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Central Pacific Financial Reports First Quarter 2024 Earnings of $12.9 Million

Highlights include:

  • Net income of $12.9 million, or $0.48 per diluted share
  • NIM of 2.83% compared to 2.84% in the previous quarter and 3.08% a year ago
  • Total loans of $5.40 billion decreased by $37.6 million from the previous quarter
  • Total deposits of $6.62 billion decreased by $228.7 million from the previous quarter, which included a decrease in government time deposits of $139.1 million
  • Total risk-based capital and common equity tier 1 ratios of 14.8% and 11.6%, respectively
  • Board of Directors approved 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 $12.9 million, or fully diluted earnings per share ("EPS") of $0.48 for the first quarter of 2024, compared to net income of $14.9 million, or EPS of $0.55 in the previous quarter and net income of $16.2 million, or EPS of $0.60 in the year-ago quarter.

"Our financial results for the first quarter reflect our continued focus on optimizing the balance sheet, while maintaining strong liquidity, asset quality and capital," said Arnold Martines, President and Chief Executive Officer. "The first quarter was also significant as we celebrated our 70th year in business serving Hawaii. We are extremely proud to continue the legacy of our founders as a champion of local small businesses in Hawaii and we are pleased to be recognized by the SBA Hawaii District as the 2023 Lender of the Year for mid-sized banks in Hawaii."

Earnings Highlights

Net interest income was $50.2 million for the first quarter of 2024, which decreased by $1.0 million, or 1.9% from the previous quarter, and decreased by $4.0 million, or 7.4% from the year-ago quarter. Net interest margin ("NIM") was 2.83% for the first quarter of 2024, which decreased by 1 basis point ("bp" or "bps") from the previous quarter and decreased by 25 bps from the year-ago quarter. The sequential quarter decrease in net interest income was primarily due to higher average rates paid on interest-bearing deposits, combined with lower average loan balances, which was partially offset by higher average yields earned on loans.

The Company recorded a provision for credit losses of $3.9 million in the first quarter of 2024, compared to a provision of $4.7 million in the previous quarter and a provision of $1.9 million in the year-ago quarter. The provision in the first quarter consisted of a provision for credit losses on loans of $4.1 million and a credit to the provision for off-balance sheet exposures of $0.2 million.

Other operating income totaled $11.2 million for the first quarter of 2024, compared to $15.2 million in the previous quarter and $11.0 million in the year-ago quarter. The previous quarter included a non-recurring pre-tax net gain on the sale of a real estate property (included in other) of $5.1 million and losses on the sales of investment securities of $1.9 million.

Other operating expense totaled $40.6 million for the first quarter of 2024, compared to $42.5 million in the previous quarter and $42.1 million in the year-ago quarter. The previous quarter included a non-recurring branch lease termination expense (included in other) of $2.3 million.

The efficiency ratio was 66.05% for the first quarter of 2024, compared to 64.12% in the previous quarter and 64.58% in the year-ago quarter.

The effective tax rate was 23.5% for the first quarter of 2024, compared to 22.3% in the previous quarter and 23.8% in the year-ago quarter.

Balance Sheet Highlights

Total assets of $7.41 billion at March 31, 2024 decreased by $232.8 million, or 3.0% from $7.64 billion at December 31, 2023, and decreased by $111.2 million, or 1.5% from $7.52 billion at March 31, 2023. The Company had $312.9 million in cash on its balance sheet and $2.42 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities at March 31, 2024. Total available sources of liquidity as a percentage of uninsured and uncollateralized deposits was 118% at March 31, 2024. During the first quarter of 2024, excess balance sheet liquidity was used to pay off $139.1 million in higher cost government time deposits.

Total loans, net of deferred fees and costs, of $5.40 billion at March 31, 2024 decreased by $37.6 million, or 0.7% from $5.44 billion at December 31, 2023, and decreased by $156.0 million, or 2.8% from $5.56 billion at March 31, 2023. Average yields earned on loans during the first quarter of 2024 was 4.67%, compared to 4.55% in the previous quarter and 4.26% in the year-ago quarter.

Total deposits of $6.62 billion at March 31, 2024 decreased by $228.7 million or 3.3% from $6.85 billion at December 31, 2023, and decreased by $128.1 million, or 1.9% from $6.75 billion at March 31, 2023. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.90 billion at March 31, 2024, and decreased by $90.8 million, or 1.5% from $5.99 billion at December 31, 2023. Average rates paid on total deposits during the first quarter of 2024 was 1.32%, compared to 1.23% in the previous quarter and 0.60% in the year-ago quarter. At March 31, 2024, approximately 65% of the Company's total deposits were FDIC-insured or fully collateralized.

