Company: CVBF
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-029985
Chunk: 111

Company: CVB FINANCIAL CORP
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1A
Chunk 111
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 to obtain funding that is collateralized by affected instruments, as well as affect the pricing of that funding when it is available. A downgrade may also adversely affect the market value of such instruments. We cannot predict if, when or how any changes to the credit ratings or perceived creditworthiness of these organizations will affect economic conditions. Among other things, a downgrade in the U.S. government’s credit rating could adversely impact the value of our securities portfolio and may trigger requirements that we post additional collateral for trades relative to these securities. A downgrade of the sovereign credit ratings of the U.S. government or the credit ratings of related institutions, agencies or instruments would significantly exacerbate the other risks to which we are subject and any related adverse effects on our business, financial condition and results of operations.

Recent proposals for reforms to government-sponsored enterprises, such as Fannie Mae and Freddie Mac, including proposals to privatize such entities, could also negatively affect the credit ratings of bonds that such entities have previously issued and that are currently held in our securities portfolio.  Any credit ratings downgrades of one or more of these government-sponsored enterprises could in turn adversely impact the value of our securities portfolio and the regulatory risk-weightings assigned to these assets.  The effects of these credit rating downgrades to lower asset values and increase risk-weighted assets could negatively impact our capital and capital ratios and exacerbate other risks to which we are subject in the same manner described above.

Climate change and climate change regulation could have a material adverse effect on us and our customers.

Our business, as well as the operations and activities of certain of our banking customers, could be negatively impacted by climate change. Climate change presents multi-faceted risks, including operational risk from the physical effects of climate events on our bank and our customers’ facilities and other assets, including the enhanced risks of drought or wildfires, credit risk from borrowers with significant exposure to climate risk, particularly our customers in the dairy and agricultural sectors, transition risks associated with the transition to a less carbon-dependent economy, and possible reputational risk from stakeholder concerns about our practices and business relationships with clients who operate in carbon-intensive industries.

Additionally, federal and state banking regulators and supervisory authorities, investors, and other stakeholders have increasingly viewed financial institutions as important in helping to address the risks related to climate change, both directly and with respect to their clients, which may result in financial institutions coming under increased scrutiny regarding the disclosure and management of their climate risks and related lending and investment activities, including in the context of stress testing for various climate stress scenarios