CVB Financial Corp. Reports Record Second Quarter Earnings for 2011

ONTARIO, Calif.--(BUSINESS WIRE)--

CVB Financial Corp. CVBF and its subsidiary, Citizens Business Bank (“the Company”), announced record earnings for the second quarter of 2011.

CVB Financial Corp. reported net income of $21.0 million for the second quarter of 2011. This figure represents the highest earnings in company history for a fiscal quarter. Earnings increased $2.0 million, or 10.64%, when compared with net income of $19.0 million for the second quarter of 2010. Diluted earnings per share were $0.20 for the second quarter of 2011. This was up $0.02, or 11.11%, from diluted earnings per share of $0.18 for the same period last year.

Second quarter 2011 operating results included $5.7 million in interest income from accelerated accretion on loans from our FDIC assisted acquisition of San Joaquin Bank (SJB), a $1.7 million reduction in other operating income from the decrease in the FDIC loss sharing asset, and zero provision for credit losses.

Chris Myers, President and CEO, commented, “We are extremely proud of our strong financial results for the quarter. We have made significant progress in reducing our non-performing assets from $162.3 million at December 31, 2010 to $88.8 million at June 30, 2011. In addition, our non-interest bearing deposits continued to grow and now represent over 42% of total deposits.”

Net income for the second quarter of 2011 produced an annualized return on beginning equity of 12.69%, an annualized return on average equity of 12.67% and an annualized return on average assets of 1.31%. The efficiency ratio, excluding the provision for credit losses, was 54.33% for the quarter. Operating expenses as a percentage of average assets were 2.32%.

Net income for the six months ending June 30, 2011 was $37.6 million. This represents an increase of $2.5 million, or 7.13%, when compared with net income of $35.1 million for the same period of 2010. Diluted earnings per share for the six months ending June 30, 2011 were $0.35, an increase of $0.02, or 6.06%, over diluted earnings per share of $0.33 for the same period last year. Operating results for the first six months of 2011 include a provision for credit losses of $7.1 million. Net income for the six months ending June 30, 2011 produced a return on beginning equity of 11.26%, a return on average equity of 11.52% and a return on average assets of 1.17%.

Interest income and fees on loans for the second quarter of 2011 totaled $54.7 million, which includes $5.7 million of discount accretion from accelerated principal reductions on covered loans acquired from SJB. Excluding the discount accretion, interest income and fees on loans would have been $49.0 million for the second quarter of 2011. This represents a decrease of $5.7 million, or 10.42%, when compared to interest income and fees on loans of $54.7 million for the same period last year.

In addition to the yield adjustment to interest income of $5.7 million for the second quarter of 2011, we calculated a $1.7 million net decrease in the FDIC loss sharing asset as a result of lower estimated losses and offset by expenses to be recovered under our loss sharing agreement with the FDIC. In the quarter ended June 30, 2011, we received $7.4 million from the FDIC from previously submitted loss claims. The $1.7 million decrease in the FDIC loss sharing asset is included in other operating income.

Net Interest Income and Net Interest Margin

Net interest income, before the provision for credit losses, totaled $62.4 million for the three months ending June 30, 2011. Net interest income for the second quarter of 2011 decreased $1.8 million, or 2.83%, compared to the same period in 2010.

Excluding the impact of the yield adjustment on covered loans, net interest margin (tax equivalent) increased from 3.80% for the second quarter of 2010 to 3.92% for the second quarter of 2011. Total average earning asset yields decreased from 5.17% for the second quarter of 2010 to 4.95% for the second quarter of 2011. Total cost of funds decreased from 1.04% for the second quarter of 2010 to 0.61% for the second quarter of 2011.

Assets

The Company reported total assets of $6.46 billion at June 30, 2011. This represents an increase of $23.5 million, or 0.37%, from total assets of $6.44 billion at December 31, 2010. Earning assets (excluding the allowance for loan and lease losses) totaling $6.00 billion decreased $19.2 million, or 0.32%, when compared with earning assets of $6.02 billion at December 31, 2010.

