Central Pacific Financial Corp. Reports $9.8 Million First Quarter Earnings

PR Newswire

HONOLULU, April 24, 2014 /PRNewswire/ -- Central Pacific Financial Corp. (CPF), parent company of Central Pacific Bank (the "Bank"), today reported net income for the first quarter of 2014 of $9.8 million, or $0.23 per diluted share, compared to net income in the first quarter of 2013 of $137.3 million, or $3.25 per diluted share, and net income in the fourth quarter of 2013 of $10.3 million, or $0.24 per diluted share. Net income in the first quarter of 2013 included a non-cash income tax benefit of $119.8 million related to the reversal of a significant portion of a valuation allowance established against the Company's net deferred tax assets during the third quarter of 2009.  Excluding this income tax benefit, net income for the first quarter of 2013 was $17.5 million, or $0.41 per diluted share.

"We are pleased to start the new year with continued earnings consistency and strong loan growth," said John C. Dean, President and CEO of Central Pacific Financial Corp.  "Our financial performance and capital position allowed us to repurchase 15% of our outstanding shares for the benefit of our shareholders which was completed on April 7, 2014."

The Company's Board of Directors declared a quarterly cash dividend of $0.08 per share on the Company's outstanding common shares. The dividend will be payable on or about June 16, 2014 to shareholders of record at the close of business on May 30, 2014. This represents the fourth consecutive quarterly cash dividend.

Significant Highlights and First Quarter Results

  • Completed a tender offer to purchase 3,405,888 shares of common stock at a purchase price of $20.20 per share for a total cost of $68.8 million, excluding fees and expenses. The tender offer was completed on March 28, 2014. We also entered into repurchase agreements to privately purchase up to $28.1 million in common stock from each of our two largest shareholders at a purchase price of $20.20 per share for an aggregate cost of $56.2 million, excluding fees and expenses. The private repurchases were completed on April 7, 2014, and are not reflected in our first quarter financials.
  • Reported net income of $9.8 million, compared to net income in the fourth quarter of 2013 of $10.3 million.
  • Increased the loans and leases portfolio by $66.9 million to $2.70 billion at March 31, 2014, compared to $2.63 billion at December 31, 2013.
  • Improved our net interest margin from 3.29% in the fourth quarter of 2013 to 3.31% in the first quarter of 2014.
  • Increased total deposits by $49.6 million to $3.99 billion at March 31, 2014, compared to $3.94 billion at December 31, 2013.
  • Recorded a credit to the provision for loan and lease losses of $1.3 million in the first quarter of 2014 and the fourth quarter of 2013.
  • Nonperforming assets increased by $7.3 million to $54.0 million at March 31, 2014 from $46.8 million at December 31, 2013.
  • The allowance for loan and lease losses ("ALLL"), as a percentage of total loans and leases, decreased to 3.08% at March 31, 2014, compared to 3.19% at December 31, 2013.  The Company's ALLL, as a percentage of nonperforming assets, decreased to 153.87% at March 31, 2014 from 179.29% at December 31, 2013 and the Company's ALLL, as a percentage of nonaccrual loans, decreased to 168.97% at March 31, 2014 from 201.55% at December 31, 2013.
  • Maintained a strong capital position with Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios of 18.63%, 19.90%, and 12.62%, respectively, as of March 31, 2014, compared to 20.30%, 21.57%, and 13.68%, respectively, as of December 31, 2013.  The Company's capital ratios continue to be well in excess of the minimum levels required for a "well-capitalized" regulatory designation.

Earnings Highlights
Net interest income for the first quarter of 2014 was $35.8 million, compared to $30.7 million in the year-ago quarter and $35.5 million in the fourth quarter of 2013.  Net interest margin was 3.31%, compared to 3.06% in the year-ago quarter and 3.29% in the fourth quarter of 2013. The sequential quarter increase in net interest income and net interest margin was primarily due to an overall increase in the Company's interest earning assets, including a net increase of $112.3 million in its average loan portfolio, partially offset by a net decrease of $42.8 million in its average investment securities portfolio and an increase in the taxable equivalent yield on the investment securities portfolio to 2.62% in the first quarter of 2014, compared to 2.43% in the fourth quarter of 2013.

