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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Central Pacific Financial Corp | NYSE:CPF | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.605 | 2.33% | 26.595 | 27.4765 | 25.22 | 26.24 | 301,601 | 19:11:59 |
Wednesday 31 July 2024
Highlights include:
Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $15.8 million, or fully diluted earnings per share ("EPS") of $0.58 for the second quarter of 2024, compared to net income of $12.9 million, or EPS of $0.48 in the previous quarter and net income of $14.5 million, or EPS of $0.53 in the year-ago quarter.
"We continue to navigate the current environment and positive trends are developing. We are pleased with our strong second quarter financial results, which included the highest net income in our last five quarters," said Arnold Martines, Chairman, President and Chief Executive Officer. "Key contributors included NIM expansion of 14 bps, core deposit growth and improvement in net charge-offs. At the same time, we maintained solid liquidity and grew our capital levels further."
"We were recently recognized by Forbes Magazine as one of America’s Best Banks as well as the Best-In-State Bank for Hawaii in 2024. We are humbled by this recognition, proud of our employees, and thankful to our customers for the trust they place in Central Pacific Bank," Martines said.
The Board of Directors has also appointed Mr. Martines as Chairman of the Board of the Company and the Bank. Mr. Martines replaces Ms. A. Catherine Ngo who continues to serve as a member of the Board of Directors of the Company and the Bank.
Earnings Highlights
Net interest income was $51.9 million for the second quarter of 2024, which increased by $1.7 million, or 3.5% from the previous quarter, and decreased by $0.8 million, or 1.5% from the year-ago quarter. Net interest margin ("NIM") was 2.97% for the second quarter of 2024, an increase of 14 basis points ("bp" or "bps") from the previous quarter and 1 bp from the year-ago quarter. The sequential quarter increase in net interest income and NIM was primarily due to higher average yields earned on investment securities and loans, while interest-bearing liability costs remained relatively stable. The higher average yield earned on investment securities includes $0.9 million in income from an interest rate swap that became effective on March 31, 2024.
The Company recorded a provision for credit losses of $2.2 million in the second quarter of 2024, compared to a provision of $3.9 million in the previous quarter and a provision of $4.3 million in the year-ago quarter. The provision in the second quarter consisted of a provision for credit losses on loans of $2.4 million and a credit to the provision for off-balance sheet exposures of $0.2 million.
Other operating income totaled $12.1 million for the second quarter of 2024, compared to $11.2 million in the previous quarter and $10.4 million in the year-ago quarter. The higher other operating income was primarily due to higher mortgage banking income of $0.4 million and higher investment services fees of $0.6 million (included in other service charges and fees).
Other operating expense totaled $41.2 million for the second quarter of 2024, compared to $40.6 million in the previous quarter and $39.9 million in the year-ago quarter. The higher other operating expense was primarily due to higher salaries and employee benefits.
The efficiency ratio was 64.26% for the second quarter of 2024, compared to 66.05% in the previous quarter and 63.17% in the year-ago quarter.
The effective tax rate was 23.4% for the second quarter of 2024, compared to 23.5% in the previous quarter and 23.6% in the year-ago quarter.
Balance Sheet Highlights
Total assets of $7.39 billion at June 30, 2024 decreased by $23.0 million, or 0.3% from $7.41 billion at March 31, 2024, and decreased by $180.6 million, or 2.4% from $7.57 billion at June 30, 2023. The Company had $298.9 million in cash on its balance sheet and $2.56 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities at June 30, 2024. Total available sources of liquidity as a percentage of uninsured and uncollateralized deposits was 121% at June 30, 2024, compared to 118% at March 31, 2024 and 128% at June 30, 2023. During the second quarter of 2024, excess balance sheet liquidity was used to pay off $41.6 million in higher cost government time deposits.
Total loans, net of deferred fees and costs, of $5.38 billion at June 30, 2024 decreased by $17.8 million, or 0.3% from $5.40 billion at March 31, 2024, and decreased by $137.0 million, or 2.5% from $5.52 billion at June 30, 2023. Average yields earned on loans during the second quarter of 2024 was 4.80%, compared to 4.67% in the previous quarter and 4.37% in the year-ago quarter.
Total deposits of $6.58 billion at June 30, 2024 decreased by $36.4 million or 0.5% from $6.62 billion at March 31, 2024, and decreased by $223.3 million, or 3.3% from $6.81 billion at June 30, 2023. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.91 billion at June 30, 2024, and increased by $16.7 million, or 0.3% from $5.90 billion at March 31, 2024. Average rates paid on total deposits during the second quarter of 2024 was 1.33%, compared to 1.32% in the previous quarter and 0.84% in the year-ago quarter. Approximately 64%, 65% and 65% of the Company's total deposits were FDIC-insured or fully collateralized at June 30, 2024, March 31, 2024 and June 30, 2023, respectively.