Investment Securities

Investment securities totaled $1.98 billion at June 30, 2011. This is up from $1.79 billion at December 31, 2010. Our investment portfolio continues to perform well. As of June 30, 2011 we had a pretax unrealized gain of $43.4 million of which $20.0 million is in our municipal securities portfolio. We have no preferred stock nor trust preferred securities in our portfolio.

Virtually all of our mortgage-backed securities (“MBS”) are issued by Freddie Mac or Fannie Mae, which have the guarantee of the U.S. Government. We have one private-label mortgage-backed security that is impaired. This Alt-A bond, with a book value of $2.8 million as of June 30, 2011, has had $1.4 million in net impairment losses to date since it was purchased in early 2008, with a $119,000 impairment recorded in the second quarter of 2011.

Our municipal securities, totaling $631.0 million, are diversified among 607 individual issues and located in 30 states, with 6.0% located within the state of California. Our largest holdings are in New Jersey at 14.6%, Illinois at 12.4% and Michigan at 12.0%. All municipal bond securities are performing.

We continue to reinvest our cash flows from the investment portfolio. During the second quarter we purchased $20.7 million in MBS with an average yield of 2.98% and $13.9 million in municipal securities with an average yield of 5.44%. MBS purchased in the second quarter have an average duration of about 3.5 years as our purchasing strategy is to minimize extension risk as interest rates rise.

Loans

Total loans and leases of $3.53 billion at June 30, 2011 decreased by $216.8 million, or 5.78%, from $3.75 billion at December 31, 2010. We attribute a significant portion of the decrease to the following:

• $79.3 million to the non-covered dairy and livestock portfolio.
• $42.9 million in note sales related to our former largest borrower.
• $39.8 million from working down problem assets acquired from SJB.

We also experienced a $33.8 million decline in non-covered construction loans and a $18.9 million decline in purchased mortgage pools. The non-covered construction loans and purchased mortgage pools are considered non-core lending niches. Our core lending strategy is focused on commercial & industrial business lending, dairy and livestock lending, agribusiness lending and commercial real estate loans.

We continue to see only moderate loan demand in our market areas as a result of the weakness in the state and local economies. Many of our business owner clients are hesitating to invest in new equipment, buildings, or employees until they see stronger signs of economic recovery and stability.

Deposits & Customer Repurchase Agreements

Total deposits of $4.50 billion and customer repurchase agreements of $535.4 million totaled $5.04 billion at June 30, 2011. This represents a decrease of $21.3 million, or 0.42%, when compared with total deposits and customer repurchase agreements of $5.06 billion at December 31, 2010.

Non-interest bearing deposits were $1.89 billion at June 30, 2011, an increase of $193.0 million, or 11.34%, from $1.70 billion at December 31, 2010. At June 30, 2011, non-interest bearing deposits were 42.06% of total deposits, up from 37.65% at December 31, 2010 and 35.79% at June 30, 2010.

Our cost of total deposits was 0.20% for the three months ending June 30, 2011, compared to our cost of total deposits of 0.43% for the same period last year. Our cost of total deposits including customer repurchase agreements was 0.22% for the three months ending June 30, 2011, compared to 0.45% for the same period last year.

Borrowings

At June 30, 2011, we had $553.5 million in borrowings, compared to borrowings of $553.4 million at December 31, 2010 and $653.3 million at June 30, 2010. The $99.8 million decrease from June 30, 2010 was primarily due to a $100 million prepayment of FHLB borrowings in the third quarter of 2010.

Asset Quality

The FDIC and the California Department of Financial Institutions completed the field portion of their annual Safety and Soundness Examination in mid-July.

We have separated the discussion of asset quality into two sections: non-covered loans and covered loans. The non-covered loans represent the legacy Citizens Business Bank loans and exclude all loans acquired in the 2009 SJB acquisition. The SJB loans were marked to fair value at the acquisition date and are “covered” loans as defined in the loss sharing agreement with the FDIC.

