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Central Pacific Financial Corp. Reports $16.0 Million First Quarter Earnings And Increases Quarterly Cash Dividend

- Net income of $16.0 million, or fully diluted EPS of $0.55 for the first quarter, representing an increase of 12.3% and 14.6%, respectively, from the year-ago quarter.

- ROA of 1.10% and ROE of 12.97% for the first quarter, compared to 1.01% and 11.60%, respectively, in the year-ago quarter.

- Asset quality remains strong as nonperforming assets totaled $3.3 million, or 0.06% of total assets.

- Net interest margin increased by 6 basis points in the first quarter and 13 basis points from the year-ago quarter.

- Increased second quarter cash dividend by 9.5% to $0.23 per share.

HONOLULU, April 24, 2019 /PRNewswire/ -- Central Pacific Financial Corp. (CPF), (the "Company"), today reported net income in the first quarter of 2019 of $16.0 million, or diluted earnings per share ("EPS") of $0.55, compared to net income in the first quarter of 2018 of $14.3 million, or EPS of $0.48, and net income in the fourth quarter of 2018 of $15.8 million, or EPS of $0.54.

Central Pacific Financial Corp. Logo (PRNewsFoto/Central Pacific Financial Corp.)

"We are pleased that our consistent earnings combined with solid asset quality and capital position has allowed us to increase our cash dividend," said Paul Yonamine, Chairman and Chief Executive Officer. "Our team continues to work on building customer relationships and we look forward to continuing to execute on our strategies during the rest of the year," said Catherine Ngo, President.

In April 2019, the Company's Board of Directors declared a quarterly cash dividend of $0.23 per share on its outstanding common shares. This represents a 9.5% increase from the $0.21 dividend paid in the first quarter of 2019. The dividend will be payable on June 17, 2019 to shareholders of record at the close of business on May 31, 2019.

During the three months ended March 31, 2019, the Company repurchased 277,000 shares of common stock, or approximately 1.0% of its common stock outstanding as of December 31, 2018. Total cost of the shares repurchased during the three months ended March 31, 2019 was $7.7 million, or an average cost per share of $27.83. The Company's remaining repurchase authority under its common stock repurchase program at March 31, 2019 is $13.0 million. During the three months ended March 31, 2019, the Company returned $13.8 million in capital to its shareholders through cash dividends and share repurchases.

Earnings Highlights
Net interest income for the first quarter of 2019 was $45.1 million, compared to $42.3 million in the year-ago quarter and $44.7 million in the previous quarter. Net interest margin for the first quarter of 2019 was 3.34%, compared to 3.21% in the year-ago quarter and 3.28% 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 increases in the yields earned on the loan and investment securities portfolios. These increases were partially offset by higher deposit and borrowing costs from the year-ago and sequential quarters.

Other operating income for the first quarter of 2019 totaled $11.7 million, compared to $9.0 million in the year-ago quarter and $9.4 million in the previous quarter. The increases from the year-ago and previous quarters were primarily due to the conversion of MasterCard Class B common stock received during their initial public offering to Class A common stock and immediate sale of the converted shares resulting in a gain of $2.6 million (recorded in other), combined with higher income from bank-owned life insurance. The increases in income from bank-owned life insurance from the year-ago and previous quarters of $0.6 million and $0.7 million, respectively, were primarily attributable to fluctuations in the stock market during the first quarter of 2019. These positive variances were partially offset by lower net gains on sales of residential mortgage loans (included in mortgage banking income) from the year-ago and previous quarters of $0.4 million and $0.5 million, respectively, and lower commissions and fees on investment services (included in other service charges and fees) of $0.4 million, compared to the previous quarter.