Asset Quality
Nonperforming assets totaled $10.3 million, or 0.14% of total assets at June 30, 2024, compared to $10.1 million, or 0.14% of total assets at March 31, 2024 and $11.1 million, or 0.15% of total assets at June 30, 2023.
Net charge-offs totaled $3.8 million in the second quarter of 2024, compared to net charge-offs of $4.5 million in the previous quarter, and net charge-offs of $3.4 million in the year-ago quarter. Annualized net charge-offs as a percentage of average loans was 0.28%, 0.34% and 0.24% during the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively.
The allowance for credit losses, as a percentage of total loans was 1.16% at June 30, 2024, compared to 1.18% at March 31, 2024, and 1.16% at June 30, 2023.
Capital
Total shareholders' equity was $518.6 million at June 30, 2024, compared to $507.2 million and $476.3 million at March 31, 2024 and June 30, 2023, respectively.
During the second quarter of 2024, the Company did not repurchase any shares of common stock. As of June 30, 2024, $19.1 million in share repurchase authorization remained available under the Company's share repurchase program.
The Company's leverage, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 capital ratios were 9.3%, 12.8%, 15.1%, and 11.9%, respectively, at June 30, 2024, compared to 9.0%, 12.6%, 14.8%, and 11.6%, respectively, at March 31, 2024.
On July 30, 2024, the Company's Board of Directors declared a quarterly cash dividend of $0.26 per share on its outstanding common shares. The dividend will be payable on September 16, 2024 to shareholders of record at the close of business on August 30, 2024.
Conference Call
The Company's management will host a conference call today at 1:00 p.m. Eastern Time (7:00 a.m. Hawaii Time) to discuss the quarterly results. Individuals are encouraged to listen to the live webcast of the presentation by visiting the investor relations page of the Company's website at http://ir.cpb.bank. Alternatively, investors may participate in the live call by dialing 1-800-715-9871 (conference ID: 9836028). A playback of the call will be available through August 30, 2024 by dialing 1-800-770-2030 (playback ID: 9836028) and on the Company's website. Information which may be discussed in the conference call is provided in an earnings supplement presentation on the Company's website at http://ir.cpb.bank.
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $7.39 billion in assets as of June 30, 2024. Central Pacific Bank, its primary subsidiary, operates 27 branches and 55 ATMs in the State of Hawaii. For additional information, please visit the Company's website at http://www.cpb.bank.
Equal Housing Lender Member FDIC NYSE Listed: CPF
Forward-Looking Statements
This document may contain forward-looking statements ("FLS") concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, payment or nonpayment of dividends, capital position, credit losses, net interest margin or other financial items; statements of plans, objectives and expectations of Central Pacific Financial Corp. (the "Company") or its management or Board of Directors, including those relating to business plans, use of capital resources, products or services and regulatory developments and regulatory actions; statements of future economic performance including anticipated performance results from our business initiatives; or any statements of the assumptions underlying or relating to any of the foregoing. Words such as "believe," "plan," "anticipate," "seek," "expect," "intend," "forecast," "hope," "target," "continue," "remain," "estimate," "will," "should," "may" and other similar expressions are intended to identify FLS but are not the exclusive means of identifying such statements.
While we believe that our FLS and the assumptions underlying them are reasonably based, such statements and assumptions are by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect. Accordingly, actual results could differ materially from those statements or projections for a variety of reasons, including, but not limited to: the effects of inflation and interest rate fluctuations; the adverse effects of recent bank failures and the potential impact of such developments on customer confidence, deposit behavior, liquidity and regulatory responses thereto; the adverse effects of the COVID-19 pandemic virus (and its variants) and other pandemic viruses on local, national and international economies, including, but not limited to, the adverse impact on tourism and construction in the State of Hawaii, our borrowers, customers, third-party contractors, vendors and employees, as well as the effects of government programs and initiatives in response thereto; supply chain disruptions; the increase in inventory or adverse conditions in the real estate market and deterioration in the construction industry; adverse changes in the financial performance and/or condition of our borrowers and, as a result, increased loan delinquency rates, deterioration in asset quality, and losses in our loan portfolio; the impact of local, national, and international economies and events (including natural disasters such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, and earthquakes) on the Company's business and operations and on tourism, the military, and other major industries operating within the Hawaii market and any other markets in which the Company does business; deterioration or malaise in domestic economic conditions, including any destabilization in the financial industry and deterioration of the real estate market, as well as the impact of declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, changes in capital standards, other regulatory reform and federal and state legislation, including but not limited to regulations promulgated by the Consumer Financial Protection Bureau, government-sponsored enterprise reform, and any related rules and regulations which affect our business operations and competitiveness; the costs and effects of legal and regulatory developments, including legal proceedings and lawsuits we are or may become subject to, or regulatory or other governmental inquiries and proceedings and the resolution thereof; the results of regulatory examinations or reviews and the effect of, and our ability to comply with, any regulations or regulatory orders or actions we are or may become subject to, and the effect of any recurring or special FDIC assessments; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters and the cost and resources required to implement such changes; the effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System; securities market and monetary fluctuations, including the impact resulting from the elimination of the London Interbank Offered Rate Index; negative trends in our market capitalization and adverse changes in the price of the Company's common stock; the effects of any acquisitions or dispositions we may make; political instability; acts of war or terrorism; changes in consumer spending, borrowings and savings habits; technological changes and developments; cybersecurity and data privacy breaches and the consequence therefrom; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; our ability to address deficiencies in our internal controls over financial reporting or disclosure controls and procedures; changes in the competitive environment among financial holding companies and other financial service providers; our ability to successfully implement our initiatives to lower our efficiency ratio; our ability to attract and retain key personnel; changes in our personnel, organization, compensation and benefit plans; our ability to successfully implement and achieve the objectives of our Banking-as-a-Service initiatives, including adoption of the initiatives by customers and risks faced by any of our bank collaborations including reputational and regulatory risk; and our success at managing the risks involved in the foregoing items.