Citizens Business Bank Asset Quality (Non-covered loans)

The allowance for credit losses decreased from $105.3 million as of December 31, 2010 to $96.9 million as of June 30, 2011. The decrease was due to net loan charge-offs of $15.4 million, offset by a $7.1 million provision for credit losses during the first six months of 2011. The allowance for credit losses was 3.04% and 3.12% of total non-covered loans and leases outstanding as of June 30, 2011 and December 31, 2010, respectively.

There was zero provision for credit losses for the second quarter of 2011.

We had $75.1 million in non-performing loans at June 30, 2011, or 2.35% of total non-covered loans. This compares to non-performing loans of $157.0 million at December 31, 2010. The non-performing loans for the second quarter are summarized as follows: $24.0 million in commercial construction, $17.8 million in residential mortgages, $24.7 million in commercial real estate, $2.7 million in dairy loans, and $5.9 million in all other loans.

At June 30, 2011, we had $13.7 million in Other Real Estate Owned (“OREO”), an increase of $8.4 million from OREO of $5.3 million at December 31, 2010. At December 31, 2010, we had three OREO properties. During the first six months of 2011, we added nine properties for a total of $11.1 million to OREO. We sold two properties with an OREO value of $2.6 million for cash proceeds of $2.5 million. We now have ten OREO properties.

At June 30, 2011, we had loans delinquent 30 to 89 days of $3.9 million. This compares to delinquent loans of $3.6 million at March 31, 2011 and $9.1 million at December 31, 2010. As a percentage of total loans, delinquencies, excluding non-accruals, were 0.12% at June 30, 2011, 0.11% at March 31, 2011, and 0.27% at December 31, 2010. All loans delinquent 90 days or more were categorized as non-performing.

At June 30, 2011, we had $32.8 million in performing troubled debt restructured loans (“TDRs”), an increase of $19.5 million from performing TDRs of $13.3 million at December 31, 2010. At December 31, 2010, we had five performing TDRs and eleven at June 30, 2011. $17.1 million of the $19.5 million increase in performing TDRs is due to two commercial real estate loans that emerged out of bankruptcy court and are now paying in accordance with the terms approved by the court.

In total, non-performing assets, defined as non-covered non-accrual loans plus OREO, have decreased substantially and were $88.8 million at June 30, 2011, $114.4 million at March 31, 2011, and $162.3 million at December 31, 2010.

We have made substantial progress in reducing our classified loans. At June 30, 2011, classified loans were $445.3 million, $588.7 million at March 31, 2011, and $654.1 million at December 31, 2010.

San Joaquin Bank Asset Quality (Covered loans)

At June 30, 2011, we had $407.7 million in gross loans from SJB with a carrying value of $334.2 million, compared to $488.8 million of gross loans at December 31, 2010 and $374.0 million in carrying value. Of the gross loans, we have $104.5 million in loans 90 days or more past due as of June 30, 2011, or 25.6%, compared to $133.1 million in loans 90 days or more past due at December 31, 2010. We have 20 properties in OREO totaling $13.3 million compared to 17 properties totaling $11.3 million at December 31, 2010.

CitizensTrust

CitizensTrust has approximately $2.2 billion in assets under administration, including $1.2 billion in assets under management, as of June 30, 2011. This compares with $2.1 billion in assets under administration, including $1.1 billion in assets under management, at December 31, 2010. Revenues from CitizensTrust were $4.4 million and $4.3 million for six months ended June 30, 2011 and 2010, respectively. CitizensTrust provides trust, investment and brokerage related services, as well as financial, estate and business succession planning.

Conference Call

Management will hold a conference call at 8:30 a.m. Pacific time/11:30 a.m. Eastern time on Thursday, July 21^st (tomorrow) to discuss the Company's second quarter 2011 financial results.

To listen to the conference call, please dial (877) 317-6789. A taped replay will be made available approximately one hour after the conclusion of the call and will remain available through July 29, 2011 at 9:00 a.m. To access the replay, please dial (877) 344-7529, passcode 10001742.

