CPF Central Pacific Financial Corp

• Net income of $14.5 million, or $0.53 per diluted share for the quarter.
• ROA of 0.78% and ROE of 12.12% for the quarter.
• Total loans of $5.52 billion decreased by $36.7 million in the second quarter.
• Total deposits of $6.81 billion increased by $58.8 million in the second quarter. Core deposits of $5.98 billion increased by $10.1 million, or 0.2% in the second quarter. 65% of total deposits are FDIC-insured or fully collateralized as of June 30, 2023.
• Solid liquidity position with $311.0 million in cash on balance sheet and $2.71 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities as of June 30, 2023.
• Ratio of total available sources of liquidity to uninsured and uncollateralized deposits was 128% as of June 30, 2023.
• Leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios improved to 8.7%, 11.8%, 13.9%, and 10.9%, respectively, in the second quarter, compared to 8.6%, 11.5%, 13.6%, and 10.6% in the first quarter.
• 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 for the second quarter of 2023 of $14.5 million, or fully diluted earnings per share ("EPS") of $0.53, compared to net income of $16.2 million, or EPS of $0.60 in the previous quarter and net income of $17.6 million, or EPS of $0.64 in the year-ago quarter.

Pre-provision net revenue ("PPNR"), or net income excluding provision for credit losses and income taxes, totaled $23.3 million in the second quarter of 2023, compared to PPNR of $23.1 million in the previous quarter and $24.8 million in the year-ago quarter. Net income and PPNR in the year-ago quarter included an $8.5 million non-recurring gain on sale of Class B shares of Visa, partially offset by a $4.9 million non-recurring, non-cash settlement charge related to the termination and settlement of our defined benefit pension plan. Additional information on pre-provision net revenue is presented in Table 10.

"Central Pacific delivered solid results during the second quarter and further strengthened our balance sheet, liquidity and capital positions," said Arnold Martines, President and Chief Executive Officer. "We were successful in growing deposits by focusing on the needs of our long-time personal and business customers as well as attracting new relationships. We will continue our focus on building liquidity and ensuring strong credit quality while we navigate the current economic environment."

Earnings Highlights

Net interest income for the second quarter of 2023 was $52.7 million, which decreased by $1.5 million, or 2.7% from the previous quarter, and decreased by $0.2 million, or 0.5% from the year-ago quarter. The sequential quarter decrease in net interest income is primarily due to increases in average balances and rates paid on interest-bearing deposits, which outpaced the increases in average loan balances and loan yields.

Net interest margin ("NIM") for the second quarter of 2023 was 2.96%, which decreased by 12 basis points ("bps") from the previous quarter and decreased by 9 bps from the year-ago quarter. The sequential quarter decrease in NIM is primarily due to higher rates paid on deposits, which outpaced the increase in loan yields. Additional information on average balances, interest income and expenses and yields and rates is presented in Tables 4 and 5.

In the second quarter of 2023, the Company recorded a provision for credit losses of $4.3 million, compared to a provision of $1.9 million in the previous quarter and a provision of $1.0 million in the year-ago quarter. The provision in the second quarter consisted of a provision for credit losses on loans of $4.1 million and a provision for credit losses on off-balance sheet credit exposures of $0.2 million.

Other operating income for the second quarter of 2023 totaled $10.4 million, compared to $11.0 million in the previous quarter and $17.1 million in the year-ago quarter. The decrease from the previous quarter was primarily due to lower income from fiduciary activities of $0.3 million and lower income recovered on nonaccrual loans previously charged-off of $0.2 million (included in other). Other operating income in the year-ago quarter included the aforementioned $8.5 million gain on the sale of Class B common stock of Visa. Additional information on other operating income is presented in Table 3.

Other operating expense for the second quarter of 2023 totaled $39.9 million, compared to $42.1 million in the previous quarter and $45.3 million in the year-ago quarter. The decrease in other operating expense was primarily due to lower salaries and employee benefits of $1.2 million and lower legal and professional services of $0.4 million. Other operating expense in the year-ago quarter included the aforementioned non-cash settlement charge of $4.9 million related to the termination and settlement of our defined benefit pension plan. Additional information on other operating expense is presented in Table 3.

The efficiency ratio for the second quarter of 2023 was 63.17%, compared to 64.58% in the previous quarter and 64.68% in the year-ago quarter.

The effective tax rate for the second quarter of 2023 was 23.6%, compared to 23.8% in the previous quarter and 26.0% in the year-ago quarter.

Balance Sheet Highlights

Total assets at June 30, 2023 of $7.57 billion increased by $46.3 million, or 0.6% from $7.52 billion at March 31, 2023, and increased by $268.4 million, or 3.7% from $7.30 billion at June 30, 2022. At June 30, 2023, the Company had $311.0 million in cash on its balance sheet and $2.71 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities. Total available sources of liquidity as a percentage of uninsured and uncollateralized deposits was 128%.

Total loans, net of deferred fees and costs, at June 30, 2023 of $5.52 billion decreased by $36.7 million from $5.56 billion at March 31, 2023, and increased by $219.1 million, or 4.1% from $5.30 billion at June 30, 2022. Average yields earned on loans during the second quarter of 2023 was 4.37%, compared to 4.26% in the previous quarter and 3.60% in the year-ago quarter. Loans by type and geographic distribution are summarized in Table 6.

Total deposits at June 30, 2023 of $6.81 billion increased by $58.8 million or 0.9% from $6.75 billion at March 31, 2023, and increased by $183.7 million, or 2.8% from $6.62 billion at June 30, 2022. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.98 billion at June 30, 2023, and increased by $10.1 million, or 0.2% from $5.97 billion at March 31, 2023. Average rates paid on total deposits during the second quarter of 2023 was 0.84%, compared to 0.60% in the previous quarter and 0.06% in the year-ago quarter. At June 30, 2023, approximately 65% of the Company's total deposits were FDIC-insured or fully collateralized. Core deposit and total deposit balances are summarized in Table 7.

Asset Quality

Nonperforming assets at June 30, 2023 totaled $11.1 million, or 0.15% of total assets, compared to $5.3 million, or 0.07% of total assets at March 31, 2023 and $5.0 million, or 0.07% of total assets at June 30, 2022. The increase in nonperforming assets from the previous quarter is primarily attributable to the addition of two Hawaii construction loans to a single borrower totaling $4.9 million. In mid-July 2023, the loans were paid-off in full.

Additional information on nonperforming assets, past due and restructured loans is presented in Table 8.

