Central Pacific Financial Reports Third Quarter 2024 Earnings

Highlights include:

• Net income of $13.3 million, or $0.49 per diluted share. Excluding $3.1 million in pre-tax expenses related to a strategic opportunity, adjusted net income (non-GAAP) was $15.7 million, or $0.58 per diluted share.
• Net interest margin of 3.07% increased by 10 bps from 2.97% in the previous quarter
• Total loans of $5.34 billion decreased by $41.0 million from the previous quarter
• Core deposits of $5.97 billion increased by $53.9 million from the previous quarter. Total deposits of $6.58 billion increased by $0.6 million from the previous quarter, which included a decrease in government time deposits of $69.1 million.
• Total risk-based capital and common equity tier 1 ratios of 15.3% and 12.1%, respectively
• The CPF Board of Directors approved a quarterly cash dividend of $0.26 per share

Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $13.3 million, or fully diluted earnings per share ("EPS") of $0.49 for the third quarter of 2024, compared to net income of $15.8 million, or EPS of $0.58 in the previous quarter and net income of $13.1 million, or EPS of $0.49 in the year-ago quarter. Results for the third quarter of 2024 were impacted by $3.1 million in pre-tax expenses related to our evaluation and assessment of a strategic opportunity. While the parties are no longer currently engaged in discussions, we remain interested in the opportunity under the right terms and conditions. Excluding these expenses, adjusted net income and EPS (non-GAAP) for the quarter was approximately $15.7 million and $0.58, respectively.

"Our third quarter core results were strong and we continue to pursue our strategies for future growth and additional internal operating efficiencies," said Arnold Martines, Chairman, President and Chief Executive Officer. "Our net interest income and net interest margin expanded as we successfully managed the balance sheet and repricing in this evolving interest rate environment."

"Central Pacific remains committed to supporting our customers and communities. We were pleased to open a new state-of-the-art branch in Kahului to support the business and personal financial needs of the Maui community as we move to expand our presence on the neighbor islands," Martines said.

Earnings Highlights

Net interest income was $53.9 million for the third quarter of 2024, which increased by $1.9 million, or 3.7% from the previous quarter, and increased by $1.9 million, or 3.7% from the year-ago quarter. Net interest margin ("NIM") was 3.07% for the third quarter of 2024, an increase of 10 basis points ("bp" or "bps") from the previous quarter and an increase of 19 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 of 11 and 9 bps, respectively, combined with a 1 bp decline in average rates paid on interest-bearing deposits. The higher average yield earned on investment securities in the third quarter of 2024 includes $1.1 million in income from an interest rate swap that became effective on March 31, 2024, compared to $0.9 million in the second quarter of 2024.

The Company recorded a provision for credit losses of $2.8 million in the third quarter of 2024, compared to a provision of $2.2 million in the previous quarter and a provision of $4.9 million in the year-ago quarter. The provision in the current quarter consisted of a provision for credit losses on loans of $3.0 million, offset by a credit to the provision for off-balance sheet exposures of $0.2 million.

Other operating income totaled $12.7 million for the third quarter of 2024, compared to $12.1 million in the previous quarter and $10.0 million in the year-ago quarter. The higher other operating income was primarily due to higher income from bank-owned life insurance of $0.7 million, partially offset by lower mortgage banking income of $0.2 million.

Other operating expense totaled $46.7 million for the third quarter of 2024, compared to $41.2 million in the previous quarter and $39.6 million in the year-ago quarter. The higher other operating expense was primarily due to the aforementioned $3.1 million in expenses related to a strategic opportunity (included in other), higher salaries and employee benefits of $1.1 million, and higher directors' deferred compensation plan expenses of $1.0 million (included in other).

The efficiency ratio was 70.12% for the third quarter of 2024, compared to 64.26% in the previous quarter and 63.91% in the year-ago quarter. Excluding the aforementioned expenses related to a strategic opportunity, the adjusted efficiency ratio (non-GAAP) for the third quarter of 2024 was 65.51%.

The effective tax rate was 22.0% for the third quarter of 2024, compared to 23.4% in the previous quarter and 24.9% in the year-ago quarter. The decrease in the effective tax rate was primarily due to higher tax-exempt income from bank-owned life insurance and additional tax credits recognized.

Balance Sheet Highlights

Total assets of $7.42 billion at September 30, 2024 increased by $28.5 million, or 0.4% from $7.39 billion at June 30, 2024, and decreased by $222.5 million, or 2.9% from $7.64 billion at September 30, 2023. The Company had $326.6 million in cash on its balance sheet and $2.55 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities at September 30, 2024. Total available sources of liquidity as a percentage of uninsured and uncollateralized deposits was 118% at September 30, 2024, compared to 121% at June 30, 2024 and 122% at September 30, 2023. During the third quarter of 2024, excess balance sheet liquidity was used to pay off $69.1 million in higher cost government time deposits.

Total loans, net of deferred fees and costs, of $5.34 billion at September 30, 2024 decreased by $41.0 million, or 0.8% from $5.38 billion at June 30, 2024, and decreased by $166.1 million, or 3.0% from $5.51 billion at September 30, 2023. Average yields earned on loans during the third quarter of 2024 was 4.89%, compared to 4.80% in the previous quarter and 4.49% in the year-ago quarter.

Total deposits of $6.58 billion at September 30, 2024 increased by $0.6 million or 0.01% from $6.58 billion at June 30, 2024, and decreased by $291.7 million, or 4.2% from $6.87 billion at September 30, 2023. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.97 billion at September 30, 2024, and increased by $53.9 million, or 0.9% from $5.91 billion at June 30, 2024. Average rates paid on total deposits during the third quarter of 2024 was 1.32%, compared to 1.33% in the previous quarter and 1.07% in the year-ago quarter. FDIC-insured or fully collateralized deposits represented approximately 63% of total deposits at September 30, 2024, compared to 64% at June 30, 2024 and 65% at September 30, 2023.

Asset Quality

Nonperforming assets totaled $11.6 million, or 0.16% of total assets at September 30, 2024, compared to $10.3 million, or 0.14% of total assets at June 30, 2024 and $6.7 million, or 0.09% of total assets at September 30, 2023. The increase in nonperforming assets was primarily due to the addition of residential mortgage loans totaling $2.2 million which were well-collateralized with strong loan-to-value ratios.

Net charge-offs totaled $3.6 million in the third quarter of 2024, compared to net charge-offs of $3.8 million in the previous quarter, and net charge-offs of $3.9 million in the year-ago quarter. Annualized net charge-offs as a percentage of average loans was 0.27%, 0.28% and 0.28% during the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

The allowance for credit losses, as a percentage of total loans was 1.15% at September 30, 2024, compared to 1.16% at June 30, 2024, and 1.17% at September 30, 2023.