The provision for loan and lease losses for the first quarter of 2014 and the fourth quarter of 2013 was a credit of $1.3 million, compared to a credit to the provision for loan and lease losses of $6.6 million in the year-ago quarter.

Other operating income for the first quarter of 2014 totaled $10.1 million, compared to $13.0 million in the year-ago quarter and $12.2 million in the fourth quarter of 2013. The decrease from the year-ago quarter was primarily due to lower net gains on sales of residential mortgage loans of $2.9 million, lower unrealized gains on loans held for sale and interest rate locks of $0.4 million, and lower gains on sales of foreclosed assets of $0.4 million, partially offset by higher service charges on deposit accounts of $0.4 million and higher income from fiduciary activities of $0.4 million. The sequential quarter decrease was primarily due to a gain on the extinguishment of trust preferred debt of $1.0 million recorded last quarter, investment securities gains of $0.5 million recorded last quarter, and lower net gains on sales of residential mortgage loans of $0.3 million, partially offset by higher income from fiduciary activities of $0.3 million.

Other operating expense for the first quarter of 2014 totaled $31.9 million, compared to $32.8 million in the year-ago quarter and $35.3 million in the fourth quarter of 2013.  The decrease from the year-ago quarter was primarily due to lower salaries and employee benefits of $1.1 million, lower amortization of intangible assets of $1.0 million, and lower legal and professional services of $0.5 million, partially offset by a lower credit to the reserve for unfunded loan commitments of $1.1 million and a higher provision for losses on residential mortgage loan repurchases of $1.1 million. The sequential quarter decrease was primarily attributable to lower salaries and employee benefits of $2.9 million, lower charitable contributions of $0.4 million, and a higher credit to the reserve for unfunded loan commitments of $0.3 million, partially offset by a higher provision for losses on residential mortgage loan repurchases of $0.6 million. The sequential quarter decrease in salaries and employee benefits was primarily due to severance, early retirement and retention benefits in the prior quarter of $1.8 million, compared to $0.4 million in the current quarter.

The efficiency ratio for the first quarter of 2014 was 69.50%, compared to 74.95% in the year-ago quarter and 73.99% in the fourth quarter of 2013.

In the first quarter of 2014, the Company recorded income tax expense of $5.5 million, compared to an income tax benefit of $119.8 million in the year-ago quarter and income tax expense of $3.4 million in the fourth quarter of 2013. The income tax benefit of $119.8 million in the year-ago quarter related to the reversal of a significant portion of a valuation allowance established against the Company's net deferred tax assets during the third quarter of 2009. As of March 31, 2014, the Company's net deferred tax assets totaled $125.3 million.

Balance Sheet Highlights
Total assets at March 31, 2014 of $4.83 billion increased by $246.4 million from March 31, 2013, and increased by $86.2 million from December 31, 2013.

Total loans and leases at March 31, 2014 of $2.70 billion increased by $422.9 million and $66.9 million from March 31, 2013 and December 31, 2013, respectively.  The increase in total loans and leases from the fourth quarter of 2013 was due to an increase in the residential mortgage, commercial, and construction and development loan portfolios of $43.5 million, $37.5 million, and $11.0 million, respectively, offset by a decrease in the commercial mortgage loan, consumer loan, and leases portfolios of $19.2 million, $5.1 million, and $0.9 million, respectively.

Total deposits at March 31, 2014 were $3.99 billion, and increased by $221.1 million and $49.6 million from March 31, 2013 and December 31, 2013, respectively.  Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $3.17 billion at March 31, 2014.  This represents an increase of $160.7 million and $81.4 million from a year ago and from December 31, 2013, respectively.  Changes in total deposits during the quarter included an increase in noninterest-bearing demand deposits, savings and money market deposits, and interest-bearing demand deposits of $48.1 million, $23.5 million, and $16.1 million, respectively, offset by a decrease in time deposits of $38.1 million.

Total shareholders' equity was $608.4 million at March 31, 2014, compared to $650.1 million and $660.1 million at March 31, 2013 and December 31, 2013, respectively. The sequential quarter decrease is due primarily to the completion of the aforementioned tender offer of $68.8 million, partially offset by an increase in unrealized gains on investment securities of $9.6 million and net income of $9.8 million in the current quarter.