For further information with respect to factors that could cause actual results to materially differ from the expectations or projections stated in the FLS, please see the Company's publicly available Securities and Exchange Commission filings, including the Company's Form 10-K for the last fiscal year and, in particular, the discussion of "Risk Factors" set forth therein. We urge investors to consider all of these factors carefully in evaluating the FLS contained in this document. FLS speak only as of the date on which such statements are made. We undertake no obligation to update any FLS to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events except as required by law.
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
TABLE 1
Three Months Ended
Six Months Ended
(Dollars in thousands,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
Jun 30,
except for per share amounts)
2024
2024
2023
2023
2023
2024
2023
CONDENSED INCOME STATEMENT
Net interest income
$
51,921
$
50,187
$
51,142
$
51,928
$
52,734
$
102,108
$
106,930
Provision for credit losses
2,239
3,936
4,653
4,874
4,319
6,175
6,171
Total other operating income
12,121
11,244
15,172
10,047
10,435
23,365
21,444
Total other operating expense
41,151
40,576
42,522
39,611
39,903
81,727
82,010
Income tax expense
4,835
3,974
4,273
4,349
4,472
8,809
9,531
Net income
15,817
12,945
14,866
13,141
14,475
28,762
30,662
Basic earnings per share
$
0.58
$
0.48
$
0.55
$
0.49
$
0.54
$
1.06
$
1.14
Diluted earnings per share
0.58
0.48
0.55
0.49
0.53
1.06
1.13
Dividends declared per share
0.26
0.26
0.26
0.26
0.26
0.52
0.52
PERFORMANCE RATIOS
Return on average assets (ROA) [1]
0.86
%
0.70
%
0.79
%
0.70
%
0.78
%
0.78
%
0.82
%
Return on average shareholders’ equity (ROE) [1]
12.42
10.33
12.55
10.95
12.12
11.38
13.03
Average shareholders’ equity to average assets
6.94
6.73
6.32
6.39
6.40
6.83
6.31
Efficiency ratio [2]
64.26
66.05
64.12
63.91
63.17
65.14
63.88
Net interest margin (NIM) [1]
2.97
2.83
2.84
2.88
2.96
2.90
3.02
Dividend payout ratio [3]
44.83
54.17
47.27
53.06
49.06
49.06
46.02
SELECTED AVERAGE BALANCES
Average loans, including loans held for sale
$
5,385,829
$
5,400,558
$
5,458,245
$
5,507,248
$
5,543,398
$
5,393,193
$
5,534,741
Average interest-earning assets
7,032,515
7,140,264
7,208,613
7,199,866
7,155,606
7,086,389
7,134,111
Average assets
7,338,714
7,449,661
7,498,097
7,510,537
7,463,629
7,394,188
7,453,753
Average deposits
6,542,767
6,659,812
6,730,883
6,738,071
6,674,650
6,601,290
6,665,208
Average interest-bearing liabilities
4,910,998
5,009,542
5,023,321
4,999,820
4,908,120
4,960,270
4,864,633
Average shareholders’ equity
509,507
501,120
473,708
480,118
477,711
505,314
470,673
[1]
ROA and ROE are annualized based on a 30/360 day convention. Annualized net interest income and expense in the NIM calculation are based on the day count interest payment conventions at the interest-earning asset or interest-bearing liability level (i.e. 30/360, actual/actual).
[2]
Efficiency ratio is defined as total other operating expense divided by total revenue (net interest income and total other operating income).