Asset Quality

Nonperforming assets totaled $10.1 million, or 0.14% of total assets at March 31, 2024, compared to $7.0 million, or 0.09% of total assets at December 31, 2023 and $5.3 million, or 0.07% of total assets at March 31, 2023.

Net charge-offs totaled $4.5 million in the first quarter of 2024, compared to net charge-offs of $5.5 million in the previous quarter, and net charge-offs of $2.3 million in the year-ago quarter. Annualized net charge-offs as a percentage of average loans was 0.34%, 0.41% and 0.16% during the three months ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

The allowance for credit losses, as a percentage of total loans was 1.18% at March 31, 2024, compared to 1.18% at December 31, 2023, and 1.14% at March 31, 2023.

Capital

Total shareholders' equity was $507.2 million at March 31, 2024, compared to $503.8 million and $470.9 million at December 31, 2023 and March 31, 2023, respectively.

During the first quarter of 2024, the Company repurchased 49,960 shares of common stock, at a total cost of $0.9 million, or an average cost per share of $18.92. As of March 31, 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 9.0%, 12.6%, 14.8%, and 11.6%, respectively, at March 31, 2024, compared to 8.8%, 12.4%, 14.6%, and 11.4%, respectively, at December 31, 2023.

On April 23, 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 June 17, 2024 to shareholders of record at the close of business on May 31, 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 (access code: 1551295). A playback of the call will be available through May 24, 2024 by dialing 1-800-770-2030 (access code: 1551295) 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 $7.41 billion in assets as of March 31, 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

(Dollars in thousands,

Mar 31,

Dec 31,

Sep 30,

Jun 30,

Mar 31,

except for per share amounts)

2024

2023

2023

2023

2023

CONDENSED INCOME STATEMENT

 

 

 

 

 

Net interest income

$

50,187

 

$

51,142

 

$

51,928

 

$

52,734

 

$

54,196

 

Provision for credit losses

 

3,936

 

 

4,653

 

 

4,874

 

 

4,319

 

 

1,852

 

Total other operating income

 

11,244

 

 

15,172

 

 

10,047

 

 

10,435

 

 

11,009

 

Total other operating expense

 

40,576

 

 

42,522

 

 

39,611

 

 

39,903

 

 

42,107

 

Income tax expense

 

3,974

 

 

4,273

 

 

4,349

 

 

4,472

 

 

5,059

 

Net income

 

12,945

 

 

14,866

 

 

13,141

 

 

14,475

 

 

16,187

 

Basic earnings per share

$

0.48

 

$

0.55

 

$

0.49

 

$

0.54

 

$

0.60

 

Diluted earnings per share

 

0.48

 

 

0.55

 

 

0.49

 

 

0.53

 

 

0.60

 

Dividends declared per share

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

 

 

 

 

 

 

PERFORMANCE RATIOS

 

 

 

 

 

Return on average assets (ROA) [1]

 

0.70

%

 

0.79

%

 

0.70

%

 

0.78

%

 

0.87

%

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

 

10.33

 

 

12.55

 

 

10.95

 

 

12.12

 

 

13.97

 

Average shareholders’ equity to average assets

 

6.73

 

 

6.32

 

 

6.39

 

 

6.40

 

 

6.23

 

Efficiency ratio [2]

 

66.05

 

 

64.12

 

 

63.91

 

 

63.17

 

 

64.58

 

Net interest margin (NIM) [1]

 

2.83

 

 

2.84

 

 

2.88

 

 

2.96

 

 

3.08

 

Dividend payout ratio [3]

 

54.17

 

 

47.27

 

 

53.06

 

 

49.06

 

 

43.33

 

 

 

 

 

 

 

SELECTED AVERAGE BALANCES

 

 

 

 

 

Average loans, including loans held for sale

$

5,400,558

 

$

5,458,245

 

$

5,507,248

 

$

5,543,398

 

$

5,525,988

 

Average interest-earning assets

 

7,140,264

 

 

7,208,613

 

 

7,199,866

 

 

7,155,606

 

 

7,112,377

 

Average assets

 

7,449,661

 

 

7,498,097

 

 

7,510,537

 

 

7,463,629

 

 

7,443,767

 

Average deposits

 

6,659,812

 

 

6,730,883

 

 

6,738,071

 

 

6,674,650

 

 

6,655,660

 

Average interest-bearing liabilities

 

5,009,542

 

 

5,023,321

 

 

4,999,820

 

 

4,908,120

 

 

4,820,660

 

Average shareholders’ equity

 

501,120

 

 

473,708

 

 

480,118

 

 

477,711

 

 

463,556

 

[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)

 

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Mar 31,

 

2024

 

2023

 

2023

 

2023

 

2023

REGULATORY CAPITAL RATIOS

 

 

 

 

 

Central Pacific Financial Corp.