The conference call will also be simultaneously webcast over the Internet. Please visit the Company's website at www.cbbank.com and click on the CVB Investor tab to access the call from the site. Access the website 15 minutes prior to the call to download any necessary audio software. This webcast will be recorded and available for replay on the Company's website approximately two hours after the conclusion of the conference call, and will be available on the website for twelve months.

Corporate Overview

CVB Financial Corp. is the holding company for Citizens Business Bank, a financial services company based in Ontario, California. Citizens Business Bank serves 41 cities with 43 business financial centers and five commercial banking centers in the Inland Empire, Los Angeles County, Orange County and the Central Valley areas of California.

Shares of CVB Financial Corp. common stock are listed on the NASDAQ under the ticker symbol of CVBF. For investor information on CVB Financial Corp., visit our Citizens Business Bank website at www.cbbank.com and click on the CVB Investor tab.

Safe Harbor

Certain matters set forth herein (including the exhibits hereto) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company's current business plan and expectations regarding future operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, local, regional, national and international economic conditions and events and the impact they may have on us and our customers; ability to attract deposits and other sources of liquidity; oversupply of inventory and continued deterioration in values of California real estate, both residential and commercial; a prolonged slowdown in construction activity; changes in the financial performance and/or condition of our borrowers; changes in the level of non-performing assets and charge-offs; ability to repurchase our securities issued to the U.S. Treasury pursuant to its Capital Purchase Program; the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, executive compensation and insurance) with which we and our subsidiaries must comply; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; inflation, interest rate, securities market and monetary fluctuations; political instability; acts of war or terrorism, or natural disasters, such as earthquakes, or the effects of pandemic flu; the timely development and acceptance of new banking products and services and perceived overall value of these products and services by users; changes in consumer spending, borrowing and savings habits; technological changes; the ability to increase market share and control expenses; changes in the competitive environment among financial and bank holding companies and other financial service providers; continued volatility in the credit and equity markets and its effect on the general economy; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; changes in our organization, management, compensation and benefit plans; the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; our success at managing the risks involved in the foregoing items and other factors set forth in the Company's public reports including its Annual Report on Form 10-K for the year ended December 31, 2010, and particularly the discussion of risk factors within that document. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by law.

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(unaudited)
dollars in thousands
						June 30,												December 31,
						2011						2010						2010
Assets:
Cash and due from banks						$	102,600					$	56,342					$	67,279
Interest-bearing balances due from Federal Reserve							304,131						394,704						286,769
Interest-bearing balances due from depository institutions							50,344						50,274						50,227
Total cash and cash equivalents							457,075						501,320						404,275
Interest-bearing balances due from depository institutions							50,190						190						50,190
Investment Securities available-for-sale							1,978,997						2,011,492						1,791,558
Investment Securities held-to-maturity							2,814						3,173						3,143
Investment in stock of Federal Home Loan Bank (FHLB)							79,744						93,962						86,744
Loans held-for-sale							7,341						2,554						2,954
Loans and lease finance receivables							3,526,596						3,929,321						3,747,740
Less allowance for credit losses							(96,895	)					(118,548	)					(105,259	)
Net loans and lease finance receivables							3,429,701						3,810,773						3,642,481
Premises and equipment, net							38,019						42,585						40,921
Intangibles							7,262						10,872						9,029
Goodwill							55,097						55,097						55,097
Cash value of life insurance							114,766						111,385						112,901
FDIC loss sharing asset							72,007						111,992						101,461
Other assets							167,180						105,001						135,937
TOTAL						$	6,460,193					$	6,860,396					$	6,436,691
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Demand Deposits (noninterest-bearing)						$	1,894,558					$	1,646,717					$	1,701,523
Investment Checking							340,645						448,567						384,674
Savings/MMDA							1,381,712						1,307,002						1,342,758
Time Deposits							887,356						1,199,204						1,089,873
Total Deposits							4,504,271						4,601,490						4,518,828
Demand Note to U.S. Treasury							2,483						2,611						1,917
Customer Repurchase Agreements							535,420						745,661						542,188
Borrowings							553,526						653,254						553,390
Junior Subordinated Debentures							115,055						115,055						115,055
Other liabilities							65,753						68,341						61,458
Total Liabilities							5,776,508						6,186,412						5,792,836
Stockholders' equity:
Stockholders' equity							658,519						631,063						637,670
Accumulated other comprehensive income, net of tax							25,166						42,921						6,185
							683,685						673,984						643,855
TOTAL						$	6,460,193					$	6,860,396					$	6,436,691

