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| 8-K - 8-K - CENTRAL PACIFIC FINANCIAL CORP | a8-kq42019.htm |
Central Pacific Financial Corp. Reports Results for Fourth Quarter and Full Year of 2019
Page 1
Exhibit 99.1
FOR IMMEDIATE RELEASE | |||
Investor Contact: | Ian Tanaka | Media Contact: | Dean Kawamura |
VP, Treasury Manager | VP, Community Development Manager | ||
(808) 544-3646 | (808) 544-3642 | ||
ian.tanaka@cpb.bank | dean.kawamura@cpb.bank | ||
NEWS RELEASE
CENTRAL PACIFIC FINANCIAL CORP. REPORTS RESULTS FOR
FOURTH QUARTER AND FULL YEAR OF 2019
• | Net income of $14.2 million, or fully diluted EPS of $0.50 for the fourth quarter, compared to net income of $14.6 million, or fully diluted EPS of $0.51 for the third quarter. |
• | Net income of $58.3 million, or fully diluted EPS of $2.03 for the year, compared to net income of $59.5 million, or fully diluted EPS of $2.01 last year. |
• | Total loans increased by $81.7 million, or 1.9% sequentially, and $371.2 million, or 9.1% year-over-year. |
• | Core deposits increased by $102.7 million, or 2.5% sequentially, and $243.4 million, or 6.1% year-over-year. |
• | Cost of average total deposits of 0.41% in the fourth quarter declined by 8 basis points from the third quarter. |
• | RISE2020 transformation project remains on schedule with significant progress made on multiple initiatives. |
HONOLULU, HI, January 29, 2020 – Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank, today reported net income in the fourth quarter of 2019 of $14.2 million, or fully diluted earnings per share ("EPS") of $0.50, compared to net income in the fourth quarter of 2018 of $15.8 million, or EPS of $0.54, and net income in the third quarter of 2019 of $14.6 million, or EPS of $0.51. Net income in the year ended December 31, 2019 totaled $58.3 million, or EPS of $2.03, compared to net income in the year ended December 31, 2018 of $59.5 million, or EPS of $2.01.
"2019 was a pivotal year for the Company as we embarked on our RISE2020 transformation. We continue to make significant progress and are on schedule to meet our 2020 milestones in our digital banking and branch transformation initiatives. We are pleased with the financial results for 2019 which reflect continued execution on revenue growth while we invest for the future," said Paul Yonamine, Chairman and Chief Executive Officer.
"We concluded 2019 with strong financial results including solid loan and deposit growth and core margin expansion. We look forward to continuing to transform our bank in 2020 and beyond," said Catherine Ngo, President.
Central Pacific Financial Corp. Reports Results for Fourth Quarter and Full Year of 2019
Page 2
On January 28, 2020, the Company's Board of Directors declared a quarterly cash dividend of $0.23 per share on its outstanding common shares. The dividend will be payable on March 16, 2020 to shareholders of record at the close of business on February 28, 2020.
During the fourth quarter of 2019, the Company repurchased 165,703 shares of common stock, at a total cost of $4.8 million, or an average cost per share of $29.13. During the year ended December 31, 2019, the Company repurchased 797,003 shares of common stock, or approximately 2.8% of its common stock outstanding as of December 31, 2018. Total cost of the shares repurchased during the year ended December 31, 2019 was $22.8 million, or an average cost per share of $28.60. During the year ended December 31, 2019, the Company returned $48.5 million in capital to its shareholders through cash dividends and share repurchases.
In January 2020, the Company's Board of Directors also authorized the repurchase of up to $30 million of its outstanding common stock under its share repurchase program (the "Repurchase Plan"). This authorization supersedes the remaining repurchase authority under the prior repurchase program, which had $21.1 million in remaining repurchase authority at December 31, 2019.
Earnings Highlights
Net interest income for the fourth quarter of 2019 was $47.9 million, compared to $44.7 million in the year-ago quarter and $45.6 million in the previous quarter. Net interest margin for the fourth quarter of 2019 was 3.43%, compared to 3.28% in the year-ago quarter and 3.30% in the previous quarter. The increases in net interest income and net interest margin from the year-ago and sequential quarters were primarily due to growth in the loan portfolio, combined with higher non-recurring interest and dividends and lower deposit and borrowing costs compared to the year-ago and sequential quarters. These increases were partially offset by lower interest and dividends on investment securities due to the planned runoff of our investment securities portfolio from the year-ago and sequential quarters. Net interest income in the current quarter included higher non-recurring interest and dividends of $0.9 million and $1.1 million from the year-ago and sequential quarters, respectively, which positively impacted net interest income and net interest margin in the current quarter. The non-recurring amounts included in net interest income primarily related to interest recoveries on nonaccrual loans. The decline in deposit and borrowing costs from the year-ago and sequential quarters were primarily attributable to, and consistent with, the three rate cuts by the Federal Reserve during second half of 2019.
Other operating income for the fourth quarter of 2019 totaled $9.8 million, compared to $9.4 million in the year-ago quarter and $10.3 million in the previous quarter. The increase from the year-ago quarter was primarily due to higher merchant and bank card fees and commission and fees on investment services of $0.3 million and $0.2 million, respectively (both included in other service charges and fees), higher income from bank-owned life insurance of $0.4 million, and net losses on sales of investment securities of $0.3 million recorded the year-ago quarter, partially offset by lower mortgage banking income of $0.6 million. The decrease from the previous quarter was primarily due to lower mortgage banking income of $0.6 million, combined with a net loss on the sale of a foreclosed asset during the current quarter of $0.2 million, partially offset by higher commissions and fees on investment services of $0.1 million (included in other service charges and fees).
Other operating expense for the fourth quarter of 2019 totaled $36.2 million, which increased from $33.6 million in the year-ago quarter and increased from $34.9 million in the previous quarter. The increase from the year-ago quarter was primarily due to higher salaries and employee benefits of $2.2 million and higher computer software expense of $0.3 million. The higher salaries and employee benefits compared to the year-ago quarter was partially attributable to the addition of positions in strategic areas and higher commissions, combined with annual merit increases effective in the second quarter of 2019. The increase from the previous quarter was primarily due to higher salaries and employee benefits of $0.6 million and higher computer software expense of $0.2 million. The increases from the year-ago and sequential quarter were also attributable to a lower credit to the reserve for unfunded loan commitments. During the current quarter the Company recorded a credit to the reserve for unfunded loan commitments of $0.2 million (included in other), compared to a credit to the reserve for unfunded loan commitments during the year-ago and previous quarters of $0.5 million. Other operating expense in the fourth quarter of 2019 included approximately $1.3 million in RISE2020-related expenses.
The efficiency ratio for the fourth quarter of 2019 was 62.81%, compared to 62.21% in the year-ago quarter and 62.48% in the previous quarter.
In the fourth quarter of 2019, the Company recorded income tax expense of $5.2 million, compared to $6.0 million in the year-ago quarter and $4.9 million in the previous quarter. The effective tax rate for the fourth quarter of 2019 was 26.7%, compared to 27.6% in the year-ago quarter and 25.2% in the previous quarter.
Central Pacific Financial Corp. Reports Results for Fourth Quarter and Full Year of 2019
Page 3
Balance Sheet Highlights
Total assets at December 31, 2019 of $6.01 billion increased by $205.6 million, or 3.5% from December 31, 2018, and increased by $36.0 million, or 0.6% from September 30, 2019.