 

 

 

 

 

Leverage ratio

 

9.0

%

 

8.8

%

 

8.7

%

 

8.7

%

 

8.6

%

Tier 1 risk-based capital ratio

 

12.6

 

 

12.4

 

 

11.9

 

 

11.8

 

 

11.5

 

Total risk-based capital ratio

 

14.8

 

 

14.6

 

 

14.1

 

 

13.9

 

 

13.6

 

Common equity tier 1 capital ratio

 

11.6

 

 

11.4

 

 

11.0

 

 

10.9

 

 

10.6

 

Central Pacific Bank

 

 

 

 

 

Leverage ratio

 

9.4

 

 

9.2

 

 

9.1

 

 

9.1

 

 

9.0

 

Tier 1 risk-based capital ratio

 

13.1

 

 

12.9

 

 

12.4

 

 

12.3

 

 

12.0

 

Total risk-based capital ratio

 

14.3

 

 

14.1

 

 

13.7

 

 

13.5

 

 

13.2

 

Common equity tier 1 capital ratio

 

13.1

 

 

12.9

 

 

12.4

 

 

12.3

 

 

12.0

 

 

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Mar 31,

(dollars in thousands, except for per share amounts)

2024

 

2023

 

2023

 

2023

 

2023

BALANCE SHEET

 

 

 

 

 

Total loans, net of deferred fees and costs

$

5,401,417

 

$

5,438,982

 

$

5,508,710

 

$

5,520,683

 

$

5,557,397

 

Total assets

 

7,409,999

 

 

7,642,796

 

 

7,637,924

 

 

7,567,592

 

 

7,521,247

 

Total deposits

 

6,618,854

 

 

6,847,592

 

 

6,874,745

 

 

6,805,737

 

 

6,746,968

 

Long-term debt

 

156,163

 

 

156,102

 

 

156,041

 

 

155,981

 

 

155,920

 

Total shareholders’ equity

 

507,203

 

 

503,815

 

 

468,598

 

 

476,279

 

 

470,926

 

Total shareholders’ equity to total assets

 

6.84

%

 

6.59

%

 

6.14

%

 

6.29

%

 

6.26

%

 

 

 

 

 

 

ASSET QUALITY

 

 

 

 

 

Allowance for credit losses (ACL)

$

63,532

 

$

63,934

 

$

64,517

 

$

63,849

 

$

63,099

 

Nonaccrual loans

 

10,132

 

 

7,008

 

 

6,652

 

 

11,061

 

 

5,313

 

Non-performing assets (NPA)

 

10,132

 

 

7,008

 

 

6,652

 

 

11,061

 

 

5,313

 

Ratio of ACL to total loans

 

1.18

%

 

1.18

%

 

1.17

%

 

1.16

%

 

1.14

%

Ratio of NPA to total assets

 

0.14

%

 

0.09

%

 

0.09

%

 

0.15

%

 

0.07

%

 

 

 

 

 

 

PER SHARE OF COMMON STOCK OUTSTANDING

 

 

 

 

 

Book value per common share

$

18.76

 

$

18.63

 

$

17.33

 

$

17.61

 

$

17.44

 

Closing market price per common share

 

19.75

 

 

19.68

 

 

16.68

 

 

15.71

 

 

17.90

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

TABLE 2

 

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Mar 31,

(Dollars in thousands, except share data)

2024

 

2023

 

2023

 

2023

 

2023

ASSETS

 

 

 

 

 

Cash and due from financial institutions

$

98,410

 

$

116,181

 

$

108,818

 

$

129,071

 

$

108,535

 

Interest-bearing deposits in other financial institutions

 

214,472

 

 

406,256

 

 

329,913

 

 

181,913

 

 

90,247

 

Investment securities:

 

 

 

 

 

Available-for-sale debt securities, at fair value

 

660,833

 

 

647,210

 

 

625,253

 

 

664,071

 

 

687,188

 

Held-to-maturity debt securities, at amortized cost; fair value of: $541,685 at March 31, 2024, $565,178 at December 31, 2023, $531,887 at September 30, 2023, $581,222 at June 30, 2023, and $599,300 at March 31, 2023

 

624,948

 

 

632,338

 

 

640,053

 

 

649,946

 

 

658,596

 

Total investment securities

 

1,285,781

 

 

1,279,548

 

 

1,265,306

 

 

1,314,017

 

 

1,345,784

 

Loans held for sale

 

755

 

 

1,778

 

 

 

 

2,593

 

 

 

Loans, net of deferred fees and costs

 

5,401,417

 

 

5,438,982

 

 

5,508,710

 

 

5,520,683

 

 

5,557,397

 

Less: allowance for credit losses

 

(63,532

)

 

(63,934

)

 

(64,517

)

 

(63,849

)

 

(63,099

)