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEET
(unaudited)
dollars in thousands
				Three months ended June 30,												Six months ended June 30,
				2011						2010						2011						2010
Assets:
Cash and due from banks				$	98,325					$	101,453					$	103,595					$	99,038
Interest-bearing balances due from Federal Reserve					259,171						311,154						294,887						239,809
Federal funds sold and Interest-bearing balances due from depository institutions					50,307						50,032						50,278						25,430
Total cash and cash equivalents					407,803						462,639						448,760						364,277
Interest-bearing balances due from depository institutions				$	50,190					$	190					$	50,190					$	579
Investment securities available-for-sale					1,966,753						2,022,697						1,911,914						2,059,585
Investment securities held-to-maturity					2,941						3,303						2,970						3,480
Investment in stock of Federal Home Loan Bank (FHLB)					81,547						95,792						84,055						96,682
Loans held-for-sale					2,639						1,055						3,047						1,596
Loans and lease finance receivables					3,559,541						3,937,448						3,618,735						3,974,467
Less allowance for credit losses					(102,996	)					(117,368	)					(106,415	)					(115,960	)
Net loans and lease finance receivables					3,456,545						3,820,080						3,512,320						3,858,507
Premises and equipment, net					38,933						41,907						39,738						41,671
Intangibles					7,629						11,285						8,073						11,758
Goodwill					55,097						55,097						55,097						55,097
Cash value of life insurance					114,320						110,877						113,767						110,332
FDIC loss sharing asset					78,275						117,467						84,183						125,261
Other assets					169,965						123,816						162,738						123,220
TOTAL				$	6,432,637					$	6,866,205					$	6,476,852					$	6,852,045
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing				$	1,852,954					$	1,621,507					$	1,822,068					$	1,598,199
Interest-bearing					2,637,536						2,922,559						2,705,203						2,913,978
Total Deposits					4,490,490						4,544,066						4,527,271						4,512,177
Other borrowings					1,097,416						1,485,896						1,115,864						1,513,045
Junior Subordinated Debentures					115,055						115,055						115,055						115,055
Other liabilities					63,570						54,589						59,652						53,874
Total Liabilities					5,766,531						6,199,606						5,817,842						6,194,151
Stockholders' equity:
Stockholders' equity					657,186						633,367						651,436						628,027
Accumulated other comprehensive income, net of tax					8,920						33,232						7,574						29,867
					666,106						666,599						659,010						657,894
TOTAL				$	6,432,637					$	6,866,205					$	6,476,852					$	6,852,045

