Sterne Agee Reiterates Neutral and PT of $10 on CVB Financial Corporation

Sterne Agee reiterated its Neutral rating on CVB Financial Corporation CVBF. At the same time, Sterne Agee left its price target on the company's stock unchanged at $10. In a research report published today, Sterne Agee states, "Although the company's fundamentals continue to outperform expectations, CVBF's lackluster near- term growth prospects and relatively full valuation keep us on the sidelines. To be sure, the company's profitability and credit quality measures will likely beat expectations in the next couple of quarters. However, CVBF's outsized substandard loans ($588mm at 1Q11 vs. $653mm at 1Q10), liability-sensitive balance sheet, and sluggish loan growth prospects require a cheaper entry point (~$8, or 9-10x normalized EPS of $0.80- $0.90) to become more aggressive on the shares." On Friday, CVB Financial added 1.78% to its value to close the week at $8.87.