Capital

Total shareholders' equity was $543.7 million at September 30, 2024, compared to $518.6 million and $468.6 million at June 30, 2024 and September 30, 2023, respectively.

During the third quarter of 2024, the Company did not repurchase any shares of common stock. As of September 30, 2024, $19.1 million in share repurchase authorization remained available under the Company's share repurchase program.

The Company's leverage, common equity tier 1, tier 1 risk-based capital, and total risk-based capital ratios were 9.5%, 12.1%, 13.1%, and 15.3%, respectively, at September 30, 2024, compared to 9.3%, 11.9%, 12.8%, and 15.1%, respectively, at June 30, 2024.

On October 29, 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 December 16, 2024 to shareholders of record at the close of business on November 29, 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: 6299769). A playback of the call will be available through November 29, 2024 by dialing 1-800-770-2030 (playback ID: 6299769) 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 $7.42 billion in assets as of September 30, 2024. Central Pacific Bank, its primary subsidiary, operates 27 branches and 56 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; labor contract disputes and potential strikes; 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 PCAOB, the FASB 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 LIBOR Index; negative trends in our market capitalization and adverse changes in the price of the Company's common stock; the effects of any potential or actual acquisitions or dispositions we may make or evaluate, and the related costs, including re-engagement in any potential acquisition process; 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 BaaS 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 SEC 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

 

Nine Months Ended

(Dollars in thousands,

Sep 30,

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Sep 30,

except for per share amounts)

2024

 

2024

 

2024

 

2023

 

2023

 

2024

 

2023

CONDENSED INCOME STATEMENT

 

 

 

 

 

 

 

Net interest income

$

53,851

 

$

51,921

 

$

50,187

 

$

51,142

 

$

51,928

 

$

155,959

 

$

158,858

 

Provision for credit losses

 

2,833

 

 

2,239

 

 

3,936

 

 

4,653

 

 

4,874

 

 

9,008

 

 

11,045

 

Total other operating income

 

12,734

 

 

12,121

 

 

11,244

 

 

15,172

 

 

10,047

 

 

36,099

 

 

31,491

 

Total other operating expense

 

46,687

 

 

41,151

 

 

40,576

 

 

42,522

 

 

39,611

 

 

128,414

 

 

121,621

 

Income tax expense

 

3,760

 

 

4,835

 

 

3,974

 

 

4,273

 

 

4,349

 

 

12,569

 

 

13,880

 

Net income

 

13,305

 

 

15,817

 

 

12,945

 

 

14,866

 

 

13,141

 

 

42,067

 

 

43,803

 

Basic earnings per share

$

0.49

 

$

0.58

 

$

0.48

 

$

0.55

 

$

0.49

 

$

1.55

 

$

1.62

 

Diluted earnings per share

 

0.49

 

 

0.58

 

 

0.48

 

 

0.55

 

 

0.49

 

 

1.55

 

 

1.62

 

Dividends declared per share

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

 

0.78

 

 

0.78

 

 

 

 

 

 

 

 

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

Return on average assets (ROA) [1]

 

0.72

%

 

0.86

%

 

0.70

%

 

0.79

%

 

0.70

%

 

0.76

%

 

0.78

%

Return on average shareholders’ equity (ROE) [1]

 

10.02

 

 

12.42

 

 

10.33

 

 

12.55

 

 

10.95

 

 

10.91

 

 

12.33

 

Average shareholders’ equity to average assets

 

7.23

 

 

6.94

 

 

6.73

 

 

6.32

 

 

6.39

 

 

6.97

 

 

6.34

 

Efficiency ratio [2]

 

70.12

 

 

64.26

 

 

66.05

 

 

64.12

 

 

63.91

 

 

66.86

 

 

63.89

 

Net interest margin (NIM) [1]

 

3.07

 

 

2.97

 

 

2.83

 

 

2.84

 

 

2.88

 

 

2.95

 

 

2.98

 

Dividend payout ratio [3]

 

53.06

 

 

44.83

 

 

54.17

 

 

47.27

 

 

53.06

 

 

50.32

 

 

48.15

 

 

 

 

 

 

 

 

 

SELECTED AVERAGE BALANCES

 

 

 

 

 

 

 

Average loans, including loans held for sale

$

5,330,810

 

$

5,385,829

 

$

5,400,558

 

$

5,458,245

 

$

5,507,248

 

$

5,372,247

 

$

5,525,476

 

Average interest-earning assets

 

7,022,910

 

 

7,032,515

 

 

7,140,264

 

 

7,208,613

 

 

7,199,866

 

 

7,065,075

 

 

7,156,270

 

Average assets

 

7,347,403

 

 

7,338,714

 

 

7,449,661

 

 

7,498,097

 

 

7,510,537

 

 

7,378,479

 

 

7,472,890

 

Average deposits

 

6,535,422

 

 

6,542,767

 

 

6,659,812

 

 

6,730,883

 

 

6,738,071

 

 

6,579,174

 

 

6,689,762

 

Average interest-bearing liabilities

 

4,904,460

 

 

4,910,998

 

 

5,009,542

 

 

5,023,321

 

 

4,999,820

 

 

4,941,530

 

 

4,910,190

 

Average shareholders’ equity

 

530,928

 

 

509,507

 

 

501,120

 

 

473,708

 

 

480,118

 

 

513,914

 

 

473,856

 

[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 SUBSIDIARIES

Financial Highlights

(Unaudited)

TABLE 1 (CONTINUED)

 

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Sep 30,

 

2024

2024

2024

2023

2023

REGULATORY CAPITAL RATIOS

 

 

 

 

 

Central Pacific Financial Corp.