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
dollar amounts in thousands, except per share
				For the Three Months												For the Six Months
				Ended June 30,												Ended June 30,
				2011						2010						2011						2010
Interest Income:
Loans held-for-sale				$	10					$	15					$	29					$	33
Loans and leases, including fees					48,980						54,684						98,325						109,056
Accelerated accretion on acquired loans					5,707						4,473						7,658						17,851
Total loans and leases, including fees					54,697						59,172						106,012						126,940
Investment securities:
Taxable					10,152						14,391						18,990						30,475
Tax-advantaged					5,921						6,409						11,840						12,941
Total investment income					16,073						20,800						30,830						43,416
Dividends from FHLB Stock					66						63						131						129
Federal funds sold & Interest-bearing CDs					346						238						721						340
Total interest income					71,182						80,273						137,694						170,825
Interest Expense:
Deposits					2,220						4,841						5,008						10,129
Borrowings and junior subordinated debentures					6,567						11,218						13,182						23,143
Total interest expense					8,787						16,059						18,190						33,272
Net interest income before provision for credit losses					62,395						64,214						119,504						137,553
Provision for credit losses					-						11,000						7,068						23,200
Net interest income after provision for credit losses					62,395						53,214						112,436						114,353
Other Operating Income:
Impairment loss on investment securities					(119	)					-						(119	)					(98	)
Loss reclassified to/(from) other comprehensive income					-						-						-						(587	)
Net impairment loss on investment securities recognized in earnings					(119	)					-						(119	)					(685	)
Service charges on deposit accounts					4,029						4,196						7,752						8,461
Trust and investment services					2,259						2,209						4,412						4,327
Gain on sale of investment securities					-						8,781						-						8,781
Increase (reduction) in FDIC loss sharing asset					(1,689	)					(1,587	)					(274	)					(12,170	)
Other					1,514						1,819						4,201						4,493
Total other operating income					5,994						15,418						15,972						13,207
Other operating expenses:
Salaries and employee benefits					18,220						17,479						35,880						35,552
Occupancy					2,742						2,947						5,573						6,081
Equipment					1,339						1,835						2,829						3,754
Professional services					5,028						2,881						8,637						5,688
Amortization of intangible assets					866						939						1,767						1,889
Provision for unfunded commitments					-						450						732						1,700
OREO Expense					1,671						654						2,776						667
Other					7,289						14,262						15,266						22,038
Total other operating expenses					37,155						41,447						73,460						77,369
Earnings before income taxes					31,234						27,185						54,948						50,191
Income taxes					10,196						8,170						17,310						15,057
Net earnings					21,038						19,015						37,638						35,134
Allocated to restricted stock					82						64						148						119
Net earnings allocated to common shareholders				$	20,956					$	18,951					$	37,490					$	35,015
Basic earnings per common share				$	0.20					$	0.18					$	0.35					$	0.33
Diluted earnings per common share				$	0.20					$	0.18					$	0.35					$	0.33
Cash dividends per common share				$	0.085					$	0.085					$	0.17					$	0.17

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
				Three months ended June 30,												Six months ended June 30,
				2011						2010						2011						2010
Interest income - (Tax-Effected) (te)				$	73,652					$	82,915					$	142,634					$	176,150
Interest Expense					8,787						16,059						18,190						33,272
Net Interest income - (te)				$	64,865					$	66,856					$	124,444					$	142,878
Return on average assets, annualized					1.31	%					1.11	%					1.17	%					1.03	%
Return on average equity, annualized					12.67	%					11.44	%					11.52	%					10.77	%
Efficiency ratio					54.33	%					60.39	%					57.21	%					60.65	%
Yield on average earning assets					4.95	%					5.17	%					4.78	%					5.75	%
Cost of deposits					0.20	%					0.43	%					0.22	%					0.45	%
Cost of deposits and customer repurchase agreements					0.22	%					0.45	%					0.24	%					0.48	%
Cost of funds					0.61	%					1.04	%					0.63	%					1.08	%
Net interest margin (te)					4.37	%					4.18	%					4.17	%					4.67	%
Net interest margin (te) excluding discount					3.92	%					3.80	%					3.85	%					3.97	%
Weighted average shares outstanding
Basic					105,659,326						105,988,971						105,655,290						105,961,239
Diluted					105,763,588						106,272,867						105,733,814						106,231,807
Dividends declared				$	9,017					$	9,041					$	18,034					$	18,076
Dividend payout ratio					42.86	%					47.55	%					47.91	%					51.45	%
Number of shares outstanding-EOP					106,084,192						106,435,754
Book value per share				$	6.44					$	6.33
Tangible Book value per share				$	5.86					$	5.71
				June 30,
				2011						2010
(Non-covered loans)
Non-performing Assets (dollar amount in thousands):
Non-accrual loans				$	75,050					$	82,850
Loans past due 90 days or more and still accruing interest					-						-
Other real estate owned (OREO), net					13,718						15,001
Total non-performing assets				$	88,768					$	97,851
Percentage of non-performing assets to total loans outstanding and OREO					2.77	%					2.78	%
Percentage of non-performing assets to total assets					1.37	%					1.43	%
Allowance for loan losses to non-performing assets					109.16	%					121.15	%
Net Charge-offs to Average loans					0.47	%					0.38	%
Allowance for Credit Losses:
Beginning Balance				$	105,259					$	108,924
Total Loans Charged-Off					(16,644	)					(13,771	)
Total Loans Recovered					1,212						195
Net Loans Charged-off					(15,432	)					(13,576	)
Provision Charged to Operating Expense					7,068						23,200
Allowance for Credit Losses at End of period				$	96,895					$	118,548