Total loans at December 31, 2019 of $4.45 billion increased by $371.2 million, or 9.1%, and $81.7 million, or 1.9% from December 31, 2018 and September 30, 2019, respectively. The year-over-year increase in total loans were driven by broad-based growth in almost all loan categories. The sequential quarter increase in total loans were primarily due to increases in consumer loans of $43.1 million, residential mortgage loans of $41.1 million, and home equity loans of $15.2 million, partially offset by decreases in commercial mortgage loans of $10.5 million and commercial loans of $6.3 million.
Total deposits at December 31, 2019 of $5.12 billion increased by $173.5 million, or 3.5% from December 31, 2018, and increased by $82.4 million, or 1.6% from September 30, 2019. The sequential quarter increase in total deposits was primarily attributable to increases in noninterest-bearing demand deposits of $51.3 million, interest-bearing demand deposits of $45.0 million and savings and money market deposits of $6.3 million, partially offset by a decrease in government time deposits of $19.4 million. Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $4.26 billion at December 31, 2019. This represents an increase of $243.4 million, or 6.1% from December 31, 2018, and $102.7 million, or 2.5% from September 30, 2019. The Company's loan-to-deposit ratio was 86.9% at December 31, 2019, compared to 82.5% at December 31, 2018 and 86.7% at September 30, 2019.
Asset Quality
Nonperforming assets at December 31, 2019 totaled $1.7 million, or 0.03% of total assets, compared to $2.7 million, or 0.05% of total assets at December 31, 2018, and $1.4 million, or 0.02% of total assets at September 30, 2019.
Loans delinquent for 90 days or more still accruing interest totaled $1.0 million at December 31, 2019, compared to $0.5 million and $0.2 million at December 31, 2018 and September 30, 2019, respectively.
Net charge-offs in the fourth quarter of 2019 totaled $2.3 million, compared to net recoveries of $2.5 million in the year-ago quarter, and net charge-offs of $1.6 million in the previous quarter.
In the fourth quarter of 2019, the Company recorded a provision for loan and lease losses of $2.1 million, compared to a credit of $1.4 million in the year-ago quarter and a provision of $1.5 million in the previous quarter. The increases in the provision from the year-ago and sequential quarters were primarily due to growth in our loan portfolio, combined with increases in net charge-offs. The allowance for loan and lease losses, as a percentage of total loans and leases at December 31, 2019 was 1.08%, compared to 1.17% at December 31, 2018 and 1.10% at September 30, 2019.
Capital
Total shareholders' equity was $528.5 million at December 31, 2019, compared to $491.7 million and $525.2 million at December 31, 2018 and September 30, 2019, 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, 2019, the Company's leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 9.5%, 12.6%, 13.6%, and 11.5%, respectively, compared to 9.5%, 12.6%, 13.7%, and 11.5%, respectively, at September 30, 2019.
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 29, 2020 by dialing 1-877-344-7529 (passcode: 10138495) and on the Company's website.
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $6.0 billion in assets. Central Pacific Bank, its primary subsidiary, operates 35 branches and 77 ATMs in the state of Hawaii, as of December 31, 2019. For additional information, please visit the Company's website at http://www.cpb.bank.
Central Pacific Financial Corp. Reports Results for Fourth Quarter and Full Year of 2019
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 including anticipated performance results from our RISE2020 initiative, 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," "targeting," "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, including, but not limited to: the effect of, and our failure to comply with any regulatory orders or actions 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; our ability to successfully implement our RISE2020 initiative; current and projected levels of RISE2020-related expense, which include estimates of expense related to dedicated staff and management time and third-party expense; the impact of local, national, and international economies and events (including political events, acts of war or terrorism, natural disasters such as wildfires, volcanoes, 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; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; cybersecurity and data privacy breaches and the consequences therefrom; 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 the Tax Cuts and Jobs Act; 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, including changes 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 directors, 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, | December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | ||||||||||||||||||||||
except for per share amounts) | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
CONDENSED INCOME STATEMENT | ||||||||||||||||||||||||||||
Net interest income | $ | 47,934 | $ | 45,649 | $ | 45,378 | $ | 45,113 | $ | 44,679 | $ | 184,074 | $ | 172,998 | ||||||||||||||
Provision (credit) for loan and lease losses | 2,098 | 1,532 | 1,404 | 1,283 | (1,386 | ) | 6,317 | (1,124 | ) | |||||||||||||||||||
Net interest income after provision (credit) for loan and lease losses | 45,836 | 44,117 | 43,974 | 43,830 | 46,065 | 177,757 | 174,122 | |||||||||||||||||||||
Total other operating income | 9,768 | 10,266 | 10,094 | 11,673 | 9,400 | 41,801 | 38,804 | |||||||||||||||||||||
Total other operating expense | 36,242 | 34,934 | 36,107 | 34,348 | 33,642 | 141,631 | 134,682 | |||||||||||||||||||||
Income before taxes | 19,362 | 19,449 | 17,961 | 21,155 | 21,823 | 77,927 | 78,244 | |||||||||||||||||||||
Income tax expense | 5,165 | 4,895 | 4,427 | 5,118 | 6,031 | 19,605 | 18,758 | |||||||||||||||||||||