 

 

 

 

 

Leverage ratio

9.5

%

9.3

%

9.0

%

8.8

%

8.7

%

Common equity tier 1 capital ratio

12.1

 

11.9

 

11.6

 

11.4

 

11.0

 

Tier 1 risk-based capital ratio

13.1

 

12.8

 

12.6

 

12.4

 

11.9

 

Total risk-based capital ratio

15.3

 

15.1

 

14.8

 

14.6

 

14.1

 

 

 

 

 

 

 

Central Pacific Bank

 

 

 

 

 

Leverage ratio

9.8

 

9.6

 

9.4

 

9.2

 

9.1

 

Common equity tier 1 capital ratio

13.6

 

13.3

 

13.1

 

12.9

 

12.4

 

Tier 1 risk-based capital ratio

13.6

 

13.3

 

13.1

 

12.9

 

12.4

 

Total risk-based capital ratio

14.8

 

14.5

 

14.3

 

14.1

 

13.7

 

 

 

 

 

 

 

 

Sep 30,

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

(dollars in thousands, except for per share amounts)

2024

 

2024

 

2024

 

2023

 

2023

BALANCE SHEET

 

 

 

 

 

Total loans, net of deferred fees and costs

$

5,342,609

 

$

5,383,644

 

$

5,401,417

 

$

5,438,982

 

$

5,508,710

 

Total assets

 

7,415,430

 

 

7,386,952

 

 

7,409,999

 

 

7,642,796

 

 

7,637,924

 

Total deposits

 

6,583,013

 

 

6,582,455

 

 

6,618,854

 

 

6,847,592

 

 

6,874,745

 

Long-term debt

 

156,284

 

 

156,223

 

 

156,163

 

 

156,102

 

 

156,041

 

Total shareholders’ equity

 

543,725

 

 

518,647

 

 

507,203

 

 

503,815

 

 

468,598

 

Total shareholders’ equity to total assets

 

7.33

%

 

7.02

%

 

6.84

%

 

6.59

%

 

6.14

%

 

 

 

 

 

 

ASSET QUALITY

 

 

 

 

 

Allowance for credit losses (ACL)

$

61,647

 

$

62,225

 

$

63,532

 

$

63,934

 

$

64,517

 

Nonaccrual loans

 

11,597

 

 

10,257

 

 

10,132

 

 

7,008

 

 

6,652

 

Non-performing assets (NPA)

 

11,597

 

 

10,257

 

 

10,132

 

 

7,008

 

 

6,652

 

Ratio of ACL to total loans

 

1.15

%

 

1.16

%

 

1.18

%

 

1.18

%

 

1.17

%

Ratio of NPA to total assets

 

0.16

%

 

0.14

%

 

0.14

%

 

0.09

%

 

0.09

%

 

 

 

 

 

 

PER SHARE OF COMMON STOCK OUTSTANDING

 

 

 

 

 

Book value per common share

$

20.09

 

$

19.16

 

$

18.76

 

$

18.63

 

$

17.33

 

Closing market price per common share

 

29.51

 

 

21.20

 

 

19.75

 

 

19.68

 

 

16.68

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

TABLE 2

 

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Sep 30,

(Dollars in thousands, except share data)

2024

2024

2024

2023

2023

ASSETS

 

 

 

 

 

Cash and due from financial institutions

$

100,064

 

$

103,829

 

$

98,410

 

$

116,181

 

$

108,818

 

Interest-bearing deposits in other financial institutions

 

226,505

 

 

195,062

 

 

214,472

 

 

406,256

 

 

329,913

 

Investment securities:

 

 

 

 

 

Available-for-sale debt securities, at fair value

 

723,453

 

 

676,719

 

 

660,833

 

 

647,210

 

 

625,253

 

Held-to-maturity debt securities, at amortized cost; fair value of: $546,990 at September 30, 2024, $528,088 at June 30, 2024, $541,685 at March 31, 2024, $565,178 at December 31, 2023, and $531,887 at September 30, 2023

 

606,117

 

 

615,867

 

 

624,948

 

 

632,338

 

 

640,053

 

Total investment securities

 

1,329,570

 

 

1,292,586

 

 

1,285,781

 

 

1,279,548

 

 

1,265,306

 

Loans held for sale

 

1,609

 

 

3,950

 

 

755

 

 

1,778

 

 

—

 

Loans, net of deferred fees and costs

 

5,342,609

 

 

5,383,644

 

 

5,401,417

 

 

5,438,982

 

 

5,508,710

 

Less: allowance for credit losses

 

(61,647

)

 

(62,225

)

 

(63,532

)

 

(63,934

)

 

(64,517

)

Loans, net of allowance for credit losses

 

5,280,962

 

 

5,321,419

 

 

5,337,885

 

 

5,375,048

 

 

5,444,193

 

Premises and equipment, net

 

104,575

 

 

100,646

 

 

97,688

 

 

96,184

 

 

97,378

 

Accrued interest receivable

 

23,942

 

 

23,184

 

 

21,957

 

 

21,511

 

 

21,529

 

Investment in unconsolidated entities

 

54,836

 

 

40,155

 

 

40,780

 

 

41,546

 

 

42,523

 

Mortgage servicing rights

 

8,513

 

 

8,636

 

 

8,599

 

 

8,696

 

 

8,797

 

Bank-owned life insurance

 

175,914

 

 

173,716

 

 

172,228

 

 

170,706

 

 

168,543

 

Federal Home Loan Bank of Des Moines ("FHLB") stock

 

6,929

 

 

6,925

 

 

6,921

 

 

6,793

 

 

10,995

 

Right-of-use lease assets

 

32,192

 

 

32,081

 

 

32,079

 

 

29,720

 

 

32,294

 

Other assets

 

69,819

 

 

84,763

 

 

92,444

 

 

88,829

 

 

107,635

 

Total assets

$

7,415,430

 

$

7,386,952

 

$

7,409,999

 

$

7,642,796

 

$

7,637,924

 

LIABILITIES

 

 

 

 

 

Deposits:

 

 

 

 

 

Noninterest-bearing demand

$

1,838,009

 

$

1,847,173

 

$

1,848,554

 

$

1,913,379

 

$

1,969,523

 

Interest-bearing demand

 

1,255,382

 

 

1,283,669

 

 

1,290,321

 

 

1,329,189

 

 

1,345,843

 

Savings and money market

 

2,336,323

 

 

2,234,111

 

 

2,211,966

 

 

2,209,733

 

 

2,209,550

 

Time

 

1,153,299

 

 

1,217,502

 

 

1,268,013

 

 

1,395,291

 

 

1,349,829

 

Total deposits

 

6,583,013

 

 

6,582,455

 

 

6,618,854

 

 

6,847,592

 

 

6,874,745

 

Long-term debt, net of unamortized debt issuance costs of: $263 at September 30, 2024, $324 at June 30, 2024, $384 at March 31, 2024, $445 at December 31, 2023, and $506 at September 30, 2023

 

156,284

 

 

156,223

 

 

156,163

 

 

156,102

 

 

156,041

 

Lease liabilities

 

33,807

 

 

33,422

 

 

33,169

 

 

30,634

 

 

33,186

 

Accrued interest payable

 

12,980

 

 

14,998

 

 

16,654

 

 

18,948

 

 

16,752

 

Other liabilities

 

85,621

 

 

81,207

 

 

77,956

 

 

85,705

 

 

88,602

 

Total liabilities

 

6,871,705

 

 

6,868,305

 

 

6,902,796

 

 

7,138,981

 

 

7,169,326

 