Asset Quality
Nonperforming assets at March 31, 2014 totaled $54.0 million, or 1.12% of total assets, compared to $46.8 million, or 0.99% of total assets at December 31, 2013.  The sequential-quarter change reflects additions of two Mainland commercial loans to a single borrower totaling $13.6 million, partially offset by net decreases in Hawaii construction and development assets of $3.6 million, and Hawaii residential mortgage assets of $2.4 million.

Loans delinquent for 90 days or more still accruing interest totaled $30,000 at March 31, 2014, compared to $15,000 at December 31, 2013.  In addition, loans delinquent for 30 days or more still accruing interest totaled $4.8 million at March 31, 2014, compared to $7.2 million at December 31, 2013.

Net recoveries in the first quarter of 2014 totaled $0.7 million, compared to net charge-offs of $3.0 million in the first quarter of 2013, and net charge-offs of $0.1 million in the fourth quarter of 2013.

The ALLL, as a percentage of total loans and leases, was 3.08% at March 31, 2014, compared to 3.19% at December 31, 2013.  The ALLL, as a percentage of nonperforming assets, was 153.87% at March 31, 2014, compared to 179.29% at December 31, 2013.  The ALLL, as a percentage of nonaccrual loans, was 168.97% at March 31, 2014, compared to 201.55% at December 31, 2013.

Capital Levels
At March 31, 2014, the Company's Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios were 18.63%, 19.90%, and 12.62%, respectively, compared to 20.30%, 21.57%, and 13.68%, respectively, at December 31, 2013.  The decline in the Company's capital levels from the sequential quarter was primarily the result of the repurchase of our common stock in the tender offer described above.  The Company's capital ratios continue to exceed the levels required to be considered a "well-capitalized" institution for regulatory purposes.

Non-GAAP Financial Measures
This press release contains certain references to financial measures that have been adjusted to exclude certain expenses and other specified items.  These financial measures differ from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP") in that they exclude unusual or non-recurring charges, losses, credits or gains.  This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure.    Management believes that financial presentations excluding the impact of these items provide useful supplemental information that is important to a proper understanding of the Company's core business results by investors.  These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies. 

Conference Call
The Company's management will host a conference call today at 1:00 p.m. Eastern Time (7:00 a.m. Hawaii Time) to discuss the quarterly results.  Individuals are encouraged to listen to the live webcast of the presentation by visiting the investor relations page of the Company's website at http://investor.centralpacificbank.com.  Alternatively, investors may participate in the live call by dialing 1-888-317-6016.  A playback of the call will be available through May 26, 2014 by dialing 1-877-344-7529 (passcode:10044611) and on the Company's website.

About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $4.8 billion in assets.  Central Pacific Bank, its primary subsidiary, operates 36 branches and 115 ATMs in the state of Hawaii, as of March 31, 2014.  For additional information, please visit the Company's website at http://www.centralpacificbank.com.

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 further losses in our loan portfolio; the impact of local, national, and international economies and events (including political events, acts of war or terrorism, natural disasters such as wildfires, tsunamis and earthquakes) on the Company's business and operations and on tourism, the military and other major industries operating within the Hawaii market and any other markets in which the Company does business; deterioration or malaise in economic conditions, including destabilizing factors in the financial industry and deterioration of the real estate market, as well as the impact from any declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular;  our ability to continue making progress on our recovery plan; the impact of regulatory action on the Company and Central Pacific Bank and legislation affecting the banking industry; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, other regulatory reform, and any related rules and regulations on our business operations and competitiveness; the costs and effects of legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews;  the effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, securities market and monetary fluctuations;  negative trends in our market capitalization and adverse changes in the price of the Company's common shares; changes in consumer spending, borrowings and savings habits; technological changes; changes in the competitive environment among financial holding companies and other financial service providers; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; our ability to attract and retain skilled executives and employees; changes in our organization, compensation and benefit plans; and our success at managing the risks involved in the foregoing items. For further information on factors that could cause actual results to materially differ from projections, please see the Company's publicly available Securities and Exchange Commission filings, including the Company's Form 10-K for the last fiscal year and, in particular, the discussion of "Risk Factors" set forth therein. The Company does not update any of its forward-looking statements except as required by law.