Loans, net of allowance for credit losses

 

5,337,885

 

 

5,375,048

 

 

5,444,193

 

 

5,456,834

 

 

5,494,298

 

Premises and equipment, net

 

97,688

 

 

96,184

 

 

97,378

 

 

96,479

 

 

93,761

 

Accrued interest receivable

 

21,957

 

 

21,511

 

 

21,529

 

 

20,463

 

 

20,473

 

Investment in unconsolidated entities

 

40,780

 

 

41,546

 

 

42,523

 

 

45,218

 

 

45,953

 

Mortgage servicing rights

 

8,599

 

 

8,696

 

 

8,797

 

 

8,843

 

 

8,943

 

Bank-owned life insurance

 

172,228

 

 

170,706

 

 

168,543

 

 

168,136

 

 

168,244

 

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

 

6,921

 

 

6,793

 

 

10,995

 

 

10,960

 

 

11,960

 

Right-of-use lease assets

 

32,079

 

 

29,720

 

 

32,294

 

 

33,247

 

 

34,237

 

Other assets

 

92,444

 

 

88,829

 

 

107,635

 

 

99,818

 

 

98,812

 

Total assets

$

7,409,999

 

$

7,642,796

 

$

7,637,924

 

$

7,567,592

 

$

7,521,247

 

LIABILITIES

 

 

 

 

 

Deposits:

 

 

 

 

 

Noninterest-bearing demand

$

1,848,554

 

$

1,913,379

 

$

1,969,523

 

$

2,009,387

 

$

2,028,087

 

Interest-bearing demand

 

1,290,321

 

 

1,329,189

 

 

1,345,843

 

 

1,359,978

 

 

1,386,913

 

Savings and money market

 

2,211,966

 

 

2,209,733

 

 

2,209,550

 

 

2,184,652

 

 

2,184,675

 

Time

 

1,268,013

 

 

1,395,291

 

 

1,349,829

 

 

1,251,720

 

 

1,147,293

 

Total deposits

 

6,618,854

 

 

6,847,592

 

 

6,874,745

 

 

6,805,737

 

 

6,746,968

 

FHLB advances and other short-term borrowings

 

 

 

 

 

 

 

 

 

25,000

 

Long-term debt, net of unamortized debt issuance costs of: $384 at March 31, 2024, $445 at December 31, 2023, $506 at September 30, 2023, $566 at June 30, 2023 and $627 at March 31, 2023

 

156,163

 

 

156,102

 

 

156,041

 

 

155,981

 

 

155,920

 

Lease liabilities

 

33,169

 

 

30,634

 

 

33,186

 

 

34,111

 

 

35,076

 

Accrued interest payable

 

16,654

 

 

18,948

 

 

16,752

 

 

11,402

 

 

7,688

 

Other liabilities

 

77,956

 

 

85,705

 

 

88,602

 

 

84,082

 

 

79,669

 

Total liabilities

 

6,902,796

 

 

7,138,981

 

 

7,169,326

 

 

7,091,313

 

 

7,050,321

 

EQUITY

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,042,326 at March 31, 2024, 27,045,033 at December 31, 2023, 27,043,169 at September 30, 2023, 27,045,792 at June 30, 2023, and 27,005,545 at March 31, 2023

 

404,494

 

 

405,439

 

 

405,439

 

 

405,511

 

 

405,866

 

Additional paid-in capital

 

103,130

 

 

102,982

 

 

102,550

 

 

101,997

 

 

101,188

 

Retained earnings

 

123,902

 

 

117,990

 

 

110,156

 

 

104,046

 

 

96,600

 

Accumulated other comprehensive loss

 

(124,323

)

 

(122,596

)

 

(149,547

)

 

(135,275

)

 

(132,728

)

Total shareholders' equity

 

507,203

 

 

503,815

 

 

468,598

 

 

476,279

 

 

470,926

 

Total liabilities and equity

$

7,409,999

 

$

7,642,796

 

$

7,637,924

 

$

7,567,592

 

$

7,521,247

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

TABLE 3

 

 

Three Months Ended

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Mar 31,

(Dollars in thousands, except per share data)

2024

 

2023

 

2023

 

2023

 

2023

Interest income:

 

 

 

 

 

Interest and fees on loans

$

62,819

 

$

62,429

 

$

62,162

 

$

60,455

 

$

58,269

 

Interest and dividends on investment securities:

 

 

 

 

 

Taxable investment securities

 

7,211

 

 

7,292

 

 

7,016

 

 

7,145

 

 

7,336

 

Tax-exempt investment securities

 

655

 

 

686

 

 

709

 

 

727

 

 

790

 

Interest on deposits in other financial institutions

 

3,611

 

 

3,597

 

 

2,412

 

 

877

 

 

