Overview

• California commercial bank's Q2 net income and EPS declined yr/yr due to acquisition expenses

• Net interest income and margin rose sharply, reflecting Heritage Commerce acquisition impact

• Company launched new share repurchase plan for up to 15 mln shares, replacing prior program

Outlook

• Company did not provide specific financial guidance for the current or future periods

Result Drivers

• HERITAGE ACQUISITION - Q2 results driven by completion of Heritage Commerce acquisition, which increased loans, deposits, and interest-earning assets

• HIGHER-YIELDING ASSETS - Addition of higher-yielding loans and factored receivables from Heritage boosted net interest margin

• ACQUISITION EXPENSES - Noninterest expense surged due to $31.4 mln of one-time acquisition costs and integration-related increases

Company press release: ID:nGNX49pMl7

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 EPS		$0.29
Q2 Net Income		$48.30 mln
Q2 Net Interest Income		$162.40 mln

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for CVB Financial Corp is $23.00, about 3.4% above its July 22 closing price of $22.24

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads

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