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| 8-K - 8-K - CENTRAL PACIFIC FINANCIAL CORP | a8-kq42016.htm |
Central Pacific Financial Corp. Reports Earnings of $12.2 Million for the Fourth Quarter and $47.0 Million for the 2016 Year
January 25, 2017
Page 1
Exhibit 99
FOR IMMEDIATE RELEASE | |||
Investor Contact: | Isaac Okita | Media Contact: | Wayne Kirihara |
VP, Treasury Manager | EVP, Chief Marketing Officer | ||
(808) 544-3626 | (808) 544-3687 | ||
isaac.okita@centralpacificbank.com | wayne.kirihara@centralpacificbank.com | ||
NEWS RELEASE
CENTRAL PACIFIC FINANCIAL CORP. REPORTS EARNINGS OF $12.2 MILLION
FOR THE FOURTH QUARTER AND $47.0 MILLION FOR THE 2016 YEAR
• | Net income of $12.2 million, or fully diluted EPS of $0.39 during the quarter. Net income of $47.0 million, or fully diluted EPS of $1.50 for the year ended December 31, 2016. |
• | ROA of 0.92% and ROE of 9.46% during the quarter. ROA of 0.90% and ROE of 9.16% for the year ended December 31, 2016. |
• | Total loans increased by $85.2 million, or 2.5%, during the quarter and by $313.4 million, or 9.8% during the year. |
• | Total deposits increased by $89.6 million, or 2.0% during the quarter and by $174.8 million, or 3.9% during the year. |
HONOLULU, HI, January 25, 2017 – Central Pacific Financial Corp. (NYSE: CPF), (the “Company”), today reported net income in the fourth quarter of 2016 of $12.2 million, or diluted earnings per share ("EPS") of $0.39, compared to net income in the fourth quarter of 2015 of $10.9 million, or EPS of $0.34, and net income in the third quarter of 2016 of $11.5 million, or EPS of $0.37. For the year ended December 31, 2016, net income was $47.0 million, or EPS of $1.50, compared to net income of $45.9 million, or EPS of $1.40 in 2015.
"We are pleased to have a very good end to 2016, and are pleased to report strong loan and deposit growth for the year, along with year-over-year improvement in net income and efficiency ratio," said Catherine Ngo, President and CEO of Central Pacific Financial Corp. "With a positive market environment and a continued focus on customer relationships, our consistent financial performance has allowed us to continue stock repurchases and quarterly cash dividends."
On January 24, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.16 per share on its outstanding common shares. The dividend will be payable on March 15, 2017 to shareholders of record at the close of business on February 28, 2017.
During the fourth quarter of 2016, the Company repurchased 159,900 shares of common stock at a total cost of $4.1 million. The average cost per share was $25.78. During the year ended December 31, 2016, the Company repurchased a total of 796,822 shares
Central Pacific Financial Corp. Reports Earnings of $12.2 Million for the Fourth Quarter and $47.0 Million for the 2016 Year
January 25, 2017
Page 2
of common stock, or approximately 2.5% of its common stock outstanding as of December 31, 2015 for a total cost of $18.2 million.
On January 24, 2017, the Company’s Board of Directors also authorized the repurchase of up to $30 million of its common stock from time to time in the open market or in privately negotiated transactions, pursuant to a newly authorized share repurchase program (the "2017 Repurchase Plan"). The 2017 Repurchase Plan replaces and supersedes in its entirety the share repurchase program previously approved by the Company's Board of Directors, which had $11.8 million in remaining repurchase authority at December 31, 2016.
Earnings Highlights
Net interest income for the fourth quarter of 2016 was $39.7 million, compared to $38.2 million in the year-ago quarter and $39.4 million in the previous quarter. Net interest margin was 3.22%, compared to 3.30% in the year-ago quarter and 3.25% in the previous quarter. Steady loan portfolio growth continues to support net interest income, however, the investment securities portfolio yields have declined due to higher premium amortization on mortgage backed securities. Additionally, funding costs related to time deposits and borrowings have increased slightly with the recent increase in the Fed Funds rate. The Company's checking and savings deposits, which represent over 70% of its average total liabilities, are less volatile during periods of rising market interest rates.
Other operating income for the fourth quarter of 2016 totaled $13.8 million, compared to $9.0 million in the year-ago quarter and $10.0 million in the previous quarter. The increase from the year-ago quarter was primarily due to a $3.5 million gain on the sale of the Company's fee interest in a former branch location. In addition, the Company recorded higher mortgage banking income of $0.9 million compared to the year-ago quarter, primarily attributable to higher net gains on sales of residential mortgage loans of $0.8 million. The sequential quarter increase was primarily due to the aforementioned $3.5 million gain on sale of property.
Other operating expense for the fourth quarter of 2016 totaled $37.5 million, compared to $31.7 million in the year-ago quarter and $32.3 million in the previous quarter. The increases from the year-ago and previous quarters were primarily attributable to higher pension expense included in salaries and employee benefits. In the fourth quarter of 2016, the Company executed a defined benefit pension plan de-risking strategy whereby the Company purchased non-participating annuity contracts to settle the pension obligation for a portion of its plan participants. This resulted in the immediate recognition of $3.8 million in net actuarial losses during the quarter. In addition to the higher pension expense, the Company recognized a $0.7 million charge (included in other) related to the early termination of a lease.
The efficiency ratio for the fourth quarter of 2016 was 70.08%, an increase from 67.24% in the year-ago quarter and 65.34% in the previous quarter. The efficiency ratio during the current quarter was negatively impacted by the aforementioned charges related to the pension obligation settlement and lease termination completed during the quarter, partially offset by the $3.5 million gain on sale of property. The efficiency ratio for the year ended December 31, 2016 was 66.69%, which declined from 2015 of 68.92% and reflects management's continued priority and focus on revenue generation and expense management.
In the fourth quarter of 2016, the Company recorded income tax expense of $6.4 million, compared to $6.5 million in the year-ago quarter and $6.4 million in the previous quarter. The effective tax rate for the fourth quarter of 2016 was 34.5%, compared to 37.2% in the year-ago quarter and 35.8% in the previous quarter.
Balance Sheet Highlights
Total assets at December 31, 2016 of $5.38 billion increased by $252.9 million from December 31, 2015, and increased by $64.3 million from September 30, 2016.
Total loans and leases at December 31, 2016 of $3.52 billion increased by $313.4 million, or 9.8% and $85.2 million, or 2.5% from December 31, 2015 and September 30, 2016, respectively. Total loans and leases grew from December 31, 2015 across all major categories, with the exception of the commercial loan portfolio which declined by $10.6 million due to a planned reduction in the mainland commercial loan portfolio. The growth in total loans and leases from the third quarter of 2016 was due to strong loan origination activities with significant net increases in the residential mortgage loan portfolio of $56.5 million and commercial mortgage loan portfolio of $22.7 million.
Total deposits at December 31, 2016 of $4.61 billion increased by $174.8 million from December 31, 2015, and increased by $89.6 million from September 30, 2016. Core deposits, which include demand deposits, savings and money market deposits, and time
Central Pacific Financial Corp. Reports Earnings of $12.2 Million for the Fourth Quarter and $47.0 Million for the 2016 Year
January 25, 2017
Page 3
deposits less than $100,000, totaled $3.71 billion at December 31, 2016. This represents an increase of $131.4 million from December 31, 2015, and an increase of $92.3 million from September 30, 2016.
Asset Quality
Nonperforming assets at December 31, 2016 totaled $9.2 million, or 0.17% of total assets, compared to $16.2 million, or 0.32% of total assets at December 31, 2015, and $11.7 million, or 0.22% of total assets at September 30, 2016. The sequential quarter decrease was primarily attributable to the payoff of a single borrower of $2.1 million.
