CENTRAL PACIFIC FINANCIAL REPORTS THIRD QUARTER EARNINGS OF $16.7 MILLION
10/21/2022 - 08:00 AM
Net income of $16.7 million $0.61 per diluted share for the quarter. ROA of 0.91% and ROE of 14.49% for the quarter. Total loans of $5.42 billion $120.6 million 2.3% (9.2% annualized) in the third quarter. Net interest income increased by $2.4 million 4.5% from the previous quarter. Net interest margin of 3.17% increased by 12 bps from the previous quarter. Board of Directors approved quarterly cash dividend of $0.26 per share.Arnold Martines , current President and Chief Operating Officer announced to succeed Paul Yonamine as Chief Executive Officer, effective January 1, 2023 . HONOLULU Oct. 21, 2022 $16.7 million $0.61 .
"We continued to execute well in the third quarter as reflected in our strong earnings, loan growth and expanding net interest margin," said Paul Yonamine , Chairman and Chief Executive Officer. "While the broader economy is presenting challenges for the entire financial services industry, Hawaii has outperformed the nation during past recessions. Additionally, Central Pacific is well-positioned with solid asset quality and capital."
"We are pleased with our third quarter performance as our teams continue to work hard to meet our customers' needs. We continue to develop our digital and Banking-as-a-Service initiatives as a key part of our long-term strategic goal to build robust digital channels," said Arnold Martines , President and Chief Operating Officer.
Yesterday, the Company announced the promotion of Martines to Chief Executive Officer of both the Company and the Bank, succeeding Yonamine who will become Chairman Emeritus of the Company and the Bank, as well as an advisor to Martines. Also, Catherine Ngo , presently Executive Vice Chair, will become Chair of the Board of Directors of both the Company and the Bank. All changes will be effective January 1, 2023 . In commenting on the changes, Yonamine said, "I have had four great years at Central Pacific Bank and have accomplished all of my strategic goals for the Company and the Bank, including our RISE 2020 program with the $40 million Arnold Martines to lead this great institution into the future."
In commenting on the changes, Martines, who will also be named to the Board of Directors of the Company and the Bank, said, "It is my honor and privilege to lead Central Pacific Bank. We are an organization with strong core values and a solid digital roadmap for the future, thanks to Paul and Catherine. We intend to stay true to our founders and continue their legacy of focusing on serving the needs of our customers, by providing exceptional service while leveraging new technologies to provide the ultimate in convenience and value."
Earnings Highlights Net interest income for the third quarter of 2022 was $55.4 million $2 .4 million, or 4.5% from the prior quarter, and a decrease of $0 .7 million, or 1.3% from the year-ago quarter.
Net interest margin for the third quarter of 2022 was 3.17% , an increase of 12 basis points ("bps") from the prior quarter and a decrease of 14 bps from the year-ago quarter. The year-ago quarter included $8.6 million $0.7 million
The sequential quarter increase in net interest income and net interest margin is primarily due to higher asset yields and continued strong loan growth. Additional information on average balances, interest income and expenses and yields and rates is presented in Tables 4 and 5.
In the third quarter of 2022, the Company recorded a provision for credit losses of $0.4 million $1.0 million $2.6 million
Other operating income for the third quarter of 2022 totaled $9.6 million $17.1 million $10.3 million $8.5 million
Other operating expense for the third quarter of 2022 totaled $42.0 million $45.3 million $41.3 million $4.9 million
The efficiency ratio for the third quarter of 2022 was 64.62% , compared to 64.68% in the previous quarter and 62.32% in the year-ago quarter.
The effective tax rate for the third quarter of 2022 was 26.2% , compared to 26.0% in the previous quarter and 24.7% in the year-ago quarter.
Balance Sheet Highlights Total assets at September 30, 2022 of $7.34 billion $38 .5 million, or 0.5% from $7 .30 billion at June 30, 2022, and increased by $39 .4 million, or 0.5% from $7 .30 billion at September 30, 2021.
Total loans, net of deferred fees and costs, at September 30, 2022 of $5.42 billion $120 .6 million, or 2.3% from $5 .30 billion at June 30, 2022, and increased by $376 .4 million, or 7.5% , from $5 .05 billion at September 30, 2021. Loans by type and geographic distribution are summarized in Table 6.
