CVB Financial Corp. (CVBF) Earnings Call Transcript & Summary

Good morning, and welcome to the CVB Financial Corp. 2025 Annual Meeting of Shareholders. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Michelle Edu, please go ahead.

Hi. Thank you, and good morning, everyone. Before we get started, let me remind you that today's meeting will include some forward-looking statements. These forward-looking statements relate to, among other things, current plans, expectations, events and industry trends that may affect CVB Financial Corp.'s future financial position and results of operations. Such statements involve risks and uncertainties, and future activities and results may differ materially from current expectations. The speakers on this call claim the protection of the safe harbor provisions in the Private Securities Litigation Reform Act of 1995. For a more complete discussion of the risks and uncertainties that may cause our actual results to differ materially from our forward-looking statements, please see CVB Financial's annual report on Form 10-K for the year ended December 31, 2024, and in particular, the information set forth in Item 1A, Risk Factors therein. I would now like to turn the meeting over to David Brager, President and Chief Executive Officer of CVB Financial Corp. and Citizens Business Bank.

Thank you, Michelle, and good morning, everybody. Welcome to our 50th Annual Meeting of Shareholders for CVBF. I am David Brager, the President and Chief Executive Officer of CVBF and Citizens Business Bank. I would like to announce that Hal Oswalt, Chairman of the Board, will preside over the meeting and that Michelle Edu will serve as Secretary of the meeting. Any shareholder attending this meeting in person who wishes to vote their shares in person or has not yet submitted their proxy, should please see Michelle Edu who's to my left. I would now like to introduce Hal Oswalt to say a few words.

Thank you, Dave, and good morning to all. I'd like to welcome all of our stakeholders, including our shareholders, our directors and the Citizens Business Bank Associates. I would also like to note that the format for the meeting today includes those attending in person as well as our conference call-in facility. Our agenda today will be generally limited to mandatory corporate and housekeeping matters with the opportunity for shareholder questions, but those questions will be entertained only at the end of the meeting. I would now like to lead the in-person attendees in the Pledge of Allegiance. Would you stand, please? I pledge allegiance to the Flag of United States of America and to the Republic for which it stands, one nation under God, indivisible with liberty and justice for all. Thank you, everyone. I next would like to announce the selection by the Board of Directors of Mark Cano of Computershare as Inspector of Elections and ask Mr. Cano to identify himself to those present at today's meeting. Thank you, Mark. May I have a motion to ratify the appointment of Mark Cano as Inspector of Elections?

Motion.

May I have a second?

Second.

All in favor, say aye.

Aye.

All of those, please say -- against, please say nay. The ayes have it. I would also like to introduce those directors who are present in person in addition to Dave Brager and myself today. Those include George Borba, Jr., Steve Del Guercio, Anna Kan and Jane Majors. Directors also attending by phone today include our former Chairman, Ray O'Brien; and our Audit Chair, Kim Sheehy. I will now hand the gavel and microphone back to Dave Brager, our President and CEO.

Thank you, Hal. Due to the hybrid in-person and virtual nature of the meeting, I will not be presenting a formal presentation. But I would like to point you to our April 2025 investor presentation, our 2024 Form 10-K and our 2025 first quarter Form 10-Q for any information on our company. I would also like to take note that this is our 50th Annual Shareholders Meeting, and the year 2025 actually represents our 51st year we've been in business since Citizens Business Bank was founded in 1974. We're proud of the remarkable growth that we've achieved over this period and the returns we've earned for our investors, while at the same time, maintaining a fundamentally safe and sound banking organization. We are also proud of the thousands of customers we serve and their loyalty to our bank, the opportunities we provide to our valued associates and the positive role we played in the numerous communities throughout the state of California. I would ask that any questions from our shareholders should be reserved until the end of the meeting. I would also request that anyone with questions, please limit yourself to one question and one follow-up question, if needed, so that all participants are treated equally. I would now like to introduce Richard Wohl, our General Counsel, to take us through the procedural items for the meeting. Richard?

Thank you, Dave. Good morning, everybody. We'll now move through the official business and legal portion of our 2025 Annual Shareholders' Meeting. Before we proceed to completing the business items for today's meeting, there are 2 procedural matters that we need to address. The first is the reading of the legal notice of this annual meeting. Computershare, the company's transfer agent, has provided me with an affidavit regarding mailing of the legal notice of the meeting, which states that notice of this annual meeting with instructions on how to obtain copies of the proxy materials was mailed on or about April 9, 2025, to all CVB Financial Corp. shareholders of record on March 28, 2025. This affidavit is available here at our corporate headquarters if any shareholder wishes to examine it, and it will be filed with the minutes of this annual meeting. So to keep things moving along quickly at this time, I would entertain a motion to waive the reading of the legal notice. Do I hear such a motion?

[ Motion ].

Thank you. Do I have a second?

Second.

Thank you. All in favor, signify by please saying aye.

Aye.

Opposed by saying nay. The motion carries. The second procedural item that we need to address is the quorum report. I've conferred with Mark Cano, our Inspector of elections, who's advised me that the number of shares of CVB Financial Corp. outstanding on the record date of March 28, 2025, for this annual meeting is 139,091,675. Shareholder votes present by proxy and in person for this meeting are 123,033,499, which constitute 88.5% of our outstanding shares. The shares which are present and voting in person or by proxy constitute at least a majority of CVB Financial Corp.'s outstanding shares. I'm pleased to report that we have a quorum of shares represented and voting at this annual meeting. Now let's move to address the actual business items that are the subject of today's annual meeting. As set forth in our notice of annual meeting, there are 3 items of business to be conducted. They are as follows: number one, election of 8 nominees for our Board of Directors; number two, to approve on a nonbinding advisory basis the compensation of the company's named executive officers for 2024, our say-on-pay resolution. And third, ratification of the appointment of KPMG LLP as independent registered public accountants of CVB Financial Corp. for the year ending December 31, 2025. As I mentioned, the first item of business is the election of 8 persons to serve a 1-year term on the company's Board of Directors and until their successors are duly elected or chosen. As set forth in the notice of annual meeting, the Board of Directors has nominated the following 8 persons to serve as directors of the company: George Borba, Jr., David Brager, Stephen Del Guercio, Anna Kan, Jane Olvera Majors; Raymond O'Brien, Hal Oswalt and Kimberly Sheehy. May I please have a motion to place a nomination the Board's 8 nominees?