Loans delinquent for 90 days or more still accruing interest totaled $1.4 million at December 31, 2016, compared to $0.3 million and $0.4 million at December 31, 2015 and September 30, 2016, respectively. The increases from December 31, 2015 and September 30, 2016 were primarily attributable to the addition of a single borrower of $1.1 million.
Net charge-offs in the fourth quarter of 2016 totaled $0.1 million, compared to net charge-offs of $1.4 million in the year-ago quarter, and net charge-offs of $0.6 million in the previous quarter. Net charge-offs in the fourth quarter of 2016 included a $0.9 million recovery from a commercial mortgage borrower.
In the fourth quarter of 2016, the Company recorded a credit to the provision for loan and lease losses of $2.6 million, compared to a credit of $2.0 million in the year-ago quarter and a credit of $0.7 million in the previous quarter. The credit to the provision for loan and lease losses in the fourth quarter of 2016 was primarily attributable to improving trends in credit quality and the aforementioned recovery of a commercial mortgage loan. After this credit, the allowance for loan and lease losses, as a percentage of total loans and leases at December 31, 2016 was 1.61%, compared to 1.97% at December 31, 2015 and 1.73% at September 30, 2016.
Capital
Total shareholders’ equity was $504.7 million at December 31, 2016, compared to $494.6 million and $519.5 million at December 31, 2015 and September 30, 2016, respectively.
The Company maintained its strong capital position and its capital ratios continue to exceed the levels required to be considered a “well-capitalized” institution for regulatory purposes under Basel III. At December 31, 2016, the Company’s leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 10.6%, 14.2%, 15.5%, and 12.3%, respectively, compared to 10.9%, 14.6%, 15.9%, and 12.5%, respectively, at September 30, 2016.
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 (8:00 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.centralpacificbank.com. Alternatively, investors may participate in the live call by dialing 1-877-505-7644. A playback of the call will be available through February 25, 2017 by dialing 1-877-344-7529 (passcode: 10098984) and on the Company’s website.
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $5.4 billion in assets. Central Pacific Bank, its primary subsidiary, operates 35 branches and 103 ATMs in the state of Hawaii, as of December 31, 2016. For additional information, please visit the Company’s website at http://www.centralpacificbank.com.
Central Pacific Financial Corp. Reports Earnings of $12.2 Million for the Fourth Quarter and $47.0 Million for the 2016 Year
January 25, 2017
Page 4
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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; 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 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 financial services 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 legal proceedings or regulatory or other governmental inquiries and proceedings and the resolution thereof, 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 and developments; changes in the competitive environment among financial holding companies and other financial service providers, including fintech businesses; 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; changes in our capital position; 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 any of 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.
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Financial Highlights | |
(Unaudited) | TABLE 1 |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
(Dollars in thousands, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Dec 31, | ||||||||||||||||||||||
except for per share amounts) | 2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
CONDENSED INCOME STATEMENT | ||||||||||||||||||||||||||||
Net interest income | $ | 39,704 | $ | 39,426 | $ | 39,609 | $ | 39,211 | $ | 38,194 | $ | 157,950 | $ | 149,528 | ||||||||||||||
Provision (credit) for loan and lease losses | (2,645 | ) | (743 | ) | (1,382 | ) | (747 | ) | (1,958 | ) | (5,517 | ) | (15,671 | ) | ||||||||||||||
Net interest income after provision (credit) for loan and lease losses | 42,349 | 40,169 | 40,991 | 39,958 | 40,152 | 163,467 | 165,199 | |||||||||||||||||||||
Total other operating income (1) | 13,769 | 9,954 | 9,937 | 8,656 | 8,997 | 42,316 | 34,799 | |||||||||||||||||||||
Total other operating expense (1) | 37,472 | 32,265 | 32,460 | 31,366 | 31,732 | 133,563 | 127,042 | |||||||||||||||||||||
Income before taxes | 18,646 | 17,858 | 18,468 | 17,248 | 17,417 | 72,220 | 72,956 | |||||||||||||||||||||
Income tax expense | 6,438 | 6,392 | 6,331 | 6,067 | 6,485 | 25,228 | 27,088 | |||||||||||||||||||||
Net income | 12,208 | 11,466 | 12,137 | 11,181 | 10,932 | 46,992 | 45,868 | |||||||||||||||||||||
Basic earnings per common share | $ | 0.40 | $ | 0.37 | $ | 0.39 | $ | 0.36 | $ | 0.35 | $ | 1.52 | $ | 1.42 | ||||||||||||||
Diluted earnings per common share | 0.39 | 0.37 | 0.39 | 0.35 | 0.34 | 1.50 | 1.40 | |||||||||||||||||||||
Dividends declared per common share (2) | 0.16 | 0.16 | 0.14 | 0.14 | 0.46 | 0.60 | 0.82 | |||||||||||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||||||||||||
Return on average assets (3) | 0.92 | % | 0.87 | % | 0.93 | % | 0.87 | % | 0.87 | % | 0.90 | % | 0.92 | % | ||||||||||||||
Return on average shareholders’ equity (3) | 9.46 | 8.81 | 9.51 | 8.85 | 8.68 | 9.16 | 8.91 | |||||||||||||||||||||
Efficiency ratio (4) | 70.08 | 65.34 | 65.51 | 65.53 | 67.24 | 66.69 | 68.92 | |||||||||||||||||||||
Net interest margin (3) | 3.22 | 3.25 | 3.29 | 3.33 | 3.30 | 3.27 | 3.30 | |||||||||||||||||||||
Dividend payout ratio (2) (5) | 41.03 | 43.24 | 35.90 | 40.00 | 135.29 | 40.00 | 58.57 | |||||||||||||||||||||
Average shareholders’ equity to average assets | 9.67 | 9.89 | 9.73 | 9.81 | 9.97 | 9.78 | 10.37 | |||||||||||||||||||||
SELECTED AVERAGE BALANCES | ||||||||||||||||||||||||||||
Average loans and leases, including loans held for sale | $ | 3,489,757 | $ | 3,415,505 | $ | 3,377,362 | $ | 3,258,872 | $ | 3,142,895 | $ | 3,385,741 | $ | 3,038,100 | ||||||||||||||