Total deposits at September 30, 2022 of $6.56 billion $65 .6 million or 1.0% from $6 .62 billion at June 30, 2022, but increased by $40 .6 million, or 0.6% , from $6 .52 billion at September 30, 2021. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000 , totaled $6.04 billion $119 .3 million from June 30, 2022. Core deposit and total deposit balances are summarized in Table 7.
Asset Quality Nonperforming assets at September 30, 2022 totaled $4.2 million 0.06% of total assets, compared to $5.0 million 0.07% of total assets at June 30, 2022, and $7.2 million 0.10% of total assets at September 30, 2021. Additional information on nonperforming assets, past due and restructured loans is presented in Table 8.
Net charge-offs in the third quarter of 2022 totaled $1.6 million $1.0 million $0.2 million
The allowance for credit losses, as a percentage of total loans at September 30, 2022 was 1.19% , compared to 1.23% at June 30, 2022, and 1.48% at September 30, 2021. Additional information on net charge-offs and recoveries and the allowance for credit losses is presented in Table 9.
Capital Total shareholders' equity was $438.5 million $455.1 million $555.4 million
During the third quarter of 2022, the Company repurchased 218,000 shares of common stock, at a total cost of $4.9 million $22.33 . As of September 30, 2022, $15 .2 million remained available for repurchase under the Company's share repurchase program.
At September 30, 2022, the Company's leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 8.7% , 11.5% , 13.7% , and 10.6% , respectively, compared to 8.6% , 11.6% , 13.9% , and 10.7% , respectively, at June 30, 2022.
On October 20, 2022, 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 15, 2022 to shareholders of record at the close of business on November 30, 2022.
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 1-844-200-6205 (access code: 420241). A playback of the call will be available through November 21, 2022 by dialing 1-866-813-9403 (access code: 996439) 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 $7.34 billion
EQUAL HOUSING LENDER | Member FDIC | CPF LISTED NYSE
Forward-Looking Statements ("FLS") This document may contain FLS concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, the 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. 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 "believes," "plans," "anticipates," "expects," "intends," "forecasts," "hopes," "targeting," "continue," "remain," "will," "should," "estimates," "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 rising interest rates; the adverse effects of the COVID-19 pandemic virus (and ongoing pandemic variants) 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 to COVID-19; the impact of our participation in the Paycheck Protection Program ("PPP") and fulfillment of government guarantees on our PPP loans; 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; our ability to achieve the objectives of our RISE2020 initiative; our ability to successfully implement and achieve the objectives of our Banking-as-a-Service ("BaaS") initiatives, including adoption of the initiatives by customers and risks faced by any of our bank collaborations including reputational and regulatory risk; the impact of local, national, and international economies and events (including natural disasters such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, earthquakes and pandemic viruses and diseases, including COVID-19) 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 (the "Dodd-Frank 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 (the "CFPB"), 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 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; ability to successfully implement our initiatives to lower our efficiency ratio; 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 (the "FRB" or the "Federal Reserve"); securities market and monetary fluctuations, including the anticipated replacement of the London Interbank Offered Rate ("LIBOR") Index and the impact on our loans and debt which are tied to that index and uncertainties regarding potential alternative reference rates, including the Secured Overnight Financing Rate ("SOFR"); negative trends in our market capitalization and adverse changes in the price of the Company's common stock; political instability; acts of war or terrorism; pandemic virus and disease, including COVID-19; changes in consumer spending, borrowings and savings habits; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; cybersecurity and data privacy breaches and the consequence therefrom; the ability to address deficiencies in our internal controls over financial reporting or disclosure controls and procedures; technological changes and developments; changes in the competitive environment among financial holding companies and other financial service providers; 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 ("PCAOB"), the Financial Accounting Standards Board ("FASB") and other accounting standard setters and the cost and resources required to implement such changes; our ability to attract and retain key personnel; changes in our personnel, organization, compensation and benefit plans; 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
Nine Months Ended
(Dollars in thousands,
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Sep 30,
except for per share amounts)
2022
2022
2022
2021
2021
2022
2021
CONDENSED INCOME STATEMENT
Net interest income
$ 55,365
$ 52,978
$ 50,935
$ 53,096
$ 56,086
$ 159,278
$ 157,951
Provision (credit) for credit losses
362
989
(3,195)
(7,692)
(2,635)
(1,844)
(6,899)
Total other operating income
9,629
17,138
9,551
11,566
10,253
36,318
31,494
Total other operating expense
41,998
45,349
38,205
42,422
41,345
125,552
120,624
Income tax expense
5,919
6,184
6,038
7,605
6,814
18,141
18,153
Net income
16,715
17,594
19,438
22,327
20,815
53,747
57,567
Basic earnings per common share
$ 0.61
$ 0.64
$ 0.70
$ 0.80
$ 0.74
$ 1.96
$ 2.05
Diluted earnings per common share
0.61
0.64
0.70
0.80
0.74
1.94
2.03
Dividends declared per common share
0.26
0.26
0.26
0.25
0.24
0.78
0.71
PERFORMANCE RATIOS
Return on average assets (ROA) [1]
0.91 %
0.96 %
1.06 %
1.22 %
1.15 %
0.98 %
1.10 %
Return on average shareholders' equity (ROE) [1]
14.49
14.93
14.44
16.05
14.82
14.62
13.82
Average shareholders' equity to average assets
6.30
6.45
7.34
7.61
7.79
6.69
7.93
Efficiency ratio [2]
64.62
64.68
63.16
65.61
62.32
64.19
63.67
Net interest margin (NIM) [1]
3.17
3.05
2.97
3.08
3.31
3.06
3.22
Dividend payout ratio [3]
42.62
40.63
37.14
31.25
32.43
40.21
34.98
SELECTED AVERAGE BALANCES
Average loans, including loans held for sale
$ 5,355,088
$ 5,221,300
$ 5,114,260
$ 5,073,069
$ 5,022,909
$ 5,231,098
$ 5,070,993
Average interest-earning assets
6,991,773
6,982,556
6,932,649
6,890,829
6,761,643
6,969,326
6,559,740
Average assets
7,320,751
7,309,939
7,341,850
7,315,325
7,210,210
7,323,596
6,998,034
Average deposits
6,535,321
6,626,462
6,581,593
6,536,826
6,424,768
6,580,502
6,219,372
Average interest-bearing liabilities
4,538,893
4,442,172
4,429,114
4,407,612
4,326,589
4,470,461
4,247,745
Average shareholders' equity
461,328
471,420
538,601
556,462
561,606
490,140
555,264
[1] ROA and ROE are annualized based on a 30/360 day convention. Annualized net interest income and expense in theNIM calculation are based on the day count interest payment conventions at the interest-earning asset or interest-bearing liability level (ie. 30/360, actual/actual)
[2] Efficiency ratio is defined as total 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,
2022
2022
2022
2021
2021
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp
Leverage capital ratio
8.7 %
8.6 %
8.5 %
8.5 %