Net income | 14,197 | 14,554 | 13,534 | 16,037 | 15,792 | 58,322 | 59,486 | |||||||||||||||||||||
Basic earnings per common share | $ | 0.50 | $ | 0.51 | $ | 0.47 | $ | 0.56 | $ | 0.54 | $ | 2.05 | $ | 2.02 | ||||||||||||||
Diluted earnings per common share | 0.50 | 0.51 | 0.47 | 0.55 | 0.54 | 2.03 | 2.01 | |||||||||||||||||||||
Dividends declared per common share | 0.23 | 0.23 | 0.23 | 0.21 | 0.21 | 0.90 | 0.82 | |||||||||||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||||||||||||
Return on average assets (ROA) [1] | 0.95 | % | 0.99 | % | 0.92 | % | 1.10 | % | 1.10 | % | 0.99 | % | 1.05 | % | ||||||||||||||
Return on average shareholders’ equity (ROE) [1] | 10.70 | 11.11 | 10.73 | 12.97 | 12.90 | 11.36 | 12.22 | |||||||||||||||||||||
Average shareholders’ equity to average assets | 8.87 | 8.87 | 8.62 | 8.51 | 8.53 | 8.72 | 8.56 | |||||||||||||||||||||
Efficiency ratio [2] | 62.81 | 62.48 | 65.09 | 60.49 | 62.21 | 62.70 | 63.59 | |||||||||||||||||||||
Net interest margin (NIM) [1] | 3.43 | 3.30 | 3.33 | 3.34 | 3.28 | 3.35 | 3.22 | |||||||||||||||||||||
Dividend payout ratio [3] | 46.00 | 45.10 | 48.94 | 38.18 | 38.89 | 44.33 | 40.80 | |||||||||||||||||||||
SELECTED AVERAGE BALANCES | ||||||||||||||||||||||||||||
Average loans and leases, including loans held for sale | $ | 4,412,247 | $ | 4,293,455 | $ | 4,171,558 | $ | 4,083,791 | $ | 4,022,376 | $ | 4,241,308 | $ | 3,898,250 | ||||||||||||||
Average interest-earning assets | 5,595,142 | 5,527,532 | 5,485,977 | 5,464,377 | 5,451,052 | 5,518,641 | 5,395,477 | |||||||||||||||||||||
Average assets | 5,978,797 | 5,907,207 | 5,856,465 | 5,809,931 | 5,739,228 | 5,888,615 | 5,688,076 | |||||||||||||||||||||
Average deposits | 4,998,897 | 4,987,414 | 4,977,781 | 4,978,470 | 4,938,560 | 4,985,701 | 5,010,698 | |||||||||||||||||||||
Average interest-bearing liabilities | 3,947,924 | 3,920,304 | 3,897,619 | 3,821,528 | 3,769,920 | 3,897,254 | 3,773,647 | |||||||||||||||||||||
Average shareholders’ equity | 530,464 | 524,083 | 504,749 | 494,635 | 489,510 | 513,610 | 486,841 | |||||||||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Financial Highlights | |
(Unaudited) | TABLE 1 (CONTINUED) |
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(dollars in thousands) | 2019 | 2019 | 2019 | 2019 | 2018 | |||||||||||||||
REGULATORY CAPITAL | ||||||||||||||||||||
Central Pacific Financial Corp. | ||||||||||||||||||||
Leverage capital | $ | 568,529 | $ | 561,478 | $ | 556,403 | $ | 554,148 | $ | 570,260 | ||||||||||
Tier 1 risk-based capital | 568,529 | 561,478 | 556,403 | 554,148 | 570,260 | |||||||||||||||
Total risk-based capital | 617,772 | 611,076 | 606,567 | 602,824 | 619,419 | |||||||||||||||
Common equity tier 1 capital | 568,529 | 511,478 | 506,403 | 504,148 | 500,260 | |||||||||||||||
Central Pacific Bank | ||||||||||||||||||||
Leverage capital | 556,077 | 550,913 | 544,480 | 539,390 | 533,166 | |||||||||||||||
Tier 1 risk-based capital | 556,077 | 550,913 | 544,480 | 539,390 | 533,166 | |||||||||||||||
Total risk-based capital | 605,320 | 600,511 | 594,644 | 588,066 | 582,325 | |||||||||||||||
Common equity tier 1 capital | 556,077 | 550,913 | 544,480 | 539,390 | 533,166 | |||||||||||||||
REGULATORY CAPITAL RATIOS | ||||||||||||||||||||
Central Pacific Financial Corp. | ||||||||||||||||||||
Leverage capital ratio | 9.5 | % | 9.5 | % | 9.5 | % | 9.5 | % | 9.9 | % | ||||||||||
Tier 1 risk-based capital ratio | 12.6 | 12.6 | 12.7 | 13.0 | 13.5 | |||||||||||||||
Total risk-based capital ratio | 13.6 | 13.7 | 13.9 | 14.1 | 14.7 | |||||||||||||||
Common equity tier 1 capital ratio | 11.5 | 11.5 | 11.6 | 11.8 | 11.9 | |||||||||||||||
Central Pacific Bank | ||||||||||||||||||||
Leverage capital ratio | 9.3 | 9.4 | 9.3 | 9.3 | 9.3 | |||||||||||||||
Tier 1 risk-based capital ratio | 12.3 | 12.4 | 12.5 | 12.7 | 12.7 | |||||||||||||||
Total risk-based capital ratio | 13.4 | 13.5 | 13.6 | 13.8 | 13.8 | |||||||||||||||
Common equity tier 1 capital ratio | 12.3 | 12.4 | 12.5 | 12.7 | 12.7 | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(dollars in thousands, except for per share amounts) | 2019 | 2019 | 2019 | 2019 | 2018 | |||||||||||||||
BALANCE SHEET | ||||||||||||||||||||
Loans and leases | $ | 4,449,540 | $ | 4,367,862 | $ | 4,247,113 | $ | 4,101,571 | $ | 4,078,366 | ||||||||||
Total assets | 6,012,672 | 5,976,716 | 5,920,006 | 5,841,352 | 5,807,026 | |||||||||||||||
Total deposits | 5,120,023 | 5,037,659 | 4,976,849 | 4,948,128 | 4,946,490 | |||||||||||||||
Long-term debt | 101,547 | 101,547 | 101,547 | 101,547 | 122,166 | |||||||||||||||
Total shareholders’ equity | 528,520 | 525,227 | 515,695 | 502,638 | 491,725 | |||||||||||||||
Total shareholders’ equity to total assets | 8.79 | % | 8.79 | % | 8.71 | % | 8.60 | % | 8.47 | % | ||||||||||
ASSET QUALITY | ||||||||||||||||||||
Allowance for loan and lease losses | $ | 47,971 | $ | 48,167 | $ | 48,267 | $ | 47,267 | $ | 47,916 | ||||||||||
Non-performing assets | 1,719 | 1,360 | 1,258 | 3,338 | 2,737 | |||||||||||||||
Allowance to loans and leases outstanding | 1.08 | % | 1.10 | % | 1.14 | % | 1.15 | % | 1.17 | % | ||||||||||
Allowance to non-performing assets | 2,790.63 | % | 3,541.69 | % | 3,836.80 | % | 1,416.03 | % | 1,750.68 | % | ||||||||||
PER SHARE OF COMMON STOCK OUTSTANDING | ||||||||||||||||||||
Book value per common share | $ | 18.68 | $ | 18.47 | $ | 18.05 | $ | 17.50 | $ | 16.97 | ||||||||||
[1] ROA, ROE and ROTE are annualized based on a 30/360 day convention. Annualized net interest income and expense in the NIM calculation are based on the day count interest payment conventions at the interest-earning asset or interest-bearing liability level (i.e. 30/360, actual/actual). | ||||||||||||||||||||
[2] Efficiency ratio is defined as total operating expense divided by total revenue (net interest income and total other operating income). | ||||||||||||||||||||
[3] Dividend payout ratio is defined as dividends declared per share divided by diluted earnings per share. | ||||||||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Consolidated Balance Sheets | |