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Financial Highlights

(Unaudited)


Three Months Ended



March 31,


December 31,


March 31,


(dollars in thousands, except for per share amounts)

2014


2013


2013









INCOME STATEMENT







Net interest income

$      35,796


$         35,496


$      30,669


Provision (credit) for loan and lease losses

(1,316)


(1,333)


(6,561)


Total other operating income

10,144


12,173


13,030


Total other operating expense

31,930


35,271


32,753


Net income

9,808


10,295


137,309


Basic earnings per common share

$          0.23


$             0.24


$          3.28


Diluted earnings per common share

0.23


0.24


3.25


Dividends declared per common share

0.08


0.08


-









PERFORMANCE RATIOS







Return on average assets (1)

0.82

%

0.87

%

12.41

%

Return on average shareholders' equity (1)

5.79


6.22


105.33


Return on average tangible shareholders' equity (1)

5.90


6.35


108.48


Efficiency ratio  (2)

69.50


73.99


74.95


Net interest margin (1)

3.31


3.29


3.06


Dividend payout ratio (3)

34.78


33.33


-


Average shareholders' equity to average assets

14.17


13.95


11.78









SELECTED AVERAGE BALANCES







Average loans and leases, including loans held for sale

2,665,825


2,553,574


2,258,951


Average interest-earning assets

4,409,700


4,368,386


4,105,321


Average assets

4,781,855


4,746,897


4,426,048


Average deposits

3,943,459


3,928,031


3,678,041


Average interest-bearing liabilities

3,175,982


3,152,826


2,965,106


Average shareholders' equity

677,765


662,106


521,422










March 31,


December 31,


March 31,



2014


2013


2013


REGULATORY CAPITAL RATIOS







Central Pacific Financial Corp.







     Tier 1 leverage capital ratio

12.62

%

13.68

%

14.50

%

     Tier 1 risk-based capital ratio

18.63


20.30


22.35


     Total risk-based capital ratio

19.90


21.57


23.63









Central Pacific Bank







     Tier 1 leverage capital ratio

11.10


13.22


13.64


     Tier 1 risk-based capital ratio

16.39


19.63


21.09


     Total risk-based capital ratio

17.66


20.90


22.36









BALANCE SHEET







Loans and leases

$ 2,697,454


$    2,630,601


$ 2,274,598


Total assets

4,827,437


4,741,198


4,581,077


Total deposits

3,985,767


3,936,173


3,764,691


Long-term debt

92,795


92,799


108,276


Total shareholders' equity

608,403


660,113


650,101


Total shareholders' equity to total assets

12.60

%

13.92

%

14.19

%

Tangible common equity to tangible assets (4)

12.38


13.69


13.91









ASSET QUALITY







Allowance for loan and lease losses

$      83,162


$         83,820


$      86,806


Non-performing assets

54,046


46,751


75,308


Allowance to loans and leases outstanding

3.08

%

3.19

%

3.82

%

Allowance to non-performing assets

153.87


179.29


115.27









PER SHARE OF COMMON STOCK







Book value per common share

$        15.71


$           15.68


$        15.50


Tangible book value per common share

15.40


15.37


15.15


Market value per common share

20.20


20.08


15.70









(1) Annualized

(2) Efficiency ratio is defined as total other 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.

(4) 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.