Other operating expense for the first quarter of 2019 totaled $34.3 million, which increased from $33.4 million in the year-ago quarter and increased from $33.6 million in the previous quarter. The increase from the year-ago quarter was primarily due to higher salaries and employee benefits of $1.4 million and higher computer software expense of $0.3 million. The increase in salaries and employee benefits in the current quarter was partially attributable to a $0.6 million increase in deferred compensation expense with a corresponding increase in income from bank-owned life insurance. These negative variances were partially offset by lower amortization of core deposit premium of $0.7 million, as the intangible asset was fully amortized as of September 30, 2018, and lower legal and professional fees of $0.3 million compared to the year-ago period. The increase from the previous quarter was primarily due to higher salaries and employee benefits of $0.8 million, combined with an increase to the reserve for unfunded commitments (included in other) of $0.2 million in the current quarter compared to a decrease to the provision of $0.5 million in the previous quarter. The increase in salaries and employee benefits in the current quarter was partially attributable to a $0.4 million increase in deferred compensation expense with a corresponding increase in income from bank-owned life insurance. These negative variances were partially offset by lower legal and professional services of $0.6 million, compared to the previous quarter.

The efficiency ratio for the first quarter of 2019 was 60.49%, compared to 65.15% in the year-ago quarter and 62.21% in the previous quarter. The efficiency ratio was positively impacted by the aforementioned MasterCard stock gain.

In the first quarter of 2019, the Company recorded income tax expense of $5.1 million, compared to $3.8 million in the year-ago quarter and $6.0 million in the previous quarter. The effective tax rate for the first quarter of 2019 was 24.2%, compared to 21.0% in the year-ago quarter and 27.6% in the previous quarter. Income tax expense in the year-ago quarter included an income tax benefit of $0.7 million related to the finalization of the impact of H.R.1, commonly referred to as the Tax Cuts and Jobs Act.

Balance Sheet Highlights
Total assets at March 31, 2019 of $5.84 billion increased by $190.1 million, or 3.4% from March 31, 2018, and increased by $34.3 million, or 0.6% from December 31, 2018.

Total loans and leases at March 31, 2019 of $4.10 billion increased by $285.4 million, or 7.5% and $23.2 million, or 0.6% from March 31, 2018 and December 31, 2018, respectively. The year-over-year increase in total loans was driven by broad based gains in every loan category, while the sequential quarter increase in total loans was led by growth in residential mortgage and commercial mortgage loans.

Total deposits at March 31, 2019 of $4.95 billion decreased by $32.3 million, or 0.6% from March 31, 2018, and remained relatively unchanged from December 31, 2018.  The year-over-year decline in total deposits was primarily attributable to a decrease in government time deposits of $102.9 million, partially offset by an increase in core deposits. Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $4.06 billion at March 31, 2019.  This represents an increase of $53.3 million, or 1.3% from March 31, 2018, and $44.3 million, or 1.1% from December 31, 2018. The Company's loan-to-deposit ratio was 82.9% at March 31, 2019, compared to 76.6% at March 31, 2018 and 82.5% at December 31, 2018.

Asset Quality
Nonperforming assets at March 31, 2019 totaled $3.3 million, or 0.06% of total assets, compared to $3.4 million, or 0.06% of total assets at March 31, 2018, and $2.7 million, or 0.05% of total assets at December 31, 2018.

Loans delinquent for 90 days or more still accruing interest totaled $0.2 million at March 31, 2019, compared to $0.4 million and $0.5 million at March 31, 2018 and December 31, 2018, respectively.

Net charge-offs in the first quarter of 2019 totaled $1.9 million, compared to net charge-offs of $0.6 million in the year-ago quarter, and net recoveries of $2.5 million in the previous quarter. Net recoveries in the fourth quarter of 2018 included a $4.5 million recovery on a U.S. mainland land loan.

In the first quarter of 2019, the Company recorded a provision for loan and lease losses of $1.3 million, compared to a credit of $0.2 million in the year-ago quarter and a credit of $1.4 million in the previous quarter. The aforementioned $4.5 million recovery contributed to the credit to the provision for loan and lease losses in the previous quarter. The allowance for loan and lease losses, as a percentage of total loans and leases at March 31, 2019 was 1.15%, compared to 1.29% at March 31, 2018 and 1.17% at December 31, 2018.

