Attached files
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| 8-K - FORM 8-K - CENTRAL PACIFIC FINANCIAL CORP | form8-k.htm |
| Investor Contact: | David Morimoto | Media Contact: |
Wayne Kirihara
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| SVP & Treasurer | SVP - Corporate Communications | ||
| (808) 544-3627 | (808) 544-3687 | ||
| david.morimoto@centralpacificbank.com | wayne.kirihara@centralpacificbank.com | ||
NEWS RELEASE
CENTRAL PACIFIC FINANCIAL CORP. REPORTS $10.2 MILLION
THIRD QUARTER EARNINGS
HONOLULU, HI, October 30, 2013 – Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank (the “Bank”), today reported net income for the third quarter of 2013 of $10.2 million, or $0.24 per diluted share, compared to net income in the third quarter of 2012 of $10.7 million, or $0.26 per diluted share, and net income in the second quarter of 2013 of $14.3 million, or $0.34 per diluted share.
“We continue to realize solid earnings as we execute our strategic initiatives,” said John C. Dean, President and Chief Executive Officer. “We are pleased with the strong loan and deposit growth for the quarter, and continue to work on improving our operational efficiencies.”
The Company’s Board of Directors declared a quarterly cash dividend of $0.08 per share on the Company’s outstanding common shares. The dividend will be payable on December 16, 2013 to shareholders of record at the close of business on November 29, 2013. This represents our second consecutive quarterly cash dividend.
Significant Highlights and Third Quarter Results
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Reported eleventh consecutive profitable quarter since the Company’s recapitalization with net income of $10.2 million, compared to net income in the second quarter of 2013 of $14.3 million.
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Declared quarterly cash dividend of $0.08 per share on the Company’s outstanding common shares payable on December 16, 2013.
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Increased the loans and leases portfolio by $111.2 million to $2.48 billion at September 30, 2013, compared to $2.37 billion at June 30, 2013.
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Increased total deposits by $50.6 million to $3.91 billion at September 30, 2013, compared to $3.86 billion at June 30, 2013.
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For the tenth consecutive quarter, the Company did not incur credit costs. A credit to the provision for loan and lease losses of $3.2 million was recorded, compared to a credit of $0.2 million for the second quarter of 2013.
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Reduced nonperforming assets by $1.9 million to $59.0 million at September 30, 2013 from $60.9 million at June 30, 2013.
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The ALLL, as a percentage of total loans and leases, decreased to 3.43% at September 30, 2013, compared to 3.67% at June 30, 2013. The Company’s ALLL, as a percentage of nonperforming assets, increased to 144.33% at September 30, 2013 from 143.05% at June 30, 2013 and the Company’s ALLL, as a percentage of nonaccrual loans, decreased to 159.94% at September 30, 2013 from 162.95% at June 30, 2013.
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Maintained a strong capital position with Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios of 21.30%, 22.58%, and 13.96%, respectively, as of September 30, 2013, compared to 21.55%, 22.83%, and 14.24%, respectively, as of June 30, 2013. The Company’s capital ratios continue to be well in excess of the minimum levels required for a “well-capitalized” regulatory designation.
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Earnings Highlights
Net interest income for the third quarter of 2013 was $33.8 million, compared to $29.6 million in the year-ago quarter and $33.2 million in the second quarter of 2013. Net interest margin was 3.19%, compared to 3.02% in the year-ago quarter and 3.23% in the second quarter of 2013. The sequential quarter increase in net interest income was primarily due to an overall increase in the Company’s interest earning assets, including net increases of $115.4 million and $69.0 million in its average loan and investment securities portfolios, respectively, partially offset by lower recoveries of interest on loans previously placed on nonaccrual status of $1.1 million. The sequential quarter decrease in net interest margin was primarily attributable to lower yields earned on the loan portfolio due to lower recoveries of interest on loans previously placed on nonaccrual status.
The provision for loan and lease losses for the third quarter of 2013 was a credit of $3.2 million, compared to a credit of $5.0 million in the year-ago quarter and a credit of $0.2 million in the second quarter of 2013. The credit to the provision for loan and lease losses was the result of continued improvement in the Company’s credit risk profile, as evidenced by the previously mentioned decrease in nonperforming assets and further reductions in the historical quarterly charge-off data used to calculate the ALLL.
Other operating income for the third quarter of 2013 totaled $11.9 million, compared to $17.0 million in the year-ago quarter and $17.8 million in the second quarter of 2013. The decrease from the year-ago quarter was primarily due to lower net gains on sales of residential mortgage loans of $3.2 million, lower rental income from foreclosed properties of $1.1 million, lower gains on sales of foreclosed assets of $0.8 million, and lower investment securities gains of $0.8 million, partially offset by higher unrealized gains on loans held for sale and interest rate locks of $0.5 million. The sequential quarter decrease was primarily due to lower net gains on sales of foreclosed assets of $7.4 million and lower net gains on sales of residential loans of $1.4 million, partially offset by higher unrealized gains on loans held for sale and interest rate locks of $1.9 million.