[3]
Dividend payout ratio is defined as dividends declared per share divided by diluted earnings per share.
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIESFinancial Highlights
(Unaudited)
TABLE 1 (CONTINUED)
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
2024
2024
2023
2023
2023
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp.
Leverage ratio
9.3
%
9.0
%
8.8
%
8.7
%
8.7
%
Tier 1 risk-based capital ratio
12.8
12.6
12.4
11.9
11.8
Total risk-based capital ratio
15.1
14.8
14.6
14.1
13.9
Common equity tier 1 capital ratio
11.9
11.6
11.4
11.0
10.9
Central Pacific Bank
Leverage ratio
9.6
9.4
9.2
9.1
9.1
Tier 1 risk-based capital ratio
13.3
13.1
12.9
12.4
12.3
Total risk-based capital ratio
14.5
14.3
14.1
13.7
13.5
Common equity tier 1 capital ratio
13.3
13.1
12.9
12.4
12.3
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
(dollars in thousands, except for per share amounts)
2024
2024
2023
2023
2023
BALANCE SHEET
Total loans, net of deferred fees and costs
$
5,383,644
$
5,401,417
$
5,438,982
$
5,508,710
$
5,520,683
Total assets
7,386,952
7,409,999
7,642,796
7,637,924
7,567,592
Total deposits
6,582,455
6,618,854
6,847,592
6,874,745
6,805,737
Long-term debt
156,223
156,163
156,102
156,041
155,981
Total shareholders’ equity
518,647
507,203
503,815
468,598
476,279
Total shareholders’ equity to total assets
7.02
%
6.84
%
6.59
%
6.14
%
6.29
%
ASSET QUALITY
Allowance for credit losses (ACL)
$
62,225
$
63,532
$
63,934
$
64,517
$
63,849
Nonaccrual loans
10,257
10,132
7,008
6,652
11,061
Non-performing assets (NPA)
10,257
10,132
7,008
6,652
11,061
Ratio of ACL to total loans
1.16
%
1.18
%
1.18
%
1.17
%
1.16
%
Ratio of NPA to total assets
0.14
%
0.14
%
0.09
%
0.09
%
0.15
%
PER SHARE OF COMMON STOCK OUTSTANDING
Book value per common share
$
19.16
$
18.76
$
18.63
$
17.33
$
17.61
Closing market price per common share
21.20
19.75
19.68
16.68
15.71
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
TABLE 2
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
(Dollars in thousands, except share data)
2024
2024
2023
2023
2023
ASSETS
Cash and due from financial institutions
$
103,829
$
98,410
$
116,181
$
108,818
$
129,071
Interest-bearing deposits in other financial institutions
195,062
214,472
406,256
329,913
181,913
Investment securities:
Available-for-sale debt securities, at fair value
676,719
660,833
647,210
625,253
664,071
Held-to-maturity debt securities, at amortized cost; fair value of: $528,088 at June 30, 2024, $541,685 at March 31, 2024, $565,178 at December 31, 2023, $531,887 at September 30, 2023, and $581,222 at June 30, 2023
615,867
624,948
632,338
640,053
649,946
Total investment securities
1,292,586
1,285,781
1,279,548
1,265,306
1,314,017
Loans held for sale
3,950
755
1,778
—
2,593
Loans, net of deferred fees and costs
5,383,644
5,401,417
5,438,982
5,508,710
5,520,683
Less: allowance for credit losses
(62,225
)
(63,532
)
(63,934
)
(64,517
)
(63,849
)
Loans, net of allowance for credit losses
5,321,419
5,337,885
5,375,048
5,444,193
5,456,834
Premises and equipment, net
100,646
97,688
96,184
97,378
96,479
Accrued interest receivable
23,184
21,957
21,511
21,529
20,463
Investment in unconsolidated entities
40,155
40,780
41,546
42,523
45,218
Mortgage servicing rights
8,636
8,599
8,696
8,797
8,843
Bank-owned life insurance
173,716
172,228
170,706
168,543
168,136
Federal Home Loan Bank of Des Moines ("FHLB") stock
6,925
6,921
6,793
10,995
10,960
Right-of-use lease assets
32,081
32,079
29,720
32,294
33,247
Other assets
84,763
92,444
88,829
107,635
99,818
Total assets
$
7,386,952
$
7,409,999
$
7,642,796
$
7,637,924