(Unaudited) | TABLE 2 |
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands, except share data) | 2019 | 2019 | 2019 | 2019 | 2018 | |||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from financial institutions | $ | 78,418 | $ | 87,395 | $ | 83,534 | $ | 90,869 | $ | 80,569 | ||||||||||
Interest-bearing deposits in other financial institutions | 24,554 | 7,803 | 15,173 | 7,310 | 21,617 | |||||||||||||||
Investment securities: | ||||||||||||||||||||
Available-for-sale debt securities, at fair value | 1,126,983 | 1,186,875 | 1,254,743 | 1,319,450 | 1,205,478 | |||||||||||||||
Held-to-maturity debt securities, at amortized cost; fair value of: none at December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, and $144,272 at December 31, 2018 | — | — | — | — | 148,508 | |||||||||||||||
Equity securities, at fair value | 1,127 | 1,058 | 1,034 | 910 | 826 | |||||||||||||||
Total investment securities | 1,128,110 | 1,187,933 | 1,255,777 | 1,320,360 | 1,354,812 | |||||||||||||||
Loans held for sale | 9,083 | 7,016 | 6,848 | 3,539 | 6,647 | |||||||||||||||
Loans and leases | 4,449,540 | 4,367,862 | 4,247,113 | 4,101,571 | 4,078,366 | |||||||||||||||
Less allowance for loan and lease losses | 47,971 | 48,167 | 48,267 | 47,267 | 47,916 | |||||||||||||||
Loans and leases, net of allowance for loan and lease losses | 4,401,569 | 4,319,695 | 4,198,846 | 4,054,304 | 4,030,450 | |||||||||||||||
Premises and equipment, net | 46,343 | 44,095 | 43,600 | 44,527 | 45,285 | |||||||||||||||
Accrued interest receivable | 16,500 | 16,220 | 17,260 | 17,082 | 17,000 | |||||||||||||||
Investment in unconsolidated subsidiaries | 17,115 | 17,001 | 17,247 | 16,054 | 14,008 | |||||||||||||||
Other real estate owned | 164 | 466 | 276 | 276 | 414 | |||||||||||||||
Mortgage servicing rights | 14,718 | 15,058 | 15,266 | 15,347 | 15,596 | |||||||||||||||
Bank-owned life insurance | 159,656 | 158,939 | 158,294 | 158,392 | 157,440 | |||||||||||||||
Federal Home Loan Bank ("FHLB") stock | 14,983 | 17,183 | 17,824 | 16,145 | 16,645 | |||||||||||||||
Right of use lease asset [1] | 52,348 | 52,588 | 53,678 | 54,781 | — | |||||||||||||||
Other assets | 49,111 | 45,324 | 36,383 | 42,366 | 46,543 | |||||||||||||||
Total assets | $ | 6,012,672 | $ | 5,976,716 | $ | 5,920,006 | $ | 5,841,352 | $ | 5,807,026 | ||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing demand | $ | 1,450,532 | $ | 1,399,200 | $ | 1,351,190 | $ | 1,357,890 | $ | 1,436,967 | ||||||||||
Interest-bearing demand | 1,043,010 | 998,037 | 1,002,706 | 965,316 | 954,011 | |||||||||||||||
Savings and money market | 1,600,028 | 1,593,738 | 1,573,805 | 1,562,798 | 1,448,257 | |||||||||||||||
Time | 1,026,453 | 1,046,684 | 1,049,148 | 1,062,124 | 1,107,255 | |||||||||||||||
Total deposits | 5,120,023 | 5,037,659 | 4,976,849 | 4,948,128 | 4,946,490 | |||||||||||||||
FHLB advances and other short-term borrowings | 150,000 | 205,000 | 221,000 | 179,000 | 197,000 | |||||||||||||||
Long-term debt | 101,547 | 101,547 | 101,547 | 101,547 | 122,166 | |||||||||||||||
Lease liability [1] | 52,632 | 52,807 | 53,829 | 54,861 | — | |||||||||||||||
Other liabilities | 59,950 | 54,476 | 51,086 | 55,178 | 49,645 | |||||||||||||||
Total liabilities | 5,484,152 | 5,451,489 | 5,404,311 | 5,338,714 | 5,315,301 | |||||||||||||||
Shareholders' equity: | ||||||||||||||||||||
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018 | — | — | — | — | — | |||||||||||||||
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 28,289,257 at December 31, 2019, 28,441,341 at September 30, 2019, 28,567,777 at June 30, 2019, 28,723,041 at March 31, 2019, and 28,967,715 at December 31, 2018 | 447,602 | 452,278 | 456,293 | 462,952 | 470,660 | |||||||||||||||
Additional paid-in capital | 91,611 | 90,604 | 89,724 | 89,374 | 88,876 | |||||||||||||||
Accumulated deficit | (19,102 | ) | (26,782 | ) | (34,780 | ) | (41,733 | ) | (51,718 | ) | ||||||||||
Accumulated other comprehensive income (loss) | 8,409 | 9,127 | 4,458 | (7,955 | ) | (16,093 | ) | |||||||||||||
Total shareholders' equity | 528,520 | 525,227 | 515,695 | 502,638 | 491,725 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 6,012,672 | $ | 5,976,716 | $ | 5,920,006 | $ | 5,841,352 | $ | 5,807,026 | ||||||||||
[1] The Company adopted ASU 2016-02 effective January 1, 2019 using the modified retrospective approach and recorded a right of use lease asset and lease liability on the balance sheet as of March 31, 2019 for its operating leases where it is a lessee. The Company also elected to apply the practical expedient available under ASU 2018-11, which allows entities to apply the new leases standard at the adoption date and elect to not recast comparative periods. | ||||||||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Consolidated Statements of Income | |
(Unaudited) | TABLE 3 |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | |||||||||||||||||||||||
(Dollars in thousands, except per share data) | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||
Interest and fees on loans and leases | $ | 47,488 | $ | 45,861 | $ | 45,540 | $ | 43,768 | $ | 42,836 | $ | 182,657 | $ | 159,456 | ||||||||||||||
Interest and dividends on investment securities: | ||||||||||||||||||||||||||||
Taxable investment securities | 6,486 | 7,178 | 7,530 | 8,260 | 8,451 | 29,454 | 34,501 | |||||||||||||||||||||
Tax-exempt investment securities | 656 | 708 | 814 | 866 | 910 | 3,044 | 3,696 | |||||||||||||||||||||
Dividend income on investment securities | 17 | 14 | 14 | 18 | 17 | 63 | 61 | |||||||||||||||||||||
Interest on deposits in other financial institutions | 54 | 33 | 46 | 68 | 55 | 201 | 365 | |||||||||||||||||||||
Dividend income on FHLB stock | 456 | 186 | 161 | 161 | 70 | 964 | 215 | |||||||||||||||||||||
Total interest income | 55,157 | 53,980 | 54,105 | 53,141 | 52,339 | 216,383 | 198,294 | |||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Interest on deposits: | ||||||||||||||||||||||||||||
Demand | 202 | 207 | 199 | 192 | 180 | 800 | 734 | |||||||||||||||||||||