Other operating expense for the third quarter of 2013 totaled $36.5 million, compared to $40.9 million in the year-ago quarter and $35.0 million in the second quarter of 2013. The decrease from the year-ago quarter was primarily due to net credit-related charges of $7.0 million (which include changes in the reserve for unfunded commitments, write-downs of loans held for sale and foreclosed asset expense), lower amortization of other intangible assets of $1.1 million, and lower legal and professional fees of $0.6 million, partially offset by higher salaries and employee benefits of $1.9 million, a premium paid on the repurchase of preferred stock of two subsidiaries of $1.9 million, and a lower credit for repurchased residential mortgage loans of $0.9 million. The sequential quarter increase was primarily attributable to the aforementioned premium paid on the repurchase of preferred stock of two subsidiaries of $1.9 million, higher salaries and employee benefits of $0.9 million, and higher net credit-related charges of $0.5 million, partially offset by a lower provision for repurchased residential mortgage loans of $1.3 million and lower amortization of other intangible assets of $0.5 million. The increase in salaries and employee benefits in the current quarter was due to severance, early retirement and retention benefits totaling $1.3 million, which were related to an efficiency initiative that included a voluntary early retirement program and a reduction of select positions. There will be additional expenses related to this initiative in the fourth quarter of 2013 and in 2014, as some employees must render service through dates extending into 2014 as a condition to receiving their benefits.
The efficiency ratio for the third quarter of 2013 was 78.02% (excluding amortization expense related to certain intangible assets totaling $0.7 million, net gains on sales of foreclosed assets of $0.3 million, and foreclosed asset income of $12,000), compared to 78.51% in the year-ago quarter (excluding foreclosed asset expense of $4.0 million, net gains on sales of foreclosed assets of $1.1 million, write downs of loans held for sale of $0.8 million, gains on sales of investment securities of $0.8 million, and amortization expense related to certain intangible assets totaling $0.7 million) and 76.68% in the second quarter of 2013 (excluding net gains on sales of foreclosed assets of $7.7 million, foreclosed asset expense of $0.7 million, and amortization expense related to certain intangible assets totaling $0.7 million).
In the third quarter of 2013, the Company recorded income tax expense of $2.2 million, compared to income tax expense of $1.9 million in the second quarter of 2013. As of September 30, 2013, the Company’s net deferred tax assets totaled $139.3 million.
Balance Sheet Highlights
Total assets at September 30, 2013 of $4.74 billion increased by $434.9 million and $37.7 million from September 30, 2012 and June 30, 2013, respectively.
Total loans and leases at September 30, 2013 of $2.48 billion increased by $374.2 million and $111.2 million from September 30, 2012 and June 30, 2013, respectively. The increase in total loans and leases from the second quarter of 2013 was due to an increase in the residential mortgage, commercial, and consumer loan portfolios of $62.1 million, $51.8 million, and $27.6 million, respectively, offset by a decrease in the commercial mortgage loan, construction and development loan and leases portfolios of $23.1 million, $6.3 million, and $0.9 million, respectively.
Total deposits at September 30, 2013 were $3.91 billion, and increased by $284.7 million and $50.6 million from September 30, 2012 and June 30, 2013, respectively. Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $3.10 billion at September 30, 2013. This represents an increase of $160.9 million from a year ago and an increase of $59.7 million from June 30, 2013. Changes in total deposits during the quarter included an increase in savings and money market deposits, interest-bearing demand deposits, and non-interest bearing demand deposits of $31.8 million, $18.7 million, and $17.6 million, respectively, offset by a decrease in time deposits of $17.5 million.
Total shareholders’ equity was $653.5 million at September 30, 2013, compared to $501.0 million and $642.0 million at September 30, 2012 and June 30, 2013, respectively.
Asset Quality
Nonperforming assets at September 30, 2013 totaled $59.0 million, or 1.24% of total assets, compared to $60.9 million, or 1.29% of total assets at June 30, 2013. The sequential-quarter change reflects net decreases in Hawaii residential mortgage assets of $2.1 million, Hawaii construction and development assets of $1.0 million, Hawaii commercial assets of $0.3 million, and Mainland commercial mortgage assets of $0.1 million, partially offset by a net increase in Hawaii commercial mortgage assets of $1.6 million.
Loans delinquent for 90 days or more still accruing interest totaled $37,000 at September 30, 2013, compared to $17,000 at June 30, 2013. In addition, loans delinquent for 30 days or more still accruing interest totaled $3.7 million at September 30, 2013, compared to $1.5 million at June 30, 2013.
Net recoveries in the third quarter of 2013 totaled $1.3 million, compared to net charge-offs of $1.9 million in the third quarter of 2012, and net recoveries of $0.5 million in the second quarter of 2013.
The ALLL, as a percentage of total loans and leases, was 3.43% at September 30, 2013, compared to 3.67% at June 30, 2013. The ALLL, as a percentage of nonperforming assets, was 144.33% at September 30, 2013, compared to 143.05% at June 30, 2013. The ALLL, as a percentage of nonaccrual loans, was 159.94% at September 30, 2013, compared to 162.95% at June 30, 2013.