$
7,567,592
LIABILITIES
Deposits:
Noninterest-bearing demand
$
1,847,173
$
1,848,554
$
1,913,379
$
1,969,523
$
2,009,387
Interest-bearing demand
1,283,669
1,290,321
1,329,189
1,345,843
1,359,978
Savings and money market
2,234,111
2,211,966
2,209,733
2,209,550
2,184,652
Time
1,217,502
1,268,013
1,395,291
1,349,829
1,251,720
Total deposits
6,582,455
6,618,854
6,847,592
6,874,745
6,805,737
Long-term debt, net of unamortized debt issuance costs of: $324 at June 30, 2024, $384 at March 31, 2024, $445 at December 31, 2023, $506 at September 30, 2023 and $566 at June 30, 2023
156,223
156,163
156,102
156,041
155,981
Lease liabilities
33,422
33,169
30,634
33,186
34,111
Accrued interest payable
14,998
16,654
18,948
16,752
11,402
Other liabilities
81,207
77,956
85,705
88,602
84,082
Total liabilities
6,868,305
6,902,796
7,138,981
7,169,326
7,091,313
EQUITY
Shareholders' equity:
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023
—
—
—
—
—
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,063,644 at June 30, 2024, 27,042,326 at March 31, 2024, 27,045,033 at December 31, 2023, 27,043,169 at September 30, 2023, and 27,045,792 at June 30, 2023
404,494
404,494
405,439
405,439
405,511
Additional paid-in capital
104,161
103,130
102,982
102,550
101,997
Retained earnings
132,683
123,902
117,990
110,156
104,046
Accumulated other comprehensive loss
(122,691
)
(124,323
)
(122,596
)
(149,547
)
(135,275
)
Total shareholders' equity
518,647
507,203
503,815
468,598
476,279
Total liabilities and equity
$
7,386,952
$
7,409,999
$
7,642,796
$
7,637,924
$
7,567,592
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
TABLE 3
Three Months Ended
Six Months Ended
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
Jun 30,
(Dollars in thousands, except per share data)
2024
2024
2023
2023
2023
2024
2023
Interest income:
Interest and fees on loans
$
64,422
$
62,819
$
62,429
$
62,162
$
60,455
$
127,241
$
118,724
Interest and dividends on investment securities:
Taxable investment securities
8,466
7,211
7,292
7,016
7,145
15,677
14,481
Tax-exempt investment securities
598
655
686
709
727
1,253
1,517
Interest on deposits in other financial institutions
2,203
3,611
3,597
2,412
877
5,814
1,154
Dividend income on FHLB stock
151
106
109
113
120
257
256
Total interest income
75,840
74,402
74,113
72,412
69,324
150,242
136,132
Interest expense:
Interest on deposits:
Interest-bearing demand
490
499
467
460
411
989
774
Savings and money market
8,977
8,443
7,459
6,464
4,670
17,420
8,056
Time
12,173
12,990
12,741
11,268
8,932
25,163
15,196
Interest on short-term borrowings
1
—
—
—
378
1
1,139
Interest on long-term debt
2,278
2,283
2,304
2,292
2,199
4,561
4,037
Total interest expense
23,919
24,215
22,971
20,484
16,590
48,134
29,202
Net interest income
51,921
50,187
51,142
51,928
52,734
102,108
106,930
Provision for credit losses
2,239
3,936
4,653
4,874
4,319
6,175
6,171
Net interest income after provision for credit losses
49,682
46,251
46,489
47,054
48,415
95,933
100,759
Other operating income:
Mortgage banking income
1,040
613
611
765
690
1,653
1,216
Service charges on deposit accounts
2,135
2,103
2,312
2,193
2,137
4,238
4,248
Other service charges and fees
5,869
5,261
5,349
5,203
4,994
11,130
9,979
Income from fiduciary activities
1,449
1,435
1,272
1,234
1,068
2,884
2,389
Income from bank-owned life insurance
1,234
1,522
2,015
379
1,185
2,756
2,476
Net loss on sales of investment securities
—
—
(1,939
)
(135
)
—
—
—
Other
394
310
5,552
408
361
704
1,136
Total other operating income
12,121
11,244
15,172
10,047
10,435
23,365
21,444
Other operating expense:
Salaries and employee benefits
21,246
20,735
20,164
19,015
20,848
41,981
42,871
Net occupancy
4,597
4,600
4,676
4,725
4,310
9,197
8,784
Computer software
4,381
4,287
4,026
4,473
4,621
8,668
9,227
Legal and professional services
2,506
2,320
2,245
2,359
2,469
4,826
5,355
Equipment
995
1,010
968
1,112
932
2,005
1,878
Advertising
901
914
1,045
968
942
1,815
1,875
Communication
657
837
632
809
791
1,494
1,569
Other
5,868
5,873
8,766
6,150
4,990
11,741
10,451
Total other operating expense
41,151
40,576
42,522
39,611
39,903
81,727
82,010
Income before income taxes
20,652
16,919
19,139
17,490
18,947
37,571
40,193
Income tax expense
4,835
3,974
4,273
4,349
4,472
8,809
9,531
Net income
$
15,817
$
12,945
$
14,866
$
13,141
$
14,475
$
28,762
$
30,662
Per common share data:
Basic earnings per share
$
0.58
$
0.48
$
0.55
$
0.49
$
0.54
$
1.06
$
1.14
Diluted earnings per share
0.58
0.48
0.55
0.49
0.53
1.06
1.13
Cash dividends declared
0.26
0.26
0.26
0.26
0.26
0.52
0.52
Basic weighted average shares outstanding
27,053,549
27,046,525
27,044,121
27,042,762
27,024,043
27,050,037
27,011,659
Diluted weighted average shares outstanding
27,116,349
27,099,101
27,097,285
27,079,484
27,071,478
27,106,267
27,090,258
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
(Unaudited)
TABLE 4
Three Months Ended
Three Months Ended
Three Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
Average
Average
Average
Average
Average
Average
(Dollars in thousands)
Balance
Yield/Rate
Interest
Balance
Yield/Rate
Interest
Balance
Yield/Rate
Interest
ASSETS
Interest-earning assets:
Interest-bearing deposits in other financial institutions
$
162,393
5.46
%
$
2,203
$
265,418
5.47
%
$
3,611
$
69,189
5.08
%
$
877
Investment securities:
Taxable
1,335,100
2.54
8,466
1,324,657
2.18
7,211
1,379,319
2.07
7,145
Tax-exempt [1]
142,268
2.13
757
142,830
2.32
829
151,979
2.42
920
Total investment securities
1,477,368
2.50
9,223
1,467,487
2.19
8,040
1,531,298
2.11
8,065
Loans, including loans held for sale
5,385,829
4.80
64,422
5,400,558
4.67
62,819
5,543,398
4.37
60,455
FHLB stock
6,925
8.71
151
6,801
6.24
106
11,721
4.10
120
Total interest-earning assets
7,032,515
4.34
75,999
7,140,264
4.19
74,576
7,155,606
3.89
69,517
Noninterest-earning assets
306,199
309,397
308,023
Total assets
$
7,338,714
$
7,449,661
$
7,463,629
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits
$
1,273,901
0.15
%
$
490
$
1,296,865
0.15
%
$
499
$
1,367,878
0.12
%
$
411
Savings and money market deposits
2,221,754
1.63
8,977
2,218,250
1.53
8,443
2,172,680
0.86
4,670
Time deposits up to $250,000
555,809
3.29
4,548
544,279
3.21
4,339
390,961
1.82
1,770
Time deposits over $250,000
703,280
4.36
7,625
794,019
4.38
8,651
790,864
3.63
7,162
Total interest-bearing deposits
4,754,744
1.83
21,640
4,853,413
1.82
21,932
4,722,383
1.19
14,013
FHLB advances and other short-term borrowings
66
5.60
1
—
—
—
29,791
5.09
378
Long-term debt
156,188
5.86
2,278
156,129
5.88
2,283
155,946
5.65
2,199
Total interest-bearing liabilities
4,910,998
1.96
23,919
5,009,542
1.94
24,215
4,908,120
1.36
16,590
Noninterest-bearing deposits
1,788,023
1,806,399
1,952,267
Other liabilities
130,186
132,600
125,531
Total liabilities
6,829,207
6,948,541
6,985,918
Total equity
509,507
501,120
477,711
Total liabilities and equity
$
7,338,714
$
7,449,661
$
7,463,629
Net interest income
$
52,080
$
50,361
$
52,927
Interest rate spread
2.38
%
2.25
%
2.53
%
Net interest margin
2.97
%
2.83
%
2.96
%
[1]
Interest income and resultant yield information for tax-exempt investment securities is expressed on a taxable-equivalent basis using a federal statutory tax rate of 21%.
