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Central Pacific Financial Corp. Reports $15.2 Million Third Quarter Earnings

- Net income of $15.2 million, or fully diluted EPS of $0.52 for the third quarter, representing an increase of 28.6% and 33.3%, respectively, from the year-ago quarter.

- ROA of 1.06% and ROE of 12.54% for the third quarter.

- Total loans increased by $96.4 million in the third quarter, or 2.5% sequentially and 9.4% year-over-year.

- Total deposits increased by $24.6 million in the third quarter, or 0.5% sequentially and 1.5% year-over-year.

HONOLULU, Oct. 24, 2018 /PRNewswire/ -- Central Pacific Financial Corp. (CPF), (the "Company"), today reported net income in the third quarter of 2018 of $15.2 million, or diluted earnings per share ("EPS") of $0.52, compared to net income in the third quarter of 2017 of $11.8 million, or EPS of $0.39, and net income in the second quarter of 2018 of $14.2 million, or EPS of $0.48.

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

"We are pleased to report another quarter of solid financial performance highlighted by strong loan growth and improved efficiency," said Paul Yonamine, Chairman and Chief Executive Officer. "The continued improvement in the efficiency ratio is reflective of the execution of our strategic initiatives and the continued great work of our employees," said Catherine Ngo, President.

In October 2018, the Company's Board of Directors declared a quarterly cash dividend of $0.21 per share on its outstanding common shares. The dividend will be payable on December 17, 2018 to shareholders of record at the close of business on November 30, 2018.

During the third quarter of 2018, the Company repurchased 235,043 shares of common stock, at a total cost of $6.7 million, or an average cost per share of $28.43. During the nine months ended September 30, 2018, the Company has repurchased 849,290 shares of common stock, or approximately 2.8% of its common stock outstanding as of December 31, 2017. Total cost of the shares repurchased during the nine months ended September 30, 2018 was $24.8 million, or an average cost per share of $29.16. The Company's remaining repurchase authority under its common stock repurchase program at September 30, 2018 is $28.7 million. During the nine months ended September 30, 2018, the Company returned $42.8 million in capital to its shareholders through cash dividends and share repurchases.

Earnings Highlights
Net interest income for the third quarter of 2018 was $43.3 million, compared to $42.0 million in the year-ago quarter and $42.7 million in the previous quarter. Net interest margin for the third quarter of 2018 was 3.20%, compared to 3.25% in the year-ago quarter and 3.20% in the previous quarter. The increase in net interest income from the year-ago and sequential quarters was primarily due to growth in the loan portfolio, combined with increases in the yield earned on the loan and investment securities portfolios. These increases were partially offset by higher deposit and borrowing costs attributable to the recent increases in the federal funds rate, which also resulted in the decline in the net interest margin from the year-ago quarter.

To improve net interest income and net interest margin, the Company announced in October 2018 that it submitted a notice to redeem, in whole and at par, $20 million of floating rate trust preferred securities and the underlying floating rate junior subordinated debentures, which are reported as long-term debt on the Company's balance sheet with a current interest rate of 5.18%. The redemption is pursuant to the optional prepayment provisions of the indenture and is scheduled to occur on December 17, 2018.

Other operating income for the third quarter of 2018 totaled $10.8 million, compared to $9.6 million in the year-ago quarter and $9.6 million in the previous quarter. The increase from the year-ago quarter was primarily due to income recovered on nonaccrual loans previously charged-off of $0.4 million (included in other), higher net gains on sales of residential mortgage loans of $0.4 million (included in mortgage banking income), and higher income from fiduciary activities of $0.2 million. The sequential quarter increase was primarily due to death benefit income of $0.4 million (included in income from bank-owned life insurance), higher income recovered on nonaccrual loans previously charged-off of $0.3 million (included in other), and higher service charges on deposit accounts of $0.2 million.

Other operating expense for the third quarter of 2018 totaled $34.1 million, which increased from $33.5 million in the year-ago quarter and increased from $33.7 million in the previous quarter. The increase from the year-ago quarter was primarily due to higher salaries and employee benefits of $0.9 million, primarily attributable to the increase in the Company's starting pay rate effective January 1, 2018. The sequential quarter increase was primarily due to higher computer software expense of $0.4 million.

The efficiency ratio for the third quarter of 2018 was 63.05%, compared to 64.99% in the year-ago quarter and 64.48% in the previous quarter. The improvements in the efficiency ratio from the year-ago and sequential quarters were primarily due to the aforementioned improvements in net interest income and other operating income, partially offset by higher other operating expenses in the current quarter compared to the year-ago and sequential quarters.

