Andrew Edwards, Staff Writer
ONTARIO - CVB Financial Corp., the parent company of Citizens Business Bank, ended 2011 on positive notes, appearing to have recovered from much of the tumult that hit the Inland Empire's largest locally based financial institution the previous year.
As of the final day of trading in 2011, the Ontario-based company's stock price has largely recovered from a mini-collapse that happened in summer 2010. CVB Financial also reported record profits - $22.4 million - for the quarter ending Sept. 30.
The bank also announced its 89th consecutive dividend - 8.5 cents per share - on Dec. 21, and reported having $6.53 billion in assets during its last quarterly filing.
CVB Financial's apparent good fortunes happened not only at a time when the Inland Empire and national economies remain weak, but after news of a federal subpoena and the filing of investors' lawsuits against the bank. Those cases are still pending in federal and West Valley Superior Court.
The U.S. Securities and Exchange Commission, which filed the subpoena last year, refused to comment as a matter of policy. CVB Financial CEO Christopher Myers did not return phone calls placed during the past two weeks seeking comment.
Analysts who study CVB Financial, however, praised the banking company for maintaining a conservative lending strategy and resolving the issues at the heart of the lawsuits.
For example, the bank in March sold $41 million worth of nonperforming loans owed by the bank's largest borrower, identified in court papers as Garrett Group, LLC a Temecula development company.
One analyst said Garrett Group's problem loans had worried investors, but nothing as worrisome has come to light since CVB disentangled itself from the developer.
"At the end of the day, they dissolved their relationship, and time told the street and investors that there weren't any other ticking time bombs," Raymond James analyst W. Christian Stulpin said.
Another analyst, Joe Gladue of B. Riley Co., said some investors were shorting CVB stock before the SEC filed its subpoena in July 2010.
Like Stulpin, Gladue said the bank's problems were not as severe as some thought last year.
In the long run, the bank's focus on commercial borrowers, helped keep CVB alive when other banks fell victim to the housing crash, Gladue said.
CVB Financial's stock traded at $10.03 in after-hours trading on Friday.
That's near $10.30 price the stock traded prior to Aug. 10, when the bank revealed the SEC subpoena. CVB Financial's stock lost nearly a quarter of its value that day, hitting $8.
The stock price dropped below $7 by the end of August 2010. The ups and downs of CVB Financial stock have roughly mirrored those of the Dow Jones Industrial Average and S&P 500 in the past few months, meaning the institution was not immune from the wild fluctuations of August through September 2011.
Gladue said he thinks CVB Financial stock is currently priced near its proper value.
"I expect them to continue to report some improvement," said Gladue, noting that his project stock price for CVB Financial is at $11.
Reach Andrew via email, call him at 909-483-8550, or find him on Twitter @InlandBizz.