Savings and money market | 1,253 | 1,549 | 1,507 | 791 | 579 | 5,100 | 2,000 | |||||||||||||||||||||
Time | 3,653 | 4,432 | 4,867 | 5,092 | 4,567 | 18,044 | 16,770 | |||||||||||||||||||||
Interest on short-term borrowings | 1,139 | 1,130 | 1,123 | 893 | 999 | 4,285 | 1,236 | |||||||||||||||||||||
Interest on long-term debt | 976 | 1,013 | 1,031 | 1,060 | 1,335 | 4,080 | 4,556 | |||||||||||||||||||||
Total interest expense | 7,223 | 8,331 | 8,727 | 8,028 | 7,660 | 32,309 | 25,296 | |||||||||||||||||||||
Net interest income | 47,934 | 45,649 | 45,378 | 45,113 | 44,679 | 184,074 | 172,998 | |||||||||||||||||||||
Provision (credit) for loan and lease losses ("Provision") | 2,098 | 1,532 | 1,404 | 1,283 | (1,386 | ) | 6,317 | (1,124 | ) | |||||||||||||||||||
Net interest income after Provision | 45,836 | 44,117 | 43,974 | 43,830 | 46,065 | 177,757 | 174,122 | |||||||||||||||||||||
Other operating income: | ||||||||||||||||||||||||||||
Mortgage banking income | 1,194 | 1,764 | 1,601 | 1,424 | 1,770 | 5,983 | 7,315 | |||||||||||||||||||||
Service charges on deposit accounts | 2,159 | 2,125 | 2,041 | 2,081 | 2,237 | 8,406 | 8,406 | |||||||||||||||||||||
Other service charges and fees | 3,879 | 3,724 | 3,691 | 3,064 | 3,426 | 14,358 | 13,123 | |||||||||||||||||||||
Income from fiduciary activities | 1,175 | 1,126 | 1,129 | 965 | 1,113 | 4,395 | 4,245 | |||||||||||||||||||||
Equity in earnings of unconsolidated subsidiaries | 92 | 86 | 71 | 8 | 82 | 257 | 233 | |||||||||||||||||||||
Fees on foreign exchange | 216 | 170 | 218 | 151 | 197 | 755 | 905 | |||||||||||||||||||||
Net gains (losses) on sales of investment securities | — | 36 | — | — | (279 | ) | 36 | (279 | ) | |||||||||||||||||||
Income from bank-owned life insurance | 594 | 645 | 914 | 952 | 243 | 3,105 | 2,117 | |||||||||||||||||||||
Loan placement fees | 216 | 230 | 107 | 149 | 215 | 702 | 747 | |||||||||||||||||||||
Net gains (losses) on sales of foreclosed assets | (162 | ) | 17 | — | — | — | (145 | ) | — | |||||||||||||||||||
Other (refer to Table 4) | 405 | 343 | 322 | 2,879 | 396 | 3,949 | 1,992 | |||||||||||||||||||||
Total other operating income | 9,768 | 10,266 | 10,094 | 11,673 | 9,400 | 41,801 | 38,804 | |||||||||||||||||||||
Other operating expense: | ||||||||||||||||||||||||||||
Salaries and employee benefits | 21,207 | 20,631 | 20,563 | 19,889 | 19,053 | 82,290 | 75,352 | |||||||||||||||||||||
Net occupancy | 3,619 | 3,697 | 3,525 | 3,458 | 3,649 | 14,299 | 13,763 | |||||||||||||||||||||
Equipment | 1,142 | 1,067 | 1,138 | 1,006 | 1,079 | 4,353 | 4,239 | |||||||||||||||||||||
Amortization of core deposit premium | — | — | — | — | — | — | 2,006 | |||||||||||||||||||||
Communication expense | 906 | 1,008 | 903 | 734 | 863 | 3,551 | 3,410 | |||||||||||||||||||||
Legal and professional services | 2,123 | 1,933 | 1,728 | 1,570 | 2,212 | 7,354 | 7,330 | |||||||||||||||||||||
Computer software expense | 2,942 | 2,713 | 2,560 | 2,597 | 2,597 | 10,812 | 9,841 | |||||||||||||||||||||
Advertising expense | 527 | 711 | 712 | 711 | 834 | 2,661 | 2,675 | |||||||||||||||||||||
Foreclosed asset expense | 28 | 15 | 49 | 159 | 37 | 251 | 574 | |||||||||||||||||||||
Other (refer to Table 4) | 3,748 | 3,159 | 4,929 | 4,224 | 3,318 | 16,060 | 15,492 | |||||||||||||||||||||
Total other operating expense | 36,242 | 34,934 | 36,107 | 34,348 | 33,642 | 141,631 | 134,682 | |||||||||||||||||||||
Income before income taxes | 19,362 | 19,449 | 17,961 | 21,155 | 21,823 | 77,927 | 78,244 | |||||||||||||||||||||
Income tax expense | 5,165 | 4,895 | 4,427 | 5,118 | 6,031 | 19,605 | 18,758 | |||||||||||||||||||||
Net income | $ | 14,197 | $ | 14,554 | $ | 13,534 | $ | 16,037 | $ | 15,792 | $ | 58,322 | $ | 59,486 | ||||||||||||||
Per common share data: | ||||||||||||||||||||||||||||
Basic earnings per share | $ | 0.50 | $ | 0.51 | $ | 0.47 | $ | 0.56 | $ | 0.54 | $ | 2.05 | $ | 2.02 | ||||||||||||||
Diluted earnings per share | 0.50 | 0.51 | 0.47 | 0.55 | 0.54 | 2.03 | 2.01 | |||||||||||||||||||||
Cash dividends declared | 0.23 | 0.23 | 0.23 | 0.21 | 0.21 | 0.90 | 0.82 | |||||||||||||||||||||
Basic weighted average shares outstanding | 28,259,294 | 28,424,898 | 28,546,564 | 28,758,310 | 29,033,261 | 28,495,699 | 29,409,683 | |||||||||||||||||||||
Diluted weighted average shares outstanding | 28,448,243 | 28,602,338 | 28,729,510 | 28,979,855 | 29,217,480 | 28,677,100 | 29,609,907 | |||||||||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Other Operating Income and Other Operating Expense - Detail | |
(Unaudited) | TABLE 4 |
The following table sets forth the components of other operating income - other for the periods indicated:
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | |||||||||||||||||||||||
(Dollars in thousands) | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
Other operating income - other: | ||||||||||||||||||||||||||||
Income recovered on nonaccrual loans previously charged-off | $ | 80 | $ | 73 | $ | 85 | $ | 82 | $ | 99 | $ | 320 | $ | 720 | ||||||||||||||
Other recoveries | 36 | 42 | 26 | 26 | 25 | 130 | 221 | |||||||||||||||||||||
Commissions on sale of checks | 75 | 75 | 79 | 80 | 79 | 309 | 328 | |||||||||||||||||||||
Gain on sale of MasterCard stock | — | — | — | 2,555 | — | 2,555 | — | |||||||||||||||||||||
Other | 214 | 153 | 132 | 136 | 193 | 635 | 723 | |||||||||||||||||||||
Total other operating income - other | $ | 405 | $ | 343 | $ | 322 | $ | 2,879 | $ | 396 | $ | 3,949 | $ | 1,992 | ||||||||||||||
The following table sets forth the components of other operating expense - other for the periods indicated:
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | |||||||||||||||||||||||
(Dollars in thousands) | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
Other operating expense - other: | ||||||||||||||||||||||||||||
Charitable contributions | $ | 122 | $ | 230 | $ | 175 | $ | 154 | $ | 138 | $ | 681 | $ | 635 | ||||||||||||||
FDIC insurance assessment | — | 5 | 362 | 501 | 427 | 868 | 1,732 | |||||||||||||||||||||