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures

(Unaudited)
















Quarter Ended


Quarter Ended


Quarter Ended


(Dollars in thousands, except per share data)

March 31, 2014


December 31, 2013


March 31, 2013









Adjusted Net Income







Reported net income

$        9,808


$          10,295


$    137,309


Release of valuation allowance on net deferred tax assets

-


-


(119,802)


Adjusted net income

$        9,808


$          10,295


$      17,507









Adjusted Diluted Earnings Per Share







Diluted earnings per share

$         0.23


$              0.24


$         3.25


Release of valuation allowance on net deferred tax assets

-


-


(2.84)


Adjusted diluted earnings per share

$         0.23


$              0.24


$         0.41










 As of 


 As of 


 As of 



March 31, 2014


December 31, 2013


March 31, 2013









Tangible Common Equity Ratio







Total shareholders' equity

$    608,403


$         660,113


$    650,101


Less: Other intangible assets

(12,035)


(12,704)


(14,709)


Tangible common equity

596,368


647,409


635,392









Total assets

4,827,437


4,741,198


4,581,077


Less: Other intangible assets

(12,035)


(12,704)


(14,709)


Tangible assets

4,815,402


4,728,494


4,566,368


Tangible common equity / Tangible assets

12.38

%

13.69

%

13.91

%

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)












 March 31, 


 December 31, 


 March 31, 

(In thousands, except share data)



2014


2013


2013









ASSETS








Cash and due from banks


$

85,347

$

45,092

$

46,877

Interest-bearing deposits in other banks


5,919


4,256


167,632

Investment securities:








  Available for sale



1,408,124


1,407,999


1,537,065

Held to maturity (fair value of $238,782 at March 31, 2014,  $238,705 December 31, 2013 and $159,483 March 31, 2013)


248,788


252,047


159,363

      Total investment securities



1,656,912


1,660,046


1,696,428









Loans held for sale



11,247


12,370


17,293

Loans and leases



2,697,454


2,630,601


2,274,598

  Less allowance for loan and lease losses


83,162


83,820


86,806

      Net loans and leases



2,614,292


2,546,781


2,187,792









Premises and equipment, net



47,992


49,039


48,578

Accrued interest receivable



13,507


14,072


14,148

Investment in unconsolidated subsidiaries


8,478


9,127


10,078

Other real estate



4,829


5,163


10,068

Mortgage servicing rights



19,916


20,079


21,466

Other intangible assets



12,035


12,704


14,709

Bank-owned life insurance



150,274


149,604


147,975

Federal Home Loan Bank stock



45,592


46,193


47,494

Other assets



151,097


166,672


150,539

      Total assets


$

4,827,437

$

4,741,198

$

4,581,077









LIABILITIES AND EQUITY








Deposits:








  Noninterest-bearing demand


$

939,138

$

891,017

$

857,427

  Interest-bearing demand



744,690


728,619


692,537

  Savings and money market



1,230,480


1,207,016


1,168,989

  Time



1,071,459


1,109,521


1,045,738

      Total deposits



3,985,767


3,936,173


3,764,691









Short-term borrowings



102,000


8,015


-

Long-term debt



92,795


92,799


108,276

Other liabilities



38,411


44,037


48,058

      Total liabilities



4,218,973


4,081,024


3,921,025









Equity:








Preferred stock, no par value, authorized 1,100,000 shares; issued and outstanding none at March 31, 2014, December 31, 2013, and March 31, 2013



-


-


-

Common stock, no par value, authorized 185,000,000 shares; issued and outstanding 38,723,250 shares at March 31, 2014, 42,107,633 shares at December 31, 2013, and 41,938,294 shares at March 31, 2013

715,708


784,547


784,519

  Surplus



76,426


75,498


71,735

  Accumulated deficit



(177,649)


(184,087)


(212,118)

  Accumulated other comprehensive income (loss)


(6,082)


(15,845)


5,965

      Total shareholders' equity



608,403


660,113


650,101

Non-controlling interest



61


61


9,951

      Total equity



608,464


660,174


660,052

      Total liabilities and equity


$

4,827,437

$

4,741,198

$

4,581,077

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)












Three Months Ended




March 31,


December 31,


March 31,

(In thousands, except per share data)


2014


2013


2013

Interest income:







  Interest and fees on loans and leases

$

26,883

$

27,117

$

24,443

  Interest and dividends on investment securities:







        Taxable interest


9,496


8,980


7,031

        Tax-exempt interest


994


992


1,027

        Dividends


1


7


5

  Interest on deposits in other banks


7


25


89

  Dividends on Federal Home Loan Bank stock


12


12


-









      Total interest income


37,393


37,133


32,595









Interest expense:







  Interest on deposits:







    Demand



90


90


81

    Savings and money market


224


231


217

    Time



630


651


759

  Interest on short-term borrowings


17


3


-

  Interest on long-term debt


636


662


869









      Total interest expense


1,597


1,637


1,926









      Net interest income


35,796


35,496


30,669

Provision (credit) for loan and lease losses


(1,316)


(1,333)


(6,561)

Net interest income after provision for loan and lease losses


37,112


36,829


37,230









Other operating income:







  Service charges on deposit accounts


1,993


2,091


1,591

  Loan servicing fees


1,444


1,479


1,543

  Other service charges and fees


2,943


3,164


2,787

  Income from fiduciary activities


1,062


748


697

  Equity in earnings of unconsolidated subsidiaries


52


57


28

  Fees on foreign exchange


114


160


71

  Investment securities gains


-


482


-

  Income from bank-owned life insurance


670


841


564

  Loan placement fees


143


162


149

  Net gains on sales of residential loans


1,239


1,494


4,128

  Net gains on sales of foreclosed assets


162


56


558

  Other



322


1,439


914









      Total other operating income


10,144


12,173


13,030









Other operating expense:







  Salaries and employee benefits


17,434


20,350


18,535

  Net occupancy 


3,590


3,672


3,227

  Equipment



796


888


958

  Amortization of other intangible assets


1,240


1,424


2,248

  Communication expense


894


796


950

  Legal and professional services


1,812


1,684


2,310

  Computer software expense


1,358


1,397


933

  Advertising expense


686


525


812

  Foreclosed asset expense


105


43


300

  Other



4,015


4,492


2,480









      Total other operating expense


31,930


35,271


32,753









   Income before income taxes


15,326


13,731


17,507

Income tax expense (benefit)


5,518


3,436


(119,802)

      Net income

$

9,808

$

10,295

$

137,309









Per common share data:







  Basic earnings per share

$

0.23

$

0.24

$

3.28

  Diluted earnings per share 


0.23


0.24


3.25

  Cash dividends declared


0.08


0.08


-









Basic weighted average shares outstanding


41,915


42,040


41,816

Diluted weighted average shares outstanding


42,477


42,536


42,297

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)









































Three Months Ended


Three Months Ended


Three Months Ended

(Dollars in thousands)


March 31, 2014


December 31, 2013


March 31, 2013





Average

Average




Average

Average




Average

Average







Balance

Yield/Rate


Interest


Balance

Yield/Rate


Interest


Balance

Yield/Rate


Interest



















Assets:
















Interest earning assets:

















Interest-bearing deposits in other banks

$      11,585

0.24

%

$          7


$      39,316

0.25

%

$        25


$    144,773

0.25

%

$        89


Taxable investment securities, excluding valuation allowance


1,508,213

2.52


9,497


1,551,844

2.32


8,987


1,477,887

1.90


7,036


Tax-exempt investment securities, excluding valuation allowance

178,005

3.44


1,529


177,135

3.44


1,526


175,850

3.59


1,580


Loans and leases, including loans held for sale

2,665,825

4.07


26,883


2,553,574

4.23


27,117


2,258,951

4.36


24,443


Federal Home Loan Bank stock

46,072

0.10


12


46,517

0.10


12


47,860

-


-



Total interest earning assets 

4,409,700

3.46


37,928


4,368,386

3.44


37,667


4,105,321

3.25


33,148

Nonearning assets


372,155





378,511





320,727





Total assets


$ 4,781,855





$ 4,746,897





$ 4,426,048






















Liabilities & Equity:
















Interest-bearing liabilities:

