Average interest-earning assets | 4,981,766 | 4,902,151 | 4,890,398 | 4,786,256 | 4,676,931 | 4,890,426 | 4,590,686 | |||||||||||||||||||||
Average assets | 5,335,909 | 5,266,588 | 5,248,088 | 5,148,744 | 5,049,232 | 5,250,113 | 4,965,689 | |||||||||||||||||||||
Average deposits | 4,558,589 | 4,486,064 | 4,459,019 | 4,468,070 | 4,327,908 | 4,496,096 | 4,223,613 | |||||||||||||||||||||
Average interest-bearing liabilities | 3,568,767 | 3,532,334 | 3,565,530 | 3,492,748 | 3,370,560 | 3,539,903 | 3,335,445 | |||||||||||||||||||||
Average shareholders’ equity | 516,067 | 520,757 | 510,753 | 505,330 | 503,570 | 513,255 | 515,043 | |||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | ||||||||||||||||
(dollars in thousands) | 2016 | 2016 | 2016 | 2016 | 2015 | |||||||||||||||
REGULATORY CAPITAL | ||||||||||||||||||||
Central Pacific Financial Corp. | ||||||||||||||||||||
Leverage capital | $ | 562,460 | $ | 567,891 | $ | 560,674 | $ | 547,195 | $ | 532,787 | ||||||||||
Tier 1 risk-based capital | 562,460 | 567,891 | 560,674 | 547,195 | 532,787 | |||||||||||||||
Total risk-based capital | 612,202 | 616,858 | 609,012 | 594,801 | 579,651 | |||||||||||||||
Common equity tier 1 capital | 485,268 | 487,097 | 481,209 | 472,171 | 472,698 | |||||||||||||||
Central Pacific Bank | ||||||||||||||||||||
Leverage capital | 541,577 | 545,578 | 529,754 | 533,307 | 518,617 | |||||||||||||||
Tier 1 risk-based capital | 541,577 | 545,578 | 529,754 | 533,307 | 518,617 | |||||||||||||||
Total risk-based capital | 591,185 | 594,407 | 577,966 | 580,715 | 565,231 | |||||||||||||||
Common equity tier 1 capital | 541,577 | 545,578 | 529,754 | 533,307 | 518,617 | |||||||||||||||
REGULATORY CAPITAL RATIOS | ||||||||||||||||||||
Central Pacific Financial Corp. | ||||||||||||||||||||
Leverage capital ratio | 10.6 | % | 10.9 | % | 10.8 | % | 10.8 | % | 10.7 | % | ||||||||||
Tier 1 risk-based capital ratio | 14.2 | 14.6 | 14.6 | 14.5 | 14.4 | |||||||||||||||
Total risk-based capital ratio | 15.5 | 15.9 | 15.9 | 15.8 | 15.7 | |||||||||||||||
Common equity tier 1 capital ratio | 12.3 | 12.5 | 12.5 | 12.5 | 12.8 | |||||||||||||||
Central Pacific Bank | ||||||||||||||||||||
Leverage capital ratio | 10.2 | 10.6 | 10.2 | 10.5 | 10.4 | |||||||||||||||
Tier 1 risk-based capital ratio | 13.7 | 14.1 | 13.8 | 14.2 | 14.1 | |||||||||||||||
Total risk-based capital ratio | 15.0 | 15.3 | 15.1 | 15.4 | 15.3 | |||||||||||||||
Common equity tier 1 capital ratio | 13.7 | 14.1 | 13.8 | 14.2 | 14.1 | |||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | ||||||||||||||||
(dollars in thousands, except for per share amounts) | 2016 | 2016 | 2016 | 2016 | 2015 | |||||||||||||||
BALANCE SHEET | ||||||||||||||||||||
Loans and leases | $ | 3,524,890 | $ | 3,439,654 | $ | 3,403,947 | $ | 3,308,968 | $ | 3,211,532 | ||||||||||
Total assets | 5,384,236 | 5,319,947 | 5,282,967 | 5,242,202 | 5,131,288 | |||||||||||||||
Total deposits | 4,608,201 | 4,518,578 | 4,405,142 | 4,496,602 | 4,433,439 | |||||||||||||||
Long-term debt | 92,785 | 92,785 | 92,785 | 92,785 | 92,785 | |||||||||||||||
Total shareholders’ equity | 504,650 | 519,466 | 517,607 | 509,358 | 494,614 | |||||||||||||||
Total shareholders’ equity to total assets | 9.37 | % | 9.76 | % | 9.80 | % | 9.72 | % | 9.64 | % | ||||||||||
Tangible common equity to tangible assets (6) | 9.29 | % | 9.67 | % | 9.69 | % | 9.60 | % | 9.51 | % | ||||||||||
ASSET QUALITY | ||||||||||||||||||||
Allowance for loan and lease losses | $ | 56,631 | $ | 59,384 | $ | 60,764 | $ | 62,149 | $ | 63,314 | ||||||||||
Non-performing assets | 9,187 | 11,666 | 14,907 | 15,944 | 16,230 | |||||||||||||||
Allowance to loans and leases outstanding | 1.61 | % | 1.73 | % | 1.79 | % | 1.88 | % | 1.97 | % | ||||||||||
Allowance to non-performing assets | 616.43 | 509.03 | 407.62 | 389.80 | 390.10 | |||||||||||||||
PER SHARE OF COMMON STOCK | ||||||||||||||||||||
Book value per common share | $ | 16.39 | $ | 16.79 | $ | 16.68 | $ | 16.34 | $ | 15.77 | ||||||||||
Tangible book value per common share | 16.23 | 16.62 | 16.48 | 16.13 | 15.54 | |||||||||||||||
Closing market price per common share | 31.42 | 25.19 | 23.60 | 21.77 | 22.02 | |||||||||||||||
(1) Loan servicing fees, amortization of mortgage servicing rights, net gain on sale of residential mortgage loans, and unrealized gain (loss) on interest rate locks have been reclassified into mortgage banking income in the consolidated statements of income. Prior period amounts in the consolidated statements of income have been reclassified to conform to the current period presentation. | ||||||||||||||||||||
(2) Dividends declared in the fourth quarter of 2015 include a special cash dividend of $0.32 per share. | ||||||||||||||||||||
(3) Annualized. | ||||||||||||||||||||
(4) Efficiency ratio is defined as total operating expense divided by total revenue (net interest income and total other operating income). Prior period amounts have been revised to conform to current period which reflects reclassifications referred to in note (1). | ||||||||||||||||||||
(5) Dividend payout ratio is defined as dividends declared per share divided by diluted earnings per share. | ||||||||||||||||||||
(6) The tangible common equity ratio is a non-GAAP measure which should be read in conjunction with the Company’s GAAP financial information. Comparison of our ratio with those of other companies may not be possible because other companies may calculate the ratio differently. See Reconciliation of Non-GAAP Financial Measures in Table 2. | ||||||||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Reconciliation of Non-GAAP Financial Measures | |
(Unaudited) | TABLE 2 |
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 2016 | 2016 | 2016 | 2016 | 2015 | |||||||||||||||
Tangible Common Equity Ratio: | ||||||||||||||||||||
Total shareholders’ equity | $ | 504,650 | $ | 519,466 | $ | 517,607 | $ | 509,358 | $ | 494,614 | ||||||||||
Less: Other intangible assets | (4,680 | ) | (5,349 | ) | (6,018 | ) | (6,686 | ) | (7,355 | ) | ||||||||||
Tangible common equity | $ | 499,970 | $ | 514,117 | $ | 511,589 | $ | 502,672 | $ | 487,259 | ||||||||||
Total assets | $ | 5,384,236 | $ | 5,319,947 | $ | 5,282,967 | $ | 5,242,202 | $ | 5,131,288 | ||||||||||
Less: Other intangible assets | (4,680 | ) | (5,349 | ) | (6,018 | ) | (6,686 | ) | (7,355 | ) | ||||||||||