EQUITY

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,064,501 at September 30, 2024, 27,063,644 at June 30, 2024, 27,042,326 at March 31, 2024, 27,045,033 at December 31, 2023, and 27,043,169 at September 30, 2023

 

404,494

 

 

404,494

 

 

404,494

 

 

405,439

 

 

405,439

 

Additional paid-in capital

 

104,794

 

 

104,161

 

 

103,130

 

 

102,982

 

 

102,550

 

Retained earnings

 

138,951

 

 

132,683

 

 

123,902

 

 

117,990

 

 

110,156

 

Accumulated other comprehensive loss

 

(104,514

)

 

(122,691

)

 

(124,323

)

 

(122,596

)

 

(149,547

)

Total shareholders' equity

 

543,725

 

 

518,647

 

 

507,203

 

 

503,815

 

 

468,598

 

Total liabilities and equity

$

7,415,430

 

$

7,386,952

 

$

7,409,999

 

$

7,642,796

 

$

7,637,924

 

 

 

 

 

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

TABLE 3

 

Three Months Ended

 

Nine Months Ended

 

Sep 30,

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Sep 30,

(Dollars in thousands, except per share data)

2024

 

2024

 

2024

 

2023

 

2023

 

2024

 

2023

Interest income:

 

 

 

 

 

 

 

Interest and fees on loans

$

65,469

 

$

64,422

 

$

62,819

 

$

62,429

 

$

62,162

 

$

192,710

 

$

180,886

 

Interest and dividends on investment securities:

 

 

 

 

 

 

 

Taxable investment securities

 

8,975

 

 

8,466

 

 

7,211

 

 

7,292

 

 

7,016

 

 

24,652

 

 

21,497

 

Tax-exempt investment securities

 

551

 

 

598

 

 

655

 

 

686

 

 

709

 

 

1,804

 

 

2,226

 

Interest on deposits in other financial institutions

 

2,775

 

 

2,203

 

 

3,611

 

 

3,597

 

 

2,412

 

 

8,589

 

 

3,566

 

Dividend income on FHLB stock

 

127

 

 

151

 

 

106

 

 

109

 

 

113

 

 

384

 

 

369

 

Total interest income

 

77,897

 

 

75,840

 

 

74,402

 

 

74,113

 

 

72,412

 

 

228,139

 

 

208,544

 

Interest expense:

 

 

 

 

 

 

 

Interest on deposits:

 

 

 

 

 

 

 

Interest-bearing demand

 

484

 

 

490

 

 

499

 

 

467

 

 

460

 

 

1,473

 

 

1,234

 

Savings and money market

 

10,235

 

 

8,977

 

 

8,443

 

 

7,459

 

 

6,464

 

 

27,655

 

 

14,520

 

Time

 

11,040

 

 

12,173

 

 

12,990

 

 

12,741

 

 

11,268

 

 

36,203

 

 

26,464

 

Interest on short-term borrowings

 

—

 

 

1

 

 

—

 

 

—

 

 

—

 

 

1

 

 

1,139

 

Interest on long-term debt

 

2,287

 

 

2,278

 

 

2,283

 

 

2,304

 

 

2,292

 

 

6,848

 

 

6,329

 

Total interest expense

 

24,046

 

 

23,919

 

 

24,215

 

 

22,971

 

 

20,484

 

 

72,180

 

 

49,686

 

Net interest income

 

53,851

 

 

51,921

 

 

50,187

 

 

51,142

 

 

51,928

 

 

155,959

 

 

158,858

 

Provision for credit losses

 

2,833

 

 

2,239

 

 

3,936

 

 

4,653

 

 

4,874

 

 

9,008

 

 

11,045

 

Net interest income after provision for credit losses

 

51,018

 

 

49,682

 

 

46,251

 

 

46,489

 

 

47,054

 

 

146,951

 

 

147,813

 

Other operating income:

 

 

 

 

 

 

 

Mortgage banking income

 

822

 

 

1,040

 

 

613

 

 

611

 

 

765

 

 

2,475

 

 

1,981

 

Service charges on deposit accounts

 

2,167

 

 

2,135

 

 

2,103

 

 

2,312

 

 

2,193

 

 

6,405

 

 

6,441

 

Other service charges and fees

 

5,947

 

 

5,869

 

 

5,261

 

 

5,349

 

 

5,203

 

 

17,077

 

 

15,182

 

Income from fiduciary activities

 

1,447

 

 

1,449

 

 

1,435

 

 

1,272

 

 

1,234

 

 

4,331

 

 

3,623

 

Income from bank-owned life insurance

 

1,897

 

 

1,234

 

 

1,522

 

 

2,015

 

 

379

 

 

4,653

 

 

2,855

 

Net loss on sales of investment securities

 

—

 

 

—

 

 

—

 

 

(1,939

)

 

(135

)

 

—

 

 

(135

)

Other

 

454

 

 

394

 

 

310

 

 

5,552

 

 

408

 

 

1,158

 

 

1,544

 

Total other operating income

 

12,734

 

 

12,121

 

 

11,244

 

 

15,172

 

 

10,047

 

 

36,099

 

 

31,491

 

Other operating expense:

 

 

 

 

 

 

 

Salaries and employee benefits

 

22,299

 

 

21,246

 

 

20,735

 

 

20,164

 

 

19,015

 

 

64,280

 

 

61,886

 

Net occupancy

 

4,612

 

 

4,597

 

 

4,600

 

 

4,676

 

 

4,725

 

 

13,809

 

 

13,509

 

Computer software

 

4,590

 

 

4,381

 

 

4,287

 

 

4,026

 

 

4,473

 

 

13,258

 

 

13,700

 

Legal and professional services

 

2,460

 

 

2,506

 

 

2,320

 

 

2,245

 

 

2,359

 

 

7,286

 

 

7,714

 

Equipment

 

972

 

 

995

 

 

1,010

 

 

968

 

 

1,112

 

 

2,977

 

 

2,990

 

Advertising

 

889

 

 

901

 

 

914

 

 

1,045

 

 

968

 

 

2,704

 

 

2,843

 

Communication

 

740

 

 

657

 

 

837

 

 

632

 

 

809

 

 

2,234

 

 

2,378

 

Other

 

10,125

 

 

5,868

 

 

5,873

 

 

8,766

 

 

6,150

 

 

21,866

 

 

16,601

 

Total other operating expense

 

46,687

 

 

41,151

 

 

40,576

 

 

42,522

 

 

39,611

 

 

128,414

 

 

121,621

 

Income before income taxes

 

17,065

 

 

20,652

 

 

16,919

 

 

19,139

 

 

17,490

 

 

54,636

 

 

57,683

 

Income tax expense

 

3,760

 

 

4,835

 

 

3,974

 