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIESAverage Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
(Unaudited)
TABLE 5
Six Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
Average
Average
Average
Average
(Dollars in thousands)
Balance
Yield/Rate
Interest
Balance
Yield/Rate
Interest
ASSETS
Interest-earning assets:
Interest-bearing deposits in other financial institutions
$
213,905
5.47
%
$
5,814
$
47,195
4.93
%
$
1,154
Investment securities:
Taxable
1,329,879
2.36
15,677
1,387,606
2.09
14,481
Tax-exempt [1]
142,549
2.23
1,586
152,520
2.52
1,920
Total investment securities
1,472,428
2.34
17,263
1,540,126
2.13
16,401
Loans, including loans held for sale
5,393,193
4.74
127,241
5,534,741
4.32
118,724
FHLB stock
6,863
7.49
257
12,049
4.26
256
Total interest-earning assets
7,086,389
4.26
150,575
7,134,111
3.85
136,535
Noninterest-earning assets
307,799
319,642
Total assets
$
7,394,188
$
7,453,753
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits
$
1,285,383
0.15
%
$
989
$
1,391,386
0.11
%
$
774
Savings and money market deposits
2,220,002
1.58
17,420
2,177,783
0.75
8,056
Time deposits up to $250,000
550,044
3.25
8,887
366,316
1.60
2,907
Time deposits over $250,000
748,649
4.37
16,276
740,428
3.35
12,289
Total interest-bearing deposits
4,804,078
1.82
43,572
4,675,913
1.04
24,026
FHLB advances and other short-term borrowings
33
5.60
1
47,031
4.88
1,139
Long-term debt
156,159
5.87
4,561
141,689
5.75
4,037
Total interest-bearing liabilities
4,960,270
1.95
48,134
4,864,633
1.21
29,202
Noninterest-bearing deposits
1,797,212
1,989,295
Other liabilities
131,392
129,152
Total liabilities
6,888,874
6,983,080
Total equity
505,314
470,673
Total liabilities and equity
$
7,394,188
$
7,453,753
Net interest income
$
102,441
$
107,333
Interest rate spread
2.31
%
2.64
%
Net interest margin
2.90
%
3.02
%
[1]
Interest income and resultant yield information for tax-exempt investment securities is expressed on a taxable-equivalent basis using a federal statutory tax rate of 21%.
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIESLoans by Geographic Distribution
(Unaudited)
TABLE 6
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
(Dollars in thousands)
2024
2024
2023
2023
2023
HAWAII:
Commercial and industrial
$
415,538
$
420,009
$
421,736
$
406,433
$
374,601
Real estate:
Construction
147,657
145,213
163,337
174,057
168,012
Residential mortgage
1,913,177
1,924,889
1,927,789
1,930,740
1,942,906
Home equity
706,811
729,210
736,524
753,980
750,760
Commercial mortgage
1,150,703
1,103,174
1,063,969
1,045,625
1,037,826
Consumer
287,295
306,563
322,346
338,248
327,790
Total loans, net of deferred fees and costs
4,621,181
4,629,058
4,635,701
4,649,083
4,601,895
Less: Allowance for credit losses
(47,902
)
(48,739
)
(48,189
)
(48,105
)
(44,828
)
Loans, net of allowance for credit losses
$
4,573,279
$
4,580,319
$
4,587,512
$
4,600,978
$
4,557,067
U.S. MAINLAND: [1]
Commercial and industrial
$
169,318
$
156,087
$
153,971
$
157,373
$
170,557
Real estate:
Construction
23,865
23,356
22,182
37,455
32,807
Commercial mortgage
314,667
319,088
318,933
319,802
329,736
Consumer
254,613
273,828
308,195
344,997
385,688
Total loans, net of deferred fees and costs
762,463
772,359
803,281
859,627
918,788
Less: Allowance for credit losses
(14,323
)
(14,793
)
(15,745
)
(16,412
)
(19,021
)
Loans, net of allowance for credit losses
$
748,140
$
757,566
$
787,536
$
843,215
$
899,767
TOTAL:
Commercial and industrial
$
584,856
$
576,096
$
575,707
$
563,806
$
545,158
Real estate:
Construction
171,522
168,569
185,519
211,512
200,819
Residential mortgage
1,913,177
1,924,889
1,927,789
1,930,740
1,942,906
Home equity
706,811
729,210
736,524
753,980
750,760
Commercial mortgage
1,465,370
1,422,262
1,382,902
1,365,427
1,367,562
Consumer
541,908
580,391
630,541
683,245
713,478
Total loans, net of deferred fees and costs
5,383,644
5,401,417
5,438,982
5,508,710
5,520,683
Less: Allowance for credit losses
(62,225
)
(63,532
)
(63,934
)
(64,517
)
(63,849
)
Loans, net of allowance for credit losses
$
5,321,419
$
5,337,885
$
5,375,048
$
5,444,193
$
5,456,834
[1]
U.S. Mainland includes territories of the United States.
