CVB Financial ratings affirmed by Fitch with stable outlook

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CVB ratings affirmed stable

Highlights

Fitch affirms CVB Financial and Citizens Business Bank Long-Term IDR at 'BBB+' and Short-Term IDR at 'F2' with a Stable Outlook, citing solid capital, strong asset quality, and steady earnings.
The Heritage Commerce acquisition boosts geographic diversity and is expected to increase commercial real estate concentration to 270% of risk-based capital, remaining below the 300% regulatory threshold.
CVB Financial's CET1 ratio reaches 16.3% in Q1 2026 before declining to a robust 14.6% post-merger, with efficiency ratio at 45% and noninterest-bearing deposits projected at 56% of total deposits by year-end 2025.

Fitch cites capital strength and merger capacity

As reported by Fitch Ratings, the agency affirms the Long-Term Issuer Default Ratings of CVB Financial Corporation and Citizens Business Bank at 'BBB+', while their Short-Term Issuer Default Ratings remain at 'F2' with a Stable Outlook. Fitch says the decision reflects solid asset quality, strong capital levels and steady earnings, even as the bank continues to operate with a concentrated business model and geographic exposure.

Fitch says the pending benefits from the Heritage Commerce acquisition are likely to be modestly positive for CVB Financial's franchise by expanding its reach into the Bay Area and adding geographic diversity. The agency views integration risk as contained because the two banks have similar business mixes and cultures, and because CVB Financial has a record of completing acquisitions successfully.

The ratings agency says loan growth resumes modestly in 2025 after two years of declines, with balances up 1.9%. After the April 2026 closing of the HTBK merger, Fitch expects the combined bank's commercial real estate concentration to rise to about 270% of risk-based capital, above the current 234% but still below the 300% regulatory guidance threshold.

Fitch also says capital remains a key support for the rating. CVB Financial's CET1 ratio reaches 16.3% in the first quarter of 2026, and although it is expected to decline after the merger, Fitch still sees it staying robust at about 14.6%.

Deposit profile and asset quality support outlook

Fitch says CVB Financial continues to post exceptionally strong credit metrics, with impaired loans remaining among the lowest in its rated U.S. bank universe through the first half of 2025. Realized losses are nearly absent, averaging 1 basis point annually over the past four years, which Fitch attributes to conservative underwriting and a client base built on long-term relationships.

The agency also points to operating efficiency as a rating strength. CVB Financial runs fewer branches than more retail-focused peers, helping produce an efficiency ratio of 45%, among the lowest for U.S. banks rated by Fitch, while its high share of noninterest-bearing deposits supports a net interest margin of 3.41%.

Deposits remain another stabilizing factor, with the loan-to-deposit ratio at 72% and expected to rise only slightly after the merger. Noninterest-bearing deposits account for 56% of total deposits at year-end 2025, helping keep deposit costs at 0.77% in the first quarter of 2026, although Fitch notes liquid assets make up a smaller share of total assets than at similarly rated community banks.

Fitch adds that the holding company's Viability Rating matches that of its operating bank because U.S. bank holding companies are expected to serve as a source of strength for subsidiaries. As of the first quarter of 2026, CVB Financial has no double leverage and adequate fixed expense cash coverage at the holding company level.

Our earlier coverage of Fitch’s rating action on Jacksonville-based utility JEA focused on the agency’s 'AA' assessment of the electric system’s new 2026 revenue bond issues and the affirmation of its outstanding electric-system-related debt with a Stable Outlook. We also noted Fitch’s view that senior and subordinate liens show broadly similar vulnerability, given how much of JEA’s total obligations sit in senior lien bonds and contract debt, alongside the utility’s large scale customer base.

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