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(unaudited)
Quarterly Common Stock Price
						2011														2010														2009
Quarter End						High							Low							High							Low							High							Low
March 31,						$	9.32						$	7.83						$	10.89						$	8.44						$	12.11						$	5.31
June 30,						$	9.94						$	8.18						$	11.85						$	9.00						$	7.77						$	5.69
September 30,																				$	10.99						$	6.61						$	8.70						$	4.90
December 31,																				$	9.09						$	7.30						$	9.00						$	6.93

Quarterly Consolidated Statements of Earnings
						2Q							1Q							4Q							3Q							2Q
						2011							2011							2010							2010							2010
Interest income
Loans, including fees						$	54,697						$	51,315						$	55,621						$	58,165						$	59,172
Investment securities and other							16,485							15,197							14,370							18,308							21,101
							71,182							66,512							69,991							76,473							80,273
Interest expense
Deposits							2,220							2,788							3,814							4,310							4,841
Other borrowings							6,567							6,615							7,028							9,548							11,218
							8,787							9,403							10,842							13,858							16,059
Net interest income before provision for credit losses							62,395							57,109							59,149							62,615							64,214
Provision for credit losses							-							7,068							12,700							25,300							11,000
Net interest income after
provision for credit losses							62,395							50,041							46,449							37,315							53,214
Non-interest income							5,994							9,978							7,188							36,719							15,418
Non-interest expenses							37,155							36,305							41,805							49,318							41,447
Earnings before income taxes							31,234							23,714							11,832							24,716							27,185
Income taxes							10,196							7,114							1,958							6,789							8,170
Net earnings							21,038							16,600							9,874							17,927							19,015
Allocated to restricted stock							82							66							41							58							64
Net earnings allocated to common shareholders						$	20,956						$	16,534						$	9,833						$	17,869						$	18,951
Basic earning per common share						$	0.20						$	0.16						$	0.09						$	0.17						$	0.18
Diluted earnings per common share						$	0.20						$	0.16						$	0.09						$	0.17						$	0.18
Cash dividends per common share						$	0.085						$	0.085						$	0.085						$	0.085						$	0.085
Dividends Declared						$	9,017						$	9,017						$	9,016						$	9,011						$	9,041

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
Distribution of Loan Portfolio
				6/30/2011						3/31/2011						12/31/2010						9/30/2010						6/30/2010
Commercial and Industrial				$	500,746					$	490,316					$	499,986					$	509,502					$	513,483
Real Estate:
Construction					119,637						169,562						223,478						280,756						305,724
Commercial Real Estate					2,237,975						2,255,247						2,272,270						2,280,861						2,321,257
SFR Mortgage					201,457						210,445						224,325						238,179						254,499
Consumer					59,496						61,622						67,371						71,487						73,342
Municipal lease finance receivables					119,792						122,897						129,128						149,584						154,042
Auto and equipment leases					16,998						17,399						17,982						20,658						23,754
Dairy and Livestock					296,801						325,052						376,143						359,778						378,785
Agribusiness					52,528						49,664						57,304						61,206						69,663
Gross Loans					3,605,430						3,702,204						3,867,987						3,972,011						4,094,549
Less:
Purchase Accounting Discount					(73,449	)					(98,117	)					(114,763	)					(143,752	)					(159,393	)
Deferred net loan fees					(5,385	)					(5,640	)					(5,484	)					(5,457	)					(5,835	)
Allowance for credit losses					(96,895	)					(101,067	)					(105,259	)					(105,289	)					(118,548	)
Net Loans				$	3,429,701					$	3,497,380					$	3,642,481					$	3,717,513					$	3,810,773
Covered Loans				$	334,225					$	348,759					$	374,012					$	403,822					$	424,377
Non-covered Loans					3,095,476						3,148,621						3,268,469						3,313,691						3,386,396
Total Net Loans				$	3,429,701					$	3,497,380					$	3,642,481					$	3,717,513					$	3,810,773