Capital Levels
At September 30, 2013, the Company’s Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios were 21.30%, 22.58%, and 13.96%, respectively, compared to 21.55%, 22.83%, and 14.24%, respectively, at June 30, 2013. The Company’s capital ratios continue to exceed the levels required to be considered a “well-capitalized” institution for regulatory purposes.
Non-GAAP Financial Measures
This press release contains certain references to financial measures that have been adjusted to exclude certain expenses and other specified items. These financial measures differ from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) in that they exclude unusual or non-recurring charges, losses, credits or gains. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Management believes that financial presentations excluding the impact of these items provide useful supplemental information that is important to a proper understanding of the Company’s core business results by investors. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies.
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://investor.centralpacificbank.com. Alternatively, investors may participate in the live call by dialing 1-888-317-6016. A playback of the call will be available through December 2, 2013 by dialing 1-877-344-7529 (passcode: 10035664) and on the Company's website.
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $4.7 billion in assets. Central Pacific Bank, its primary subsidiary, operates 35 branches and 112 ATMs in the state of Hawaii, as of September 30, 2013. For additional information, please visit the Company’s website at http://www.centralpacificbank.com.
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Forward-Looking Statements
This document may contain forward-looking statements concerning projections of revenues, income/loss, earnings/loss per share, capital expenditures, dividends, capital structure, or other financial items, plans and objectives of management for future operations, future economic performance, or any of the assumptions underlying or relating to any of the foregoing. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts, and may include the words “believes,” “plans,” “expects,” “anticipates,” “forecasts,” “intends,” “hopes,” “should,” “estimates,” or words of similar meaning. While the Company believes that our forward-looking statements 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 materially differ from projections for a variety of reasons, to include, but not limited to: the effect of, and our failure to comply with any regulatory orders we are or may become subject to; our ability to continue making progress on our recovery plan; oversupply of inventory and adverse conditions in the Hawaii and California real estate markets and any weakness 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 further losses in our loan portfolio; the impact of local, national, and international economies and events (including political events, acts of war or terrorism, natural disasters such as wildfires, tsunamis and earthquakes) on the Company’s business and operations and on tourism, the military and other major industries operating within the Hawaii market and any other markets in which the Company does business; deterioration or malaise in economic conditions, including destabilizing factors in the financial industry and deterioration of the real estate market, as well as the impact from any declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular; the impact of regulatory action on the Company and Central Pacific Bank and legislation affecting the banking industry; 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, other regulatory reform, and any related rules and regulations on our business operations and competitiveness; the costs and effects of legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; 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; inflation, interest rate, securities market and monetary fluctuations; negative trends in our market capitalization and adverse changes in the price of the Company’s common shares; changes in consumer spending, borrowings and savings habits; technological changes; 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, the Financial Accounting Standards Board and other accounting standard setters; our ability to attract and retain skilled executives and employees; changes in our organization, compensation and benefit plans; and our success at managing the risks involved in the foregoing items. For further information on factors that could cause actual results to materially differ from projections, 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. The Company does not update any of its forward-looking statements except as required by law.
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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
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Financial Highlights - September 30, 2013
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(Unaudited)
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(in thousands, except per share data)
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2013
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2012
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2013
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2012
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INCOME STATEMENT
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Net income
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$ | 10,204 | $ | 10,721 | $ | 161,780 | $ | 35,011 | |||||||||||||
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Per common share data:
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Basic earnings per share
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0.24 | 0.26 | 3.86 | 0.84 | |||||||||||||||||
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Diluted earnings per share
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0.24 | 0.26 | 3.83 | 0.83 | |||||||||||||||||
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Cash dividends declared
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0.08 | - | 0.08 | - | |||||||||||||||||
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PERFORMANCE RATIOS
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Return on average assets (1)
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0.87 | % | 1.00 | % | 4.73 | % | 1.12 | % | |||||||||||||
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Return on average shareholders' equity (1)
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6.34 | 8.73 | 35.51 | 9.81 | |||||||||||||||||
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Net income to average tangible shareholders' equity (1)
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6.48 | 9.04 | 36.37 | 10.19 | |||||||||||||||||
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Efficiency ratio (2)
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78.02 | 78.51 | 75.85 | 77.98 | |||||||||||||||||
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Net interest margin (1)
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3.19 | 3.02 | 3.16 | 3.14 | |||||||||||||||||
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September 30,
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REGULATORY CAPITAL RATIOS
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2013 | 2012 | |||||||||||||||||||
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Central Pacific Financial Corp.