277

 

Dividend income on FHLB stock

 

106

 

 

109

 

 

113

 

 

120

 

 

136

 

Total interest income

 

74,402

 

 

74,113

 

 

72,412

 

 

69,324

 

 

66,808

 

Interest expense:

 

 

 

 

 

Interest on deposits:

 

 

 

 

 

Interest-bearing demand

 

499

 

 

467

 

 

460

 

 

411

 

 

363

 

Savings and money market

 

8,443

 

 

7,459

 

 

6,464

 

 

4,670

 

 

3,386

 

Time

 

12,990

 

 

12,741

 

 

11,268

 

 

8,932

 

 

6,264

 

Interest on short-term borrowings

 

 

 

 

 

 

 

378

 

 

761

 

Interest on long-term debt

 

2,283

 

 

2,304

 

 

2,292

 

 

2,199

 

 

1,838

 

Total interest expense

 

24,215

 

 

22,971

 

 

20,484

 

 

16,590

 

 

12,612

 

Net interest income

 

50,187

 

 

51,142

 

 

51,928

 

 

52,734

 

 

54,196

 

Provision for credit losses

 

3,936

 

 

4,653

 

 

4,874

 

 

4,319

 

 

1,852

 

Net interest income after provision for credit losses

 

46,251

 

 

46,489

 

 

47,054

 

 

48,415

 

 

52,344

 

Other operating income:

 

 

 

 

 

Mortgage banking income

 

613

 

 

611

 

 

765

 

 

690

 

 

526

 

Service charges on deposit accounts

 

2,103

 

 

2,312

 

 

2,193

 

 

2,137

 

 

2,111

 

Other service charges and fees

 

5,261

 

 

5,349

 

 

5,203

 

 

4,994

 

 

4,985

 

Income from fiduciary activities

 

1,435

 

 

1,272

 

 

1,234

 

 

1,068

 

 

1,321

 

Income from bank-owned life insurance

 

1,522

 

 

2,015

 

 

379

 

 

1,185

 

 

1,291

 

Net loss on sales of investment securities

 

 

 

(1,939

)

 

(135

)

 

 

 

 

Other

 

310

 

 

5,552

 

 

408

 

 

361

 

 

775

 

Total other operating income

 

11,244

 

 

15,172

 

 

10,047

 

 

10,435

 

 

11,009

 

Other operating expense:

 

 

 

 

 

Salaries and employee benefits

 

20,735

 

 

20,164

 

 

19,015

 

 

20,848

 

 

22,023

 

Net occupancy

 

4,600

 

 

4,676

 

 

4,725

 

 

4,310

 

 

4,474

 

Computer software

 

4,287

 

 

4,026

 

 

4,473

 

 

4,621

 

 

4,606

 

Legal and professional services

 

2,320

 

 

2,245

 

 

2,359

 

 

2,469

 

 

2,886

 

Equipment

 

1,010

 

 

968

 

 

1,112

 

 

932

 

 

946

 

Advertising

 

914

 

 

1,045

 

 

968

 

 

942

 

 

933

 

Communication

 

837

 

 

632

 

 

809

 

 

791

 

 

778

 

Other

 

5,873

 

 

8,766

 

 

6,150

 

 

4,990

 

 

5,461

 

Total other operating expense

 

40,576

 

 

42,522

 

 

39,611

 

 

39,903

 

 

42,107

 

Income before income taxes

 

16,919

 

 

19,139

 

 

17,490

 

 

18,947

 

 

21,246

 

Income tax expense

 

3,974

 

 

4,273

 

 

4,349

 

 

4,472

 

 

5,059

 

Net income

$

12,945

 

$

14,866

 

$

13,141

 

$

14,475

 

$

16,187

 

Per common share data:

 

 

 

 

 

Basic earnings per share

$

0.48

 

$

0.55

 

$

0.49

 

$

0.54

 

$

0.60

 

Diluted earnings per share

 

0.48

 

 

0.55

 

 

0.49

 

 

0.53

 

 

0.60

 

Cash dividends declared

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

Basic weighted average shares outstanding

 

27,046,525

 

 

27,044,121

 

 

27,042,762

 

 

27,024,043

 

 

26,999,138

 

Diluted weighted average shares outstanding

 

27,099,101

 

 

27,097,285

 

 

27,079,484

 

 

27,071,478

 

 

27,122,012

 

 

 

 

 

 

 

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

 

March 31, 2024

 

December 31, 2023

 

March 31, 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

$

265,418

5.47

%

$

3,611

$

261,594

5.45

%

$

3,597

$

24,957

4.51

%

$

277

Investment securities:

 

 

 

 

 

 

 

 

 

Taxable

 

1,324,657

2.18

 

 

7,211

 

1,331,752

2.19

 

 