Net charge-offs in the second quarter of 2023 totaled $3.4 million, compared to net charge-offs of $2.3 million in the previous quarter, and net charge-offs of $1.0 million in the year-ago quarter. Annualized net charge-offs as a percentage of average loans was 0.24%, 0.16% and 0.08% during the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

The allowance for credit losses, as a percentage of total loans at June 30, 2023 was 1.16%, compared to 1.14% at March 31, 2023, and 1.23% at June 30, 2022. Additional information on net charge-offs and recoveries and the allowance for credit losses is presented in Table 9.

Capital

Total shareholders' equity was $476.3 million at June 30, 2023, compared to $470.9 million and $455.1 million at March 31, 2023 and June 30, 2022, respectively.

During the second quarter of 2023, the Company repurchased 23,750 shares of common stock, at a total cost of $0.4 million, or an average cost per share of $14.92. During the six months ended June 30, 2023, the Company repurchased 125,510 shares of common stock, at a total cost of $2.6 million, or an average cost per share of $20.39. As of June 30, 2023, $23.5 million remained available for repurchase under the Company's share repurchase program.

At June 30, 2023, the Company's leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 8.7%, 11.8%, 13.9%, and 10.9%, respectively, compared to 8.6%, 11.5%, 13.6%, and 10.6%, respectively, at March 31, 2023.

On July 25, 2023, the Company's Board of Directors declared a quarterly cash dividend of $0.26 per share on its outstanding common shares. The dividend will be payable on September 15, 2023 to shareholders of record at the close of business on August 31, 2023.

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 1-888-510-2553 (access code: 9816541). A playback of the call will be available through August 26, 2023 by dialing 1-800-770-2030 (access code: 9816541) 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 $7.57 billion in assets as of June 30, 2023. Central Pacific Bank, its primary subsidiary, operates 27 branches and 57 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 ("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. (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 "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 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 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; 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; 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) 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 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; 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 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; changes in consumer spending, borrowings and savings habits; cybersecurity and data privacy breaches and the consequence therefrom; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; 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

 

Six Months Ended

(Dollars in thousands,

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Jun 30,

except for per share amounts)

2023

 

2023

 

2022

 

2022

 

2022

 

2023

 

2022

CONDENSED INCOME STATEMENT

 

 

 

 

 

 

 

Net interest income

$

52,734

 

$

54,196

 

$

56,285

 

$

55,365

 

$

52,978

 

$

106,930

 

$

103,913

 

Provision (credit) for credit losses

 

4,319

 

 

1,852

 

 

571

 

 

362

 

 

989

 

 

6,171

 

 

(2,206

)

Total other operating income

 

10,435

 

 

11,009

 

 

11,601

 

 

9,629

 

 

17,138

 

 

21,444

 

 

26,689

 

Total other operating expense

 

39,903

 

 

42,107

 

 

40,434

 

 

41,998

 

 

45,349

 

 

82,010

 

 

83,554

 

Income tax expense

 

4,472

 

 

5,059

 

 

6,700

 

 

5,919

 

 

6,184

 

 

9,531

 

 

12,222

 

Net income

 

14,475

 

 

16,187

 

 

20,181

 

 

16,715

 

 

17,594

 

 

30,662

 

 

37,032

 

Basic earnings per share

$

0.54

 

$

0.60

 

$

0.74

 

$

0.61

 

$

0.64

 

$

1.14

 

$

1.34

 

Diluted earnings per share

 

0.53

 

 

0.60

 

 

0.74

 

 

0.61

 

 

0.64

 

 

1.13

 

 

1.33

 

Dividends declared per share

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

 

0.52

 

 

0.52

 

 

 

 

 

 

 

 

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

Return on average assets (ROA) [1]

 

0.78

%

 

0.87

%

 

1.09

%

 

0.91

%

 

0.96

%

 

0.82

%

 

1.01

%

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

 

12.12

 

 

13.97

 

 

18.30

 

 

14.49

 

 

14.93

 

 

13.03

 

 

14.67

 

Average shareholders’ equity to average assets

 

6.40

 

 

6.23

 

 

5.97

 

 

6.30

 

 

6.45

 

 

6.31

 

 

6.89

 

Efficiency ratio [2]

 

63.17

 

 

64.58

 

 

59.56

 

 

64.62

 

 

64.68

 

 

63.88

 

 

63.98

 

Net interest margin (NIM) [1]

 

2.96

 

 

3.08

 

 

3.17

 

 

3.17

 

 

3.05

 

 

3.02

 

 

3.01

 

Dividend payout ratio [3]

 

49.06

 

 

43.33

 

 

35.14

 

 

42.62

 

 

40.63

 

 

46.02

 

 

39.10

 

 

 

 

 

 

 

 

 

SELECTED AVERAGE BALANCES

 

 

 

 

 

 

 

Average loans, including loans held for sale

$

5,543,398

 

$

5,525,988

 

$

5,498,800

 

$

5,355,088

 

$

5,221,300

 

$

5,534,741

 

$

5,168,076

 

Average interest-earning assets

 

7,155,606

 

 

7,112,377

 

 

7,103,841

 

 

6,991,773

 

 

6,982,556

 

 

7,134,111

 

 

6,957,918

 

Average assets

 

7,463,629

 

 

7,443,767

 

 

7,389,712

 

 

7,320,751

 

 

7,309,939

 

 

7,453,753

 

 

7,325,042

 

Average deposits

 

6,674,650

 

 

6,655,660

 

 

6,673,922

 

 

6,535,321

 

 

6,626,462

 

 

6,665,208

 

 

6,603,467

 

Average interest-bearing liabilities

 

4,908,120

 

 

4,820,660

 

 

4,708,045

 

 

4,538,893

 

 

4,442,172

 

 

4,864,633

 

 

4,435,678

 

Average shareholders’ equity

 

477,711

 

 

463,556

 

 

441,084

 

 

461,328

 

 

471,420

 

 

470,673

 

 

504,825

 

[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 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)

 

Jun 30,

Mar 31,

Dec 31,

Sep 30,

Jun 30,

2023

2023

2022

2022

2022

REGULATORY CAPITAL RATIOS

Central Pacific Financial Corp.

