Company: CVBF
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-029985
Chunk: 101

Company: CVB FINANCIAL CORP
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1A
Chunk 101
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. There are no perfect hedging strategies, and interest rate hedging may fail to protect us from loss. Moreover, hedging activities could result in losses if the event against which we hedge does not occur. Additionally, interest rate hedging could fail to protect us or adversely affect us because, among other things:

•Available interest rate hedging may not correspond directly with the interest rate risk for which protection is sought; 

•The duration of the hedge may not match the duration of the related asset or liability; 

•The party owing money in the hedging transaction may default on its obligation to pay; 

•The credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; 

•The value of derivatives used for hedging may be adjusted from time to time in accordance with accounting rules to reflect changes in fair value; and/or 

•Downward adjustments, or “mark-to-market” losses, would reduce our stockholders’ equity.

Operational Risks 

We face risks related to our operational, technological and organizational infrastructure.

Our ability to grow and compete, including to develop and deliver new products that meet the needs of our existing customers and attract new ones, is dependent on our ability to build or acquire the necessary operational and technological infrastructure and to manage the cost of that infrastructure as we expand. Our ability to run our business in compliance with applicable laws and regulations is also dependent on that infrastructure. Operational risk can manifest itself in many ways, such as errors related to failed or inadequate processes, faulty or disabled computer systems, fraud by employees or outside persons and exposure to external events, and we are dependent on our operational infrastructure to help manage these risks. In addition, we are heavily dependent on the strength and capability of our technology systems, which we use both to 

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interface with our customers and to manage our internal financial records and other systems. Any shortcomings in our technology systems subjects us to risk of misconduct by our employees that may go undetected.

A number of our most critical technology systems and applications are provided or managed by outside vendors or service providers.  Any failure by such vendors or service providers to properly design, manage or secure these technology systems and applications, or the occurrence of external events affecting the functionality of such technology systems and applications, could in turn result in significant disruptions and exposure to potential losses in connection with our operations and to us and our customers. 

We are subject to extensive laws and regulations at