7,292

 

1,395,985

2.10

 

 

7,336

Tax-exempt [1]

 

142,830

2.32

 

 

829

 

146,803

2.36

 

 

868

 

153,067

2.61

 

 

1,000

Total investment securities

 

1,467,487

2.19

 

 

8,040

 

1,478,555

2.21

 

 

8,160

 

1,549,052

2.15

 

 

8,336

Loans, including loans held for sale

 

5,400,558

4.67

 

 

62,819

 

5,458,245

4.55

 

 

62,429

 

5,525,988

4.26

 

 

58,269

FHLB stock

 

6,801

6.24

 

 

106

 

10,219

4.30

 

 

109

 

12,380

4.40

 

 

136

Total interest-earning assets

 

7,140,264

4.19

 

 

74,576

 

7,208,613

4.10

 

 

74,295

 

7,112,377

3.80

 

 

67,018

Noninterest-earning assets

 

309,397

 

 

 

289,484

 

 

 

331,390

 

 

Total assets

$

7,449,661

 

 

$

7,498,097

 

 

$

7,443,767

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

1,296,865

0.15

%

$

499

$

1,315,943

0.14

%

$

467

$

1,415,155

0.10

%

$

363

Savings and money market deposits

 

2,218,250

1.53

 

 

8,443

 

2,217,065

1.33

 

 

7,459

 

2,182,942

0.63

 

 

3,386

Time deposits up to $250,000

 

544,279

3.21

 

 

4,339

 

478,085

2.80

 

 

3,373

 

341,396

1.35

 

 

1,137

Time deposits over $250,000

 

794,019

4.38

 

 

8,651

 

856,159

4.34

 

 

9,368

 

689,432

3.02

 

 

5,127

Total interest-bearing deposits

 

4,853,413

1.82

 

 

21,932

 

4,867,252

1.68

 

 

20,667

 

4,628,925

0.88

 

 

10,013

FHLB advances and other short-term borrowings

 

 

 

 

 

 

 

64,462

4.79

 

 

761

Long-term debt

 

156,129

5.88

 

 

2,283

 

156,069

5.86

 

 

2,304

 

127,273

5.86

 

 

1,838

Total interest-bearing liabilities

 

5,009,542

1.94

 

 

24,215

 

5,023,321

1.81

 

 

22,971

 

4,820,660

1.06

 

 

12,612

Noninterest-bearing deposits

 

1,806,399

 

 

 

1,863,631

 

 

 

2,026,735

 

 

Other liabilities

 

132,600

 

 

 

137,437

 

 

 

132,816

 

 

Total liabilities

 

6,948,541

 

 

 

7,024,389

 

 

 

6,980,211

 

 

Total equity

 

501,120

 

 

 

473,708

 

 

 

463,556

 

 

Total liabilities and equity

$

7,449,661

 

 

$

7,498,097

 

 

$

7,443,767

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

50,361

 

 

$

51,324

 

 

$

54,406

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

2.25

%

 

 

2.29

%

 

 

2.74

%

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

2.83

%

 

 

2.84

%

 

 

3.08

%

 

[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 5

 

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Mar 31,

(Dollars in thousands)

2024

 

2023

 

2023

 

2023

 

2023

HAWAII:

 

 

 

 

 

Commercial and industrial

$

420,009

 

$

421,736

 

$

406,433

 

$

374,601

 

$

376,979

 

Real estate:

 

 

 

 

 

Construction

 

145,213

 

 

163,337

 

 

174,057

 

 

168,012

 

 

154,303

 

Residential mortgage

 

1,924,889

 

 

1,927,789

 

 

1,930,740

 

 

1,942,906

 

 

1,941,230

 

Home equity

 

729,210

 

 

736,524

 

 

753,980

 

 

750,760

 

 

743,908

 

Commercial mortgage

 

1,103,174

 

 

1,063,969

 

 

1,045,625

 

 

1,037,826

 

 

1,030,086

 

Consumer

 

306,563

 

 

322,346

 

 

338,248

 

 

327,790

 

 

342,922

 

Total loans, net of deferred fees and costs

 

4,629,058

 

 

4,635,701

 

 

4,649,083

 

 

4,601,895

 

 

4,589,428

 

Less: Allowance for credit losses

 

(48,739

)

 

(48,189

)

 

(48,105

)

 

(44,828

)

 

(44,062

)

Loans, net of allowance for credit losses

$

4,580,319

 

$

4,587,512

 

$

4,600,978

 

$

4,557,067

 

$

4,545,366

 

 

 

 

 

 

 

U.S. MAINLAND: [1]

 

 

 

 

 

Commercial and industrial

$

156,087

 

$

153,971

 

$

157,373

 

$

170,557

 

$

179,906

 

Real estate:

 

 