 

 

 

 

 

Leverage capital ratio

 

8.7

%

 

8.6

%

 

8.5

%

 

8.7

%

 

8.6

%

Tier 1 risk-based capital ratio

 

11.8

 

 

11.5

 

 

11.3

 

 

11.5

 

 

11.6

 

Total risk-based capital ratio

 

13.9

 

 

13.6

 

 

13.5

 

 

13.7

 

 

13.9

 

Common equity tier 1 capital ratio

 

10.9

 

 

10.6

 

 

10.5

 

 

10.6

 

 

10.7

 

Central Pacific Bank

 

 

 

 

 

Leverage capital ratio

 

9.1

 

 

9.0

 

 

9.0

 

 

9.1

 

 

9.0

 

Tier 1 risk-based capital ratio

 

12.3

 

 

12.0

 

 

11.9

 

 

12.2

 

 

12.2

 

Total risk-based capital ratio

 

13.5

 

 

13.2

 

 

13.1

 

 

13.4

 

 

13.5

 

Common equity tier 1 capital ratio

 

12.3

 

 

12.0

 

 

11.9

 

 

12.2

 

 

12.2

 

 

 

Jun 30,

Mar 31,

Dec 31,

Sep 30,

Jun 30,

(dollars in thousands, except for per share amounts)

2023

2023

2022

2022

2022

BALANCE SHEET

 

 

 

 

 

Total loans, net of deferred fees and costs

$

5,520,683

 

$

5,557,397

 

$

5,555,466

 

$

5,422,212

 

$

5,301,633

 

Total assets

 

7,567,592

 

 

7,521,247

 

 

7,432,763

 

 

7,337,631

 

 

7,299,178

 

Total deposits

 

6,805,737

 

 

6,746,968

 

 

6,736,223

 

 

6,556,434

 

 

6,622,061

 

Long-term debt

 

155,981

 

 

155,920

 

 

105,859

 

 

105,799

 

 

105,738

 

Total shareholders’ equity

 

476,279

 

 

470,926

 

 

452,871

 

 

438,468

 

 

455,100

 

Total shareholders’ equity to total assets

 

6.29

%

 

6.26

%

 

6.09

%

 

5.98

%

 

6.23

%

 

 

 

 

 

 

ASSET QUALITY

 

 

 

 

 

Allowance for credit losses (ACL)

$

63,849

 

$

63,099

 

$

63,738

 

$

64,382

 

$

65,211

 

Nonaccrual loans

 

11,061

 

 

5,313

 

 

5,251

 

 

4,220

 

 

4,983

 

Non-performing assets (NPA)

 

11,061

 

 

5,313

 

 

5,251

 

 

4,220

 

 

4,983

 

ACL to total loans

 

1.16

%

 

1.14

%

 

1.15

%

 

1.19

%

 

1.23

%

ACL to nonaccrual loans

 

577.24

%

 

1,187.63

%

 

1,213.83

%

 

1,525.64

%

 

1,308.67

%

NPA to total assets

 

0.15

%

 

0.07

%

 

0.07

%

 

0.06

%

 

0.07

%

 

 

 

 

 

 

PER SHARE OF COMMON STOCK OUTSTANDING

 

 

 

 

 

Book value per common share

$

17.61

 

$

17.44

 

$

16.76

 

$

16.08

 

$

16.57

 

Closing market price per common share

 

15.71

 

 

17.90

 

 

20.28

 

 

20.69

 

 

21.45

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

TABLE 2

 

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

(Dollars in thousands, except share data)

2023

 

2023

 

2022

 

2022

 

2022

ASSETS

 

 

 

 

 

Cash and due from financial institutions

$

129,071

 

$

108,535

 

$

97,150

 

$

116,365

 

$

108,389

 

Interest-bearing deposits in other financial institutions

 

181,913

 

 

90,247

 

 

14,894

 

 

22,332

 

 

22,741

 

Investment securities:

 

 

 

 

 

Available-for-sale debt securities, at fair value

 

664,071

 

 

687,188

 

 

671,794

 

 

686,681

 

 

787,373

 

Held-to-maturity debt securities, at amortized cost; fair value of: $581,222 at June 30, 2023, $599,300 at March 31, 2023, $596,780 at December 31, 2022, $590,880 at September 30, 2022, and $635,565 at June 30, 2022

 

649,946

 

 

658,596

 

 

664,883

 

 

662,827

 

 

663,365

 

Total investment securities

 

1,314,017

 

 

1,345,784

 

 

1,336,677

 

 

1,349,508

 

 

1,450,738

 

Loans held for sale, at fair value

 

2,593

 

 

—

 

 

1,105

 

 

1,701

 

 

535

 

Loans, net of deferred fees and costs

 

5,520,683

 

 

5,557,397

 

 

5,555,466

 

 

5,422,212

 

 

5,301,633

 

Less: allowance for credit losses

 

63,849

 

 

63,099

 

 

63,738

 

 

64,382

 

 

65,211

 

Loans, net of allowance for credit losses

 

5,456,834

 

 

5,494,298

 

 

5,491,728

 

 

5,357,830

 

 

5,236,422

 

Premises and equipment, net

 

96,479

 

 

93,761

 

 

91,634

 

 

89,979

 

 

88,664

 

Accrued interest receivable

 

20,463

 

 

20,473

 

 

20,345

 

 

18,134

 

 

17,146

 

Investment in unconsolidated entities

 

45,218

 

 

45,953

 

 

46,641

 

 

36,769

 

 

37,341

 

Mortgage servicing rights

 

8,843

 

 

8,943

 

 

9,074

 

 

9,216

 

 

9,369

 

Bank-owned life insurance

 

168,136

 

 

168,244

 

 

167,967

 

 

167,761

 

 

167,202

 

Federal Home Loan Bank ("FHLB") stock

 

10,960

 

 

11,960

 

 

9,146

 

 

13,546

 

 

8,943

 

Right-of-use lease asset

 

33,247

 

 

34,237

 

 

34,985

 

 

35,978

 

 

36,978

 

Other assets

 

99,818

 

 

98,812

 

 

111,417

 

 

118,512

 

 

114,710

 

Total assets

$

7,567,592

 

$

7,521,247

 

$

7,432,763

 

$

7,337,631

 

$

7,299,178

 

LIABILITIES

 

 

 

 

 

Deposits:

 

 

 

 

 

Noninterest-bearing demand

$

2,009,387

 

$

2,028,087

 

$

2,092,823

 

$

2,138,083

 

$

2,282,967

 

Interest-bearing demand

 

1,359,978

 

 

1,386,913

 

 

1,453,167

 

 

1,441,302

 

 

1,444,566

 

Savings and money market

 

2,184,652

 

 

2,184,675

 

 

2,199,028

 

 

2,194,991

 

 

2,214,146

 