Tangible assets | $ | 5,379,556 | $ | 5,314,598 | $ | 5,276,949 | $ | 5,235,516 | $ | 5,123,933 | ||||||||||
Tangible common equity to tangible assets | 9.29 | % | 9.67 | % | 9.69 | % | 9.60 | % | 9.51 | % | ||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Consolidated Balance Sheets | |
(Unaudited) | TABLE 3 |
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands, except share data) | 2016 | 2016 | 2016 | 2016 | 2015 | |||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 75,272 | $ | 79,647 | $ | 76,482 | $ | 85,495 | $ | 71,797 | ||||||||||
Interest-bearing deposits in other banks | 9,069 | 23,727 | 14,184 | 7,180 | 8,397 | |||||||||||||||
Investment securities: | ||||||||||||||||||||
Available for sale | 1,243,847 | 1,262,224 | 1,260,593 | 1,299,176 | 1,272,255 | |||||||||||||||
Held to maturity, fair value of: $214,366 at December 31, 2016, $230,529 at September 30, 2016, $238,066 at June 30, 2016, $243,072 at March 31, 2016, and $244,136 at December 31, 2015 | 217,668 | 226,573 | 234,230 | 241,597 | 247,917 | |||||||||||||||
Total investment securities | 1,461,515 | 1,488,797 | 1,494,823 | 1,540,773 | 1,520,172 | |||||||||||||||
Loans held for sale | 31,881 | 12,755 | 9,921 | 11,270 | 14,109 | |||||||||||||||
Loans and leases | 3,524,890 | 3,439,654 | 3,403,947 | 3,308,968 | 3,211,532 | |||||||||||||||
Less allowance for loan and lease losses | 56,631 | 59,384 | 60,764 | 62,149 | 63,314 | |||||||||||||||
Net loans and leases | 3,468,259 | 3,380,270 | 3,343,183 | 3,246,819 | 3,148,218 | |||||||||||||||
Premises and equipment, net | 48,258 | 48,242 | 48,370 | 48,322 | 49,161 | |||||||||||||||
Accrued interest receivable | 15,675 | 14,554 | 15,339 | 14,818 | 14,898 | |||||||||||||||
Investment in unconsolidated subsidiaries | 6,889 | 7,011 | 7,204 | 5,627 | 6,157 | |||||||||||||||
Other real estate owned | 791 | 791 | 1,032 | 1,260 | 1,962 | |||||||||||||||
Mortgage servicing rights | 15,779 | 15,638 | 15,778 | 16,800 | 17,797 | |||||||||||||||
Other intangible assets | 4,680 | 5,349 | 6,018 | 6,686 | 7,355 | |||||||||||||||
Bank-owned life insurance | 155,593 | 155,233 | 154,678 | 154,592 | 153,967 | |||||||||||||||
Federal Home Loan Bank stock | 11,572 | 12,173 | 15,218 | 10,420 | 8,606 | |||||||||||||||
Other assets | 79,003 | 75,760 | 80,737 | 92,140 | 108,692 | |||||||||||||||
Total assets | $ | 5,384,236 | $ | 5,319,947 | $ | 5,282,967 | $ | 5,242,202 | $ | 5,131,288 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing demand | $ | 1,265,246 | $ | 1,194,557 | $ | 1,152,666 | $ | 1,140,741 | $ | 1,145,244 | ||||||||||
Interest-bearing demand | 862,991 | 849,128 | 846,589 | 849,880 | 824,895 | |||||||||||||||
Savings and money market | 1,390,600 | 1,379,484 | 1,371,163 | 1,465,524 | 1,399,093 | |||||||||||||||
Time | 1,089,364 | 1,095,409 | 1,034,724 | 1,040,457 | 1,064,207 | |||||||||||||||
Total deposits | 4,608,201 | 4,518,578 | 4,405,142 | 4,496,602 | 4,433,439 | |||||||||||||||
Short-term borrowings | 135,000 | 150,000 | 226,000 | 106,000 | 69,000 | |||||||||||||||
Long-term debt | 92,785 | 92,785 | 92,785 | 92,785 | 92,785 | |||||||||||||||
Other liabilities | 43,575 | 39,092 | 41,424 | 37,438 | 41,425 | |||||||||||||||
Total liabilities | 4,879,561 | 4,800,455 | 4,765,351 | 4,732,825 | 4,636,649 | |||||||||||||||
Equity: | ||||||||||||||||||||
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding none at: December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016, and December 31, 2015 | — | — | — | — | — | |||||||||||||||
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 30,796,243 at December 31, 2016, 30,930,598 at September 30, 2016, 31,036,895 at June 30, 2016, 31,164,287 at March 31, 2016, and 31,361,452 at December 31, 2015 | 530,932 | 534,856 | 538,434 | 544,029 | 548,878 | |||||||||||||||
Surplus | 84,180 | 84,207 | 83,482 | 83,534 | 82,847 | |||||||||||||||
Accumulated deficit | (108,941 | ) | (116,225 | ) | (122,730 | ) | (130,511 | ) | (137,314 | ) | ||||||||||
Accumulated other comprehensive income (loss) | (1,521 | ) | 16,628 | 18,421 | 12,306 | 203 | ||||||||||||||
Total shareholders' equity | 504,650 | 519,466 | 517,607 | 509,358 | 494,614 | |||||||||||||||
Non-controlling interest | 25 | 26 | 9 | 19 | 25 | |||||||||||||||
Total equity | 504,675 | 519,492 | 517,616 | 509,377 | 494,639 | |||||||||||||||
Total liabilities and equity | $ | 5,384,236 | $ | 5,319,947 | $ | 5,282,967 | $ | 5,242,202 | $ | 5,131,288 | ||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Consolidated Statements of Income | |
(Unaudited) | TABLE 4 |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Dec 31, | |||||||||||||||||||||||
(Dollars in thousands, except per share data) | 2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||
Interest and fees on loans and leases | $ | 33,973 | $ | 33,384 | $ | 32,878 | $ | 31,793 | $ | 30,565 | $ | 132,028 | $ | 118,887 | ||||||||||||||
Interest and dividends on investment securities: | ||||||||||||||||||||||||||||
Taxable interest | 7,203 | 7,296 | 7,953 | 8,396 | 8,282 | 30,848 | 32,969 | |||||||||||||||||||||
Tax-exempt interest | 989 | 995 | 995 | 996 | 1,006 | 3,975 | 4,022 | |||||||||||||||||||||
Dividends | 12 | 10 | 10 | 10 | 10 | 42 | 36 | |||||||||||||||||||||
Interest on deposits in other banks | 22 | 17 | 11 | 17 | 7 | 67 | 35 | |||||||||||||||||||||
Dividends on Federal Home Loan Bank stock | 56 | 63 | 23 | 37 | 46 | 179 | 86 | |||||||||||||||||||||
Total interest income | 42,255 | 41,765 | 41,870 | 41,249 | 39,916 | 167,139 | 156,035 | |||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Interest on deposits: | ||||||||||||||||||||||||||||
Demand | 129 | 126 | 123 | 111 | 101 | 489 | 399 | |||||||||||||||||||||
Savings and money market | 257 | 254 | 269 | 263 | 238 | 1,043 | 916 | |||||||||||||||||||||
Time | 1,175 | 1,044 | 957 | 898 | 647 | 4,074 | 2,312 | |||||||||||||||||||||
Interest on short-term borrowings | 191 | 160 | 177 | 50 | 59 | 578 | 254 | |||||||||||||||||||||
Interest on long-term debt | 799 | 755 | 735 | 716 | 677 | 3,005 | 2,626 | |||||||||||||||||||||
Total interest expense | 2,551 | 2,339 | 2,261 | 2,038 | 1,722 | 9,189 | 6,507 | |||||||||||||||||||||
Net interest income | 39,704 | 39,426 | 39,609 | 39,211 | 38,194 | 157,950 | 149,528 | |||||||||||||||||||||
