CVB Financial Corp. (CVBF) Earnings Call Transcript

Good morning, and welcome to the CVB Financial Corp. 2023 Annual Meeting of Shareholders. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Christina Carrabino. Please go ahead.

Thank you, Andrew, 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, 2022, 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, Christina. Good morning, and welcome to the 48th 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 Myrna ViSanta 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 Myrna ViSanta, who is directly in front of me. I'd like to now introduce Hal Oswalt to say a few words.

Thank you, Dave, and good morning to all of our shareholders, directors and associates. I'd like to first note the revised meeting format, and that is both in-person attendance as well as our conference facility. I would also like to note that our agenda will be generally limited to mandatory corporate and housekeeping matters, with the opportunity for shareholders to questions, but only at the end of the meeting, please. And the first thing I would like to do is for those in the room to stand and we will say the Pledge of Allegiance. I pledge allegiance to the flag of the 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 would also like to announce the selection by the Board of Directors of Mark Cano of Computershare as our Inspector of Elections and ask Mark to identify himself to those present at the meeting. Thank you, Mark. May I have a motion to ratify the appointment of Mark Cano as Inspector of Elections?

Motion.

Do we have a second?

Second.

All in favor, aye.

Aye.

All opposed, nay. The ayes have it. I would also like to introduce our directors or the ones that are present here this morning. In addition to myself and Dave Brager, we have Ray O'Brien, the former Chairman of CVB Financial; Anna Kan; Kim Sheehy. On the phone, we have Steve Del Guercio and George Borba. And Jane Majors could not be here this morning. I would now like to hand the gavel and the microphone back to Dave Brager, our President and CEO.

Thank you, Hal. Due to the mostly virtual nature of the meeting, I will not be presenting a formal presentation. However, I would point you to our April 2023 investor presentation, our 2023 Form 10-K and our 2023 first quarter Form 10-Q for any information on our company. I ask that all questions should be reserved until the end of the meeting. I would also request that anyone with questions, 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 matters of the meeting. Richard?

Thank you, Dave. Good morning, everybody. We'll now move through the official business and legal portion of our 2023 Annual Shareholders' Meeting. Before we proceed to the business items for today's meeting, there are 2 procedural matters that we need to address. The first one is the reading of the legal notice of this annual meeting. Computershare, the company's transfer agent, has provided me with an affidavit of mailing of the notice of the meeting, which states that the notice of this annual meeting, with instructions on how to obtain copies of our proxy materials, was mailed on or about April 5, 2023, to all CVB Financial Corp. shareholders of record on March 27, 2023. 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. To keep things moving along quickly, I would entertain a motion to waive the reading of the legal notice. Do I hear such a motion?

Motion.

Motion.

Thank you. Do I have a second?

Second.

Thank you. All in favor, signify by saying aye, oppose by saying nay.

Aye.

Aye.

The motion carries. The second procedural item we need to address is the quorum report. I have confirmed with Mark Cano, the Inspector of Elections, who has advised me that the number of shares of CVB Financial Corp. outstanding on the record date of March 27, 2023, for this annual meeting is 139,302,451 shares. Shareholder votes present by proxy and in person for this meeting are 121,574,839 shares, which constitutes 87.3% of our outstanding shares. This means the shares which are present and voting in person or by proxy constitute at least a majority of CVB Financial Corp.'s outstanding shares. So I'm pleased to report that we have a quorum of shares represented and voting at this annual meeting. Now let's move to the actual business items that are the subject of today's annual meeting. As set forth in the notice of the annual meeting, there are 4 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 2022, that's our say-on-pay resolution; number three, to cast a nonbinding advisory vote on the frequency of our advisory say-on-pay vote; and fourth, ratification of the appointment of KPMG LLP as our independent registered public accountants for CVB Financial Corp. for the year ending December 31, 2023. 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 to the Board's 8 nominees?

Motion.

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 are 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.

May I have a second?

Second.

Thank you. So the motion on the floor has been 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 our 2024 Annual Meeting of Shareholders and until their successors have been duly elected and are so qualified. I confirm -- I've conferred with Mr. Cano, the Inspector of Elections, who advises me that each of the Board's nominees has received at least 98,610,719 votes, which is 97.6% in favor of election, and 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. So congratulations to all of our Directors. Our second item of business is a proposal to ratify the compensation of the company's named executive officers. This say-on-pay proposal is explained in further detail in the proxy statement and by a separate vote of our shareholders at our annual meeting in 2017, it's been established this item shall be placed on the annual meeting agenda for a vote by our shareholders on an annual basis or 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 ended on December 31, 2022. 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 the company's proxy statement. Please note that this shareholder vote is advisory only and, thus, is 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 will 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.