Time

 

1,251,720

 

 

1,147,293

 

 

991,205

 

 

782,058

 

 

680,382

 

Total deposits

 

6,805,737

 

 

6,746,968

 

 

6,736,223

 

 

6,556,434

 

 

6,622,061

 

FHLB advances and other short-term borrowings

 

—

 

 

25,000

 

 

5,000

 

 

115,000

 

 

—

 

Long-term debt, net of unamortized debt issuance costs of: $566 at June 30, 2023, $627 at March 31, 2023, $688 at December 31, 2022, $748 at September 30, 2022 and $809 at June 30, 2022

 

155,981

 

 

155,920

 

 

105,859

 

 

105,799

 

 

105,738

 

Lease liability

 

34,111

 

 

35,076

 

 

35,889

 

 

36,941

 

 

38,037

 

Other liabilities

 

95,484

 

 

87,357

 

 

96,921

 

 

84,989

 

 

78,242

 

Total liabilities

 

7,091,313

 

 

7,050,321

 

 

6,979,892

 

 

6,899,163

 

 

6,844,078

 

EQUITY

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,045,792 at June 30, 2023, 27,005,545 at March 31, 2023, 27,025,070 at December 31, 2022, 27,262,879 at September 30, 2022, and 27,463,562 at June 30, 2022

 

405,511

 

 

405,866

 

 

408,071

 

 

412,994

 

 

417,862

 

Additional paid-in capital

 

101,997

 

 

101,188

 

 

101,346

 

 

100,426

 

 

98,977

 

Retained earnings

 

104,046

 

 

96,600

 

 

87,438

 

 

74,301

 

 

64,693

 

Accumulated other comprehensive loss

 

(135,275

)

 

(132,728

)

 

(143,984

)

 

(149,253

)

 

(126,432

)

Total shareholders' equity

 

476,279

 

 

470,926

 

 

452,871

 

 

438,468

 

 

455,100

 

Non-controlling interest

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Total equity

 

476,279

 

 

470,926

 

 

452,871

 

 

438,468

 

 

455,100

 

Total liabilities and equity

$

7,567,592

 

$

7,521,247

 

$

7,432,763

 

$

7,337,631

 

$

7,299,178

 

 

 

 

 

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

TABLE 3

 

Three Months Ended

Six Months Ended

 

Jun 30,

Mar 31,

Dec 31,

Sep 30,

Jun 30,

Jun 30,

(Dollars in thousands, except per share data)

2023

2023

2022

2022

2022

2023

2022

Interest income:

 

 

 

 

 

 

 

Interest and fees on loans

$

60,455

 

$

58,269

 

$

56,682

 

$

51,686

 

$

46,963

 

$

118,724

 

$

91,912

 

Interest and dividends on investment securities:

 

 

 

 

 

 

 

Taxable investment securities

 

7,145

 

 

7,336

 

 

7,104

 

 

6,933

 

 

7,035

 

 

14,481

 

 

14,004

 

Tax-exempt investment securities

 

727

 

 

790

 

 

776

 

 

805

 

 

807

 

 

1,517

 

 

1,623

 

Dividends on investment securities

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

21

 

Interest on deposits in other financial institutions

 

877

 

 

277

 

 

370

 

 

107

 

 

191

 

 

1,154

 

 

263

 

Dividend income on FHLB stock

 

120

 

 

136

 

 

105

 

 

138

 

 

68

 

 

256

 

 

127

 

Total interest income

 

69,324

 

 

66,808

 

 

65,037

 

 

59,669

 

 

55,064

 

 

136,132

 

 

107,950

 

Interest expense:

 

 

 

 

 

 

 

Interest on deposits:

 

 

 

 

 

 

 

Demand

 

411

 

 

363

 

 

333

 

 

217

 

 

144

 

 

774

 

 

256

 

Savings and money market

 

4,670

 

 

3,386

 

 

2,488

 

 

1,054

 

 

317

 

 

8,056

 

 

646

 

Time

 

8,932

 

 

6,264

 

 

4,063

 

 

1,092

 

 

490

 

 

15,196

 

 

959

 

Interest on short-term borrowings

 

378

 

 

761

 

 

393

 

 

660

 

 

2

 

 

1,139

 

 

2

 

Interest on long-term debt

 

2,199

 

 

1,838

 

 

1,475

 

 

1,281

 

 

1,133

 

 

4,037

 

 

2,174

 

Total interest expense

 

16,590

 

 

12,612

 

 

8,752

 

 

4,304

 

 

2,086

 

 

29,202

 

 

4,037

 

Net interest income

 

52,734

 

 

54,196

 

 

56,285

 

 

55,365

 

 

52,978

 

 

106,930

 

 

103,913

 

Provision (credit) for credit losses

 

4,319

 

 

1,852

 

 

571

 

 

362

 

 

989

 

 

6,171

 

 

(2,206

)

Net interest income after provision (credit) for credit losses

 

48,415

 

 

52,344

 

 

55,714

 

 

55,003

 

 

51,989

 

 

100,759

 

 

106,119

 

Other operating income:

 

 

 

 

 

 

 

Mortgage banking income

 

690

 

 

526

 

 

667

 

 

831

 

 

1,140

 

 

1,216

 

 

2,312

 

Service charges on deposit accounts

 

2,137

 

 

2,111

 

 

2,172

 

 

2,138

 

 

2,026

 

 

4,248

 

 

3,887

 

Other service charges and fees

 

4,994

 

 

4,985

 

 

4,972

 

 

4,955

 

 

4,610

 

 

9,979

 

 

9,098

 

Income from fiduciary activities

 

1,068

 

 

1,321

 

 

1,058

 

 

1,165

 

 

1,188

 

 

2,389

 

 

2,342

 

Net gain on sales of investment securities

 

—

 

 

—

 

 

—

 

 

—

 

 

8,506

 

 

—

 

 

8,506

 

Income from bank-owned life insurance

 

1,185

 

 

1,291

 

 

2,187

 

 

167

 

 

(1,028

)

 

2,476

 

 

(489

)

Other

 

361

 

 

775

 

 

545

 

 

373

 

 

696

 

 

1,136

 

 

1,033

 

Total other operating income

 

10,435

 

 

11,009

 

 

11,601

 

 

9,629

 

 

17,138

 

 

21,444

 

 

26,689

 

Other operating expense:

 

 

 

 

 

 

 

Salaries and employee benefits

 

20,848

 

 

22,023

 

 

22,692

 

 

22,778

 

 

22,369

 