Capital
Total shareholders' equity was $502.6 million at March 31, 2019, compared to $484.1 million and $491.7 million at March 31, 2018 and December 31, 2018, 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 March 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%, 13.0%, 14.1%, and 11.8%, respectively, compared to 9.9%, 13.5%, 14.7%, and 11.9%, respectively, at December 31, 2018. The decline in the ratios was primarily due to  the redemption of $20 million in floating rate trust preferred securities and the underlying floating rate junior subordinated debentures during the first quarter of 2019 which was treated as capital.

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://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 May 24, 2019 by dialing 1-877-344-7529 (passcode:10130726) and on the Company's website.

About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $5.8 billion in assets.  Central Pacific Bank, its primary subsidiary, operates 35 branches and 79 ATMs in the state of Hawaii, as of March 31, 2019.  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 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; 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; 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

(Dollars in thousands,


Mar 31,


Dec 31,


Sep 30,


Jun 30,


Mar 31,

except for per share amounts)


2019


2018


2018


2018


2018

CONDENSED INCOME STATEMENT











Net interest income


$

45,113



$

44,679



$

43,325



$

42,672



$

42,322


Provision (credit) for loan and lease losses


1,283



(1,386)



(59)



532



(211)


Net interest income after provision (credit) for loan and lease losses


43,830



46,065



43,384



42,140



42,533


Total other operating income


11,673



9,400



10,820



9,630



8,954


Total other operating expense


34,348



33,642



34,025



33,611



33,404


Income before taxes


21,155



21,823



20,179



18,159



18,083


Income tax expense


5,118



6,031



4,986



3,935



3,806


Net income


16,037



15,792



15,193



14,224



14,277


Basic earnings per common share


$

0.56



$

0.54



$

0.52



$

0.48



$

0.48


Diluted earnings per common share


0.55



0.54



0.52



0.48



0.48


Dividends declared per common share


0.21



0.21



0.21



0.21



0.19













PERFORMANCE RATIOS











Return on average assets (ROA) [1]


1.10

%


1.10

%


1.06

%


1.00

%


1.01

%

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


12.97



12.90



12.54



11.83



11.60


Return on average tangible shareholders' equity (ROTE) [1]


12.97



12.90



12.55



11.85



11.64


Average shareholders' equity to average assets


8.51



8.53



8.49



8.49



8.73


Efficiency ratio  [2]


60.49



62.21



62.84



64.26



65.15


Net interest margin (NIM) [1]


3.34



3.28



3.20



3.20



3.21


Dividend payout ratio [3]


38.18



38.89



40.38



43.75



39.58













SELECTED AVERAGE BALANCES











Average loans and leases, including loans held for sale


$

4,083,791



$

4,022,376



$

3,941,511



$

3,836,739



$

3,789,338


Average interest-earning assets


5,464,377



5,451,052



5,418,924



5,376,115



5,334,276


Average assets


5,809,931



5,739,228



5,709,825



5,663,697



5,638,205


Average deposits


4,978,470



4,938,560



5,063,061



5,041,164



5,000,108


Average interest-bearing liabilities


3,821,528



3,769,920



3,802,028



3,776,053



3,746,012


Average shareholders' equity


494,635



489,510



484,737



480,985



492,184


Average tangible shareholders' equity


494,635



489,510



484,391



479,959



490,453


 


CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES


Financial Highlights


(Unaudited)

TABLE 1 (CONTINUED)




Mar 31,


Dec 31,


Sep 30,


Jun 30,


Mar 31,

(dollars in thousands)


2019


2018


2018


2018


2018

REGULATORY CAPITAL











Central Pacific Financial Corp.