Motion.

Thank you. May I have a second?

Second.

Thank you. The procedures for shareholders to nominate individuals to serve on the Board of Directors are set forth in our corporate bylaws, which were referenced in the notice of this meeting. I've been advised that no shareholder nominations were otherwise received by CVB Financial Corp., and therefore, the only nominees for director are the Board's 8 nominees. May I have a motion to close the nominations?

Motion.

Thank you. May I have a second?

Second.

Thank you. So the motion on the floor is, be it resolved that the 8 nominees whom I announced be and they hereby are elected to serve as members of the Board of Directors of CVB Financial Corp. until the 2026 Annual Meeting of Shareholders and until their successors have been duly elected and are so qualified. I've confirmed with Mr. Cano, the Inspector of Elections, who advises me that each of our Board nominees has received at least 102,277,902 votes or 97.7% in favor of election and that no other person has received any votes. Since each nominee has received a plurality of the votes cast, they are all elected for another 1-year term. Congratulations to our directors. Our second item of business is a proposal to ratify the compensation of the company's 5 named executive officers. This say-on-pay proposal is explained in further detail in our proxy statement and by a separate vote of our shareholders at our annual meeting in 2023, it has been established that this item shall be placed on the annual meeting agenda for a vote by our shareholders on an annual basis, so every single year. That being so, this resolution covers the compensation for our named executive officers for the most recent fiscal year of the company, which ended on December 31, 2024. The component elements of our individual named executive officers compensation, the metrics for determining their performance, the amounts paid for each component element and the total amounts paid are all set forth in detail in our proxy statement. Please note that this shareholder vote is advisory only and thus nonbinding on the company, although our Board will, of course, consider the views of our shareholders in setting our compensation plans for our named executive officers. At this time, I would entertain a motion to ratify the compensation of our 5 named executive officers for the company's most recent fiscal year. Do I hear such a motion?

Motion.

Thank you. Do I have a second?

[ Second ].

Thank you. The motion on the floor is, be it resolved that the compensation paid to the company's named executive officers for 2024 as disclosed in our proxy statement pursuant to the compensation rules of the SEC set forth in Item 402 of Regulation S-K, including the compensation discussion and analysis, the summary compensation tables and the related narrative discussion be hereby approved. I've conferred with Mr. Cano, our Inspector of Elections, who advises me that on this proposal, voting in favor were 99,117,640 shares or 94.7%. Voting against were 4,796,892 shares or 4.6% and abstaining were 750,201 shares or 0.7%. Since the number of shares voting in favor of the proposal exceeds a majority of the shares represented in voting at the meeting, with the affirmative votes constituting a majority of the required quorum, this nonbinding advisory proposal passes. Our third and last item of business is a proposal to ratify the appointment of KPMG LLP as the company's independent public accountants for the company's 2025 fiscal year. This proposal is also explained in detail in our proxy statement for this annual meeting. At this time, I would entertain a motion to ratify the appointment of KPMG LLP as the company's independent public accountants for the company's 2025 fiscal year. Do I hear such a motion?

Motion.

Do I have a second?

[ Second ].

Thank you. The motion on the floor is, be it resolved that the appointment of KPMG LLP as the company's independent public accountants for the fiscal year ended December 31, 2025, be and hereby is ratified and approved. Again, I've conferred with Mr. Cano, our Inspector of Elections, who advises me that on this proposal, voting in favor were 122,004,851 shares or 99.2% of the voting shares. Against were 929,035 shares or 0.8% and abstaining were 99,613 shares or 0.1%. Again, since the number of shares voting in favor of the proposal exceeds a majority of the shares represented in voting at the meeting, with the affirmative votes constituting a majority of the required quorum, the proposal passes. That now concludes the business portion of today's annual meeting. Thank you all very much, and I'll now turn the meeting back over to Dave Brager.

Thank you, Richard. Any shareholder questions from this room or via our conference call facility should be addressed to me and should relate to the matters on the annual meeting agenda. We will address any questions from individuals who are present here in the room first and then move to any questions by telephone. If there are any questions posed by persons here in the room, we will repeat them for the benefit of those of you participating by telephone. Questions should be asked only by shareholders and each person asking a question should identify themselves either in person or over the telephone by stating their name and affirming that they are a shareholder. So that we can be fair to all shareholders who may have a question, each person is requested to limit himself or herself to one question plus a follow-up only if needed on the same topic and to limit his or her question to a maximum of 1 minute. Please allow for a complete response before seeking to ask any follow-up questions. Are there any questions in the room? Okay. Operator, we're now ready to take questions from any of the dial-in participants.

[Operator Instructions] Seeing no dial-in questions, I would like to turn back to Hal Oswalt for closing.

Thank you. In concluding this meeting, I would like to thank our shareholders, our bank associates and of course, our directors for their continued loyalty and support. We hope everyone stays safe and healthy. At this time, I would entertain a motion to adjourn the meeting.

Motion.

Do I have a second?

[ Second ].

All in favor, please say aye.

Aye.

The annual meeting is hereby adjourned. Thank you all for attending.

The Annual Meeting of Shareholders has now concluded. Thank you for participating.