8.5 %
Tier 1 risk-based capital ratio
11.5
11.6
11.9
12.2
12.2
Total risk-based capital ratio
13.7
13.9
14.2
14.5
14.6
Common equity tier 1 capital ratio
10.6
10.7
10.9
11.2
11.2
Central Pacific Bank
Leverage capital ratio
9.1
9.0
9.0
8.9
9.0
Tier 1 risk-based capital ratio
12.2
12.2
12.6
12.8
13.0
Total risk-based capital ratio
13.4
13.5
13.8
14.0
14.3
Common equity tier 1 capital ratio
12.2
12.2
12.6
12.8
13.0
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
(dollars in thousands, except for per share amounts)
2022
2022
2022
2021
2021
BALANCE SHEET
Total loans, net of deferred fees and costs
$ 5,422,212
$ 5,301,633
$ 5,174,837
$ 5,101,649
$ 5,045,797
Total assets
7,337,631
7,299,178
7,298,819
7,419,089
7,298,231
Total deposits
6,556,434
6,622,061
6,599,031
6,639,158
6,515,863
Long-term debt
105,799
105,738
105,677
105,616
105,556
Total shareholders' equity
438,468
455,100
486,328
558,219
555,419
Total shareholders' equity to total assets
5.98 %
6.23 %
6.66 %
7.52 %
7.61 %
ASSET QUALITY
Allowance for credit losses (ACL)
$ 64,382
$ 65,211
$ 64,754
$ 68,097
$ 74,587
Nonaccrual loans
4,220
4,983
5,336
5,881
7,237
Non-performing assets (NPA)
4,220
4,983
5,336
5,881
7,237
ACL to total loans
1.19 %
1.23 %
1.25 %
1.33 %
1.48 %
ACL to nonaccrual loans
1,525.64 %
1,308.67 %
1,213.53 %
1,157.92 %
1,030.63 %
NPA to total assets
0.06 %
0.07 %
0.07 %
0.08 %
0.10 %
PER SHARE OF COMMON STOCK OUTSTANDING
Book value per common share
$ 16.08
$ 16.57
$ 17.63
$ 20.14
$ 19.84
Closing market price per common share
20.69
21.45
27.90
28.17
25.68
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)
2022
2022
2022
2021
2021
ASSETS
Cash and due from financial institutions
$ 116,365
$ 108,389
$ 83,947
$ 81,506
$ 108,669
Interest-bearing deposits in other financial institutions
22,332
22,741
118,183
247,401
240,173
Investment securities:
Available-for-sale debt securities, at fair value
686,681
787,373
1,199,482
1,631,699
1,535,450
Held-to-maturity debt securities, at amortized cost; fair value of:
$590,880 at September 30, 2022, $635,565 at June 30, 2022,
$329,503 at March 31, 2022, and none at December 31, 2021
and September 30, 2021
662,827
663,365
329,507
—
—
Equity securities, at fair value
—
—
—
—
1,593
Total investment securities
1,349,508
1,450,738
1,528,989
1,631,699
1,537,043
Loans held for sale
1,701
535
4,677
3,531
5,290
Loans, net of deferred fees and costs
5,422,212
5,301,633
5,174,837
5,101,649
5,045,797
Less: allowance for credit losses
64,382
65,211
64,754
68,097
74,587
Loans, net of allowance for credit losses
5,357,830
5,236,422
5,110,083
5,033,552
4,971,210
Premises and equipment, net
89,979
88,664
79,455
80,354
80,190
Accrued interest receivable
18,134
17,146
16,423
16,709
17,110
Investment in unconsolidated entities
36,769
37,341
31,092
29,679
30,397
Mortgage servicing rights
9,216
9,369
9,480
9,738
9,976
Bank-owned life insurance
167,761
167,202
167,407
169,148
167,961
Federal Home Loan Bank ("FHLB") stock
13,546
8,943
8,943
7,964
7,952
Right of use lease asset
35,978
36,978
38,435
39,441
40,757
Other assets
118,512
114,710
101,705
68,367
81,503
Total assets
$ 7,337,631
$ 7,299,178
$ 7,298,819
$ 7,419,089
$ 7,298,231
LIABILITIES
Deposits:
Noninterest-bearing demand
$ 2,138,083
$ 2,282,967
$ 2,269,562
$ 2,291,246
$ 2,195,404
Interest-bearing demand
1,441,302
1,444,566
1,433,284
1,415,277
1,372,626
Savings and money market
2,194,991
2,214,146
2,197,647
2,225,903
2,296,968
Time
782,058
680,382
698,538
706,732
650,865
Total deposits
6,556,434
6,622,061
6,599,031
6,639,158
6,515,863
FHLB advances and other short-term borrowings
115,000
—
—
—
—
Long-term debt
105,799
105,738
105,677
105,616
105,556
Lease liability
36,941
38,037
39,610
40,731
41,933
Other liabilities
84,989
78,242
68,123
75,317
79,412
Total liabilities
6,899,163
6,844,078
6,812,441
6,860,822
6,742,764
EQUITY
Shareholders' equity:
Preferred stock, no par value, authorized 1,000,000 shares;
issued and outstanding: none at September 30, 2022, June 30, 2022,
March 31, 2022, December 31, 2021, and September 30, 2021
—
—
—
—
—
Common stock, no par value, authorized 185,000,000 shares;
issued and outstanding: 27,262,879 at September 30, 2022,
27,463,562 at June 30, 2022, 27,584,929 at March 31, 2022,
27,714,071 at December 31, 2021, and 27,999,588 at September 30, 2021
412,994
417,862
421,153
426,091
436,957
Additional paid-in capital
100,426
98,977
98,270
98,073
97,279
Retained earnings
74,301
64,693
54,252
42,015
22,916
Accumulated other comprehensive loss
(149,253)
(126,432)
(87,347)
(7,960)
(1,733)
Total shareholders' equity
438,468
455,100
486,328
558,219
555,419
Non-controlling interest
—
—
50
48
48
Total equity
438,468
455,100
486,378
558,267
555,467
Total liabilities and equity
$ 7,337,631
$ 7,299,178
$ 7,298,819
$ 7,419,089
$ 7,298,231
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,
September 30,
(Dollars in thousands, except per share data)
2022
2022
2022
2021
2021
2022
2021
Interest income:
Interest and fees on loans
$ 51,686
$ 46,963
$ 44,949
$ 47,576
$ 51,104
$ 143,598
$ 146,202
Interest and dividends on investment securities:
Taxable investment securities
6,933
7,035
6,969
6,667
6,210
20,937
15,763
Tax-exempt investment securities
805
807
816
642
470
2,428
1,330
Dividend income on investment securities
—
—
21
21
18
21
54
Interest on deposits in other financial institutions
107
191
72
86
105
370
176
Dividend income on FHLB stock
138
68
59
61
62
265
184
Total interest income
59,669
55,064
52,886
55,053
57,969
167,619
163,709
Interest expense:
Interest on deposits:
Demand
217
144
112
104
101
473
280
Savings and money market
1,054
317
329
352
332
1,700
888
Time
1,092
490
469
478
428
2,051
1,514
Interest on short-term borrowings
660
2
—
—
—
662
2
Interest on long-term debt
1,281
1,133
1,041
1,023
1,022
3,455
3,074
Total interest expense
4,304
2,086
1,951
1,957
1,883
8,341
5,758
Net interest income
55,365
52,978
50,935
53,096
56,086
159,278
157,951
Provision (credit) for credit losses
362
989
(3,195)
(7,692)
(2,635)
(1,844)
(6,899)
Net interest income after provision (credit) for credit losses
55,003
51,989
54,130
60,788
58,721
161,122
164,850
Other operating income:
Mortgage banking income
831
1,140
1,172
1,902
1,327
3,143
5,830
Service charges on deposit accounts
2,138
2,026
1,861
1,800
1,637
6,025
4,558
Other service charges and fees
4,955
4,610
4,488
5,016
4,942
14,053
13,351
Income from fiduciary activities
1,165
1,188
1,154
1,283
1,292
3,507
3,792
Net gain on sales of investment securities
—
8,506
—
—
100
8,506
150
Income from bank-owned life insurance
167
(1,028)
539
946
540
(322)
2,547
Other
373
696
337
619
415
1,406
1,266
Total other operating income
9,629
17,138
9,551
11,566
10,253
36,318
31,494
Other operating expense:
Salaries and employee benefits
22,778
22,369
20,942
23,030
23,566
66,089
67,183
Net occupancy
4,743
4,448
3,774
4,129
4,185
12,965
12,004
Equipment
1,085
1,075
1,082
1,207
1,089
3,242
3,137
Communication
712
744
806
922
824
2,262
2,349
Legal and professional services
2,573
2,916
2,626
2,928
2,575
8,115
7,524
Computer software
4,138
3,624
3,082
3,125
2,998
10,844
10,179
Advertising
1,150
1,150
1,150
1,179
1,329
3,450
4,316
Other
4,819
9,023
4,743
5,902
4,779
18,585
13,932
Total other operating expense
41,998
45,349
38,205
42,422
41,345
125,552
120,624
Income before income taxes
22,634
23,778
25,476
29,932
27,629
71,888
75,720
Income tax expense
5,919
6,184
6,038
7,605
6,814
18,141
18,153
Net income
$ 16,715
$ 17,594
$ 19,438
$ 22,327
$ 20,815
$ 53,747
$ 57,567
Per common share data:
Basic earnings per share
$ 0.61
$ 0.64
$ 0.70
$ 0.80
$ 0.74
$ 1.96
$ 2.05
Diluted earnings per share
0.61
0.64
0.70
0.80
0.74
1.94
2.03
Cash dividends declared
0.26
0.26
0.26
0.25
0.24
0.78
0.71
Basic weighted average shares outstanding