 

 

 

Construction

 

23,356

 

 

22,182

 

 

37,455

 

 

32,807

 

 

27,171

 

Commercial mortgage

 

319,088

 

 

318,933

 

 

319,802

 

 

329,736

 

 

331,546

 

Consumer

 

273,828

 

 

308,195

 

 

344,997

 

 

385,688

 

 

429,346

 

Total loans, net of deferred fees and costs

 

772,359

 

 

803,281

 

 

859,627

 

 

918,788

 

 

967,969

 

Less: Allowance for credit losses

 

(14,793

)

 

(15,745

)

 

(16,412

)

 

(19,021

)

 

(19,037

)

Loans, net of allowance for credit losses

$

757,566

 

$

787,536

 

$

843,215

 

$

899,767

 

$

948,932

 

 

 

 

 

 

 

TOTAL:

 

 

 

 

 

Commercial and industrial

$

576,096

 

$

575,707

 

$

563,806

 

$

545,158

 

$

556,885

 

Real estate:

 

 

 

 

 

Construction

 

168,569

 

 

185,519

 

 

211,512

 

 

200,819

 

 

181,474

 

Residential mortgage

 

1,924,889

 

 

1,927,789

 

 

1,930,740

 

 

1,942,906

 

 

1,941,230

 

Home equity

 

729,210

 

 

736,524

 

 

753,980

 

 

750,760

 

 

743,908

 

Commercial mortgage

 

1,422,262

 

 

1,382,902

 

 

1,365,427

 

 

1,367,562

 

 

1,361,632

 

Consumer

 

580,391

 

 

630,541

 

 

683,245

 

 

713,478

 

 

772,268

 

Total loans, net of deferred fees and costs

 

5,401,417

 

 

5,438,982

 

 

5,508,710

 

 

5,520,683

 

 

5,557,397

 

Less: Allowance for credit losses

 

(63,532

)

 

(63,934

)

 

(64,517

)

 

(63,849

)

 

(63,099

)

Loans, net of allowance for credit losses

$

5,337,885

 

$

5,375,048

 

$

5,444,193

 

$

5,456,834

 

$

5,494,298

 

[1]

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

 
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Deposits

(Unaudited)

TABLE 6

 

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Mar 31,

(Dollars in thousands)

2024

 

2023

 

2023

 

2023

 

2023

Noninterest-bearing demand

$

1,848,554

 

$

1,913,379

 

$

1,969,523

 

$

2,009,387

 

$

2,028,087

 

Interest-bearing demand

 

1,290,321

 

 

1,329,189

 

 

1,345,843

 

 

1,359,978

 

 

1,386,913

 

Savings and money market

 

2,211,966

 

 

2,209,733

 

 

2,209,550

 

 

2,184,652

 

 

2,184,675

 

Time deposits up to $250,000

 

544,600

 

 

533,898

 

 

465,543

 

 

427,864

 

 

372,150

 

Core deposits

 

5,895,441

 

 

5,986,199

 

 

5,990,459

 

 

5,981,881

 

 

5,971,825

 

 

 

 

 

 

 

Government time deposits

 

235,463

 

 

374,581

 

 

400,130

 

 

383,426

 

 

360,501

 

Other time deposits greater than $250,000

 

487,950

 

 

486,812

 

 

484,156

 

 

440,430

 

 

414,642

 

Total time deposits greater than $250,000

 

723,413

 

 

861,393

 

 

884,286

 

 

823,856

 

 

775,143

 

Total deposits

$

6,618,854

 

$

6,847,592

 

$

6,874,745

 

$

6,805,737

 

$

6,746,968

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Nonperforming Assets and Accruing Loans 90+ Days Past Due

(Unaudited)

TABLE 7

 

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Mar 31,

(Dollars in thousands)

2024

 

2023

 

2023

 

2023

 

2023

Nonaccrual loans:

 

 

 

 

 

Commercial and industrial

$

357

 

$

432

 

$

352

 

$

319

 

$

264

 

Real estate:

 

 

 

 

 

Construction

 

 

 

 

 

 

 

4,851

 

 

 

Residential mortgage

 

7,979

 

 

4,962

 

 

4,949

 

 

4,385

 

 

3,445

 

Home equity

 

929

 

 

834

 

 

677

 

 

797

 

 

712

 

Commercial mortgage

 

77

 

 

77

 

 

77

 

 

77

 

 

77

 

Consumer

 

790

 

 

703

 

 

597

 

 

632

 

 

815

 

Total nonaccrual loans

 

10,132

 

 

7,008

 

 

6,652

 

 

11,061

 

 

5,313

 

Other real estate owned ("OREO")

 

 

 

 

 

 

 

 

 

 

Total nonperforming assets ("NPAs")

 

10,132

 

 