 

4,273

 

 

4,349

 

 

12,569

 

 

13,880

 

Net income

$

13,305

 

$

15,817

 

$

12,945

 

$

14,866

 

$

13,141

 

$

42,067

 

$

43,803

 

Per common share data:

 

 

 

 

 

 

 

Basic earnings per share

$

0.49

 

$

0.58

 

$

0.48

 

$

0.55

 

$

0.49

 

$

1.55

 

$

1.62

 

Diluted earnings per share

 

0.49

 

 

0.58

 

 

0.48

 

 

0.55

 

 

0.49

 

 

1.55

 

 

1.62

 

Cash dividends declared

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

 

0.78

 

 

0.78

 

Basic weighted average shares outstanding

 

27,064,035

 

 

27,053,549

 

 

27,046,525

 

 

27,044,121

 

 

27,042,762

 

 

27,054,737

 

 

27,022,141

 

Diluted weighted average shares outstanding

 

27,194,625

 

 

27,116,349

 

 

27,099,101

 

 

27,097,285

 

 

27,079,484

 

 

27,137,985

 

 

27,081,541

 

 

 

 

 

 

 

 

 

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

 

September 30, 2024

 

June 30, 2024

 

September 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

$

203,657

5.42

%

$

2,775

$

162,393

5.46

%

$

2,203

$

177,780

5.38

%

$

2,412

Investment securities:

 

 

 

 

 

 

 

 

 

Taxable

 

1,340,347

2.68

 

 

8,975

 

1,335,100

2.54

 

 

8,466

 

1,354,039

2.07

 

 

7,016

Tax-exempt [1]

 

141,168

1.98

 

 

697

 

142,268

2.13

 

 

757

 

149,824

2.40

 

 

897

Total investment securities

 

1,481,515

2.61

 

 

9,672

 

1,477,368

2.50

 

 

9,223

 

1,503,863

2.10

 

 

7,913

Loans, including loans held for sale

 

5,330,810

4.89

 

 

65,469

 

5,385,829

4.80

 

 

64,422

 

5,507,248

4.49

 

 

62,162

FHLB stock

 

6,928

7.31

 

 

127

 

6,925

8.71

 

 

151

 

10,975

4.09

 

 

113

Total interest-earning assets

 

7,022,910

4.43

 

 

78,043

 

7,032,515

4.34

 

 

75,999

 

7,199,866

4.01

 

 

72,600

Noninterest-earning assets

 

324,493

 

 

 

306,199

 

 

 

310,671

 

 

Total assets

$

7,347,403

 

 

$

7,338,714

 

 

$

7,510,537

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

1,267,135

0.15

%

$

484

$

1,273,901

0.15

%

$

490

$

1,339,294

0.14

%

$

460

Savings and money market deposits

 

2,298,853

1.77

 

 

10,235

 

2,221,754

1.63

 

 

8,977

 

2,209,835

1.16

 

 

6,464

Time deposits up to $250,000

 

534,497

3.15

 

 

4,238

 

555,809

3.29

 

 

4,548

 

449,844

2.33

 

 

2,637

Time deposits over $250,000

 

647,728

4.18

 

 

6,802

 

703,280

4.36

 

 

7,625

 

844,842

4.05

 

 

8,631

Total interest-bearing deposits

 

4,748,213

1.82

 

 

21,759

 

4,754,744

1.83

 

 

21,640

 

4,843,815

1.49

 

 

18,192

FHLB advances and other short-term borrowings

 

—

—

 

 

—

 

66

5.60

 

 

1

 

—

—

 

 

—

Long-term debt

 

156,247

5.82

 

 

2,287

 

156,188

5.86

 

 

2,278

 

156,005

5.83

 

 

2,292

Total interest-bearing liabilities

 

4,904,460

1.95

 

 

24,046

 

4,910,998

1.96

 

 

23,919

 

4,999,820

1.63

 

 

20,484

Noninterest-bearing deposits

 

1,787,209

 

 

 

1,788,023

 

 

 

1,894,256

 

 

Other liabilities

 

124,806

 

 

 

130,186

 

 

 

136,343

 

 

Total liabilities

 

6,816,475

 

 

 

6,829,207

 

 

 

7,030,419

 

 

Total equity

 

530,928

 

 

 

509,507

 

 

 

480,118

 

 

Total liabilities and equity

$

7,347,403

 

 

$

7,338,714

 

 

$

7,510,537

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

53,997

 

 

$

52,080

 

 

$

52,116

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

2.48

%

 

 

2.38

%

 

 

2.38

%

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

3.07

%

 

 

2.97

%

 

 

2.88

%

 

[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 SUBSIDIARIES

Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)

(Unaudited)

TABLE 5

 

Nine Months Ended

 

Nine Months Ended

 

September 30, 2024

 

September 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

$

210,464

5.45

%

$

8,589

$

91,202

5.23

%

$

3,566

Investment securities:

 

 

 

 

 

 

Taxable

 

1,333,394

2.47

 

 

24,652

 

1,376,294

2.08

 

 

21,497

Tax-exempt [1]

 

142,085

2.14

 

 

2,284

 

151,611

2.48

 

 

2,818

Total investment securities

 

1,475,479

2.43

 

 

26,936

 

1,527,905

2.12

 

 

24,315

Loans, including loans held for sale

 

5,372,247

4.79

 

 

192,710

 

5,525,476

4.37

 

 

180,886

FHLB stock

 

6,885

7.43

 

 

384

 

11,687

4.21

 

 

369

Total interest-earning assets

 

7,065,075

4.32

 

 

228,619

 

7,156,270

3.90

 

 

209,136

Noninterest-earning assets

 

313,404

 

 

 

316,620

 

 

Total assets

$

7,378,479

 

 

$

7,472,890

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

Interest-bearing liabilities:

 

 

 

 

 

 

Interest-bearing demand deposits

$

1,279,256

0.15

%

$

1,473

$

1,373,831

0.12

%

$

1,234

Savings and money market deposits

 

2,246,478

1.64

 

 

27,655

 

2,188,585

0.89

 

 

14,520

Time deposits up to $250,000

 

544,823

3.22

 

 

13,125

 

394,464

1.88

 

 

5,544

Time deposits over $250,000

 

714,763

4.31

 

 

23,078

 

775,615

3.61

 

 

20,920

Total interest-bearing deposits

 

4,785,320

1.82

 

 

65,331

 

4,732,495

1.19

 

 

42,218

FHLB advances and other short-term borrowings

 

22

5.60

 

 

1

 

31,182

4.88

 

 

1,139

Long-term debt

 

156,188

5.86

 

 

6,848

 

146,513

5.78

 

 

6,329

Total interest-bearing liabilities

 