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Tier 1 risk-based capital
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21.30 | % | 23.34 | % | |||||||||||||||||
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Total risk-based capital
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22.58 | 24.63 | |||||||||||||||||||
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Leverage capital
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13.96 | 14.06 | |||||||||||||||||||
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Central Pacific Bank
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Tier 1 risk-based capital
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20.12 | % | 22.20 | % | |||||||||||||||||
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Total risk-based capital
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21.39 | 23.49 | |||||||||||||||||||
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Leverage capital
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13.13 | 13.39 | |||||||||||||||||||
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September 30,
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%
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Change
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BALANCE SHEET
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Total assets
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$ | 4,744,483 | $ | 4,309,618 | 10.1 | % | |||||||||||||||
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Loans and leases
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2,484,318 | 2,110,163 | 17.7 | ||||||||||||||||||
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Net loans and leases
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2,399,090 | 2,013,235 | 19.2 | ||||||||||||||||||
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Deposits
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3,906,264 | 3,621,590 | 7.9 | ||||||||||||||||||
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Total shareholders' equity
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653,476 | 501,042 | 30.4 | ||||||||||||||||||
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Book value per common share
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15.53 | 11.97 | 29.7 | ||||||||||||||||||
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Tangible book value per common share
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15.21 | 11.59 | 31.2 | ||||||||||||||||||
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Market value per common share
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17.70 | 14.30 | 23.8 | ||||||||||||||||||
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Tangible common equity ratio (3)
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13.53 | % | 11.30 | % | 19.8 | ||||||||||||||||
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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(in thousands, except per share data)
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2013 | 2012 |
Change
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2013 | 2012 |
Change
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SELECTED AVERAGE BALANCES
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Total assets
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$ | 4,671,536 | $ | 4,270,497 | 9.4 | % | $ | 4,564,965 | $ | 4,178,984 | 9.2 | % | |||||||||
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Interest-earning assets
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4,286,152 | 3,949,697 | 8.5 | 4,190,119 | 3,870,034 | 8.3 | |||||||||||||||
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Loans and leases, including loans held for sale
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2,439,459 | 2,132,775 | 14.4 | 2,341,500 | 2,116,636 | 10.6 | |||||||||||||||
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Other real estate
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6,980 | 49,474 | (85.9 | ) | 8,643 | 53,031 | (83.7 | ) | |||||||||||||
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Deposits
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3,856,574 | 3,592,165 | 7.4 | 3,763,087 | 3,510,884 | 7.2 | |||||||||||||||
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Interest-bearing liabilities
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3,112,081 | 2,911,709 | 6.9 | 3,030,927 | 2,864,758 | 5.8 | |||||||||||||||
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Total shareholders' equity
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643,874 | 491,011 | 31.1 | 607,525 | 475,924 | 27.7 | |||||||||||||||
| CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |||||||||||||||||||||
| Financial Highlights - September 30, 2013 | |||||||||||||||||||||
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September 30,
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%
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Change
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NONPERFORMING ASSETS
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Nonaccrual loans (including loans held for sale)
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$ | 53,288 | $ | 92,931 | (42.7 | ) % | |||||||||||||||
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Other real estate
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5,761 | 47,378 | (87.8 | ) | |||||||||||||||||
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Total nonperforming assets
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59,049 | 140,309 | (57.9 | ) | |||||||||||||||||
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Loans delinquent for 90 days or more (still accruing interest)
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37 | 539 | (93.1 | ) | |||||||||||||||||
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Restructured loans (still accruing interest)
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27,805 | 24,869 | 11.8 | ||||||||||||||||||
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Total nonperforming assets, loans delinquent for 90 days or more (still
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accruing interest) and restructured loans (still accruing interest)
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$ | 86,891 | $ | 165,717 | (47.6 | ) | |||||||||||||||
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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Change
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2013 | 2012 |
Change
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Loan charge-offs
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$ | 892 | $ | 3,444 | (74.1 | ) % | $ | 8,113 | $ | 13,331 | (39.1 | ) % | |||||||||
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Recoveries
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2,204 | 1,540 | 43.1 | 6,905 | 4,768 | 44.8 | |||||||||||||||
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Net loan charge-offs (recoveries)
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$ | (1,312 | ) | $ | 1,904 | (168.9 | ) | $ | 1,208 | $ | 8,563 | (85.9 | ) | ||||||||
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Net loan charge-offs (recoveries) to average loans (1)
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(0.22 | ) % | 0.36 | % | 0.07 | % | 0.54 | % | |||||||||||||
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September 30,
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2013
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2012
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ASSET QUALITY RATIOS
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Nonaccrual loans (including loans held for sale) to total loans and leases and loans held for sale
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2.13 | % | 4.35 | % | ||||||
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Nonperforming assets to total assets
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1.24 | 3.26 | ||||||||
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Nonperforming assets, loans delinquent for 90 days or more (still accruing interest) and restructured
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loans (still accruing interest) to total loans and leases, loans held for sale & other real estate
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3.47 | 7.60 | ||||||||
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Allowance for loan and lease losses to total loans and leases
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3.43 | 4.59 | ||||||||
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Allowance for loan and lease losses to nonaccrual loans (including loans held for sale)
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159.94 | 104.30 | ||||||||
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Allowance for loan and lease losses to nonperforming assets
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144.33 | 69.08 | ||||||||
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Annualized
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| (2 | ) |
The efficiency ratio is a non-GAAP financial measure which should be read and used in conjunction with the Company's GAAP financial information. Comparison of our efficiency ratio with those of other companies may not be possible because other companies may calculate the efficiency ratio differently. Our efficiency ratio is derived by dividing other operating expense (excluding amortization, impairment and write-down of intangible assets, goodwill, loans held for sale and foreclosed assets, loss on early extinguishment of debt, loss on investment transaction and loss on sale of commercial real estate loans) by net operating revenue (net interest income on a taxable equivalent basis plus other operating income before securities transactions and gains on sale of foreclosed assets). See Reconciliation of Non-GAAP Financial Measures.