Miscellaneous loan expenses | 361 | 274 | 317 | 294 | 339 | 1,246 | 1,365 | |||||||||||||||||||||
ATM and debit card expenses | 672 | 660 | 620 | 650 | 613 | 2,602 | 2,645 | |||||||||||||||||||||
Armored car expenses | 186 | 220 | 211 | 198 | 238 | 815 | 822 | |||||||||||||||||||||
Entertainment and promotions | 495 | 323 | 1,023 | 230 | 445 | 2,071 | 1,062 | |||||||||||||||||||||
Stationery and supplies | 305 | 240 | 279 | 225 | 271 | 1,049 | 914 | |||||||||||||||||||||
Directors’ fees and expenses | 246 | 242 | 238 | 242 | 263 | 968 | 1,040 | |||||||||||||||||||||
Provision (credit) for residential mortgage loan repurchase losses | — | — | (403 | ) | — | (181 | ) | (403 | ) | 150 | ||||||||||||||||||
Increase (decrease) to the reserve for unfunded commitments | (160 | ) | (465 | ) | 487 | 167 | (461 | ) | 29 | (425 | ) | |||||||||||||||||
Other | 1,521 | 1,430 | 1,620 | 1,563 | 1,226 | 6,134 | 5,552 | |||||||||||||||||||||
Total other operating expense - other | $ | 3,748 | $ | 3,159 | $ | 4,929 | $ | 4,224 | $ | 3,318 | $ | 16,060 | $ | 15,492 | ||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent) | |
(Unaudited) | TABLE 5 |
Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | ||||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Yield/Rate | Interest | Balance | Yield/Rate | Interest | Balance | Yield/Rate | Interest | ||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||
Interest-bearing deposits in other financial institutions | $ | 13,704 | 1.57 | % | $ | 54 | $ | 6,295 | 2.05 | % | $ | 33 | $ | 9,393 | 2.29 | % | $ | 55 | |||||||||||||||
Investment securities, excluding valuation allowance: | |||||||||||||||||||||||||||||||||
Taxable | 1,042,057 | 2.50 | 6,503 | 1,093,352 | 2.63 | 7,192 | 1,243,226 | 2.72 | 8,468 | ||||||||||||||||||||||||
Tax-exempt [1] | 108,630 | 3.06 | 830 | 117,784 | 3.04 | 896 | 161,935 | 2.84 | 1,152 | ||||||||||||||||||||||||
Total investment securities | 1,150,687 | 2.55 | 7,333 | 1,211,136 | 2.67 | 8,088 | 1,405,161 | 2.74 | 9,620 | ||||||||||||||||||||||||
Loans and leases, including loans held for sale | 4,412,247 | 4.28 | 47,488 | 4,293,455 | 4.25 | 45,861 | 4,022,376 | 4.24 | 42,836 | ||||||||||||||||||||||||
Federal Home Loan Bank stock | 18,504 | 9.85 | 456 | 16,646 | 4.46 | 186 | 14,122 | 1.98 | 70 | ||||||||||||||||||||||||
Total interest-earning assets | 5,595,142 | 3.94 | 55,331 | 5,527,532 | 3.90 | 54,168 | 5,451,052 | 3.84 | 52,581 | ||||||||||||||||||||||||
Noninterest-earning assets | 383,655 | 379,675 | 288,176 | ||||||||||||||||||||||||||||||
Total assets | $ | 5,978,797 | $ | 5,907,207 | $ | 5,739,228 | |||||||||||||||||||||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,019,854 | 0.08 | % | $ | 202 | $ | 1,002,875 | 0.08 | % | $ | 207 | $ | 923,810 | 0.08 | % | $ | 180 | |||||||||||||||
Savings and money market deposits | 1,592,398 | 0.31 | 1,253 | 1,582,795 | 0.39 | 1,549 | 1,459,326 | 0.16 | 579 | ||||||||||||||||||||||||
Time deposits under $100,000 | 167,675 | 0.71 | 299 | 167,331 | 0.69 | 293 | 176,669 | 0.60 | 265 | ||||||||||||||||||||||||
Time deposits $100,000 and over | 828,434 | 1.61 | 3,354 | 874,192 | 1.88 | 4,139 | 940,348 | 1.81 | 4,302 | ||||||||||||||||||||||||
Total interest-bearing deposits | 3,608,361 | 0.56 | 5,108 | 3,627,193 | 0.68 | 6,188 | 3,500,153 | 0.60 | 5,326 | ||||||||||||||||||||||||
Federal Home Loan Bank advances and other short-term borrowings | 238,016 | 1.90 | 1,139 | 191,564 | 2.34 | 1,130 | 157,299 | 2.52 | 999 | ||||||||||||||||||||||||
Long-term debt | 101,547 | 3.81 | 976 | 101,547 | 3.96 | 1,013 | 112,468 | 4.71 | 1,335 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 3,947,924 | 0.73 | 7,223 | 3,920,304 | 0.84 | 8,331 | 3,769,920 | 0.81 | 7,660 | ||||||||||||||||||||||||
Noninterest-bearing deposits | 1,390,536 | 1,360,221 | 1,438,407 | ||||||||||||||||||||||||||||||
Other liabilities | 109,873 | 102,599 | 41,391 | ||||||||||||||||||||||||||||||
Total liabilities | 5,448,333 | 5,383,124 | 5,249,718 | ||||||||||||||||||||||||||||||
Shareholders’ equity | 530,464 | 524,083 | 489,510 | ||||||||||||||||||||||||||||||
Non-controlling interest | — | — | — | ||||||||||||||||||||||||||||||
Total equity | 530,464 | 524,083 | 489,510 | ||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 5,978,797 | $ | 5,907,207 | $ | 5,739,228 | |||||||||||||||||||||||||||
Net interest income | $ | 48,108 | $ | 45,837 | $ | 44,921 | |||||||||||||||||||||||||||
Interest rate spread | 3.21 | % | 3.06 | % | 3.03 | % | |||||||||||||||||||||||||||
Net interest margin | 3.43 | % | 3.30 | % | 3.28 | % | |||||||||||||||||||||||||||
[1] Interest income and resultant yield information for tax-exempt investment securities is expressed on a taxable-equivalent basis using a federal statutory tax rate of 21% effective January 1, 2018. | |||||||||||||||||||||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent) | |
(Unaudited) | TABLE 6 |
Year Ended | Year Ended | |||||||||||||||||||||
December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||
(Dollars in thousands) | Balance | Yield/Rate | Interest | Balance | Yield/Rate | Interest | ||||||||||||||||
ASSETS | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Interest-bearing deposits in other financial institutions | $ | 9,842 | 2.04 | % | $ | 201 | $ | 20,104 | 1.81 | % | $ | 365 | ||||||||||
Investment securities, excluding valuation allowance: | ||||||||||||||||||||||
Taxable | 1,120,711 | 2.63 | 29,517 | 1,304,523 | 2.65 | 34,562 | ||||||||||||||||
Tax-exempt [1] | 130,411 | 2.95 | 3,853 | 163,610 | 2.86 | 4,678 | ||||||||||||||||
Total investment securities | 1,251,122 | 2.67 | 33,370 | 1,468,133 | 2.67 | 39,240 | ||||||||||||||||
Loans and leases, including loans held for sale | 4,241,308 | 4.31 | 182,657 | 3,898,250 | 4.09 | 159,456 | ||||||||||||||||
Federal Home Loan Bank stock | 16,369 | 5.89 | 964 | 8,990 | 2.40 | 215 | ||||||||||||||||
Total interest-earning assets | 5,518,641 | 3.94 | 217,192 | 5,395,477 | 3.69 | 199,276 | ||||||||||||||||
Noninterest-earning assets | 369,974 | 292,599 | ||||||||||||||||||||