4,941,530

1.95

 

 

72,180

 

4,910,190

1.35

 

 

49,686

Noninterest-bearing deposits

 

1,793,854

 

 

 

1,957,267

 

 

Other liabilities

 

129,181

 

 

 

131,577

 

 

Total liabilities

 

6,864,565

 

 

 

6,999,034

 

 

Total equity

 

513,914

 

 

 

473,856

 

 

Total liabilities and equity

$

7,378,479

 

 

$

7,472,890

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

156,439

 

 

$

159,450

 

 

 

 

 

 

 

Interest rate spread

 

2.37

%

 

 

2.55

%

 

 

 

 

 

 

 

 

Net interest margin

 

2.95

%

 

 

2.98

%

 

[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 SUBSIDIARIES

Loans by Geographic Distribution

(Unaudited)

TABLE 6

 

Sep 30,

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

(Dollars in thousands)

2024

 

2024

 

2024

 

2023

 

2023

HAWAII:

 

 

 

 

 

Commercial and industrial

$

411,209

 

$

415,538

 

$

420,009

 

$

421,736

 

$

406,433

 

Real estate:

 

 

 

 

 

Construction

 

134,043

 

 

147,657

 

 

145,213

 

 

163,337

 

 

174,057

 

Residential mortgage

 

1,897,919

 

 

1,913,177

 

 

1,924,889

 

 

1,927,789

 

 

1,930,740

 

Home equity

 

697,123

 

 

706,811

 

 

729,210

 

 

736,524

 

 

753,980

 

Commercial mortgage

 

1,157,625

 

 

1,150,703

 

 

1,103,174

 

 

1,063,969

 

 

1,045,625

 

Consumer

 

277,849

 

 

287,295

 

 

306,563

 

 

322,346

 

 

338,248

 

Total loans, net of deferred fees and costs

 

4,575,768

 

 

4,621,181

 

 

4,629,058

 

 

4,635,701

 

 

4,649,083

 

Less: Allowance for credit losses

 

(47,789

)

 

(47,902

)

 

(48,739

)

 

(48,189

)

 

(48,105

)

Loans, net of allowance for credit losses

$

4,527,979

 

$

4,573,279

 

$

4,580,319

 

$

4,587,512

 

$

4,600,978

 

 

 

 

 

 

 

U.S. MAINLAND: [1]

 

 

 

 

 

Commercial and industrial

$

188,238

 

$

169,318

 

$

156,087

 

$

153,971

 

$

157,373

 

Real estate:

 

 

 

 

 

Construction

 

24,083

 

 

23,865

 

 

23,356

 

 

22,182

 

 

37,455

 

Commercial mortgage

 

312,685

 

 

314,667

 

 

319,088

 

 

318,933

 

 

319,802

 

Consumer

 

241,835

 

 

254,613

 

 

273,828

 

 

308,195

 

 

344,997

 

Total loans, net of deferred fees and costs

 

766,841

 

 

762,463

 

 

772,359

 

 

803,281

 

 

859,627

 

Less: Allowance for credit losses

 

(13,858

)

 

(14,323

)

 

(14,793

)

 

(15,745

)

 

(16,412

)

Loans, net of allowance for credit losses

$

752,983

 

$

748,140

 

$

757,566

 

$

787,536

 

$

843,215

 

 

 

 

 

 

 

TOTAL:

 

 

 

 

 

Commercial and industrial

$

599,447

 

$

584,856

 

$

576,096

 

$

575,707

 

$

563,806

 

Real estate:

 

 

 

 

 

Construction

 

158,126

 

 

171,522

 

 

168,569

 

 

185,519

 

 

211,512

 

Residential mortgage

 

1,897,919

 

 

1,913,177

 

 

1,924,889

 

 

1,927,789

 

 

1,930,740

 

Home equity

 

697,123

 

 

706,811

 

 

729,210

 

 

736,524

 

 

753,980

 

Commercial mortgage

 

1,470,310

 

 

1,465,370

 

 

1,422,262

 

 

1,382,902

 

 

1,365,427

 

Consumer

 

519,684

 

 

541,908

 

 

580,391

 

 

630,541

 

 

683,245

 

Total loans, net of deferred fees and costs

 

5,342,609

 

 

5,383,644

 

 

5,401,417

 

 

5,438,982

 

 

5,508,710

 

Less: Allowance for credit losses

 

(61,647

)

 

(62,225

)

 

(63,532

)

 

(63,934

)

 

(64,517

)

Loans, net of allowance for credit losses

$

5,280,962

 

$

5,321,419

 

$

5,337,885

 

$

5,375,048

 

$

5,444,193

 

[1]

U.S. Mainland includes territories of the United States.

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Deposits

(Unaudited)

TABLE 7

 

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Sep 30,

(Dollars in thousands)

2024

2024

2024

2023

2023

Noninterest-bearing demand

$

1,838,009

 

$

1,847,173

 

$

1,848,554

 

$

1,913,379

 

$

1,969,523

 

Interest-bearing demand

 

1,255,382

 

 

1,283,669

 

 

1,290,321

 

 

1,329,189

 

 

1,345,843

 

Savings and money market

 

2,336,323

 

 

2,234,111

 

 

2,211,966

 

 

2,209,733

 

 

2,209,550

 

Time deposits up to $250,000

 

536,316

 

 

547,212

 

 

544,600

 

 

533,898

 

 

465,543

 

Core deposits

 

5,966,030

 

 

5,912,165

 

 

5,895,441

 

 

5,986,199

 

 

5,990,459

 

Other time deposits greater than $250,000

 

492,221

 

 

476,457

 

 

487,950

 

 

486,812

 

 

484,156

 

Government time deposits

 

124,762

 

 

193,833

 

 

235,463

 

 

374,581

 

 

400,130

 

Total time deposits greater than $250,000

 

616,983

 

 

670,290

 

 

723,413

 

 

861,393

 

 

884,286

 

Total deposits

$

6,583,013

 

$

6,582,455

 

$

6,618,854

 

$

6,847,592

 

$

6,874,745

 

 

 

 

 

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Nonperforming Assets and Accruing Loans 90+ Days Past Due

(Unaudited)

TABLE 8

 

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Sep 30,

(Dollars in thousands)

2024

2024

2024

2023

2023

Nonaccrual loans:

 

 

 

 

 

Commercial and industrial

$

376

 

$

355

 

$

357

 

$

432

 

$

352

 

Real estate:

 

 

 

 

 

Residential mortgage

 

9,680

 

 

7,991

 

 

7,979

 

 

4,962

 

 

4,949

 

Home equity

 

915

 

 

1,247

 

 

929

 

 

834

 

 