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The tangible common equity ratio is a non-GAAP financial measure which should be read and used in conjunction with the Company's GAAP financial information. Comparison of our tangible common equity ratio with those of other companies may not be possible because other companies may calculate the tangible common equity ratio differently. Our tangible common equity ratio is derived by dividing common shareholders' equity, less intangible assets (excluding mortgage servicing rights (MSRs)) by total assets, less intangible assets (excluding MSRs).
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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
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Reconciliation of Non-GAAP Financial Measures
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(Unaudited)
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Quarter Ended
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Quarter Ended
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Quarter Ended
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(Dollars in thousands, except per share data)
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September 30, 2013
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June 30, 2013
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September 30, 2012
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Efficiency Ratio
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Total other operating expenses
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$ | 36,512 | $ | 35,000 | $ | 40,859 | ||||||
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Less:
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Amortization of other intangible assets
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669 | 668 | 668 | |||||||||
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Foreclosed asset expense
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(12 | ) | 705 | 3,972 | ||||||||
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Write down of assets
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- | - | 827 | |||||||||
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Adjusted other operating expenses
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$ | 35,855 | $ | 33,627 | $ | 35,392 | ||||||
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Net interest income (tax equivalent)
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$ | 34,305 | $ | 33,733 | $ | 29,939 | ||||||
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Total other operating income
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11,930 | 17,812 | 17,038 | |||||||||
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Less:
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Net gains on sales of foreclosed assets
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276 | 7,694 | 1,109 | |||||||||
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Net gains on sales of investment securities
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- | - | 789 | |||||||||
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Adjusted other operating income
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$ | 45,959 | $ | 43,851 | $ | 45,079 | ||||||
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Efficiency ratio
|
78.02 | % | 76.68 | % | 78.51 | % | ||||||
|
September 30, 2013
|
September 30, 2012
|
|||||||||||
|
Tangible Common Equity Ratio
|
||||||||||||
|
Total shareholders' equity
|
$ | 653,476 | $ | 501,042 | ||||||||
|
Less: Other intangible assets
|
(13,372 | ) | (16,047 | ) | ||||||||
|
Tangible common equity
|
$ | 640,104 | $ | 484,995 | ||||||||
|
Total assets
|
$ | 4,744,483 | $ | 4,309,618 | ||||||||
|
Less: Other intangible assets
|
(13,372 | ) | (16,047 | ) | ||||||||
|
Tangible assets
|
$ | 4,731,111 | $ | 4,293,571 | ||||||||
|
Tangible common equity / Tangible assets
|
13.53 | % | 11.30 | % | ||||||||
|
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
|
||||||||||||
|
CONSOLIDATED BALANCE SHEETS
|
||||||||||||
|