Total assets | $ | 5,888,615 | $ | 5,688,076 | ||||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing demand deposits | $ | 984,298 | 0.08 | % | $ | 800 | $ | 936,034 | 0.08 | % | $ | 734 | ||||||||||
Savings and money market deposits | 1,556,766 | 0.33 | 5,100 | 1,494,658 | 0.13 | 2,000 | ||||||||||||||||
Time deposits under $100,000 | 171,064 | 0.69 | 1,183 | 177,936 | 0.51 | 910 | ||||||||||||||||
Time deposits $100,000 and over | 897,670 | 1.88 | 16,861 | 1,016,643 | 1.56 | 15,860 | ||||||||||||||||
Total interest-bearing deposits | 3,609,798 | 0.66 | 23,944 | 3,625,271 | 0.54 | 19,504 | ||||||||||||||||
Federal Home Loan Bank advances and other short-term borrowings | 185,909 | 2.31 | 4,285 | 50,630 | 2.44 | 1,236 | ||||||||||||||||
Long-term debt | 101,547 | 4.02 | 4,080 | 97,746 | 4.66 | 4,556 | ||||||||||||||||
Total interest-bearing liabilities | 3,897,254 | 0.83 | 32,309 | 3,773,647 | 0.67 | 25,296 | ||||||||||||||||
Noninterest-bearing deposits | 1,375,903 | 1,385,427 | ||||||||||||||||||||
Other liabilities | 101,848 | 42,157 | ||||||||||||||||||||
Total liabilities | 5,375,005 | 5,201,231 | ||||||||||||||||||||
Shareholders’ equity | 513,610 | 486,841 | ||||||||||||||||||||
Non-controlling interest | — | 4 | ||||||||||||||||||||
Total equity | 513,610 | 486,845 | ||||||||||||||||||||
Total liabilities and equity | $ | 5,888,615 | $ | 5,688,076 | ||||||||||||||||||
Net interest income | $ | 184,883 | $ | 173,980 | ||||||||||||||||||
Interest rate spread | 3.11 | % | 3.02 | % | ||||||||||||||||||
Net interest margin | 3.35 | % | 3.22 | % | ||||||||||||||||||
[1] Interest income and resultant yield information for tax-exempt investment securities is expressed on a taxable-equivalent basis using a federal statutory tax rate of 21% effective January 1, 2018. | ||||||||||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Loans and Leases by Geographic Distribution | |
(Unaudited) | TABLE 7 |
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 2019 | 2019 | 2019 | 2019 | 2018 | |||||||||||||||
HAWAII: | ||||||||||||||||||||
Commercial, financial and agricultural | $ | 454,582 | $ | 439,296 | $ | 435,353 | $ | 411,396 | $ | 439,112 | ||||||||||
Real estate: | ||||||||||||||||||||
Construction | 95,854 | 96,661 | 72,427 | 68,981 | 64,654 | |||||||||||||||
Residential mortgage | 1,599,801 | 1,558,735 | 1,516,936 | 1,451,794 | 1,428,205 | |||||||||||||||
Home equity | 490,734 | 475,565 | 473,151 | 465,905 | 468,966 | |||||||||||||||
Commercial mortgage | 909,798 | 909,987 | 905,479 | 869,521 | 861,086 | |||||||||||||||
Consumer | 373,451 | 369,511 | 353,282 | 352,771 | 357,908 | |||||||||||||||
Leases | — | 31 | 52 | 83 | 124 | |||||||||||||||
Total loans and leases | 3,924,220 | 3,849,786 | 3,756,680 | 3,620,451 | 3,620,055 | |||||||||||||||
Allowance for loan and lease losses | (42,592 | ) | (42,286 | ) | (42,414 | ) | (41,413 | ) | (42,993 | ) | ||||||||||
Net loans and leases | $ | 3,881,628 | $ | 3,807,500 | $ | 3,714,266 | $ | 3,579,038 | $ | 3,577,062 | ||||||||||
U.S. MAINLAND: [1] | ||||||||||||||||||||
Commercial, financial and agricultural | $ | 115,722 | $ | 137,316 | $ | 155,130 | $ | 155,399 | $ | 142,548 | ||||||||||
Real estate: | ||||||||||||||||||||
Construction | — | — | — | 2,194 | 2,273 | |||||||||||||||
Residential mortgage | — | — | — | — | — | |||||||||||||||
Home equity | — | — | — | — | — | |||||||||||||||
Commercial mortgage | 213,617 | 223,925 | 187,379 | 188,485 | 179,192 | |||||||||||||||
Consumer | 195,981 | 156,835 | 147,924 | 135,042 | 134,298 | |||||||||||||||
Leases | — | — | — | — | — | |||||||||||||||
Total loans and leases | 525,320 | 518,076 | 490,433 | 481,120 | 458,311 | |||||||||||||||
Allowance for loan and lease losses | (5,379 | ) | (5,881 | ) | (5,853 | ) | (5,854 | ) | (4,923 | ) | ||||||||||
Net loans and leases | $ | 519,941 | $ | 512,195 | $ | 484,580 | $ | 475,266 | $ | 453,388 | ||||||||||
TOTAL: | ||||||||||||||||||||
Commercial, financial and agricultural | $ | 570,304 | $ | 576,612 | $ | 590,483 | $ | 566,795 | $ | 581,660 | ||||||||||
Real estate: | ||||||||||||||||||||
Construction | 95,854 | 96,661 | 72,427 | 71,175 | 66,927 | |||||||||||||||
Residential mortgage | 1,599,801 | 1,558,735 | 1,516,936 | 1,451,794 | 1,428,205 | |||||||||||||||
Home equity | 490,734 | 475,565 | 473,151 | 465,905 | 468,966 | |||||||||||||||
Commercial mortgage | 1,123,415 | 1,133,912 | 1,092,858 | 1,058,006 | 1,040,278 | |||||||||||||||
Consumer | 569,432 | 526,346 | 501,206 | 487,813 | 492,206 | |||||||||||||||
Leases | — | 31 | 52 | 83 | 124 | |||||||||||||||
Total loans and leases | 4,449,540 | 4,367,862 | 4,247,113 | 4,101,571 | 4,078,366 | |||||||||||||||
Allowance for loan and lease losses | (47,971 | ) | (48,167 | ) | (48,267 | ) | (47,267 | ) | (47,916 | ) | ||||||||||
Net loans and leases | $ | 4,401,569 | $ | 4,319,695 | $ | 4,198,846 | $ | 4,054,304 | $ | 4,030,450 | ||||||||||
[1] U.S. Mainland includes territories of the United States. | ||||||||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Deposits | |
(Unaudited) | TABLE 8 |
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 2019 | 2019 | 2019 | 2019 | 2018 | |||||||||||||||
Noninterest-bearing demand | $ | 1,450,532 | $ | 1,399,200 | $ | 1,351,190 | $ | 1,357,890 | $ | 1,436,967 | ||||||||||
Interest-bearing demand | 1,043,010 | 998,037 | 1,002,706 | 965,316 | 954,011 | |||||||||||||||
Savings and money market | 1,600,028 | 1,593,738 | 1,573,805 | 1,562,798 | 1,448,257 | |||||||||||||||
Time deposits less than $100,000 | 165,755 | 165,687 | 171,106 | 174,265 | 176,707 | |||||||||||||||
Core deposits | 4,259,325 | 4,156,662 | 4,098,807 | 4,060,269 | 4,015,942 | |||||||||||||||
Government time deposits | 533,088 | 552,470 | 574,825 | 600,572 | 631,293 | |||||||||||||||
Other time deposits $100,000 to $250,000 | 107,550 | 103,959 | 105,382 | 107,051 | 106,783 | |||||||||||||||
Other time deposits greater than $250,000 | 220,060 | 224,568 | 197,835 | 180,236 | 192,472 | |||||||||||||||