677

 

Commercial mortgage

 

—

 

 

77

 

 

77

 

 

77

 

 

77

 

Consumer

 

626

 

 

587

 

 

790

 

 

703

 

 

597

 

Total nonaccrual loans

 

11,597

 

 

10,257

 

 

10,132

 

 

7,008

 

 

6,652

 

Other real estate owned ("OREO")

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Total nonperforming assets ("NPAs")

 

11,597

 

 

10,257

 

 

10,132

 

 

7,008

 

 

6,652

 

Accruing loans 90+ days past due:

 

 

 

 

 

Real estate:

 

 

 

 

 

Construction

 

—

 

 

—

 

 

588

 

 

—

 

 

—

 

Residential mortgage

 

13

 

 

1,273

 

 

386

 

 

—

 

 

794

 

Home equity

 

135

 

 

135

 

 

560

 

 

229

 

 

—

 

Consumer

 

481

 

 

896

 

 

924

 

 

1,083

 

 

2,120

 

Total accruing loans 90+ days past due

 

629

 

 

2,304

 

 

2,458

 

 

1,312

 

 

2,914

 

Total NPAs and accruing loans 90+ days past due

$

12,226

 

$

12,561

 

$

12,590

 

$

8,320

 

$

9,566

 

 

 

 

 

 

 

Ratio of total nonaccrual loans to total loans

 

0.22

%

 

0.19

%

 

0.19

%

 

0.13

%

 

0.12

%

Ratio of total NPAs to total assets

 

0.16

 

 

0.14

 

 

0.14

 

 

0.09

 

 

0.09

 

Ratio of total NPAs to total loans and OREO

 

0.22

 

 

0.19

 

 

0.19

 

 

0.13

 

 

0.12

 

Ratio of total NPAs and accruing loans 90+ days past due to total loans and OREO

 

0.23

 

 

0.23

 

 

0.23

 

 

0.15

 

 

0.17

 

 

 

 

 

 

 

Quarter-to-quarter changes in NPAs:

 

 

 

 

 

Balance at beginning of quarter

$

10,257

 

$

10,132

 

$

7,008

 

$

6,652

 

$

11,061

 

Additions

 

3,484

 

 

1,920

 

 

4,792

 

 

1,836

 

 

2,311

 

Reductions:

 

 

 

 

 

Payments

 

(602

)

 

(363

)

 

(263

)

 

(268

)

 

(5,718

)

Return to accrual status

 

(354

)

 

(27

)

 

(198

)

 

(137

)

 

(207

)

Charge-offs, valuation and other adjustments

 

(1,188

)

 

(1,405

)

 

(1,207

)

 

(1,075

)

 

(795

)

Total reductions

 

(2,144

)

 

(1,795

)

 

(1,668

)

 

(1,480

)

 

(6,720

)

Balance at end of quarter

$

11,597

 

$

10,257

 

$

10,132

 

$

7,008

 

$

6,652

 

 

 

 

 

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Allowance for Credit Losses on Loans

(Unaudited)

TABLE 9

 

Three Months Ended

Nine Months Ended

 

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Sep 30,

Sep 30,

(Dollars in thousands)

2024

2024

2024

2023

2023

2024

2023

Allowance for credit losses:

 

 

 

 

 

 

 

Balance at beginning of period

$

62,225

 

$

63,532

 

$

63,934

 

$

64,517

 

$

63,849

 

$

63,934

 

$

63,738

 

Provision for credit losses on loans

 

3,040

 

 

2,448

 

 

4,121

 

 

4,959

 

 

4,526

 

 

9,609

 

 

10,276

 

Charge-offs:

 

 

 

 

 

 

 

Commercial and industrial

 

(663

)

 

(519

)

 

(682

)

 

(419

)

 

(402

)

 

(1,864

)

 

(1,543

)

Real estate:

 

 

 

 

 

 

 

Residential mortgage

 

(99

)

 

(284

)

 

—

 

 

—

 

 

—

 

 

(383

)

 

—

 

Consumer

 

(3,956

)

 

(4,345

)

 

(4,838

)

 

(5,976

)

 

(4,710

)

 

(13,139

)

 

(11,269

)

Total charge-offs

 

(4,718

)

 

(5,148

)

 

(5,520

)

 

(6,395

)

 

(5,112

)

 

(15,386

)

 

(12,812

)

Recoveries:

 

 

 

 

 

 

 

Commercial and industrial

 

158

 

 

130

 

 

90

 

 

84

 

 

261

 

 

378

 

 

636

 

Real estate:

 

 

 

 

 

 

 

Construction

 

—

 

 

—

 

 

—

 

 

—

 

 

1

 

 

—

 

 

1

 

Residential mortgage

 

8

 

 

9

 

 

8

 

 

7

 

 

10

 

 

25

 

 

70

 

Home equity

 

—

 

 

—

 

 

6

 

 

42

 

 

—

 

 

6

 

 

15

 

Consumer

 

934

 

 

1,254

 

 

893

 

 

720

 

 

982

 

 

3,081

 

 

2,593

 

Total recoveries

 

1,100

 

 

1,393

 

 

997

 

 

853

 

 

1,254

 

 

3,490

 

 

3,315

 

Net charge-offs

 

(3,618

)

 

(3,755

)

 

(4,523

)

 

(5,542

)

 

(3,858

)

 

(11,896

)

 

(9,497

)

Balance at end of period

$

61,647

 

$

62,225

 

$

63,532

 

$

63,934

 

$

64,517

 

$

61,647

 

$

64,517

 

 

 

 

 

 

 

 

 

Average loans, net of deferred fees and costs

$

5,330,810

 

$

5,385,829

 

$

5,400,558

 

$

5,458,245

 

$

5,507,248

 

$

5,372,247

 

$

5,525,476

 

Ratio of annualized net charge-offs to average loans

 

0.27

%

 

0.28

%

 

0.34

%

 

0.41

%

 

0.28

%

 

0.30

%

 

0.23

%

Ratio of ACL to total loans

 

1.15

 

 

1.16

 

 

1.18

 

 

1.18

 

 

1.17

 

 

1.15

%

 

1.17

%

 

 

 

 

 

 

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

TABLE 10

The Company uses certain non-GAAP financial measures in addition to our GAAP results to provide useful information which we believe are better indicators of the Company's core activities. This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be comparable to similarly entitled measures reported by other companies.

The following reconciling adjustments from GAAP or reported financial measures to non-GAAP adjusted financial measures are limited to the $3.1 million in pre-tax expenses related to our evaluation and assessment of a strategic opportunity. Management does not consider these expenses to be representative of the Company's core earnings.