(Unaudited)
|
||||||||||||
|
September 30,
|
June 30,
|
September 30,
|
||||||||||
|
(In thousands, except share data)
|
2013
|
2013
|
2012
|
|||||||||
|
ASSETS
|
||||||||||||
|
Cash and due from banks
|
$ | 59,400 | $ | 57,477 | $ | 61,078 | ||||||
|
Interest-bearing deposits in other banks
|
37,499 | 79,697 | 159,595 | |||||||||
|
Investment securities:
|
||||||||||||
|
Available for sale
|
1,501,948 | 1,510,861 | 1,499,546 | |||||||||
|
Held to maturity (fair value of $245,519 at September 30, 2013,
|
||||||||||||
|
$245,450 at June 30, 2013 and $165,012 at September 30, 2012)
|
255,663 | 254,981 | 163,733 | |||||||||
|
Total investment securities
|
1,757,611 | 1,765,842 | 1,663,279 | |||||||||
|
Loans held for sale
|
12,437 | 14,674 | 24,080 | |||||||||
|
Loans and leases
|
2,484,318 | 2,373,077 | 2,110,163 | |||||||||
|
Less allowance for loan and lease losses
|
85,228 | 87,105 | 96,928 | |||||||||
|
Net loans and leases
|
2,399,090 | 2,285,972 | 2,013,235 | |||||||||
|
Premises and equipment, net
|
48,151 | 48,807 | 49,424 | |||||||||
|
Accrued interest receivable
|
13,765 | 14,138 | 13,198 | |||||||||
|
Investment in unconsolidated subsidiaries
|
18,558 | 18,844 | 11,244 | |||||||||
|
Other real estate
|
5,761 | 7,437 | 47,378 | |||||||||
|
Mortgage servicing rights
|
20,249 | 20,690 | 22,726 | |||||||||
|
Other intangible assets
|
13,372 | 14,041 | 16,047 | |||||||||
|
Bank-owned life insurance
|
148,903 | 148,292 | 146,680 | |||||||||
|
Federal Home Loan Bank stock
|
46,626 | 47,059 | 48,363 | |||||||||
|
Other assets
|
163,061 | 183,786 | 33,291 | |||||||||
|
Total assets
|
$ | 4,744,483 | $ | 4,706,756 | $ | 4,309,618 | ||||||
|
LIABILITIES AND EQUITY
|
||||||||||||
|
Deposits:
|
||||||||||||
|
Noninterest-bearing demand
|
$ | 878,262 | $ | 860,694 | $ | 803,796 | ||||||
|
Interest-bearing demand
|
739,421 | 720,741 | 648,331 | |||||||||
|
Savings and money market
|
1,212,488 | 1,180,657 | 1,177,164 | |||||||||
|
Time
|
1,076,093 | 1,093,574 | 992,299 | |||||||||
|
Total deposits
|
3,906,264 | 3,855,666 | 3,621,590 | |||||||||
|
Short-term borrowings
|
28,000 | - | - | |||||||||
|
Long-term debt
|
108,268 | 108,272 | 108,285 | |||||||||
|
Other liabilities
|
48,415 | 90,837 | 68,738 | |||||||||
|
Total liabilities
|
4,090,947 | 4,054,775 | 3,798,613 | |||||||||
|
Equity:
|
||||||||||||
|
Preferred stock, no par value, authorized 1,100,000 shares; issued and outstanding
|
||||||||||||
|
none at September 30, 2013, June 30, 2013, and September 30, 2012
|
- | - | - | |||||||||
|
Common stock, no par value, authorized 185,000,000 shares; issued and
|
||||||||||||
|
outstanding 42,091,180 shares at September 30, 2013, 42,088,976 shares
|
||||||||||||
|
at June 30, 2013 and 41,859,566 shares at September 30, 2012
|
784,473 | 784,473 | 784,512 | |||||||||
|
Surplus
|
73,735 | 72,173 | 69,094 | |||||||||
|
Accumulated deficit
|
(191,014 | ) | (197,851 | ) | (361,837 | ) | ||||||
|
Accumulated other comprehensive income (loss)
|
(13,718 | ) | (16,760 | ) | 9,273 | |||||||
|
Total shareholders' equity
|
653,476 | 642,035 | 501,042 | |||||||||
|
Non-controlling interest
|
60 | 9,946 | 9,963 | |||||||||
|
Total equity
|
653,536 | 651,981 | 511,005 | |||||||||
|
Total liabilities and equity
|
$ | 4,744,483 | $ | 4,706,756 | $ | 4,309,618 | ||||||
|
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
|
|||||||||||||||||||
|
CONSOLIDATED STATEMENTS OF INCOME
|
|||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||
|
Three Months Ended
|
Nine months ended
|
||||||||||||||||||
| (In thousands, except per share data) |
September 30,
|
June 30,
|
September 30,
|
September 30,
|
|||||||||||||||
|
|
2013
|
2013
|
2012
|
2013
|
2012
|
||||||||||||||
|
Interest income:
|
|||||||||||||||||||
|
Interest and fees on loans and leases
|
$ | 26,414 | $ | 26,505 | $ | 24,241 | $ | 77,362 | $ | 73,642 | |||||||||
|
Interest and dividends on investment securities:
|
|||||||||||||||||||
|
Taxable interest
|
8,114 | 7,373 | 6,641 | 22,518 | 21,844 | ||||||||||||||
|
Tax-exempt interest
|
992 | 1,040 | 704 | 3,059 | 1,347 | ||||||||||||||
|
Dividends
|
5 | 6 | 4 | 16 | 11 | ||||||||||||||