Provision (credit) for loan and lease losses | (2,645 | ) | (743 | ) | (1,382 | ) | (747 | ) | (1,958 | ) | (5,517 | ) | (15,671 | ) | ||||||||||||||
Net interest income after provision for loan and lease losses | 42,349 | 40,169 | 40,991 | 39,958 | 40,152 | 163,467 | 165,199 | |||||||||||||||||||||
Other operating income: | ||||||||||||||||||||||||||||
Mortgage banking income (1) | 2,845 | 2,561 | 1,423 | 1,240 | 1,941 | 8,069 | 7,254 | |||||||||||||||||||||
Service charges on deposit accounts | 2,065 | 1,954 | 1,908 | 1,964 | 1,999 | 7,891 | 7,829 | |||||||||||||||||||||
Other service charges and fees | 2,833 | 2,821 | 3,028 | 2,767 | 2,772 | 11,449 | 11,461 | |||||||||||||||||||||
Income from fiduciary activities | 858 | 880 | 857 | 840 | 825 | 3,435 | 3,343 | |||||||||||||||||||||
Equity in earnings of unconsolidated subsidiaries | 267 | 182 | 184 | 90 | 88 | 723 | 578 | |||||||||||||||||||||
Fees on foreign exchange | 116 | 129 | 126 | 148 | 98 | 519 | 450 | |||||||||||||||||||||
Investment securities gains (losses) | — | — | — | — | — | — | (1,866 | ) | ||||||||||||||||||||
Income from bank-owned life insurance | 273 | 555 | 1,232 | 625 | 465 | 2,685 | 2,034 | |||||||||||||||||||||
Loan placement fees | 175 | 140 | 133 | 46 | 146 | 494 | 720 | |||||||||||||||||||||
Net gains on sales of foreclosed assets | 1 | 57 | 241 | 308 | 189 | 607 | 568 | |||||||||||||||||||||
Gain on sale of premises and equipment | 3,537 | — | — | — | — | 3,537 | — | |||||||||||||||||||||
Other (refer to Table 5) | 799 | 675 | 805 | 628 | 474 | 2,907 | 2,428 | |||||||||||||||||||||
Total other operating income | 13,769 | 9,954 | 9,937 | 8,656 | 8,997 | 42,316 | 34,799 | |||||||||||||||||||||
Other operating expense: | ||||||||||||||||||||||||||||
Salaries and employee benefits | 21,254 | 17,459 | 17,850 | 16,937 | 16,895 | 73,500 | 66,429 | |||||||||||||||||||||
Net occupancy | 3,606 | 3,588 | 3,557 | 3,314 | 3,981 | 14,065 | 14,432 | |||||||||||||||||||||
Equipment | 967 | 852 | 769 | 811 | 858 | 3,399 | 3,475 | |||||||||||||||||||||
Amortization of core deposit premium | 669 | 669 | 668 | 669 | 668 | 2,675 | 2,674 | |||||||||||||||||||||
Communication expense | 868 | 948 | 919 | 959 | 822 | 3,694 | 3,483 | |||||||||||||||||||||
Legal and professional services | 1,821 | 1,699 | 1,723 | 1,613 | 1,671 | 6,856 | 7,340 | |||||||||||||||||||||
Computer software expense | 2,332 | 2,217 | 2,222 | 2,704 | 2,067 | 9,475 | 8,831 | |||||||||||||||||||||
Advertising expense | 562 | 772 | 433 | 634 | 964 | 2,401 | 2,550 | |||||||||||||||||||||
Foreclosed asset expense | 16 | 72 | 49 | 15 | 154 | 152 | 486 | |||||||||||||||||||||
Other (refer to Table 5) | 5,377 | 3,989 | 4,270 | 3,710 | 3,652 | 17,346 | 17,342 | |||||||||||||||||||||
Total other operating expense | 37,472 | 32,265 | 32,460 | 31,366 | 31,732 | 133,563 | 127,042 | |||||||||||||||||||||
Income before income taxes | 18,646 | 17,858 | 18,468 | 17,248 | 17,417 | 72,220 | 72,956 | |||||||||||||||||||||
Income tax expense | 6,438 | 6,392 | 6,331 | 6,067 | 6,485 | 25,228 | 27,088 | |||||||||||||||||||||
Net income | $ | 12,208 | $ | 11,466 | $ | 12,137 | $ | 11,181 | $ | 10,932 | $ | 46,992 | $ | 45,868 | ||||||||||||||
Per common share data: | ||||||||||||||||||||||||||||
Basic earnings per share | $ | 0.40 | $ | 0.37 | $ | 0.39 | $ | 0.36 | $ | 0.35 | $ | 1.52 | $ | 1.42 | ||||||||||||||
Diluted earnings per share | 0.39 | 0.37 | 0.39 | 0.35 | 0.34 | 1.50 | 1.40 | |||||||||||||||||||||
Cash dividends declared | 0.16 | 0.16 | 0.14 | 0.14 | 0.46 | 0.60 | 0.82 | |||||||||||||||||||||
Basic weighted average shares outstanding | 30,770,528 | 30,943,756 | 31,060,593 | 31,263,433 | 31,317,627 | 31,008,744 | 32,238,237 | |||||||||||||||||||||
Diluted weighted average shares outstanding | 31,001,246 | 31,142,128 | 31,262,525 | 31,506,307 | 31,727,478 | 31,224,894 | 32,652,495 | |||||||||||||||||||||
(1) Loan servicing fees, amortization of mortgage servicing rights, net gain on sale of residential mortgage loans, and unrealized gain (loss) on interest rate locks have been reclassified into mortgage banking income in the consolidated statements of income. Prior period amounts in the consolidated statements of income have been reclassified to conform to the current period presentation. | ||||||||||||||||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Other Operating Income and Other Operating Expense - Detail | |
(Unaudited) | TABLE 5 |
The following table sets forth the components of mortgage banking income for the periods indicated:
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | December 31, | |||||||||||||||||||||||
(Dollars in thousands) | 2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Mortgage banking income: | ||||||||||||||||||||||||||||
Loan servicing fees | $ | 1,340 | $ | 1,357 | $ | 1,362 | $ | 1,362 | $ | 1,399 | $ | 5,421 | $ | 5,656 | ||||||||||||||
Amortization of mortgage servicing rights | (781 | ) | (1,021 | ) | (1,755 | ) | (1,509 | ) | (844 | ) | (5,066 | ) | (4,185 | ) | ||||||||||||||
Net gains on sales of residential mortgage loans | 2,108 | 2,212 | 1,845 | 1,466 | 1,332 | 7,631 | 6,107 | |||||||||||||||||||||
Unrealized gains (losses) on loans-held-for-sale and interest rate locks | 178 | 13 | (29 | ) | (79 | ) | 54 | 83 | (324 | ) | ||||||||||||||||||
Total mortgage banking income | $ | 2,845 | $ | 2,561 | $ | 1,423 | $ | 1,240 | $ | 1,941 | $ | 8,069 | $ | 7,254 | ||||||||||||||
The following table sets forth the components of other operating income - other for the periods indicated:
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | December 31, | |||||||||||||||||||||||
(Dollars in thousands) | 2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Other operating income - other: | ||||||||||||||||||||||||||||
Income recovered on nonaccrual loans previously charged-off | $ | 444 | $ | 423 | $ | 301 | $ | 157 | $ | 104 | $ | 1,325 | $ | 794 | ||||||||||||||
Other recoveries | 19 | 24 | 249 | 21 | 17 | 313 | 550 | |||||||||||||||||||||
Commissions on sale of checks | 84 | 84 | 86 | 86 | 79 | 340 | 325 | |||||||||||||||||||||
Other | 252 | 144 | 169 | 364 | 274 | 929 | 759 | |||||||||||||||||||||
Total other operating income - other | $ | 799 | $ | 675 | $ | 805 | $ | 628 | $ | 474 | $ | 2,907 | $ | 2,428 | ||||||||||||||