Interest-bearing demand deposits

$    735,730

0.05

%

$        90


$    726,449

0.05

%

$        90


$    673,662

0.05

%

$        81


Savings and money market deposits

1,218,087

0.07


224


1,218,088

0.08


231


1,171,953

0.08


217


Time deposits under $100,000

263,479

0.41


267


272,051

0.42


285


300,992

0.51


375


Time deposits $100,000 and over

840,595

0.17


363


839,198

0.17


366


710,221

0.22


384


Short-term borrowings


25,295

0.28


17


4,239

0.32


3


-

-


-


Long-term debt


92,796

2.78


636


92,801

2.83


662


108,278

3.25


869



Total interest-bearing liabilities

3,175,982

0.20


1,597


3,152,826

0.21


1,637


2,965,106

0.26


1,926

Noninterest-bearing deposits


885,568





872,245





821,213




Other liabilities


42,479





59,659





108,352





Total liabilities


4,104,029





4,084,730





3,894,671




Shareholders' equity


677,765





662,106





521,422




Non-controlling interest


61





61





9,955





Total equity


677,826





662,167





531,377





Total liabilities & equity


$ 4,781,855





$ 4,746,897





$ 4,426,048






















Net interest income 





$ 36,331





$ 36,030





$ 31,222





































Net interest margin



3.31

%



3.29

%



3.06

%

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES







Loans and Leases by Geographic Distribution






























March 31,


December 31,


September 30,


June 30,


March 31, 

(Dollars in thousands)

2014


2013


2013


2013


2013











Hawaii:










Commercial, financial and agricultural

$    272,007


$       255,987


$        244,680


$    231,730


$    237,375

Real estate:










   Construction

82,769


71,585


57,334


63,509


60,572

   Mortgage:










   - residential

1,180,092


1,136,573


1,100,382


1,045,670


998,851

   - commercial

554,299


555,270


560,896


546,912


522,925

Consumer

231,432


230,664


190,653


171,772


149,691

Leases

5,338


6,241


6,539


7,460


8,936

Total loans and leases

2,325,937


2,256,320


2,160,484


2,067,053


1,978,350

Allowance for loan and lease losses

(64,759)


(66,639)


(66,041)


(62,295)


(64,860)

Net loans and leases

$ 2,261,178


$    2,189,681


$     2,094,443


$ 2,004,758


$ 1,913,490











U.S. Mainland:










Commercial, financial and agricultural

$    164,237


$       142,729


$        123,550


$      84,668


$      79,493

Real estate:










   Construction

3,886


4,031


15,869


16,018


27,479

   Mortgage:










   - residential

-


-


-


-


-

   - commercial

129,254


147,497


149,480


179,170


189,014

Consumer

74,140


80,024


34,935


26,168


262

Leases

-


-


-


-


-

Total loans and leases

371,517


374,281


323,834


306,024


296,248

Allowance for loan and lease losses

(18,403)


(17,181)


(19,187)


(24,810)


(21,946)

Net loans and leases

$    353,114


$       357,100


$        304,647


$    281,214


$    274,302











Total:










Commercial, financial and agricultural

$    436,244


$       398,716


$        368,230


$    316,398


$    316,868

Real estate:










   Construction

86,655


75,616


73,203


79,527


88,051

   Mortgage:










   - residential

1,180,092


1,136,573


1,100,382


1,045,670


998,851

   - commercial

683,553


702,767


710,376


726,082


711,939

Consumer

305,572


310,688


225,588


197,940


149,953

Leases

5,338


6,241


6,539


7,460


8,936

Total loans and leases

2,697,454


2,630,601


2,484,318


2,373,077


2,274,598

Allowance for loan and lease losses

(83,162)


(83,820)


(85,228)


(87,105)


(86,806)

Net loans and leases

$ 2,614,292


$    2,546,781


$     2,399,090


$ 2,285,972


$ 2,187,792

 

 

CENTRAL PACIFIC FINANCIAL CORP AND SUBSIDIARIES






Nonperforming Assets, Past Due and Restructured Loans









March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)


2014

2013

2013

2013

2013









Nonaccrual loans (including loans held for sale):






   Commercial, financial and agricultural


$   17,067

$            3,533

$             3,529

$    3,797

$      4,605

   Real estate:







      Construction 


379

4,015

16,497

17,086

18,272

      Mortgage-residential


18,161

20,271

20,703

21,287

24,842

      Mortgage-commercial


13,610

13,769

12,559

11,285

17,462

   Leases



-

-

-

-

59

      Total nonaccrual loans


49,217

41,588

53,288

53,455

65,240









Other real estate







   Real estate:







      Construction 


3,770

3,770

3,769

4,200

7,791

      Mortgage-residential


901

1,184

1,783

3,028

2,068

      Mortgage-commercial


158

209

209

209

209

      Total other real estate


4,829

5,163

5,761

7,437

10,068









      Total nonperforming assets


54,046

46,751

59,049

60,892

75,308









Loans delinquent for 90 days or more:







   Commercial, financial and agricultural


7

-

-

-

-

   Real estate:







      Mortgage-residential


-

-

19

17

-

   Consumer


23

-

18

-

-

   Leases



-

15

-

-

-

      Total loans delinquent for 90 days or more

30

15

37

17

-









Restructured loans still accruing interest:






   Commercial, financial and agricultural


395

406

416

427

437

   Real estate:







      Construction 


970

3,857

3,935

9,317

20,742

      Mortgage-residential


18,152

16,508

15,595

14,645

15,383

      Mortgage-commercial


2,312

2,502

7,859

2,874

6,202

      Total restructured loans still accruing interest

21,829

23,273

27,805

27,263

42,764









Total nonperforming assets, loans delinquent for 90 days or more  and restructured loans still accruing interest

$   75,905

$          70,039

$           86,891

$  88,172

$  118,072









Total nonaccrual loans as a percentage of loans and leases and loans held for sale 


1.82%

1.57%

2.13%

2.24%

2.85%









Total nonperforming assets as a percentage of loans and leases, loans held for sale and other real estate


1.99%

1.77%

2.36%

2.54%

3.27%









Total nonperforming assets and loans delinquent for 90 days or more as a percentage of loans and leases, loans held for sale and other real estate

1.99%

1.77%

2.36%

2.54%

3.27%















Total nonperforming assets, loans delinquent for 90 days or more and restructured loans still accruing interest as a percentage of loans and leases, loans held for sale and other real estate

2.80%

2.64%

3.47%

3.68%

5.13%









Quarter to quarter changes in nonperforming assets






Balance at beginning of quarter


$   46,751

$          59,049

$           60,892

$  75,308

$    90,018

Additions



15,000

7,099

4,253

3,912

12,384

Reductions







   Payments


(2,282)

(16,654)

(2,202)

(11,198)

(11,863)

   Return to accrual status


(4,749)

(1,145)

(1,761)

(1,325)

(13,016)

   Sales of foreclosed real estate


(623)

(1,496)

(1,919)

(4,596)

(1,357)

   Charge-offs/writedowns


(51)

(102)

(214)

(1,209)

(858)

Total reductions


(7,705)

(19,397)

(6,096)

(18,328)

(27,094)

Balance at end of quarter


$   54,046

$          46,751

$           59,049

$  60,892

$    75,308

 

 

CENTRAL PACIFIC FINANCIAL CORP AND SUBSIDIARIES


Allowance for Loan and Lease Losses



















Three Months Ended




March 31,

December 31,

March 31,

(Dollars in thousands)


2014

2013

2013







Allowance for loan losses:




   Balance at beginning of period

$    83,820

$         85,228

$    96,413







   Provision for loan and lease losses

(1,316)

(1,333)

(6,561)







   Loan charge-offs:





   Commercial, financial and agricultural

73

611

244

   Real estate:





      Construction


-

-

78

      Mortgage-residential

37

226

414

      Mortgage-commercial

-

3,094

3,674

   Consumer


580

572

315

   Leases



8

-

-

      Total loan charge-offs

698

4,503

4,725







   Recoveries:





   Commercial, financial and agricultural

606

466

492

   Real estate:





      Construction


402

795

485

      Mortgage-residential

94

542

231

      Mortgage-commercial

13

2,146

254

   Consumer


239

138

216

   Leases



2

341

1

      Total recoveries


1,356

4,428

1,679







   Net loan charge-offs (recoveries)

(658)

75

3,046







   Balance at end of period

$    83,162

$         83,820

$    86,806







Average loans and leases, net of unearned

2,665,825

2,553,574

2,258,951







Annualized ratio of net loan charge-offs (recoveries) to average loans and leases

-0.10%

0.01%

0.54%







Ratio of allowance for loan losses to loans and leases outstanding

3.08%

3.19%

3.82%

 

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