|
Interest on deposits in other banks
|
21 | 68 | 84 | 178 | 212 | ||||||||||||||
|
Dividends on Federal Home Loan Bank stock
|
12 | - | - | 12 | - | ||||||||||||||
|
Total interest income
|
35,558 | 34,992 | 31,674 | 103,145 | 97,056 | ||||||||||||||
|
Interest expense:
|
|||||||||||||||||||
|
Interest on deposits:
|
|||||||||||||||||||
|
Demand
|
91 | 87 | 83 | 259 | 258 | ||||||||||||||
|
Savings and money market
|
227 | 219 | 232 | 663 | 783 | ||||||||||||||
|
Time
|
671 | 720 | 869 | 2,150 | 2,904 | ||||||||||||||
|
Interest on short-term borrowings
|
3 | - | - | 3 | - | ||||||||||||||
|
Interest on long-term debt
|
795 | 793 | 930 | 2,457 | 2,790 | ||||||||||||||
|
Total interest expense
|
1,787 | 1,819 | 2,114 | 5,532 | 6,735 | ||||||||||||||
|
Net interest income
|
33,771 | 33,173 | 29,560 | 97,613 | 90,321 | ||||||||||||||
|
Provision (credit) for loan and lease losses
|
(3,189 | ) | (227 | ) | (4,982 | ) | (9,977 | ) | (16,602 | ) | |||||||||
|
Net interest income after provision for loan and lease losses
|
36,960 | 33,400 | 34,542 | 107,590 | 106,923 | ||||||||||||||
|
Other operating income:
|
|||||||||||||||||||
|
Service charges on deposit accounts
|
1,776 | 1,583 | 2,130 | 4,950 | 6,719 | ||||||||||||||
|
Other service charges and fees
|
4,931 | 4,643 | 4,538 | 13,904 | 13,115 | ||||||||||||||
|
Income from fiduciary activities
|
724 | 686 | 662 | 2,107 | 1,930 | ||||||||||||||
|
Equity in earnings of unconsolidated subsidiaries
|
513 | 192 | 171 | 733 | 386 | ||||||||||||||
|
Fees on foreign exchange
|
149 | 128 | 165 | 348 | 447 | ||||||||||||||
|
Investment securities gains
|
- | - | 789 | - | 789 | ||||||||||||||
|
Income from bank-owned life insurance
|
611 | 317 | 741 | 1,492 | 2,274 | ||||||||||||||
|
Loan placement fees
|
81 | 178 | 114 | 408 | 547 | ||||||||||||||
|
Net gains on sales of residential loans
|
1,476 | 2,888 | 4,713 | 8,492 | 11,084 | ||||||||||||||
|
Net gains on sales of foreclosed assets
|
276 | 7,694 | 1,109 | 8,528 | 1,109 | ||||||||||||||
|
Other
|
1,393 | (497 | ) | 1,906 | 1,810 | 5,484 | |||||||||||||
|
Total other operating income
|
11,930 | 17,812 | 17,038 | 42,772 | 43,884 | ||||||||||||||
|
Other operating expense:
|
|||||||||||||||||||
|
Salaries and employee benefits
|
19,167 | 18,242 | 17,256 | 55,944 | 51,511 | ||||||||||||||
|
Net occupancy
|
3,802 | 3,622 | 3,629 | 10,651 | 10,159 | ||||||||||||||
|
Equipment
|
952 | 878 | 1,030 | 2,788 | 3,008 | ||||||||||||||
|
Amortization of other intangible assets
|
1,637 | 2,109 | 2,698 | 5,994 | 7,490 | ||||||||||||||
|
Communication expense
|
907 | 870 | 872 | 2,727 | 2,542 | ||||||||||||||
|
Legal and professional services
|
2,155 | 1,945 | 2,772 | 6,410 | 10,635 | ||||||||||||||
|
Computer software expense
|
1,056 | 1,193 | 959 | 3,182 | 2,852 | ||||||||||||||
|
Advertising expense
|
601 | 728 | 906 | 2,141 | 2,632 | ||||||||||||||
|
Foreclosed asset expense
|
(12 | ) | 705 | 3,972 | 993 | 6,467 | |||||||||||||
|
Write down of assets
|
- | - | 827 | - | 2,586 | ||||||||||||||
|
Other
|
6,247 | 4,708 | 5,938 | 13,435 | 15,914 | ||||||||||||||
|
Total other operating expense
|
36,512 | 35,000 | 40,859 | 104,265 | 115,796 | ||||||||||||||
|
Income before income taxes
|
12,378 | 16,212 | 10,721 | 46,097 | 35,011 | ||||||||||||||
|
Income tax expense (benefit)
|
2,174 | 1,945 | - | (115,683 | ) | - | |||||||||||||
|
Net income
|
$ | 10,204 | $ | 14,267 | $ | 10,721 | $ | 161,780 | $ | 35,011 | |||||||||
|
Per common share data:
|
|||||||||||||||||||
|
Basic earnings per share
|
$ | 0.24 | $ | 0.34 | $ | 0.26 | $ | 3.86 | $ | 0.84 | |||||||||
|
Diluted earnings per share
|
0.24 | 0.34 | 0.26 | 3.83 | 0.83 | ||||||||||||||
|
Cash dividends declared
|
0.08 | - | - | 0.08 | - | ||||||||||||||
|
Basic weighted average shares outstanding
|
42,028 | 41,957 | 41,764 | 41,934 | 41,704 | ||||||||||||||
|
Diluted weighted average shares outstanding
|
42,421 | 42,320 | 42,016 | 42,263 | 41,961 | ||||||||||||||
|
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
|
|||||||||||||||||||||||||||||||||||
|
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
|