The following table sets forth the components of other operating expense - other for the periods indicated:
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | December 31, | |||||||||||||||||||||||
(Dollars in thousands) | 2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Other operating expense - other: | ||||||||||||||||||||||||||||
Charitable contributions | $ | 102 | $ | 156 | $ | 184 | $ | 218 | $ | 103 | $ | 660 | $ | 2,559 | ||||||||||||||
FDIC insurance assessment | 420 | 430 | 563 | 639 | 622 | 2,052 | 2,706 | |||||||||||||||||||||
Miscellaneous loan expenses | 271 | 358 | 306 | 254 | 325 | 1,189 | 1,348 | |||||||||||||||||||||
ATM and debit card expenses | 444 | 451 | 448 | 428 | 407 | 1,771 | 1,538 | |||||||||||||||||||||
Amortization of investments in low-income housing tax credit partnerships | 271 | 259 | 258 | 257 | 258 | 1,045 | 1,078 | |||||||||||||||||||||
Armored car expenses | 219 | 258 | 201 | 201 | 254 | 879 | 896 | |||||||||||||||||||||
Entertainment and promotions | 449 | 198 | 223 | 231 | 405 | 1,101 | 1,059 | |||||||||||||||||||||
Stationery and supplies | 221 | 242 | 172 | 267 | 230 | 902 | 1,026 | |||||||||||||||||||||
Directors’ fees and expenses | 208 | 215 | 199 | 205 | 101 | 827 | 662 | |||||||||||||||||||||
Provision (credit) for residential mortgage loan repurchase losses | — | — | (36 | ) | (351 | ) | (596 | ) | (387 | ) | (1,352 | ) | ||||||||||||||||
Increase (decrease) to the reserve for unfunded commitments | 40 | 37 | 20 | 44 | (223 | ) | 141 | (271 | ) | |||||||||||||||||||
Other | 2,732 | 1,385 | 1,732 | 1,317 | 1,766 | 7,166 | 6,093 | |||||||||||||||||||||
Total other operating expense - other | $ | 5,377 | $ | 3,989 | $ | 4,270 | $ | 3,710 | $ | 3,652 | $ | 17,346 | $ | 17,342 | ||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent) | |
(Unaudited) | TABLE 6 |
Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||
December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||||||||||||||||||||||||||
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 banks | $ | 15,458 | 0.57 | % | $ | 22 | $ | 14,140 | 0.49 | % | $ | 17 | $ | 10,504 | 0.27 | % | $ | 7 | |||||||||||||||
Investment securities, excluding valuation allowance: | |||||||||||||||||||||||||||||||||
Taxable | 1,293,291 | 2.23 | 7,215 | 1,288,569 | 2.27 | 7,306 | 1,339,764 | 2.48 | 8,292 | ||||||||||||||||||||||||
Tax-exempt | 172,081 | 3.54 | 1,522 | 172,743 | 3.54 | 1,531 | 174,681 | 3.54 | 1,547 | ||||||||||||||||||||||||
Total investment securities | 1,465,372 | 2.39 | 8,737 | 1,461,312 | 2.42 | 8,837 | 1,514,445 | 2.60 | 9,839 | ||||||||||||||||||||||||
Loans and leases, incl. loans held for sale | 3,489,757 | 3.88 | 33,973 | 3,415,505 | 3.90 | 33,384 | 3,142,895 | 3.87 | 30,565 | ||||||||||||||||||||||||
Federal Home Loan Bank stock | 11,179 | 2.02 | 56 | 11,194 | 2.25 | 63 | 9,087 | 2.00 | 46 | ||||||||||||||||||||||||
Total interest-earning assets | 4,981,766 | 3.43 | 42,788 | 4,902,151 | 3.44 | 42,301 | 4,676,931 | 3.45 | 40,457 | ||||||||||||||||||||||||
Noninterest-earning assets | 354,143 | 364,437 | 372,301 | ||||||||||||||||||||||||||||||
Total assets | $ | 5,335,909 | $ | 5,266,588 | $ | 5,049,232 | |||||||||||||||||||||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 854,946 | 0.06 | % | $ | 129 | $ | 851,775 | 0.06 | % | $ | 126 | $ | 804,544 | 0.05 | % | $ | 101 | |||||||||||||||
Savings and money market deposits | 1,396,615 | 0.07 | 257 | 1,367,459 | 0.07 | 254 | 1,322,220 | 0.07 | 238 | ||||||||||||||||||||||||
Time deposits under $100,000 | 198,145 | 0.38 | 188 | 202,719 | 0.37 | 190 | 218,188 | 0.36 | 201 | ||||||||||||||||||||||||
Time deposits $100,000 and over | 901,102 | 0.44 | 987 | 892,188 | 0.38 | 854 | 851,796 | 0.21 | 446 | ||||||||||||||||||||||||
Total interest-bearing deposits | 3,350,808 | 0.19 | 1,561 | 3,314,141 | 0.17 | 1,424 | 3,196,748 | 0.12 | 986 | ||||||||||||||||||||||||
Short-term borrowings | 125,174 | 0.61 | 191 | 125,408 | 0.50 | 160 | 81,027 | 0.29 | 59 | ||||||||||||||||||||||||
Long-term debt | 92,785 | 3.43 | 799 | 92,785 | 3.24 | 755 | 92,785 | 2.90 | 677 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 3,568,767 | 0.28 | 2,551 | 3,532,334 | 0.26 | 2,339 | 3,370,560 | 0.20 | 1,722 | ||||||||||||||||||||||||
Noninterest-bearing deposits | 1,207,781 | 1,171,923 | 1,131,160 | ||||||||||||||||||||||||||||||
Other liabilities | 43,268 | 41,558 | 43,941 | ||||||||||||||||||||||||||||||
Total liabilities | 4,819,816 | 4,745,815 | 4,545,661 | ||||||||||||||||||||||||||||||
Shareholders’ equity | 516,067 | 520,757 | 503,570 | ||||||||||||||||||||||||||||||
Non-controlling interest | 26 | 16 | 1 | ||||||||||||||||||||||||||||||
Total equity | 516,093 | 520,773 | 503,571 | ||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 5,335,909 | $ | 5,266,588 | $ | 5,049,232 | |||||||||||||||||||||||||||
Net interest income | $ | 40,237 | $ | 39,962 | $ | 38,735 | |||||||||||||||||||||||||||
Interest rate spread | 3.15 | % | 3.18 | % | 3.25 | % | |||||||||||||||||||||||||||
Net interest margin | 3.22 | % | 3.25 | % | 3.30 | % | |||||||||||||||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent) | |
(Unaudited) | TABLE 7 |
Year Ended | Year Ended | |||||||||||||||||||||
December 31, 2016 | December 31, 2015 | |||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||
(Dollars in thousands) | Balance | Yield/Rate | Interest | Balance | Yield/Rate | Interest | ||||||||||||||||
ASSETS | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Interest-bearing deposits in other banks | $ | 13,143 | 0.51 | % | $ | 67 | $ | 13,966 | 0.25 | % | $ | 35 | ||||||||||
Investment securities, excluding valuation allowance: | ||||||||||||||||||||||
Taxable | 1,307,946 | 2.36 | 30,890 | 1,339,070 | 2.46 | 33,005 | ||||||||||||||||
Tax-exempt | 173,062 | 3.53 | 6,116 | 175,919 | 3.52 | 6,188 | ||||||||||||||||
Total investment securities | 1,481,008 | 2.50 | 37,006 | 1,514,989 | 2.59 | 39,193 | ||||||||||||||||
Loans and leases, including loans held for sale | 3,385,741 | 3.90 | 132,028 | 3,038,100 | 3.91 | 118,887 | ||||||||||||||||
Federal Home Loan Bank stock | 10,534 | 1.70 | 179 | 23,631 | 0.36 | 86 | ||||||||||||||||
Total interest earning assets | 4,890,426 | 3.46 | 169,280 | 4,590,686 | 3.45 | 158,201 | ||||||||||||||||
