Jul. 22--The Inland Empire's largest financial firm laid out plans this week to pay back the taxpayers' investment.

The government bought $130 million worth of preferred shares in Ontario-headquartered CVB Financial Corp., parent of Citizens Business Bank, in December through its Troubled Assets Relief Program.

CVB Financial announced Monday evening that it wants to raise $115 million to help pay back the TARP money and buy back warrants it issued the Treasury Department, as long as regulators approve.

The government could've used the warrants to invest more money into CVB, if needed, and would've reaped a huge return on investment.

But the company's financial outlook is one of the healthiest in the two-county region.

In December, company President and CEO Chris Myers said the TARP money would be used to expand lending and possibly acquire another bank, although the company hasn't made any acquisitions since then.

"We will continue to consider acquisition targets," the company stated in a May public disclosure.

A banking analyst with Los Angeles-based B. Riley & Company Inc. held his "neutral" rating on CVB's stock after second-quarter results were released last Wednesday.

"It's going to be diluted," said Joe Gladue. "This could increase the common share count by 25-30 percent, depending on where (the stock offering) prices."

CVB might think it's making the right move by repaying TARP, but "capital

is pretty important for any bank these days," Gladue said. "That extra margin of safety is probably worth the cost at this point."

His latest research note says the company's exposure to Inland Empire real estate loans -- only a small part of its entire loan portfolio -- is still a "significant risk."

"You have to be sure you're not cutting it too close," Gladue said about pulling out of TARP. "CVB is in a very stressed geography."

The company's income for the first six months of 2009 was more than $29 million, a 12.9 percent drop from the same period one year ago.

That's partially due to a 900 percent increase in credit loss provisions from the first half of 2008 to the first half of 2009. At the same time, customer deposits rose 22 percent to $4.4billion between June 2008 and June 2009.

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