27,356,614
27,516,284
27,591,390
27,769,651
27,967,089
27,487,237
28,082,632
Diluted weighted average shares outstanding
27,501,212
27,676,619
27,874,924
28,045,826
28,175,953
27,666,197
28,316,574
Note: Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period
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, 2022
June 30, 2022
September 30, 2021
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
$ 19,802
2.14 %
$ 107
$ 106,083
0.72 %
$ 191
$ 273,039
0.15 %
$ 105
Investment securities, excluding valuation allowance:
Taxable
1,445,781
1.92
6,934
1,487,129
1.89
7,034
1,351,272
1.84
6,228
Tax-exempt [1]
158,052
2.57
1,018
159,087
2.57
1,023
106,333
2.24
595
Total investment securities
1,603,833
1.98
7,952
1,646,216
1.96
8,057
1,457,605
1.87
6,823
Loans, including loans held for sale
5,355,088
3.84
51,686
5,221,300
3.60
46,963
5,022,909
4.05
51,104
Federal Home Loan Bank stock
13,050
4.23
138
8,957
3.02
68
8,090
3.09
62
Total interest-earning assets
6,991,773
3.41
59,883
6,982,556
3.17
55,279
6,761,643
3.42
58,094
Noninterest-earning assets
328,978
327,383
448,567
Total assets
$ 7,320,751
$ 7,309,939
$ 7,210,210
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits
$ 1,450,434
0.06 %
$ 217
$ 1,435,088
0.04 %
$ 144
$ 1,356,967
0.03 %
$ 101
Savings and money market deposits
2,208,037
0.19
1,054
2,204,934
0.06
317
2,168,055
0.06
332
Time deposits up to $250,000
228,707
0.42
245
217,605
0.27
148
228,762
0.31
181
Time deposits over $250,000
443,178
0.76
847
478,483
0.29
342
467,289
0.21
247
Total interest-bearing deposits
4,330,356
0.22
2,363
4,336,110
0.09
951
4,221,073
0.08
861
Federal Home Loan Bank advances and other short-term borrowings
102,777
2.55
660
363
1.84
2
—
—
—
Long-term debt
105,760
4.80
1,281
105,699
4.30
1,133
105,516
3.84
1,022
Total interest-bearing liabilities
4,538,893
0.38
4,304
4,442,172
0.19
2,086
4,326,589
0.17
1,883
Noninterest-bearing deposits
2,204,965
2,290,352
2,203,695
Other liabilities
115,565
105,979
118,272
Total liabilities
6,859,423
6,838,503
6,648,556
Shareholders' equity
461,328
471,420
561,606
Non-controlling interest
—
16
48
Total equity
461,328
471,436
561,654
Total liabilities and equity
$ 7,320,751
$ 7,309,939
$ 7,210,210
Net interest income
$ 55,579
$ 53,193
$ 56,211
Interest rate spread
3.03 %
2.98 %
3.25 %
Net interest margin
3.17 %
3.05 %
3.31 %
[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, 2022
September 30, 2021
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
$ 94,076
0.53 %
$ 370
$ 180,646
0.13 %
$ 176
Investment securities, excluding valuation allowance:
Taxable
1,473,989
1.90
20,958
1,202,564
1.75
15,817
Tax-exempt [1]
160,144
2.56
3,073
97,613
2.30
1,684
Total investment securities
1,634,133
1.96
24,031
1,300,177
1.79
17,501
Loans, including loans held for sale
5,231,098
3.67
143,598
5,070,993
3.85
146,202
Federal Home Loan Bank stock
10,019
3.53
265
7,924
3.11
184
Total interest-earning assets
6,969,326
3.22
168,264
6,559,740
3.34
164,063
Noninterest-earning assets
354,270
438,294
Total assets
$ 7,323,596
$ 6,998,034
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits
$ 1,437,034
0.04 %
$ 473
$ 1,271,825
0.03 %
$ 280
Savings and money market deposits
2,208,449
0.10
1,700
2,057,194
0.06
888
Time deposits up to $250,000
223,343
0.33
548
232,474
0.36
619
Time deposits over $250,000
461,180
0.44
1,503
579,984
0.21
895
Total interest-bearing deposits
4,330,006
0.13
4,224
4,141,477
0.09
2,682
Federal Home Loan Bank advances and other short-term borrowings
34,756
2.55
662
810
0.30
2
Long-term debt
105,699
4.37
3,455
105,458
3.90
3,074
Total interest-bearing liabilities
4,470,461
0.25
8,341
4,247,745
0.18
5,758
Noninterest-bearing deposits
2,250,496
2,077,895
Other liabilities
112,478
117,113
Total liabilities
6,833,435
6,442,753
Shareholders' equity
490,140
555,264
Non-controlling interest
21
17
Total equity
490,161
555,281