Noninterest-earning assets | 359,687 | 375,003 | ||||||||||||||||||||
Total assets | $ | 5,250,113 | $ | 4,965,689 | ||||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing demand deposits | $ | 844,507 | 0.06 | % | $ | 489 | $ | 802,121 | 0.05 | % | $ | 399 | ||||||||||
Savings and money market deposits | 1,406,754 | 0.07 | 1,043 | 1,276,830 | 0.07 | 916 | ||||||||||||||||
Time deposits under $100,000 | 204,940 | 0.38 | 770 | 227,288 | 0.37 | 838 | ||||||||||||||||
Time deposits $100,000 and over | 879,989 | 0.38 | 3,304 | 844,376 | 0.17 | 1,474 | ||||||||||||||||
Total interest-bearing deposits | 3,336,190 | 0.17 | 5,606 | 3,150,615 | 0.12 | 3,627 | ||||||||||||||||
Short-term borrowings | 110,928 | 0.52 | 578 | 92,045 | 0.28 | 254 | ||||||||||||||||
Long-term debt | 92,785 | 3.24 | 3,005 | 92,785 | 2.83 | 2,626 | ||||||||||||||||
Total interest-bearing liabilities | 3,539,903 | 0.26 | 9,189 | 3,335,445 | 0.20 | 6,507 | ||||||||||||||||
Noninterest-bearing deposits | 1,156,906 | 1,072,998 | ||||||||||||||||||||
Other liabilities | 40,029 | 42,203 | ||||||||||||||||||||
Total liabilities | 4,736,838 | 4,450,646 | ||||||||||||||||||||
Shareholders’ equity | 513,255 | 515,043 | ||||||||||||||||||||
Non-controlling interest | 20 | — | ||||||||||||||||||||
Total equity | 513,275 | 515,043 | ||||||||||||||||||||
Total liabilities and equity | $ | 5,250,113 | $ | 4,965,689 | ||||||||||||||||||
Net interest income | $ | 160,091 | $ | 151,694 | ||||||||||||||||||
Interest rate spread | 3.20 | % | 3.25 | % | ||||||||||||||||||
Net interest margin | 3.27 | % | 3.30 | % | ||||||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Loans and Leases by Geographic Distribution | |
(Unaudited) | TABLE 8 |
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 2016 | 2016 | 2016 | 2016 | 2015 | |||||||||||||||
HAWAII: | ||||||||||||||||||||
Commercial, financial and agricultural | $ | 373,006 | $ | 367,527 | $ | 360,102 | $ | 358,432 | $ | 339,738 | ||||||||||
Real estate: | ||||||||||||||||||||
Construction | 97,873 | 105,234 | 95,355 | 98,203 | 81,655 | |||||||||||||||
Residential mortgage | 1,217,234 | 1,160,741 | 1,167,428 | 1,147,446 | 1,134,325 | |||||||||||||||
Home equity | 361,209 | 351,256 | 334,347 | 311,756 | 301,980 | |||||||||||||||
Commercial mortgage | 767,586 | 742,584 | 716,452 | 646,013 | 642,845 | |||||||||||||||
Consumer: | ||||||||||||||||||||
Automobiles | 131,037 | 125,556 | 116,809 | 112,106 | 110,285 | |||||||||||||||
Other consumer | 177,122 | 163,703 | 161,065 | 155,749 | 162,963 | |||||||||||||||
Leases | 677 | 756 | 843 | 936 | 1,028 | |||||||||||||||
Total loans and leases | 3,125,744 | 3,017,357 | 2,952,401 | 2,830,641 | 2,774,819 | |||||||||||||||
Allowance for loan and lease losses | (49,350 | ) | (50,948 | ) | (52,375 | ) | (52,068 | ) | (54,141 | ) | ||||||||||
Net loans and leases | $ | 3,076,394 | $ | 2,966,409 | $ | 2,900,026 | $ | 2,778,573 | $ | 2,720,678 | ||||||||||
U.S. MAINLAND: | ||||||||||||||||||||
Commercial, financial and agricultural | $ | 137,434 | $ | 140,457 | $ | 143,965 | $ | 176,659 | $ | 181,348 | ||||||||||
Real estate: | ||||||||||||||||||||
Construction | 3,665 | 2,994 | 3,073 | 3,151 | 3,230 | |||||||||||||||
Residential mortgage | — | — | — | — | — | |||||||||||||||
Home equity | — | — | — | — | — | |||||||||||||||
Commercial mortgage | 117,853 | 120,133 | 126,132 | 127,023 | 117,904 | |||||||||||||||
Consumer: | ||||||||||||||||||||
Automobiles | 81,889 | 91,970 | 103,098 | 95,124 | 79,917 | |||||||||||||||
Other consumer | 58,305 | 66,743 | 75,278 | 76,370 | 54,314 | |||||||||||||||
Leases | — | — | — | — | — | |||||||||||||||
Total loans and leases | 399,146 | 422,297 | 451,546 | 478,327 | 436,713 | |||||||||||||||
Allowance for loan and lease losses | (7,281 | ) | (8,436 | ) | (8,389 | ) | (10,081 | ) | (9,173 | ) | ||||||||||
Net loans and leases | $ | 391,865 | $ | 413,861 | $ | 443,157 | $ | 468,246 | $ | 427,540 | ||||||||||
TOTAL: | ||||||||||||||||||||
Commercial, financial and agricultural | $ | 510,440 | $ | 507,984 | $ | 504,067 | $ | 535,091 | $ | 521,086 | ||||||||||
Real estate: | ||||||||||||||||||||
Construction | 101,538 | 108,228 | 98,428 | 101,354 | 84,885 | |||||||||||||||
Residential mortgage | 1,217,234 | 1,160,741 | 1,167,428 | 1,147,446 | 1,134,325 | |||||||||||||||
Home equity | 361,209 | 351,256 | 334,347 | 311,756 | 301,980 | |||||||||||||||
Commercial mortgage | 885,439 | 862,717 | 842,584 | 773,036 | 760,749 | |||||||||||||||
Consumer: | ||||||||||||||||||||
Automobiles | 212,926 | 217,526 | 219,907 | 207,230 | 190,202 | |||||||||||||||
Other consumer | 235,427 | 230,446 | 236,343 | 232,119 | 217,277 | |||||||||||||||
Leases | 677 | 756 | 843 | 936 | 1,028 | |||||||||||||||
Total loans and leases | 3,524,890 | 3,439,654 | 3,403,947 | 3,308,968 | 3,211,532 | |||||||||||||||
Allowance for loan and lease losses | (56,631 | ) | (59,384 | ) | (60,764 | ) | (62,149 | ) | (63,314 | ) | ||||||||||
Net loans and leases | $ | 3,468,259 | $ | 3,380,270 | $ | 3,343,183 | $ | 3,246,819 | $ | 3,148,218 | ||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Deposits | |
(Unaudited) | TABLE 9 |
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 2016 | 2016 | 2016 | 2016 | 2015 | |||||||||||||||
Noninterest-bearing demand | $ | 1,265,246 | $ | 1,194,557 | $ | 1,152,666 | $ | 1,140,741 | $ | 1,145,244 | ||||||||||
Interest-bearing demand | 862,991 | 849,128 | 846,589 | 849,880 | 824,895 | |||||||||||||||
Savings and money market | 1,390,600 | 1,379,484 | 1,371,163 | 1,465,524 | 1,399,093 | |||||||||||||||
Time deposits less than $100,000 | 194,730 | 198,055 | 202,733 | 207,757 | 212,946 | |||||||||||||||
Core deposits | 3,713,567 | 3,621,224 | 3,573,151 | 3,663,902 | 3,582,178 | |||||||||||||||
Government time deposits | 701,417 | 708,034 | 645,134 | 644,877 | 664,756 | |||||||||||||||
Other time deposits $100,000 and over | 193,217 | 189,320 | 186,857 | 187,823 | 186,505 | |||||||||||||||
Total time deposits $100,000 and over | 894,634 | 897,354 | 831,991 | 832,700 | 851,261 | |||||||||||||||
Total deposits | $ | 4,608,201 | $ | 4,518,578 | $ | 4,405,142 | $ | 4,496,602 | $ | 4,433,439 | ||||||||||
CENTRAL PACIFIC FINANCIAL CORP AND SUBSIDIARIES | |