Total time deposits $100,000 and over | 860,698 | 880,997 | 878,042 | 887,859 | 930,548 | |||||||||||||||
Total deposits | $ | 5,120,023 | $ | 5,037,659 | $ | 4,976,849 | $ | 4,948,128 | $ | 4,946,490 | ||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Nonperforming Assets, Past Due and Restructured Loans | |
(Unaudited) | TABLE 9 |
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 2019 | 2019 | 2019 | 2019 | 2018 | |||||||||||||||
Nonaccrual loans (including loans held for sale): | ||||||||||||||||||||
Commercial, financial and agricultural | $ | 467 | $ | — | $ | — | $ | — | $ | — | ||||||||||
Real estate: | ||||||||||||||||||||
Residential mortgage | 979 | 799 | 738 | 2,492 | 2,048 | |||||||||||||||
Home equity | 92 | 95 | 244 | 570 | 275 | |||||||||||||||
Consumer | 17 | — | — | — | — | |||||||||||||||
Total nonaccrual loans | 1,555 | 894 | 982 | 3,062 | 2,323 | |||||||||||||||
Other real estate owned ("OREO"): | ||||||||||||||||||||
Real estate: | ||||||||||||||||||||
Residential mortgage | — | 302 | 276 | 276 | 414 | |||||||||||||||
Home equity | 164 | 164 | — | — | — | |||||||||||||||
Total OREO | 164 | 466 | 276 | 276 | 414 | |||||||||||||||
Total nonperforming assets ("NPAs") | 1,719 | 1,360 | 1,258 | 3,338 | 2,737 | |||||||||||||||
Loans delinquent for 90 days or more still accruing interest: | ||||||||||||||||||||
Real estate: | ||||||||||||||||||||
Residential mortgage | 724 | — | — | — | — | |||||||||||||||
Home equity | — | — | — | — | 298 | |||||||||||||||
Consumer | 286 | 235 | 267 | 159 | 238 | |||||||||||||||
Total loans delinquent for 90 days or more still accruing interest | 1,010 | 235 | 267 | 159 | 536 | |||||||||||||||
Restructured loans still accruing interest: | ||||||||||||||||||||
Commercial, financial and agricultural | 135 | 157 | 178 | 199 | 220 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | — | — | — | 2,194 | 2,273 | |||||||||||||||
Residential mortgage | 5,502 | 6,717 | 6,831 | 7,141 | 8,026 | |||||||||||||||
Commercial mortgage | 1,839 | 1,985 | 2,097 | 2,222 | 2,348 | |||||||||||||||
Total restructured loans still accruing interest | 7,476 | 8,859 | 9,106 | 11,756 | 12,867 | |||||||||||||||
Total NPAs and loans delinquent for 90 days or more and restructured loans still accruing interest | $ | 10,205 | $ | 10,454 | $ | 10,631 | $ | 15,253 | $ | 16,140 | ||||||||||
Total nonaccrual loans as a percentage of loans and leases | 0.03 | % | 0.02 | % | 0.02 | % | 0.07 | % | 0.06 | % | ||||||||||
Total NPAs as a percentage of loans and leases and OREO | 0.04 | % | 0.03 | % | 0.03 | % | 0.08 | % | 0.07 | % | ||||||||||
Total NPAs and loans delinquent for 90 days or more still accruing interest as a percentage of loans and leases and OREO | 0.06 | % | 0.04 | % | 0.04 | % | 0.09 | % | 0.08 | % | ||||||||||
Total NPAs and loans delinquent for 90 days or more and restructured loans still accruing interest as a percentage of loans and leases and OREO | 0.23 | % | 0.24 | % | 0.25 | % | 0.37 | % | 0.40 | % | ||||||||||
Quarter-to-quarter changes in NPAs: | ||||||||||||||||||||
Balance at beginning of quarter | $ | 1,360 | $ | 1,258 | $ | 3,338 | $ | 2,737 | $ | 3,026 | ||||||||||
Additions | 695 | 112 | — | 810 | — | |||||||||||||||
Reductions: | ||||||||||||||||||||
Payments | (34 | ) | (51 | ) | (2,055 | ) | (71 | ) | (154 | ) | ||||||||||
Return to accrual status | — | (2 | ) | (25 | ) | — | (135 | ) | ||||||||||||
Sales of NPAs | (302 | ) | — | — | — | — | ||||||||||||||
Charge-offs, valuation and other adjustments | — | 43 | — | (138 | ) | — | ||||||||||||||
Total reductions | (336 | ) | (10 | ) | (2,080 | ) | (209 | ) | (289 | ) | ||||||||||
Balance at end of quarter | $ | 1,719 | $ | 1,360 | $ | 1,258 | $ | 3,338 | $ | 2,737 | ||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES | |
Allowance for Loan and Lease Losses | |
(Unaudited) | TABLE 10 |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | |||||||||||||||||||||||
(Dollars in thousands) | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 48,167 | $ | 48,267 | $ | 47,267 | $ | 47,916 | $ | 46,826 | $ | 47,916 | $ | 50,001 | ||||||||||||||
Provision (credit) for loan and lease losses | 2,098 | 1,532 | 1,404 | 1,283 | (1,386 | ) | 6,317 | (1,124 | ) | |||||||||||||||||||
Charge-offs: | ||||||||||||||||||||||||||||
Commercial, financial and agricultural | 379 | 797 | 839 | 463 | 881 | 2,478 | 2,852 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Home equity | — | 5 | — | — | — | 5 | — | |||||||||||||||||||||
Consumer | 2,723 | 1,832 | 1,459 | 2,251 | 1,899 | 8,265 | 7,323 | |||||||||||||||||||||
Total charge-offs | 3,102 | 2,634 | 2,298 | 2,714 | 2,780 | 10,748 | 10,175 | |||||||||||||||||||||
Recoveries: | ||||||||||||||||||||||||||||
Commercial, financial and agricultural | 264 | 362 | 315 | 233 | 186 | 1,174 | 1,203 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | 6 | 6 | 592 | 6 | 4,554 | 610 | 5,759 | |||||||||||||||||||||
Residential mortgage | 26 | 104 | 372 | 22 | 106 | 524 | 204 | |||||||||||||||||||||
Home equity | — | 24 | 9 | 9 | 9 | 42 | 27 | |||||||||||||||||||||
Commercial mortgage | — | — | 25 | — | — | 25 | 52 | |||||||||||||||||||||
Consumer | 512 | 506 | 581 | 512 | 401 | 2,111 | 1,969 | |||||||||||||||||||||
Total recoveries | 808 | 1,002 | 1,894 | 782 | 5,256 | 4,486 | 9,214 | |||||||||||||||||||||
Net charge-offs (recoveries) | 2,294 | 1,632 | 404 | 1,932 | (2,476 | ) | 6,262 | 961 | ||||||||||||||||||||
Balance at end of period | $ | 47,971 | $ | 48,167 | $ | 48,267 | $ | 47,267 | $ | 47,916 | $ | 47,971 | $ | 47,916 | ||||||||||||||
Average loans and leases, net of deferred costs | $ | 4,412,247 | $ | 4,293,455 | $ | 4,171,558 | $ | 4,083,791 | $ | 4,022,376 | $ | 4,241,308 | $ | 3,898,250 | ||||||||||||||
Annualized ratio of net charge-offs to average loans and leases | 0.21 | % | 0.15 | % | 0.04 | % | 0.19 | % | (0.25 | )% | 0.15 | % | 0.02 | % | ||||||||||||||
Ratio of allowance for loan and lease losses to loans and leases | 1.08 | % | 1.10 | % | 1.14 | % | 1.15 | % | 1.17 | % | 1.08 | % | 1.17 | % | ||||||||||||||