7,008

 

 

6,652

 

 

11,061

 

 

5,313

 

Accruing loans 90+ days past due:

 

 

 

 

 

Real estate:

 

 

 

 

 

Construction

 

588

 

 

 

 

 

 

 

 

 

Residential mortgage

 

386

 

 

 

 

794

 

 

959

 

 

 

Home equity

 

560

 

 

229

 

 

 

 

133

 

 

 

Consumer

 

924

 

 

1,083

 

 

2,120

 

 

2,207

 

 

1,908

 

Total accruing loans 90+ days past due

 

2,458

 

 

1,312

 

 

2,914

 

 

3,299

 

 

1,908

 

Total NPAs and accruing loans 90+ days past due

$

12,590

 

$

8,320

 

$

9,566

 

$

14,360

 

$

7,221

 

 

 

 

 

 

 

Ratio of total nonaccrual loans to total loans

 

0.19

%

 

0.13

%

 

0.12

%

 

0.20

%

 

0.10

%

Ratio of total NPAs to total assets

 

0.14

 

 

0.09

 

 

0.09

 

 

0.15

 

 

0.07

 

Ratio of total NPAs to total loans and OREO

 

0.19

 

 

0.13

 

 

0.12

 

 

0.20

 

 

0.10

 

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

 

0.23

 

 

0.15

 

 

0.17

 

 

0.26

 

 

0.13

 

 

 

 

 

 

 

Quarter-to-quarter changes in NPAs:

 

 

 

 

 

Balance at beginning of quarter

$

7,008

 

$

6,652

 

$

11,061

 

$

5,313

 

$

5,251

 

Additions

 

4,792

 

 

1,836

 

 

2,311

 

 

7,105

 

 

1,609

 

Reductions:

 

 

 

 

 

Payments

 

(263

)

 

(268

)

 

(5,718

)

 

(290

)

 

(505

)

Return to accrual status

 

(198

)

 

(137

)

 

(207

)

 

(212

)

 

(14

)

Net charge-offs, valuation and other adjustments

 

(1,207

)

 

(1,075

)

 

(795

)

 

(855

)

 

(1,028

)

Total reductions

 

(1,668

)

 

(1,480

)

 

(6,720

)

 

(1,357

)

 

(1,547

)

Balance at end of quarter

$

10,132

 

$

7,008

 

$

6,652

 

$

11,061

 

$

5,313

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Allowance for Credit Losses on Loans

(Unaudited)

TABLE 8

 

 

Three Months Ended

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Mar 31,

(Dollars in thousands)

2024

 

2023

 

2023

 

2023

 

2023

Allowance for credit losses:

 

 

 

 

 

Balance at beginning of period

$

63,934

 

$

64,517

 

$

63,849

 

$

63,099

 

$

63,738

 

 

 

 

 

 

 

Provision for credit losses on loans

 

4,121

 

 

4,959

 

 

4,526

 

 

4,135

 

 

1,615

 

 

 

 

 

 

 

Charge-offs:

 

 

 

 

 

Commercial and industrial

 

(682

)

 

(419

)

 

(402

)

 

(362

)

 

(779

)

Consumer

 

(4,838

)

 

(5,976

)

 

(4,710

)

 

(3,873

)

 

(2,686

)

Total charge-offs

 

(5,520

)

 

(6,395

)

 

(5,112

)

 

(4,235

)

 

(3,465

)

 

 

 

 

 

 

Recoveries:

 

 

 

 

 

Commercial and industrial

 

90

 

 

84

 

 

261

 

 

125

 

 

250

 

Real estate:

 

 

 

 

 

Construction

 

 

 

 

 

1

 

 

 

 

 

Residential mortgage

 

8

 

 

7

 

 

10

 

 

7

 

 

53

 

Home equity

 

6

 

 

42

 

 

 

 

15

 

 

 

Consumer

 

893

 

 

720

 

 

982

 

 

703

 

 

908

 

Total recoveries

 

997

 

 

853

 

 

1,254

 

 

850

 

 

1,211

 

Net charge-offs

 

(4,523

)

 

(5,542

)

 

(3,858

)

 

(3,385

)

 

(2,254

)

Balance at end of period

$

63,532

 

$

63,934

 

$

64,517

 

$

63,849

 

$

63,099

 

 

 

 

 

 

 

Average loans, net of deferred fees and costs

$

5,400,558

 

$

5,458,245

 

$

5,507,248

 

$

5,543,398

 

$

5,525,988

 

Ratio of annualized net charge-offs to average loans

 

0.34

%

 

0.41

%

 

0.28

%

 

0.24

%

 

0.16

%

Ratio of ACL to total loans

 

1.18

 

 

1.18

 

 

1.17

 

 

1.16

 

 

1.14

 

 

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