Nonperforming Assets, Past Due and Restructured Loans | |
(Unaudited) | TABLE 10 |
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 2016 | 2016 | 2016 | 2016 | 2015 | |||||||||||||||
Nonaccrual loans (including loans held for sale): | ||||||||||||||||||||
Commercial, financial and agricultural | $ | 1,877 | $ | 2,005 | $ | 2,132 | $ | 2,244 | $ | 1,044 | ||||||||||
Real estate: | ||||||||||||||||||||
Residential mortgage | 5,322 | 5,424 | 8,059 | 5,227 | 5,464 | |||||||||||||||
Home equity | 333 | 479 | 611 | 300 | 666 | |||||||||||||||
Commercial mortgage | 864 | 2,967 | 3,073 | 6,913 | 7,094 | |||||||||||||||
Total nonaccrual loans | 8,396 | 10,875 | 13,875 | 14,684 | 14,268 | |||||||||||||||
Other real estate owned ("OREO"): | ||||||||||||||||||||
Residential mortgage | 791 | 791 | 1,032 | 1,260 | 1,962 | |||||||||||||||
Total OREO | 791 | 791 | 1,032 | 1,260 | 1,962 | |||||||||||||||
Total nonperforming assets ("NPAs") | 9,187 | 11,666 | 14,907 | 15,944 | 16,230 | |||||||||||||||
Loans delinquent for 90 days or more: | ||||||||||||||||||||
Real estate: | ||||||||||||||||||||
Residential mortgage | — | 200 | — | — | — | |||||||||||||||
Home equity | 1,120 | — | 135 | 656 | — | |||||||||||||||
Consumer: | ||||||||||||||||||||
Automobiles | 208 | 131 | 78 | 125 | 151 | |||||||||||||||
Other consumer | 63 | 106 | 56 | — | 122 | |||||||||||||||
Total loans delinquent for 90 days or more | 1,391 | 437 | 269 | 781 | 273 | |||||||||||||||
Restructured loans still accruing interest: | ||||||||||||||||||||
Commercial, financial and agricultural | — | — | — | — | — | |||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | 21 | 51 | 745 | 776 | 809 | |||||||||||||||
Residential mortgage | 14,292 | 15,818 | 15,729 | 16,197 | 16,224 | |||||||||||||||
Commercial mortgage | 1,879 | 1,979 | 3,020 | 3,128 | 3,224 | |||||||||||||||
Total restructured loans still accruing interest | 16,192 | 17,848 | 19,494 | 20,101 | 20,257 | |||||||||||||||
Total NPAs, loans delinquent for 90 days or more and restructured loans still accruing interest | $ | 26,770 | $ | 29,951 | $ | 34,670 | $ | 36,826 | $ | 36,760 | ||||||||||
Total nonaccrual loans as a percentage of loans and leases | 0.24 | % | 0.32 | % | 0.41 | % | 0.44 | % | 0.44 | % | ||||||||||
Total NPAs as a percentage of loans and leases and OREO | 0.26 | % | 0.34 | % | 0.44 | % | 0.48 | % | 0.51 | % | ||||||||||
Total NPAs and loans delinquent for 90 days or more as a percentage of loans and leases and OREO | 0.30 | % | 0.35 | % | 0.45 | % | 0.51 | % | 0.51 | % | ||||||||||
Total NPAs, loans delinquent for 90 days or more, and restructured loans still accruing interest as a percentage of loans and leases and OREO | 0.76 | % | 0.87 | % | 1.02 | % | 1.11 | % | 1.14 | % | ||||||||||
Quarter-to-quarter changes in NPAs: | ||||||||||||||||||||
Balance at beginning of quarter | $ | 11,666 | $ | 14,907 | $ | 15,944 | $ | 16,230 | $ | 14,001 | ||||||||||
Additions | 39 | 650 | 4,334 | 1,303 | 2,992 | |||||||||||||||
Reductions: | ||||||||||||||||||||
Payments | (2,400 | ) | (2,309 | ) | (927 | ) | (754 | ) | (439 | ) | ||||||||||
Return to accrual status | (118 | ) | (578 | ) | (3,717 | ) | (133 | ) | (216 | ) | ||||||||||
Sales of NPAs | — | (1,032 | ) | (865 | ) | (702 | ) | (71 | ) | |||||||||||
Charge-offs/valuation adjustments | — | 28 | 138 | — | (37 | ) | ||||||||||||||
Total reductions | (2,518 | ) | (3,891 | ) | (5,371 | ) | (1,589 | ) | (763 | ) | ||||||||||
Balance at end of quarter | $ | 9,187 | $ | 11,666 | $ | 14,907 | $ | 15,944 | $ | 16,230 | ||||||||||
CENTRAL PACIFIC FINANCIAL CORP AND SUBSIDIARIES | |
Allowance for Loan and Lease Losses | |
(Unaudited) | TABLE 11 |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | December 31, | |||||||||||||||||||||||
(Dollars in thousands) | 2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 59,384 | $ | 60,764 | $ | 62,149 | $ | 63,314 | $ | 66,644 | $ | 63,314 | $ | 74,040 | ||||||||||||||
Provision (credit) for loan and lease losses | (2,645 | ) | (743 | ) | (1,382 | ) | (747 | ) | (1,958 | ) | (5,517 | ) | (15,671 | ) | ||||||||||||||
Charge-offs: | ||||||||||||||||||||||||||||
Commercial, financial and agricultural | 510 | 465 | 272 | 352 | 554 | 1,599 | 5,658 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Home equity | — | — | — | — | — | — | 110 | |||||||||||||||||||||
Commercial mortgage | 209 | — | — | — | 838 | 209 | 838 | |||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||
Automobiles | 381 | 409 | 392 | 381 | 433 | 1,563 | 1,479 | |||||||||||||||||||||
Other consumer | 1,077 | 940 | 743 | 731 | 288 | 3,491 | 3,171 | |||||||||||||||||||||
Total charge-offs | 2,177 | 1,814 | 1,407 | 1,464 | 2,113 | 6,862 | 11,256 | |||||||||||||||||||||
Recoveries: | ||||||||||||||||||||||||||||
Commercial, financial and agricultural | 490 | 555 | 720 | 349 | 411 | 2,114 | 4,788 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | 24 | 91 | 9 | 9 | 10 | 133 | 880 | |||||||||||||||||||||
Residential mortgage | 315 | 173 | 173 | 34 | 91 | 695 | 1,121 | |||||||||||||||||||||
Home equity | 4 | 4 | 4 | 3 | 5 | 15 | 1,056 | |||||||||||||||||||||
Commercial mortgage | 869 | 128 | 14 | 13 | 14 | 1,024 | 6,719 | |||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||
Automobiles | 214 | 115 | 365 | 194 | 183 | 888 | 948 | |||||||||||||||||||||
Other consumer | 153 | 111 | 119 | 444 | 27 | 827 | 662 | |||||||||||||||||||||
Leases | — | — | — | — | — | — | 27 | |||||||||||||||||||||
Total recoveries | 2,069 | 1,177 | 1,404 | 1,046 | 741 | 5,696 | 16,201 | |||||||||||||||||||||
Net charge-offs (recoveries) | 108 | 637 | 3 | 418 | 1,372 | 1,166 | (4,945 | ) | ||||||||||||||||||||
Balance at end of period | $ | 56,631 | $ | 59,384 | $ | 60,764 | $ | 62,149 | $ | 63,314 | $ | 56,631 | $ | 63,314 | ||||||||||||||
Average loans and leases, net of unearned | $ | 3,489,757 | $ | 3,415,505 | $ | 3,377,362 | $ | 3,258,872 | $ | 3,142,895 | $ | 3,385,741 | $ | 3,038,100 | ||||||||||||||
Annualized ratio of net charge-offs (recoveries) to average loans and leases | 0.01 | % | 0.07 | % | — | % | 0.05 | % | 0.17 | % | 0.03 | % | (0.16 | )% | ||||||||||||||
Ratio of allowance for loan and lease losses to loans and leases | 1.61 | % | 1.73 | % | 1.79 | % | 1.88 | % | 1.97 | % | 1.61 | % | 1.97 | % | ||||||||||||||