Total liabilities and equity
$ 7,323,596
$ 6,998,034
Net interest income
$ 159,923
$ 158,305
Interest rate spread
2.97 %
3.16 %
Net interest margin
3.06 %
3.22 %
[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)
2022
2022
2022
2021
2021
HAWAII:
Commercial, financial and agricultural:
SBA Paycheck Protection Program
$ 5,208
$ 19,469
$ 43,380
$ 87,459
$ 198,315
Other
358,805
367,676
407,559
422,388
404,751
Real estate:
Construction
138,724
134,103
122,329
122,867
128,908
Residential mortgage
1,923,068
1,890,783
1,874,048
1,875,980
1,748,729
Home equity
719,399
698,209
676,326
637,249
618,951
Commercial mortgage
1,002,874
994,405
927,241
922,146
915,746
Consumer
347,388
341,213
337,188
333,843
331,987
Total loans, net of deferred fees and costs
4,495,466
4,445,858
4,388,071
4,401,932
4,347,387
Allowance for credit losses
(47,814)
(51,374)
(51,521)
(55,808)
(62,126)
Loans, net of allowance for credit losses
$ 4,447,652
$ 4,394,484
$ 4,336,550
$ 4,346,124
$ 4,285,261
U.S. MAINLAND: [1]
Commercial, financial and agricultural:
SBA Paycheck Protection Program
$ —
$ 712
$ 851
$ 3,868
$ 20,356
Other
158,474
156,567
136,857
107,733
114,122
Real estate:
Construction
12,872
10,935
988
—
—
Commercial mortgage
332,872
309,230
316,258
298,058
292,671
Consumer
422,528
378,331
331,812
290,058
271,261
Total loans, net of deferred fees and costs
926,746
855,775
786,766
699,717
698,410
Allowance for credit losses
(16,568)
(13,837)
(13,233)
(12,289)
(12,461)
Loans, net of allowance for credit losses
$ 910,178
$ 841,938
$ 773,533
$ 687,428
$ 685,949
TOTAL:
Commercial, financial and agricultural:
SBA Paycheck Protection Program
$ 5,208
$ 20,181
$ 44,231
$ 91,327
$ 218,671
Other
517,279
524,243
544,416
530,121
518,873
Real estate:
Construction
151,596
145,038
123,317
122,867
128,908
Residential mortgage
1,923,068
1,890,783
1,874,048
1,875,980
1,748,729
Home equity
719,399
698,209
676,326
637,249
618,951
Commercial mortgage
1,335,746
1,303,635
1,243,499
1,220,204
1,208,417
Consumer
769,916
719,544
669,000
623,901
603,248
Total loans, net of deferred fees and costs
5,422,212
5,301,633
5,174,837
5,101,649
5,045,797
Allowance for credit losses
(64,382)
(65,211)
(64,754)
(68,097)
(74,587)
Loans, net of allowance for credit losses
$ 5,357,830
$ 5,236,422
$ 5,110,083
$ 5,033,552
$ 4,971,210
[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)
2022
2022
2022
2021
2021
Noninterest-bearing demand
$ 2,138,083
$ 2,282,967
$ 2,269,562
$ 2,291,246
$ 2,195,404
Interest-bearing demand
1,441,302
1,444,566
1,433,284
1,415,277
1,372,626
Savings and money market
2,194,991
2,214,146
2,197,647
2,225,903
2,296,968
Time deposits less than $100,000
153,238
129,103
132,712
136,584
139,358
Other time deposits $100,000 t o $250,000
108,723
84,840
87,838
88,873
87,491
Core deposits
6,036,337
6,155,622
6,121,043
6,157,883
6,091,847
Government time deposits
195,057
165,000
188,000
214,950
238,950
Other time deposits greater than $250,000
325,040
301,439
289,988
266,325
185,066
Total time deposits greater than $250,000
520,097
466,439
477,988
481,275
424,016
Total deposits
$ 6,556,434
$ 6,622,061
$ 6,599,031
$ 6,639,158
$ 6,515,863
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Nonperforming Assets, Past Due and Restructured Loans
(Unaudited)
TABLE 8
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
(Dollars in thousands)
2022
2022
2022
2021
2021
Nonaccrual loans: [1]
Commercial, financial and agricultural - Other
$ 277
$ 333
$ 293
$ 183
$ 689
Real estate:
Residential mortgage
2,771
3,490
3,804
4,623
5,351
Home equity
584
592
820
786
880
Consumer
588
568
419
289
317
Total nonaccrual loans
4,220
4,983
5,336
5,881
7,237
Other real estate owned ("OREO"):
Real estate:
Residential mortgage
—
—
—
—
—
Total OREO
—
—
—
—
—
Total nonperforming assets ("NPAs")
4,220
4,983
5,336
5,881
7,237
Loans delinquent for 90 days or more still accruing interest: [1]