Leverage capital


$

554,148



$

570,260



$

590,627



$

586,799



$

579,221


Tier 1 risk-based capital


554,148



570,260



590,627



586,799



579,221


Total risk-based capital


602,824



619,419



639,157



636,755



629,179


Common equity tier 1 capital


504,148



500,260



500,627



496,799



489,221


Central Pacific Bank











Leverage capital


539,390



533,166



571,949



569,128



568,409


Tier 1 risk-based capital


539,390



533,166



571,949



569,128



568,409


Total risk-based capital


588,066



582,325



620,479



619,084



618,240


Common equity tier 1 capital


539,390



533,166



571,949



569,128



568,409













REGULATORY CAPITAL RATIOS











Central Pacific Financial Corp.











Leverage capital ratio


9.5

%


9.9

%


10.3

%


10.3

%


10.3

%

Tier 1 risk-based capital ratio


13.0



13.5



14.2



14.4



14.5


Total risk-based capital ratio


14.1



14.7



15.4



15.7



15.8


Common equity tier 1 capital ratio


11.8



11.9



12.0



12.2



12.3


Central Pacific Bank











Leverage capital ratio


9.3



9.3



10.0



10.0



10.1


Tier 1 risk-based capital ratio


12.7



12.7



13.8



14.0



14.3


Total risk-based capital ratio


13.8



13.8



15.0



15.3



15.5


Common equity tier 1 capital ratio


12.7



12.7



13.8



14.0



14.3















Mar 31,


Dec 31,


Sep 30,


Jun 30,


Mar 31,

(dollars in thousands, except for per share amounts)


2019


2018


2018


2018


2018

BALANCE SHEET











Loans and leases


$

4,101,571



$

4,078,366



$

3,978,027



$

3,881,581



$

3,816,146


Total assets


5,841,352



5,807,026



5,728,640



5,681,519



5,651,287


Total deposits


4,948,128



4,946,490



5,003,680



4,979,099



4,980,431


Long-term debt


101,547



122,166



92,785



92,785



92,785


Total shareholders' equity


502,638



491,725



478,151



480,668



484,108


Total shareholders' equity to total assets


8.60

%


8.47

%


8.35

%


8.46

%


8.57

%

Tangible common equity to tangible assets [4]


8.60

%


8.47

%


8.35

%


8.45

%


8.54

%












ASSET QUALITY











Allowance for loan and lease losses


$

47,267



$

47,916



$

46,826



$

48,181



$

49,217


Non-performing assets


3,338



2,737



3,026



3,509



3,438


Allowance to loans and leases outstanding


1.15

%


1.17

%


1.18

%


1.24

%


1.29

%

Allowance to non-performing assets


1,416.03

%


1,750.68

%


1,547.46

%


1,373.07

%


1,431.56

%












PER SHARE OF COMMON STOCK OUTSTANDING











Book value per common share


$

17.50



$

16.97



$

16.34



$

16.30



$

16.30


Tangible book value per common share


17.50



16.97



16.34



16.28



16.25


_______________________________________

[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.

[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 in Table 2.



 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

TABLE 2












The following table sets forth a reconciliation of our tangible common equity ratio for each of the dates indicated:














March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)


2019


2018


2018


2018


2018

Tangible Common Equity Ratio:











Total shareholders' equity


$

502,638



$

491,725



$

478,151



$

480,668



$

484,108


Less: Other intangible assets








(669)



(1,337)


Tangible common equity


$

502,638



$

491,725



$

478,151



$

479,999



$

482,771













Total assets


$

5,841,352



$

5,807,026



$

5,728,640



$

5,681,519



$

5,651,287


Less: Other intangible assets








(669)



(1,337)


Tangible assets


$

5,841,352



$

5,807,026



$

5,728,640



$

5,680,850



$

5,649,950













Tangible common equity to tangible assets


8.60

%


8.47

%


8.35

%


8.45

%


8.54

%

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

TABLE 3














Mar 31,


Dec 31,


Sep 30,


Jun 30,


Mar 31,

(Dollars in thousands, except share data)


