Company: CVBF
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-029985
Chunk: 276

Company: CVB FINANCIAL CORP
Filing Date: 2025-02-28
Form: 10-K
Item: Item 7
Chunk 276
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aturities, as well as sales of securities exceeding purchases during the year. At December 31, 2024, investment securities held-to-maturity (“HTM”) totaled $2.38 billion. HTM securities decreased by $85.0 million, or 3.45% from $2.46 billion at December 31, 2023. At December 31, 2024, investment securities AFS totaled $2.54 billion, inclusive of a pre-tax net unrealized loss of $447.7 million. AFS securities decreased by $414.0 million, or 14.01%, from $2.96 billion at December 31, 2023, including the impact of the sale of $467 million of AFS securities in the third and fourth quarters. The sale of these securities resulted in a net pre-tax loss of $28.3 million. The securities sold had an average yield of less than three percent. The net cash proceeds from the sale of these securities was partially utilized to purchase $385 million of AFS securities in the fourth quarter of 2024, with yields that exceeded five percent. Our tax equivalent yield on our investment portfolio grew from 2.52% for 2023 to 2.65% for 2024. The 13 basis point increase in the yield on investment securities from the prior year was impacted by the positive spread generated from fair-value hedging of certain AFS securities, in which the Company receives daily SOFR and paid a weighted average fixed cost of approximately 3.8% during 2024.

In June 2023, fair value hedging transactions were executed in which $1 billion notional pay-fixed interest rate swaps were consummated with maturities ranging from four to five years, wherein the Company pays a weighted average fixed rate of approximately 3.8% and receives daily SOFR. In December 2024, we terminated one of these swaps which had a notional value of $300 million, a maturity date of June 2027 and a fixed rate of 3.95%. The remaining $700 million notional pay-fixed interest rate swaps had a fair value which totaled $7.2 million and was reflected as an asset at December 31, 2024. The fair value of these instruments totaled $6.9 million and were reflected as a liability at December 31, 2023. These instruments generated interest income of $14.4 million for the year ended December 31, 202