 

42,871

 

 

43,311

 

Net occupancy

 

4,310

 

 

4,474

 

 

3,998

 

 

4,743

 

 

4,448

 

 

8,784

 

 

8,222

 

Equipment

 

932

 

 

946

 

 

996

 

 

1,085

 

 

1,075

 

 

1,878

 

 

2,157

 

Communication

 

791

 

 

778

 

 

696

 

 

712

 

 

744

 

 

1,569

 

 

1,550

 

Legal and professional services

 

2,469

 

 

2,886

 

 

2,677

 

 

2,573

 

 

2,916

 

 

5,355

 

 

5,542

 

Computer software

 

4,621

 

 

4,606

 

 

3,996

 

 

4,138

 

 

3,624

 

 

9,227

 

 

6,706

 

Advertising

 

942

 

 

933

 

 

701

 

 

1,150

 

 

1,150

 

 

1,875

 

 

2,300

 

Other

 

4,990

 

 

5,461

 

 

4,678

 

 

4,819

 

 

9,023

 

 

10,451

 

 

13,766

 

Total other operating expense

 

39,903

 

 

42,107

 

 

40,434

 

 

41,998

 

 

45,349

 

 

82,010

 

 

83,554

 

Income before income taxes

 

18,947

 

 

21,246

 

 

26,881

 

 

22,634

 

 

23,778

 

 

40,193

 

 

49,254

 

Income tax expense

 

4,472

 

 

5,059

 

 

6,700

 

 

5,919

 

 

6,184

 

 

9,531

 

 

12,222

 

Net income

$

14,475

 

$

16,187

 

$

20,181

 

$

16,715

 

$

17,594

 

$

30,662

 

$

37,032

 

Per common share data:

 

 

 

 

 

 

 

Basic earnings per share

$

0.54

 

$

0.60

 

$

0.74

 

$

0.61

 

$

0.64

 

$

1.14

 

$

1.34

 

Diluted earnings per share

 

0.53

 

 

0.60

 

 

0.74

 

 

0.61

 

 

0.64

 

 

1.13

 

 

1.33

 

Cash dividends declared

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

 

0.26

 

 

0.52

 

 

0.52

 

Basic weighted average shares outstanding

 

27,024,043

 

 

26,999,138

 

 

27,134,970

 

 

27,356,614

 

 

27,516,284

 

 

27,011,659

 

 

27,553,629

 

Diluted weighted average shares outstanding

 

27,071,478

 

 

27,122,012

 

 

27,303,249

 

 

27,501,212

 

 

27,676,619

 

 

27,090,258

 

 

27,759,187

 

 

 

 

 

 

 

 

 

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

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

 

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

$

69,189

5.08

%

$

877

$

24,957

4.51

%

$

277

$

106,083

0.72

%

$

191

Investment securities, excluding valuation allowance:

 

 

 

 

 

 

 

 

 

Taxable

 

1,379,319

2.07

 

 

7,145

 

1,395,985

2.10

 

 

7,336

 

1,487,129

1.89

 

 

7,034

Tax-exempt [1]

 

151,979

2.42

 

 

920

 

153,067

2.61

 

 

1,000

 

159,087

2.57

 

 

1,023

Total investment securities

 

1,531,298

2.11

 

 

8,065

 

1,549,052

2.15

 

 

8,336

 

1,646,216

1.96

 

 

8,057

Loans, including loans held for sale

 

5,543,398

4.37

 

 

60,455

 

5,525,988

4.26

 

 

58,269

 

5,221,300

3.60

 

 

46,963

Federal Home Loan Bank stock

 

11,721

4.10

 

 

120

 

12,380

4.40

 

 

136

 

8,957

3.02

 

 

68

Total interest-earning assets

 

7,155,606

3.89

 

 

69,517

 

7,112,377

3.80

 

 

67,018

 

6,982,556

3.17

 

 

55,279

Noninterest-earning assets

 

308,023

 

 

 

331,390

 

 

 

327,383

 

 

Total assets

$

7,463,629

 

 

$

7,443,767

 

 

$

7,309,939

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

1,367,878

0.12

%

$

411

$

1,415,155

0.10

%

$

363

$

1,435,088

0.04

%

$

144

Savings and money market deposits

 

2,172,680

0.86

 

 

4,670

 

2,182,942

0.63

 

 

3,386

 

2,204,934

0.06

 

 

317

Time deposits up to $250,000

 

390,961

2.98

 

 

2,907

 

341,396

2.22

 

 

1,870

 

217,605

0.27

 

 

148

Time deposits over $250,000

 

790,864

3.06

 

 

6,025

 

689,432

2.58

 

 

4,394

 

478,483

0.29

 

 

342

Total interest-bearing deposits

 

4,722,383

1.19

 

 

14,013

 

4,628,925

0.88

 

 

10,013

 

4,336,110

0.09

 

 

951

Federal Home Loan Bank advances and other short-term borrowings

 

29,791

5.09

 

 

378

 

64,462

4.79

 

 

761

 

363

1.84

 

 

2

Long-term debt

 

155,946

5.65

 

 

2,199

 

127,273

5.86

 

 

1,838

 

105,699

4.30

 

 

1,133

Total interest-bearing liabilities

 

4,908,120

1.36

 

 

16,590

 

4,820,660

1.06

 

 

12,612

 

4,442,172

0.19

 

 

2,086

Noninterest-bearing deposits

 

1,952,267

 

 

 

2,026,735

 

 

 

2,290,352

 

 

Other liabilities

 

125,531

 

 

 

132,816

 

 

 

105,979

 

 

Total liabilities

 

6,985,918

 

 

 

6,980,211

 

 

 

6,838,503

 

 

Shareholders’ equity

 

477,711

 

 

 

463,556

 

 

 

471,420

 

 

Non-controlling interest

 

—

 

 

 

—

 

 

 

16

 

 

Total equity

 

477,711

 

 

 

463,556

 

 

 

471,436

 

 

Total liabilities and equity

$

7,463,629

 

 

$

7,443,767

 

 

$

7,309,939

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

52,927

 

 

$

54,406

 

 

$

53,193

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

2.53

%

 

 

2.74

%

 

 

2.98

%

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

2.96

%

 

 

3.08

%

 

 

3.05

%

 

[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

 

Six Months Ended

 

Six Months Ended

 

June 30, 2023

 

June 30, 2022

 

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

$

47,195

4.93

%

$

1,154

$

131,829

0.40

%

$

263

Investment securities, excluding valuation allowance:

 

 

 

 

 

 

Taxable

 

1,387,606

2.09

 

 

14,481

 

1,488,327

1.88

 

 

14,024

Tax-exempt [1]

 

152,520

2.52

 

 

1,920

 

161,208

2.55

 

 

2,056

Total investment securities

 

1,540,126

2.13

 

 

16,401

 

1,649,535

1.95

 

 

16,080

Loans, including loans held for sale

 

5,534,741

4.32

 

 

118,724

 

5,168,076

3.58

 

 

91,912

Federal Home Loan Bank stock

 

12,049

4.26

 

 

256

 

8,479

3.00

 

 

127

Total interest-earning assets

 

7,134,111

3.85

 

 

136,535

 

6,957,919

3.13

 

 

108,382

Noninterest-earning assets

 

319,642

 

 

 

367,124

 

 

Total assets

$

7,453,753

 

 

$

7,325,043

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

Interest-bearing liabilities:

 

 

 

 

 

 

Interest-bearing demand deposits

$

1,391,386

0.11

%

$

774

$

1,430,222

0.04

%

$

256

Savings and money market deposits

 

2,177,783

0.75

 

 

8,056

 

2,208,659

0.06

 

 

646

Time deposits up to $250,000

 

366,316

2.63

 

 

4,776

 

220,617

0.28

 

 

303

Time deposits over $250,000

 

740,428

2.84

 

 

10,420

 

470,330

0.28

 

 

656

Total interest-bearing deposits

 

4,675,913

1.04

 

 

24,026

 

4,329,828

0.09

 

 

1,861

Federal Home Loan Bank advances and other short-term borrowings

 

47,031

4.88

 

 

1,139

 

182

1.84

 

 

2

Long-term debt

 

141,689

5.75

 

 

4,037

 

105,668

4.15

 

 

2,174

Total interest-bearing liabilities

 

4,864,633

1.21

 

 

29,202

 

4,435,678

0.18

 

 

4,037

Noninterest-bearing deposits

 

1,989,295

 

 

 

2,273,639

 

 

Other liabilities

 

129,152

 

 

 

110,868

 

 

Total liabilities

 

6,983,080

 

 

 

6,820,185

 

 

Shareholders’ equity

 

470,673

 

 

 

504,825

 

 

Non-controlling interest

 

—

 

 

 

32

 

 

Total equity

 

470,673

 

 

 

504,857

 

 

Total liabilities and equity

$

7,453,753

 

 

$

7,325,042

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

107,333

 

 

$

104,345

 

 

 

 

 

 

 

Interest rate spread

 

2.64

%

 

 

2.95

%

 

 

 

 

 

 

 

 

Net interest margin

 

3.02

%

 

 

3.01

%

 

[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

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

(Dollars in thousands)

2023

 

2023

 

2022

 

2022

 

2022

HAWAII:

 

 

 

 

 

Commercial, financial and agricultural:

 

 

 

 

 

SBA Paycheck Protection Program

$

1,565

 

$

1,821

 

$

2,555

 

$

5,208

 

$

19,469

 

Other

 

373,036

 

 

375,158

 

 

383,665

 

 

358,805

 

 

367,676

 

Real estate:

 

 

 

 

 

Construction

 

168,012

 

 

154,303

 

 

150,208

 

 

138,724

 

 

134,103

 

Residential mortgage

 

1,942,906

 

 

1,941,230

 

 

1,940,999

 

 

1,923,068

 

 

1,890,783

 

Home equity

 

750,760

 

 

743,908

 

 

739,380

 

 

719,399

 

 

698,209

 

Commercial mortgage

 

1,037,826

 

 

1,030,086

 

 

1,029,708

 

 

1,002,874

 

 

994,405

 

Consumer

 

327,790

 

 

342,922

 

 

346,789

 

 

347,388

 

 

341,213

 

Total loans, net of deferred fees and costs

 

4,601,895

 

 

4,589,428

 

 

4,593,304

 

 

4,495,466

 

 

4,445,858

 

Allowance for credit losses

 

(44,828

)

 

(44,062

)

 

(45,169

)

 

(47,814

)

 

(51,374

)

Loans, net of allowance for credit losses

$

4,557,067

 

$

4,545,366

 

$

4,548,135

 

$

4,447,652

 

$

4,394,484

 

 

 

 

 

 

 

U.S. MAINLAND: [1]

 

 

 

 

 

Commercial, financial and agricultural:

 

 

 

 

 

SBA Paycheck Protection Program

$

—

 

$

—

 

$

—

 

$

—

 

$

712

 

Other

 

170,557

 

 

179,906

 

 

160,282

 

 

158,474

 

 

156,567

 

Real estate:

 

 

 

 

 

Construction

 

32,807

 

 

27,171

 

 

16,515

 

 

12,872

 

 

10,935

 

Commercial mortgage

 

329,736

 

 

331,546

 

 

333,367

 

 

332,872

 

 

309,230

 

Consumer

 

385,688

 

 

429,346

 

 

451,998

 

 

422,528

 

 

378,331

 

Total loans, net of deferred fees and costs

 

918,788

 

 

967,969

 

 

962,162

 

 

926,746

 

 

855,775

 

Allowance for credit losses

 

(19,021

)

 

(19,037

)

 

(18,569

)

 

(16,568

)

 

(13,837

)

Loans, net of allowance for credit losses

$

899,767

 

$

948,932

 

$

943,593

 

$

910,178

 

$

841,938

 

 

 

 

 

 

 

TOTAL:

 

 

 

 

 

Commercial, financial and agricultural:

 

 

 

 

 

SBA Paycheck Protection Program

$

1,565

 

$

1,821

 

$

2,555

 

$

5,208

 

$

20,181

 

Other

 

543,593

 

 

555,064

 

 

543,947

 

 

517,279

 

 

524,243

 

Real estate:

 

 

 

 

 

Construction

 

200,819

 

 

181,474

 

 

166,723

 

 

151,596

 

 

145,038

 

Residential mortgage

 

1,942,906

 

 

1,941,230

 

 

1,940,999

 

 

1,923,068

 

 

1,890,783

 

Home equity

 

750,760

 

 

743,908

 

 

739,380

 

 

719,399

 

 

698,209

 

Commercial mortgage

 

1,367,562

 

 

1,361,632

 

 

1,363,075

 

 

1,335,746

 

 

1,303,635

 

Consumer

 

713,478

 

 

772,268

 

 

798,787

 

 

769,916

 

 

719,544

 