2019


2018


2018


2018


2018

ASSETS











Cash and due from financial institutions


$

90,869



$

80,569



$

82,668



$

75,547



$

59,905


Interest-bearing deposits in other financial institutions


7,310



21,617



7,051



13,948



5,875


Investment securities:











Available-for-sale debt securities, at fair value


1,319,450



1,205,478



1,233,002



1,279,969



1,326,092


Held-to-maturity debt securities, at amortized cost; fair value of:  none at March 31, 2019, $144,272 at December 31, 2018, $146,466 at September 30, 2018, $152,330 at June 30, 2018, and $171,399 at March 31, 2018




148,508



152,852



158,156



177,078


Equity securities, at fair value


910



826



885



844



753


Total investment securities


1,320,360



1,354,812



1,386,739



1,438,969



1,503,923


Loans held for sale


3,539



6,647



4,460



9,096



7,492


Loans and leases


4,101,571



4,078,366



3,978,027



3,881,581



3,816,146


Less allowance for loan and lease losses


47,267



47,916



46,826



48,181



49,217


Loans and leases, net of allowance for loan and lease losses


4,054,304



4,030,450



3,931,201



3,833,400



3,766,929


Premises and equipment, net


44,527



45,285



46,184



47,004



47,436


Accrued interest receivable


17,082



17,000



16,755



16,606



16,070


Investment in unconsolidated subsidiaries


16,054



14,008



15,283



9,362



6,478


Other real estate owned


276



414



414



595



595


Mortgage servicing rights


15,347



15,596



15,634



15,756



15,821


Core deposit premium








669



1,337


Bank-owned life insurance


158,392



157,440



157,085



156,945



156,611


Federal Home Loan Bank stock


16,145



16,645



10,965



10,246



9,007


Right of use lease asset [1]


54,781










Other assets


42,366



46,543



54,201



53,376



53,808


Total assets


$

5,841,352



$

5,807,026



$

5,728,640



$

5,681,519



$

5,651,287


LIABILITIES AND SHAREHOLDERS' EQUITY











Deposits:











Noninterest-bearing demand


$

1,357,890



$

1,436,967



$

1,403,534



$

1,365,010



$

1,349,029


Interest-bearing demand


965,316



954,011



935,130



952,991



946,464


Savings and money market


1,562,798



1,448,257



1,503,465



1,502,284



1,533,483


Time


1,062,124



1,107,255



1,161,551



1,158,814



1,151,455


Total deposits


4,948,128



4,946,490



5,003,680



4,979,099



4,980,431


Federal Home Loan Bank advances and other short-term borrowings


179,000



197,000



105,000



87,000



56,000


Long-term debt


101,547



122,166



92,785



92,785



92,785


Lease liability [1]


54,861










Other liabilities


55,178



49,645



49,024



41,967



37,963


Total liabilities


5,338,714



5,315,301



5,250,489



5,200,851



5,167,179


Shareholders' equity:











Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding:  none at March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018, and March 31, 2018











Common stock, no par value, authorized 185,000,000 shares; issued and outstanding:  28,723,041 at March 31, 2019, 28,967,715 at December 31, 2018, 29,270,398 at September 30, 2018, 29,489,954 at June 30, 2018, and 29,707,122 at March 31, 2018


462,952



470,660



478,721



485,402



493,794


Additional paid-in capital


89,374



88,876



87,939



86,949



86,497


Accumulated deficit


(41,733)



(51,718)



(61,406)



(70,435)



(78,454)


Accumulated other comprehensive income (loss)


(7,955)



(16,093)



(27,103)



(21,248)



(17,729)


Total shareholders' equity


502,638



491,725



478,151



480,668



484,108


Total liabilities and shareholders' equity


$

5,841,352



$

5,807,026



$

5,728,640



$

5,681,519



$

5,651,287













[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 4






Three Months Ended



Mar 31,


Dec 31,


Sep 30,


Jun 30,


Mar 31,

(Dollars in thousands, except per share data)


