization expected post-OREO sales
Capital & buybacks/M&A	Q3: Strong capital, no buybacks YTD	CET1 16.2%; 10M buyback authorized; exploring 2025 M&A window with discipline	Optionality increasing
Technology/efficiency	Q2–Q3: Efficiency ratio ~45–47% with ongoing software spend	Continued investment to automate; keep controllable expense growth <4%	Continuous improvement
Regional macro (wildfires)	—	Limited direct credit impact; supporting communities; potential deposit/commercial activity tailwinds from rebuild	Manageable; potential upside

Management Commentary

Strategy and capital: “We recognize we have an enormous amount of capital… we want to be able to grow internally… conversations [on M&A] have definitely picked up… we should be able to execute on something in 2025… [and] we have enough capital to do M&A and buybacks” .
Deleveraging benefits: “We… reduced interest expense by $15 million per quarter, driving a 13 basis point increase in our net interest margin for the fourth quarter” .
Portfolio repositioning: “Over the third and fourth quarters… sold $467 million of low-yielding AFS securities and purchased $385 million of new investments with current yields in excess of 5%” .
Loan outlook and pricing: “Pipelines are improving… we’ll be able to execute on loan growth… new CRE loans ~6.5%–6.75%; we will be smart [given] irrational pricing in the market” .
Expenses and technology: “From a controllable expense perspective… growing about 4%… goal is to keep it below that… invest in technology… to automate and improve overall efficiencies” .

Q&A Highlights

Loan demand and 2025 outlook: Management senses improving client optimism; expects ability to execute on loan growth though pipelines not yet at desired levels .
Capital deployment: Balanced approach to internal growth, disciplined M&A, and opportunistic buybacks under the 10b5-1 plan; ready to pursue both buybacks and M&A .
Deposit costs trajectory: Non-maturity costs likely to drift lower near-term post-December Fed cut; time deposits more static; deposit cost mix benefits from stable NIB share .
Expense outlook: Aim to keep controllable cost growth below ~4% while investing in incremental automation and efficiency .
Portfolio actions: No additional sale-leasebacks planned; H2’24 restructuring largely complete .
Wildfire impact: Limited direct credit exposure with insurance coverage; potential rebuild activity could support deposits and business flows .

Estimates Context

S&P Global (Capital IQ) consensus estimates for Q4 2024 EPS and revenue were unavailable at time of analysis due to API rate limits. We will update the beat/miss assessment and any variance analytics as soon as the data can be retrieved from S&P Global.

Key Takeaways for Investors

NIM trajectory turning: deleveraging and lower funding costs expanded NIM +13 bps QoQ to 3.18%, positioning for incremental spread resilience if deposit costs continue to ease modestly .
Core funding strength: ~59% NIB with declining deposit costs supports margin durability even as asset yields dipped (loan yields −16 bps QoQ) .
Asset quality optics vs. economics: OREO inflates NPAs, but management expects no losses on sales in Q1’25—resolution could be a short-term sentiment catalyst if realized .
Loan growth watch: Balances fell again, but management cites improving pipelines; we’d monitor CRE competitiveness and price discipline versus peers .
Capital optionality: CET1 16.2% and a 10 million share buyback authorization provide tangible levers alongside selective 2025 M&A—potential share count and EPS support on pullbacks .
Portfolio repositioning: Replacing low-yield AFS with >5% securities should aid run-rate NII; hedge income tailwind is moderating as swaps roll off .
Near-term catalysts: OREO sales execution, buyback activity on volatility, deposit cost glide, and any M&A developments; risks include competitive loan pricing and macro/CRE headwinds .

Supporting Documents

Q4 2024 8-K and earnings release: net income, EPS, NIM, efficiency, deposits, loans, capital, and asset quality details .
Q4 2024 earnings call transcript: strategic remarks on deleveraging, deposit costs, loan pipelines/pricing, expense/tech investments, M&A/buybacks, wildfire impact .
Prior quarters for trend: Q3 2024 and Q2 2024 press releases (NIM, deposits, sale-leasebacks, BTFP redemption) .
Share repurchase authorization press release (Nov 21, 2024) .

CVB FINANCIAL CORP (CVBF)·Q4 2024 Earnings Summary