Commercial, financial and agricultural - Other
669
309
592
945
—
Real estate:
Residential mortgage
503
—
111
—
444
Home equity
—
—
—
44
—
Consumer
623
842
621
374
166
Total loans delinquent for 90 days or more still accruing interest
1,795
1,151
1,324
1,363
610
Restructured loans still accruing interest: [1]
Commercial, financial and agricultural - Other
—
—
—
—
12
Real estate:
Residential mortgage
2,030
2,006
2,751
3,768
4,458
Commercial mortgage
925
965
1,004
1,043
1,577
Consumer
69
76
83
92
99
Total restructured loans still accruing interest
3,024
3,047
3,838
4,903
6,146
Total NPAs and loans delinquent for 90 days or more and
restructured loans still accruing interest
$ 9,039
$ 9,181
$ 10,498
$ 12,147
$ 13,993
Total nonaccrual loans as a percentage of total loans
0.08 %
0.09 %
0.10 %
0.12 %
0.14 %
Total NPAs as a percentage of total loans and OREO
0.08 %
0.09 %
0.10 %
0.12 %
0.14 %
Total NPAs and loans delinquent for 90 days or more still accruing
interest as a percentage of total loans and OREO
0.11 %
0.12 %
0.13 %
0.14 %
0.16 %
Total NPAs, loans delinquent for 90 days or more and restructured
loans still accruing interest as a percentage of total loans and OREO
0.17 %
0.17 %
0.20 %
0.24 %
0.28 %
Quarter-to-quarter changes in NPAs:
Balance at beginning of quarter
$ 4,983
$ 5,336
$ 5,881
$ 7,237
$ 6,745
Additions
1,072
1,881
1,659
1,375
1,951
Reductions:
Payments
(329)
(285)
(1,598)
(933)
(767)
Return to accrual status
(616)
(979)
(38)
(1,034)
(141)
Charge-offs, valuation and other adjustments
(890)
(970)
(568)
(764)
(551)
Total reductions
(1,835)
(2,234)
(2,204)
(2,731)
(1,459)
Balance at end of quarter
$ 4,220
$ 4,983
$ 5,336
$ 5,881
$ 7,237
[1] Section 4013 of the CARES Act and the revised Interagency Statement were applied to loan modifications related to the COVID-19 pandemic as eligible and applicable. This relief ended on January 1, 2022. These loan modifications were not included in the delinquent or restructured loan balances presented above
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,
September 30,
(Dollars in thousands)
2022
2022
2022
2021
2021
2022
2021
Allowance for credit losses ("ACL"):
ACL at beginning of period
$ 65,211
$ 64,754
$ 68,097
$ 74,587
$ 77,781
$ 68,097
$ 83,269
(Credit) provision for credit losses on loans [1]
731
1,456
(2,931)
(7,417)
(2,969)
(744)
(6,906)
Charge-offs:
Commercial, financial and agricultural - Other
550
487
254
379
334
1,291
1,344
Consumer
1,912
1,390
1,216
952
829
4,518
3,450
Total charge-offs
2,462
1,877
1,470
1,331
1,163
5,809
4,794
Recoveries:
Commercial, financial and agricultural - Other
220
215
350
358
281
785
646
Real estate:
Construction
14
62
—
1,159
—
76
—
Residential mortgage
14
36
112
13
53
162
345
Home equity
36
—
—
—
—
36
9
Commercial mortgage
—
—
—
—
—
—
73
Consumer
618
565
596
728
604
1,779
1,945
Total recoveries
902
878
1,058
2,258
938
2,838
3,018
Net charge-offs (recoveries)
1,560
999
412
(927)
225
2,971
1,776
ACL at end of period
$ 64,382
$ 65,211
$ 64,754
$ 68,097
$ 74,587
$ 64,382
$ 74,587
Average loans, net of deferred fees and costs
$ 5,355,088
$ 5,221,300
$ 5,114,260
$ 5,073,069
$ 5,022,909
$ 5,231,098
$ 5,070,993
Annualized ratio of net charge-offs to average loans
0.12 %
0.08 %
0.03 %
(0.07) %
0.02 %
0.08 %
0.05 %
[1] As of January 1, 2021, the provision for credit losses on off-balance sheet credit exposures (previously included in other operating expense) is included in the provision for credit losses line on the consolidated statements of income. The allowance for off-balance sheet credit exposures continues to be included in other liabilities. For roll-forward purposes, in this table we exclude the provision for credit losses on off-balance sheet credit exposures
https://www.prnewswire.com/news-releases/central-pacific-financial-reports-third-quarter-earnings-of-16-7-million-301655732.html
SOURCE Central Pacific Financial Corp.