Total loans, net of deferred fees and costs

 

5,520,683

 

 

5,557,397

 

 

5,555,466

 

 

5,422,212

 

 

5,301,633

 

Allowance for credit losses

 

(63,849

)

 

(63,099

)

 

(63,738

)

 

(64,382

)

 

(65,211

)

Loans, net of allowance for credit losses

$

5,456,834

 

$

5,494,298

 

$

5,491,728

 

$

5,357,830

 

$

5,236,422

 

[1]

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

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Deposits

(Unaudited)

TABLE 7

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

(Dollars in thousands)

2023

 

2023

 

2022

 

2022

 

2022

Noninterest-bearing demand deposits

$

2,009,387

$

2,028,087

$

2,092,823

$

2,138,083

$

2,282,967

Interest-bearing demand deposits

 

1,359,978

 

1,386,913

 

1,453,167

 

1,441,302

 

1,444,566

Savings and money market deposits

 

2,184,652

 

2,184,675

 

2,199,028

 

2,194,991

 

2,214,146

Time deposits less than $100,000

 

221,366

 

188,289

 

181,547

 

153,238

 

129,103

Other time deposits $100,000 to $250,000

 

206,498

 

183,861

 

148,601

 

108,723

 

84,840

Core deposits

 

5,981,881

 

5,971,825

 

6,075,166

 

6,036,337

 

6,155,622

 

 

 

 

 

 

Government time deposits

 

383,426

 

360,501

 

290,057

 

195,057

 

165,000

Other time deposits greater than $250,000

 

440,430

 

414,642

 

371,000

 

325,040

 

301,439

Total time deposits greater than $250,000

 

823,856

 

775,143

 

661,057

 

520,097

 

466,439

Total deposits

$

6,805,737

$

6,746,968

$

6,736,223

$

6,556,434

$

6,622,061

 

 

 

 

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Nonperforming Assets, Past Due and Restructured Loans

(Unaudited)

TABLE 8

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

(Dollars in thousands)

2023

 

2023

 

2022

 

2022

 

2022

Nonaccrual loans:

 

 

 

 

 

Commercial, financial and agricultural - Other

$

319

 

$

264

 

$

297

 

$

277

 

$

333

 

Real estate:

 

 

 

 

 

Construction

 

4,851

 

 

—

 

 

—

 

 

—

 

 

—

 

Residential mortgage

 

4,385

 

 

3,445

 

 

3,808

 

 

2,771

 

 

3,490

 

Home equity

 

797

 

 

712

 

 

570

 

 

584

 

 

592

 

Commercial mortgage

 

77

 

 

77

 

 

—

 

 

—

 

 

—

 

Consumer

 

632

 

 

815

 

 

576

 

 

588

 

 

568

 

Total nonaccrual loans

 

11,061

 

 

5,313

 

 

5,251

 

 

4,220

 

 

4,983

 

Other real estate owned ("OREO"):

 

 

 

 

 

Real estate:

 

 

 

 

 

Residential mortgage

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Total OREO

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Total nonperforming assets ("NPAs")

 

11,061

 

 

5,313

 

 

5,251

 

 

4,220

 

 

4,983

 

Loans delinquent for 90 days or more still accruing interest:

 

 

 

 

 

Commercial, financial and agricultural:

 

 

 

 

 

SBA PPP

 

—

 

 

—

 

 

13

 

 

—

 

 

—

 

Other

 

—

 

 

—

 

 

26

 

 

669

 

 

309

 

Real estate:

 

 

 

 

 

Residential mortgage

 

959

 

 

—

 

 

559

 

 

503

 

 

—

 

Home equity

 

133

 

 

—

 

 

—

 

 

—

 

 

—

 

Consumer

 

2,207

 

 

1,908

 

 

1,240

 

 

623

 

 

842

 

Total loans delinquent for 90 days or more still accruing interest

 

3,299

 

 

1,908

 

 

1,838

 

 

1,795

 

 

1,151

 

Restructured loans still accruing interest:

 

 

 

 

 

Real estate:

 

 

 

 

 

Residential mortgage

 

1,339

 

 

1,376

 

 

1,845

 

 

2,030

 

 

2,006

 

Commercial mortgage

 

805

 

 

846

 

 

886

 

 

925

 

 

965

 

Consumer

 

47

 

 

54

 

 

62

 

 

69

 

 

76

 

Total restructured loans still accruing interest

 

2,191

 

 

2,276

 

 

2,793

 

 

3,024

 

 

3,047

 

Total NPAs and loans delinquent for 90 days or more and restructured loans still accruing interest

$

16,551

 

$

9,497

 

$

9,882

 

$

9,039

 

$

9,181

 

 

 

 

 

 

 

Total nonaccrual loans as a percentage of total loans

 

0.20

%

 

0.10

%

 

0.09

%

 

0.08

%

 

0.09

%

Total NPAs as a percentage of total loans and OREO

 

0.20

%

 

0.10

%

 

0.09

%

 

0.08

%

 

0.09

%

Total NPAs and loans delinquent for 90 days or more still accruing interest as a percentage of total loans and OREO

 

0.26

%

 

0.13

%

 

0.13

%

 

0.11

%

 

0.12

%

Total NPAs, loans delinquent for 90 days or more and restructured loans still accruing interest as a percentage of total loans and OREO

 

0.30

%

 

0.17

%

 

0.18

%

 

0.17

%

 

0.17

%

 

 

 

 

 

 

Quarter-to-quarter changes in NPAs:

 

 

 

 

 

Balance at beginning of quarter

$

5,313

 

$

5,251

 

$

4,220

 

$

4,983

 

$

5,336

 

Additions

 

7,105

 

 

1,609

 

 

2,162

 

 

1,072

 

 

1,881

 

Reductions:

 

 

 

 

 

Payments

 

(290

)

 

(505

)

 

(198

)

 

(329

)

 

(285

)

Return to accrual status

 

(212

)

 

(14

)

 

(44

)

 

(616

)

 

(979

)

Net charge-offs, valuation and other adjustments

 

(855

)

 

(1,028

)

 

(889

)

 

(890

)

 

(970

)

Total reductions

 

(1,357

)

 

(1,547

)

 

(1,131

)

 

(1,835

)

 

(2,234

)

Balance at end of quarter

$

11,061

 

$

5,313

 

$

5,251

 

$

4,220

 

$

4,983

 

 

 

 

 

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Allowance for Credit Losses on Loans

(Unaudited)

TABLE 9

 

Three Months Ended

Six Months Ended

 