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
Non-Performing Assets & Delinquency Trends
(Non-Covered Loans)
				June 30,						March 31,						December 31,						September 30,						June 30,
				2011						2011						2010						2010						2010
Non-Performing Loans
Residential Construction and Land				$	1,080					$	4,001					$	4,090					$	5,085					$	2,789
Commercial Construction and Land					23,953						39,976						60,591						71,428						39,114
Residential Mortgage					17,786						18,425						17,800						14,543						12,638
Commercial Real Estate					24,731						34,950						64,859						56,330						20,639
Commercial and Industrial					4,649						7,542						3,936						6,067						7,527
Dairy & Livestock					2,672						2,996						5,207						5,176						-
Consumer					179						260						537						242						143
Total				$	75,050					$	108,150					$	157,020					$	158,871					$	82,850
% of Total Loans					2.35	%					3.33	%					4.65	%					4.65	%					2.36	%
Past Due 30-89 Days
Residential Construction and Land				$	-					$	-					$	-					$	-					$	-
Commercial Construction and Land											1,492						-						-						9,093
Residential Mortgage					460						993						2,597						2,779						2,552
Commercial Real Estate					2,590						898						3,194						1,234						1,966
Commercial and Industrial					740						239						3,320						2,333						634
Dairy & Livestock					-						-						-						1,406						-
Consumer					91						9						29						494						139
Total				$	3,881					$	3,631					$	9,140					$	8,246					$	14,384
% of Total Loans					0.12	%					0.11	%					0.27	%					0.24	%					0.41	%
OREO
Residential Construction and Land				$	-					$	-					$	-					$	11,113					$	11,113
Commercial Construction and Land					7,117						2,709						2,709						2,709						-
Commercial Real Estate					6,314						3,322						2,581						3,220						3,220
Commercial and Industrial					-						209						-						-						668
Residential Mortgage					287						-						-						345						-
Consumer					-						-						-						-						-
Total				$	13,718					$	6,240					$	5,290					$	17,387					$	15,001
Total Non-Performing, Past Due & OREO				$	92,649					$	118,021					$	171,450					$	184,504					$	112,235
% of Total Loans					2.90	%					3.63	%					5.08	%					5.40	%					3.20	%

Net interest income and net interest margin reconciliations (Non-GAAP)
We use certain non-GAAP financial measures to provide supplemental information regarding our performance. The second quarter of 2011 net interest income and net interest margin include a yield adjustment of $5.7 million from discount accretion on covered loans. We believe that presenting the net interest income and net interest margin excluding the yield adjustment provides additional clarity to the users of financial statements regarding core net interest income and net interest margin.
				Three months ended June 30, 2011																Six months ended June 30, 2011
				(amounts in thousands)
				Average Balance					Interest						Yield					Average Volume					Interest						Yield
Total interest-earning assets				$	5,974,745				$	71,182					4.95	%				$	6,017,731				$	137,694					4.78	%
Accelerated accretion on acquired loans					92,614					(5,707	)										102,727					(7,658	)
Total interest-earning assets, excluding SJB loan discount and yield adjustment				$	6,067,359				$	65,475					4.49	%				$	6,120,458				$	130,036					4.44	%
Net interest income and net interest margin (TE)									$	64,865					4.37	%									$	124,444					4.17	%
Yield adjustment to interest income from discount accretion										(5,707	)															(7,658	)
Net interest income and net interest margin (TE), excluding yield adjustment									$	59,158					3.92	%									$	116,786					3.85	%