2019


2018


2018


2018


2018

Interest income:











Interest and fees on loans and leases


$

43,768



$

42,836



$

40,531



$

38,699



$

37,390


Interest and dividends on investment securities:











Taxable investment securities


8,260



8,451



8,490



8,717



8,843


Tax-exempt investment securities


866



910



920



933



933


Dividend income on investment securities


18



17



26



3



15


Interest on deposits in other financial institutions


68



55



109



117



84


Dividend income on Federal Home Loan Bank stock


161



70



60



40



45


Total interest income


53,141



52,339



50,136



48,509



47,310


Interest expense:











Interest on deposits:











Demand


192



180



181



193



180


Savings and money market


791



579



593



459



369


Time


5,092



4,567



4,744



4,034



3,425


Interest on short-term borrowings


893



999



146



48



43


Interest on long-term debt


1,060



1,335



1,147



1,103



971


Total interest expense


8,028



7,660



6,811



5,837



4,988


Net interest income


45,113



44,679



43,325



42,672



42,322


Provision (credit) for loan and lease losses ("Provision")


1,283



(1,386)



(59)



532



(211)


Net interest income after Provision


43,830



46,065



43,384



42,140



42,533


Other operating income:











Mortgage banking income (refer to Table 5)


1,424



1,770



1,923



1,775



1,847


Service charges on deposit accounts


2,081



2,237



2,189



1,977



2,003


Other service charges and fees


3,064



3,426



3,286



3,377



3,034


Income from fiduciary activities


965



1,113



1,159



1,017



956


Equity in earnings of unconsolidated subsidiaries


8



82



71



37



43


Fees on foreign exchange


151



197



220



277



211


Net gains (losses) on sales of investment securities




(279)








Income from bank-owned life insurance


952



243



1,055



501



318


Loan placement fees


149



215



115



220



197


Other (refer to Table 5)


2,879



396



802



449



345


Total other operating income


11,673



9,400



10,820



9,630



8,954


Other operating expense:











Salaries and employee benefits


19,889



19,053



19,011



18,783



18,505


Net occupancy


3,458



3,649



3,488



3,360



3,266


Equipment


1,006



1,079



1,048



1,044



1,068


Amortization of core deposit premium






669



668



669


Communication expense


734



863



903



746



898


Legal and professional services


1,570



2,212



1,528



1,769



1,821


Computer software expense


2,597



2,597



2,672



2,305



2,267


Advertising expense


711



834



612



617



612


Foreclosed asset expense


159



37



212



31



294


Other (refer to Table 5)


4,224



3,318



3,882



4,288



4,004


Total other operating expense


34,348



33,642



34,025



33,611



33,404


Income before income taxes


21,155



21,823



20,179



18,159



18,083


Income tax expense


5,118



6,031



4,986



3,935



3,806


Net income


$

16,037



$

15,792



$

15,193



$

14,224



$

14,277


Per common share data:











Basic earnings per share


$

0.56



$

0.54



$

0.52



$

0.48



$

0.48


Diluted earnings per share


0.55



0.54



0.52



0.48



0.48


Cash dividends declared


0.21



0.21



0.21



0.21



0.19


Basic weighted average shares outstanding


28,758,310



29,033,261



29,297,465



29,510,175



29,807,572


Diluted weighted average shares outstanding


28,979,855



29,217,480



29,479,812



29,714,942



30,041,351



 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Other Operating Income and Other Operating Expense - Detail

(Unaudited)


TABLE 5




The following table sets forth the components of mortgage banking income for the periods indicated:






Three Months Ended



Mar 31,


Dec 31,


Sep 30,


Jun 30,


Mar 31,

(Dollars in thousands)


2019


2018


2018


2018


2018

Mortgage banking income:











Loan servicing fees


$

1,245



$

1,290



$

1,269



$

1,289



$

1,311

null