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIESDeposits
(Unaudited)
TABLE 7
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
(Dollars in thousands)
2024
2024
2023
2023
2023
Noninterest-bearing demand
$
1,847,173
$
1,848,554
$
1,913,379
$
1,969,523
$
2,009,387
Interest-bearing demand
1,283,669
1,290,321
1,329,189
1,345,843
1,359,978
Savings and money market
2,234,111
2,211,966
2,209,733
2,209,550
2,184,652
Time deposits up to $250,000
547,212
544,600
533,898
465,543
427,864
Core deposits
5,912,165
5,895,441
5,986,199
5,990,459
5,981,881
Government time deposits
193,833
235,463
374,581
400,130
383,426
Other time deposits greater than $250,000
476,457
487,950
486,812
484,156
440,430
Total time deposits greater than $250,000
670,290
723,413
861,393
884,286
823,856
Total deposits
$
6,582,455
$
6,618,854
$
6,847,592
$
6,874,745
$
6,805,737
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Nonperforming Assets and Accruing Loans 90+ Days Past Due
(Unaudited)
TABLE 8
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
(Dollars in thousands)
2024
2024
2023
2023
2023
Nonaccrual loans:
Commercial and industrial
$
355
$
357
$
432
$
352
$
319
Real estate:
Construction
—
—
—
—
4,851
Residential mortgage
7,991
7,979
4,962
4,949
4,385
Home equity
1,247
929
834
677
797
Commercial mortgage
77
77
77
77
77
Consumer
587
790
703
597
632
Total nonaccrual loans
10,257
10,132
7,008
6,652
11,061
Other real estate owned ("OREO")
—
—
—
—
—
Total nonperforming assets ("NPAs")
10,257
10,132
7,008
6,652
11,061
Accruing loans 90+ days past due:
Real estate:
Construction
—
588
—
—
—
Residential mortgage
1,273
386
—
794
959
Home equity
135
560
229
—
133
Consumer
896
924
1,083
2,120
2,207
Total accruing loans 90+ days past due
2,304
2,458
1,312
2,914
3,299
Total NPAs and accruing loans 90+ days past due
$
12,561
$
12,590
$
8,320
$
9,566
$
14,360
Ratio of total nonaccrual loans to total loans
0.19
%
0.19
%
0.13
%
0.12
%
0.20
%
Ratio of total NPAs to total assets
0.14
0.14
0.09
0.09
0.15
Ratio of total NPAs to total loans and OREO
0.19
0.19
0.13
0.12
0.20
Ratio of total NPAs and accruing loans 90+ days past due to total loans and OREO
0.23
0.23
0.15
0.17
0.26
Quarter-to-quarter changes in NPAs:
Balance at beginning of quarter
$
10,132
$
7,008
$
6,652
$
11,061
$
5,313
Additions
1,920
4,792
1,836
2,311
7,105
Reductions:
Payments
(363
)
(263
)
(268
)
(5,718
)
(290
)
Return to accrual status
(27
)
(198
)
(137
)
(207
)
(212
)
Charge-offs, valuation and other adjustments
(1,405
)
(1,207
)
(1,075
)
(795
)
(855
)
Total reductions
(1,795
)
(1,668
)
(1,480
)
(6,720
)
(1,357
)
Balance at end of quarter
$
10,257
$
10,132
$
7,008
$
6,652
$
11,061
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Allowance for Credit Losses on Loans
(Unaudited)
TABLE 9
Three Months Ended
Six Months Ended
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
Jun 30,
(Dollars in thousands)
2024
2024
2023
2023
2023
2024
2023
Allowance for credit losses:
Balance at beginning of period
$
63,532
$
63,934
$
64,517
$
63,849
$
63,099
$
63,934
$
63,738
Provision for credit losses on loans
2,448
4,121
4,959
4,526
4,135
6,569
5,750
Charge-offs:
Commercial and industrial
(519
)
(682
)
(419
)
(402
)
(362
)
(1,201
)
(1,141
)
Real estate:
Residential mortgage
(284
)
—
—
—
—
(284
)
—
Consumer
(4,345
)
(4,838
)
(5,976
)
(4,710
)
(3,873
)
(9,183
)
(6,559
)
Total charge-offs
(5,148
)
(5,520
)
(6,395
)
(5,112
)
(4,235
)
(10,668
)
(7,700
)
Recoveries:
Commercial and industrial
130
90
84
261
125
220
375
Real estate:
Construction
—
—
—
1
—
—
—
Residential mortgage
9
8
7
10
7
17
60
Home equity
—
6
42
—
15
6
15
Consumer
1,254
893
720
982
703
2,147
1,611
Total recoveries
1,393
997
853
1,254
850
2,390
2,061
Net charge-offs
(3,755
)
(4,523
)
(5,542
)
(3,858
)
(3,385
)
(8,278
)
(5,639
)
Balance at end of period
$
62,225
$
63,532
$
63,934
$
64,517
$
63,849
$
62,225
$
63,849
Average loans, net of deferred fees and costs
$
5,385,829
$
5,400,558
$
5,458,245
$
5,507,248
$
5,543,398
$
5,393,193
$
5,534,741
Ratio of annualized net charge-offs to average loans
0.28
%
0.34
%
0.41
%
0.28
%
0.24
%
0.31
%
0.20
%
Ratio of ACL to total loans
1.16
1.18
1.18
1.17
1.16
1.16
%
1.16
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20240731076743/en/
Investor Contact: Ian Tanaka SVP, Treasury Manager (808) 544-3646 ian.tanaka@cpb.bank Media Contact: Tim Sakahara AVP, Corporate Communications Manager (808) 544-5125 tim.sakahara@cpb.bank
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