|||||||||||||||||||||||||||||||||||
|
Three Months Ended
|
Three Months Ended
|
Nine Months Ended
|
Nine Months Ended
|
||||||||||||||||||||||||||||||||
|
(Dollars in thousands)
|
September 30, 2013
|
September 30, 2012
|
September 30, 2013
|
September 30, 2012
|
|||||||||||||||||||||||||||||||
|
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
||||||||||||||||||||||||||||
|
Balance
|
Yield/Rate
|
Interest
|
Balance
|
Yield/Rate
|
Interest
|
Balance
|
Yield/Rate
|
Interest
|
Balance
|
Yield/Rate
|
Interest
|
||||||||||||||||||||||||
|
Assets:
|
|||||||||||||||||||||||||||||||||||
|
Interest earning assets:
|
|||||||||||||||||||||||||||||||||||
|
Interest-bearing deposits in other banks
|
$ | 33,973 | 0.25 | % | $ | 21 | $ | 133,963 | 0.25 | % | $ | 84 | $ | 95,381 | 0.25 | % | $ | 178 | $ | 113,968 | 0.25 | % | $ | 212 | |||||||||||
|
Taxable investment securities, excluding
|
|||||||||||||||||||||||||||||||||||
|
valuation allowance
|
1,588,412 | 2.04 | 8,119 | 1,527,572 | 1.74 | 6,645 | 1,528,169 | 1.97 | 22,534 | 1,531,785 | 1.90 | 21,855 | |||||||||||||||||||||||
|
Tax-exempt investment securities,
|
|||||||||||||||||||||||||||||||||||
|
excluding valuation allowance
|
177,319 | 3.44 | 1,526 | 106,623 | 4.06 | 1,083 | 177,636 | 3.53 | 4,706 | 58,859 | 4.69 | 2,072 | |||||||||||||||||||||||
|
Loans and leases, including loans held for sale
|
2,439,459 | 4.31 | 26,414 | 2,132,775 | 4.53 | 24,241 | 2,341,500 | 4.41 | 77,362 | 2,116,636 | 4.64 | 73,642 | |||||||||||||||||||||||
|
Federal Home Loan Bank stock
|
46,989 | 0.10 | 12 | 48,764 | - | - | 47,433 | 0.03 | 12 | 48,786 | - | - | |||||||||||||||||||||||
|
Total interest earning assets
|
4,286,152 | 3.36 | 36,092 | 3,949,697 | 3.24 | 32,053 | 4,190,119 | 3.34 | 104,792 | 3,870,034 | 3.37 | 97,781 | |||||||||||||||||||||||
|
Nonearning assets
|
385,384 | 320,800 | 374,846 | 308,950 | |||||||||||||||||||||||||||||||
|
Total assets
|
$ | 4,671,536 | $ | 4,270,497 | $ | 4,564,965 | $ | 4,178,984 | |||||||||||||||||||||||||||
|
Liabilities & Equity:
|
|||||||||||||||||||||||||||||||||||
|
Interest-bearing liabilities:
|
|||||||||||||||||||||||||||||||||||
|
Interest-bearing demand deposits
|
$ | 730,534 | 0.05 | % | $ | 91 | $ | 630,209 | 0.05 | % | $ | 83 | $ | 702,662 | 0.05 | % | $ | 259 | $ | 604,990 | 0.06 | % | $ | 258 | |||||||||||
|
Savings and money market deposits
|
1,197,911 | 0.08 | 227 | 1,172,065 | 0.08 | 232 | 1,183,101 | 0.07 | 663 | 1,159,000 | 0.09 | 783 | |||||||||||||||||||||||
|
Time deposits under $100,000
|
278,583 | 0.43 | 302 | 320,516 | 0.55 | 446 | 289,420 | 0.47 | 1,015 | 332,221 | 0.62 | 1,531 | |||||||||||||||||||||||
|
Time deposits $100,000 and over
|
793,136 | 0.18 | 369 | 680,632 | 0.25 | 423 | 746,241 | 0.20 | 1,135 | 658,245 | 0.28 | 1,373 | |||||||||||||||||||||||
|
Short-term borrowings
|
3,648 | 0.32 | 3 | - | - | - | 1,230 | 0.32 | 3 | 4 | 0.76 | - | |||||||||||||||||||||||
|
Long-term debt
|
108,269 | 2.92 | 795 | 108,287 | 3.42 | 930 | 108,273 | 3.04 | 2,457 | 110,298 | 3.38 | 2,790 | |||||||||||||||||||||||
|
Total interest-bearing liabilities
|
3,112,081 | 0.23 | 1,787 | 2,911,709 | 0.29 | 2,114 | 3,030,927 | 0.24 | 5,532 | 2,864,758 | 0.31 | 6,735 | |||||||||||||||||||||||
|
Noninterest-bearing deposits
|
856,410 | 788,743 | 841,663 | 756,428 | |||||||||||||||||||||||||||||||
|
Other liabilities
|
57,083 | 69,068 | 77,548 | 71,902 | |||||||||||||||||||||||||||||||
|
Total liabilities
|
4,025,574 | 3,769,520 | 3,950,138 | 3,693,088 | |||||||||||||||||||||||||||||||
|
Shareholders' equity
|
643,874 | 491,011 | 607,525 | 475,924 | |||||||||||||||||||||||||||||||
|
Non-controlling interest
|
2,088 | 9,966 | 7,302 | 9,972 | |||||||||||||||||||||||||||||||
|
Total equity
|
645,962 | 500,977 | 614,827 | 485,896 | |||||||||||||||||||||||||||||||
|
Total liabilities & equity
|
$ | 4,671,536 | $ | 4,270,497 | $ | 4,564,965 | $ | 4,178,984 | |||||||||||||||||||||||||||
|
Net interest income
|
$ | 34,305 | $ | 29,939 | $ | 99,260 | $ | 91,046 | |||||||||||||||||||||||||||
|
Net interest margin
|
3.19 | % |
|
3.02 | % |
|
3.16 | % |
|
3.14 | % |
|
|||||||||||||||||||||||