 

Three Months Ended September 30, 2024

 

Nine Months Ended September 30, 2024

(dollars in thousands,

 

 

 

 

Non-GAAP

 

 

 

 

 

Non-GAAP

except per share data)

Reported

 

Adjustment

 

Adjusted

 

Reported

 

Adjustment

 

Adjusted

Financial measures:

 

 

 

 

 

 

Net income

$

13,305

 

$

2,362

 

$

15,667

 

$

42,067

 

$

2,362

 

$

44,429

 

Diluted earnings per share ("EPS")

$

0.49

 

$

0.09

 

$

0.58

 

$

1.55

 

$

0.09

 

$

1.64

 

Pre-provision net revenue (non-GAAP)

$

19,898

 

$

3,068

 

$

22,966

 

$

63,644

 

$

3,068

 

$

66,712

 

Efficiency ratio (non-GAAP)

 

70.12

%

 

(4.61

)%

 

65.51

%

 

66.86

%

 

(1.60

)%

 

65.26

%

Return on average assets ("ROA")

 

0.72

%

 

0.13

%

 

0.85

%

 

0.76

%

 

0.04

%

 

0.80

%

Return on average shareholders' equity ("ROE")

 

10.02

%

 

1.73

%

 

11.75

%

 

10.91

%

 

0.60

%

 

11.51

%

As of September 30, 2024:

 

 

 

 

 

 

Tangible common equity ratio (non-GAAP)

 

7.31

%

 

0.03

%

 

7.34

%

 

 

 

The following tables present a recalculation of the non-GAAP financial measures presented above.

 

 

Three Months Ended

Nine Months Ended

(dollars in thousands, except per share data)

 

September 30, 2024

 

September 30, 2024

GAAP net income

 

$

13,305

 

 

$

42,067

 

Add: Pre-tax expenses related to a strategic opportunity

 

 

3,068

 

 

 

3,068

 

Less: Income tax effect (assumes 23% ETR)

 

 

(706

)

 

 

(706

)

Expenses related to a strategic opportunity, net of tax

 

 

2,362

 

 

 

2,362

 

Adjusted net income (non-GAAP)

 

$

15,667

 

 

$

44,429

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

 

27,194,625

 

 

 

27,137,985

 

 

 

 

 

 

GAAP EPS

 

$

0.49

 

 

$

1.55

 

Add: Expenses related to a strategic opportunity, net of tax

 

 

0.09

 

 

 

0.09

 

Adjusted EPS (non-GAAP)

 

$

0.58

 

 

$

1.64

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

TABLE 10 (CONTINUED)

 

 

Three Months Ended

 

Nine Months Ended

(dollars in thousands)

 

September 30, 2024

 

September 30, 2024

GAAP net income

 

$

13,305

 

 

$

42,067

 

Add: Income tax expense

 

 

3,760

 

 

 

12,569

 

GAAP pre-tax income

 

 

17,065

 

 

 

54,636

 

Add: Provision for credit losses

 

 

2,833

 

 

 

9,008

 

Pre-provision net revenue ("PPNR") (non-GAAP)

 

 

19,898

 

 

 

63,644

 

Add: Pre-tax expenses related to a strategic opportunity

 

 

3,068

 

 

 

3,068

 

Adjusted PPNR (non-GAAP)

 

$

22,966

 

 

$

66,712

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

(dollars in thousands)

 

September 30, 2024

 

September 30, 2024

Total other operating expense

 

$

46,687

 

 

$

128,414

 

Less: Expenses related to a strategic opportunity

 

 

(3,068

)

 

 

(3,068

)

Adjusted total other operating expense (non-GAAP)

 

$

43,619

 

 

$

125,346

 

 

 

 

 

 

Net interest income

 

$

53,851

 

 

$

155,959

 

Total other operating income

 

 

12,734

 

 

 

36,099

 

Total revenue

 

$

66,585

 

 

$

192,058

 

 

 

 

 

 

Efficiency ratio (non-GAAP)

 

 

70.12

%

 

 

66.86

%

Less: Expenses related to a strategic opportunity

 

 

(4.61

)%

 

 

(1.60

)%

Adjusted efficiency ratio (non-GAAP)

 

 

65.51

%

 

 

65.26

%

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

(dollars in thousands)

 

September 30, 2024

 

September 30, 2024

Average assets

 

$

7,347,403

 

 

$

7,378,479

 

Add: Expenses related to a strategic opportunity, net of tax

 

 

2,362

 

 

 

787

 

Adjusted average assets (non-GAAP)

 

$

7,349,765

 

 

$

7,379,266

 

 

 

 

 

 

ROA (GAAP net income divided by average assets)

 

 

0.72

%

 

 

0.76

%

Add: Expenses related to a strategic opportunity, net of tax

 

 

0.13

 

 

 

0.04

 

Adjusted ROA (non-GAAP)

 

 

0.85

%

 

 

0.80

%

 

 

 

 

 

Average shareholders' equity

 

$

530,928

 

 

$

513,914

 

Add: Expenses related to a strategic opportunity, net of tax

 

 

2,362

 

 

 

787

 

Adjusted average shareholders' equity (non-GAAP)

 

$

533,290

 

 

$

514,701

 

 

 

 

 

 

ROE (GAAP net income divided by average shareholders' equity)

 

 

10.02

%

 

 

10.91

%

Add: Expenses related to a strategic opportunity, net of tax

 

 

1.73

 

 

 

0.60

 

Adjusted ROE (non-GAAP)

 

 

11.75

%

 

 

11.51

%

 

 

 

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

TABLE 10 (CONTINUED)

(dollars in thousands)

 

September 30, 2024

Total shareholders' equity

 

$

543,725

 

Less: Intangible assets

 

 

(1,390

)

Tangible common equity ("TCE")

 

 

542,335

 

Add: Expenses related to a strategic opportunity, net of tax

 

 

2,362

 

Adjusted TCE (non-GAAP)

 

$

544,697

 

 

 

 

Total assets

 

$

7,415,430

 

Less: Intangible assets

 

 

(1,390

)

Tangible assets

 

 

7,414,040

 

Add: Expenses related to a strategic opportunity, net of tax

 

 

2,362

 

Adjusted tangible assets (non-GAAP)

 

$

7,416,402

 

 

 

 

TCE ratio (non-GAAP) (TCE divided by tangible assets)

 

 

7.31

%

Add: Expenses related to a strategic opportunity, net of tax

 

 

0.03

 

Adjusted TCE ratio (non-GAAP)

 

 

7.34

%

 

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030600615/en/

Investor Contact: Ian Tanaka SVP, Treasury Manager [phone] [e-mail] Media Contact: Tim Sakahara AVP, Corporate Communications Manager [phone] [e-mail]