Jun 30,

Mar 31,

Dec 31,

Sep 30,

Jun 30,

Jun 30,

(Dollars in thousands)

2023

2023

2022

2022

2022

2023

2022

Allowance for credit losses:

 

 

 

 

 

 

 

Balance at beginning of period

$

63,099

 

$

63,738

 

$

64,382

 

$

65,211

 

$

64,754

 

$

63,738

 

$

68,097

 

 

 

 

 

 

 

 

 

Provision (credit) for credit losses on loans

 

4,135

 

 

1,615

 

 

1,032

 

 

731

 

 

1,456

 

 

5,750

 

 

(1,475

)

 

 

 

 

 

 

 

 

Charge-offs:

 

 

 

 

 

 

 

Commercial, financial and agricultural - Other

 

362

 

 

779

 

 

678

 

 

550

 

 

487

 

 

1,141

 

 

741

 

Consumer

 

3,873

 

 

2,686

 

 

1,881

 

 

1,912

 

 

1,390

 

 

6,559

 

 

2,606

 

Total charge-offs

 

4,235

 

 

3,465

 

 

2,559

 

 

2,462

 

 

1,877

 

 

7,700

 

 

3,347

 

 

 

 

 

 

 

 

 

Recoveries:

 

 

 

 

 

 

 

Commercial, financial and agricultural - Other

 

125

 

 

250

 

 

210

 

 

220

 

 

215

 

 

375

 

 

565

 

Real estate:

 

 

 

 

 

 

 

Construction

 

—

 

 

—

 

 

—

 

 

14

 

 

62

 

 

—

 

 

62

 

Residential mortgage

 

7

 

 

53

 

 

133

 

 

14

 

 

36

 

 

60

 

 

148

 

Home equity

 

15

 

 

—

 

 

—

 

 

36

 

 

—

 

 

15

 

 

—

 

Consumer

 

703

 

 

908

 

 

540

 

 

618

 

 

565

 

 

1,611

 

 

1,161

 

Total recoveries

 

850

 

 

1,211

 

 

883

 

 

902

 

 

878

 

 

2,061

 

 

1,936

 

Net charge-offs

 

3,385

 

 

2,254

 

 

1,676

 

 

1,560

 

 

999

 

 

5,639

 

 

1,411

 

Balance at end of period

$

63,849

 

$

63,099

 

$

63,738

 

$

64,382

 

$

65,211

 

$

63,849

 

$

65,211

 

 

 

 

 

 

 

 

 

Average loans, net of deferred fees and costs

$

5,543,398

 

$

5,525,988

 

$

5,498,800

 

$

5,355,088

 

$

5,221,300

 

$

5,534,741

 

$

5,168,076

 

Annualized ratio of net charge-offs to average loans

 

0.24

%

 

0.16

%

 

0.12

%

 

0.12

%

 

0.08

%

 

0.20

%

 

0.05

%

 

 

 

 

 

 

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

TABLE 10

To supplement our consolidated financial statements presented in accordance with GAAP, the Company also uses non-GAAP financial measures in addition to our GAAP results. The Company believes non-GAAP financial measures may provide useful information for evaluating our cash operating performance, ability to service debt, compliance with debt covenants and measurement against competitors. 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 Company believes that pre-provision net revenue ("PPNR"), a non-GAAP financial measure, is useful as a tool to help evaluate the ability to provide for credit costs through operations. The following tables set forth a reconciliation of our PPNR and our PPNR to average assets for each of the periods indicated:

 

Three Months Ended

 

Six Months Ended

 

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Jun 30,

(Dollars in thousands)

 

2023

 

2023

 

2022

 

2022

 

2022

 

2023

 

2022

Net income

 

$

14,475

 

 

$

16,187

 

 

$

20,181

 

 

$

16,715

 

 

$

17,594

 

 

$

30,662

 

 

$

37,032

 

Add: Income tax expense

 

 

4,472

 

 

 

5,059

 

 

 

6,700

 

 

 

5,919

 

 

 

6,184

 

 

 

9,531

 

 

 

12,222

 

Pre-tax income

 

 

18,947

 

 

 

21,246

 

 

 

26,881

 

 

 

22,634

 

 

 

23,778

 

 

 

40,193

 

 

 

49,254

 

Add: Provision (credit) for credit losses

 

 

4,319

 

 

 

1,852

 

 

 

571

 

 

 

362

 

 

 

989

 

 

 

6,171

 

 

 

(2,206

)

PPNR

 

$

23,266

 

 

$

23,098

 

 

$

27,452

 

 

$

22,996

 

 

$

24,767

 

 

$

46,364

 

 

$

47,048

 

               

 

 

Three Months Ended

 

Six Months Ended

 

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Jun 30,

(Dollars in thousands)

 

2023

 

2023

 

2022

 

2022

 

2022

 

2023

 

2022

Net income

 

$

14,475

 

 

$

16,187

 

 

$

20,181

 

 

$

16,715

 

 

$

17,594

 

 

$

30,662

 

 

$

37,032

 

Net income (annualized)

 

 

57,900

 

 

 

64,748

 

 

 

80,724

 

 

 

66,860

 

 

 

70,376

 

 

 

61,324

 

 

 

74,064

 

PPNR

 

 

23,266

 

 

 

23,098

 

 

 

27,452

 

 

 

22,996

 

 

 

24,767

 

 

 

46,364

 

 

 

47,048

 

PPNR (annualized)

 

 

93,064

 

 

 

92,392

 

 

 

109,808

 

 

 

91,984

 

 

 

99,068

 

 

 

92,728

 

 

 

94,096

 

Average assets

 

 

7,463,629

 

 

 

7,443,767

 

 

 

7,389,712

 

 

 

7,320,751

 

 

 

7,309,939

 

 

 

7,453,753

 

 

 

7,325,042

 

Return on average assets ("ROA")

 

 

0.78

%

 

 

0.87

%

 

 

1.09

%

 

 

0.91

%

 

 

0.96

%

 

 

0.82

%

 

 

1.01

%

PPNR to average assets

 

 

1.25

%

 

 

1.24

%

 

 

1.49

%

 

 

1.26

%

 

 

1.36

%

 

 

1.24

%

 

 

1.28

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230726239537/en/

Investor Contact: Ian Tanaka SVP, Treasury Manager (808) 544-3646 ian.tanaka@cpb.bank Media Contact: Tim Sakahara AVP, Corporate Communications Manager (808) 544-5125 tim.sakahara@cpb.bank