In the third quarter of 2018, the Company recorded income tax expense of $4.9 million, compared to $6.4 million in the year-ago quarter and $3.8 million in the previous quarter. The effective tax rate for the third quarter of 2018 was 24.3%, compared to 35.0% in the year-ago quarter and 21.2% in the previous quarter. The decline in income tax expense and effective tax rate in the current quarter compared to the year-ago quarter was primarily due to the enactment of H.R.1, commonly referred to as the Tax Cuts and Jobs Act. Income tax expense in the second quarter of 2018 included a one-time estimated benefit of $0.6 million to income tax expense due to a tax accounting method change strategy.

Balance Sheet Highlights
Total assets at September 30, 2018 of $5.73 billion increased by $159.4 million, or 2.9% from September 30, 2017, and increased by $47.1 million, or 0.8% from June 30, 2018.

Total loans and leases at September 30, 2018 of $3.98 billion increased by $341.7 million, or 9.4% and $96.4 million, or 2.5% from September 30, 2017 and June 30, 2018, respectively. The increase in total loans and leases from September 30, 2017 was primarily attributable to strong organic growth in the Hawaii loan portfolios (excluding the Hawaii construction loan portfolio) totaling $289.6 million, combined with increases in the U.S. mainland commercial, financial and agricultural and commercial mortgage loan portfolios of $49.8 million and $48.5 million, respectively, partially offset by reductions in the Hawaii construction loan portfolio of $29.0 million and the U.S. mainland consumer loan portfolio of $16.5 million. The increase in total loans and leases from the second quarter of 2018 was primarily due to strong organic growth in the Hawaii loan portfolios totaling $87.3 million, combined with an increase in the U.S. mainland commercial, financial and agricultural loan portfolio of $26.7 million, partially offset by a decrease in the U.S mainland consumer loan portfolio of $16.5 million.

Total deposits at September 30, 2018 of $5.00 billion increased by $76.2 million, or 1.5% from September 30, 2017, and increased by $24.6 million, or 0.5% from June 30, 2018.  Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $4.02 billion at September 30, 2018.  This represents an increase of $61.8 million, or 1.6% from September 30, 2017, and an increase of $21.1 million, or 0.5% from June 30, 2018. The Company's loan-to-deposit ratio was 79.5% at September 30, 2018, compared to 73.8% at September 30, 2017 and 78.0% at June 30, 2018.

Asset Quality
Nonperforming assets at September 30, 2018 totaled $3.0 million, or 0.05% of total assets, compared to $6.0 million, or 0.11% of total assets at September 30, 2017, and $3.5 million, or 0.06% of total assets at June 30, 2018.

Loans delinquent for 90 days or more still accruing interest totaled $0.3 million at September 30, 2018, compared to $0.4 million and $0.6 million at September 30, 2017 and June 30, 2018, respectively.

Net charge-offs in the third quarter of 2018 totaled $1.3 million, compared to net charge-offs of $1.5 million in the year-ago quarter, and net charge-offs of $1.6 million in the previous quarter.

In the third quarter of 2018, the Company recorded a credit to the provision for loan and lease losses of $0.1 million, compared to a credit of $0.1 million in the year-ago quarter and a debit to the provision of $0.5 million in the previous quarter. The allowance for loan and lease losses, as a percentage of total loans and leases at September 30, 2018 was 1.18%, compared to 1.41% at September 30, 2017 and 1.24% at June 30, 2018.

Capital
Total shareholders' equity was $478.2 million at September 30, 2018, compared to $509.8 million and $480.7 million at September 30, 2017 and June 30, 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 September 30, 2018, the Company's leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 10.3%, 14.2%, 15.4%, and 12.0%, respectively, compared to 10.3%, 14.4%, 15.7%, and 12.2%, respectively, at June 30, 2018.

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 November 24, 2018 by dialing 1-877-344-7529 (passcode:10125425) and on the Company's website.

About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $5.7 billion in assets.  Central Pacific Bank, its primary subsidiary, operates 35 branches and 78 ATMs in the state of Hawaii, as of September 30, 2018.  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, 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 and 10-K/A 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


Nine Months Ended

(Dollars in thousands,


Sep 30,


Jun 30,


Mar 31,


Dec 31,


Sep 30,


Sep 30,

except for per share amounts)


2018


2018


2018


2017


2017


2018


2017

CONDENSED INCOME STATEMENT















Net interest income


$

43,325



$

42,672



$

42,322



$

42,824



$

41,995



$

128,319



$

124,879


Provision (credit) for loan and lease losses


(59)



532



(211)



(186)



(126)



262



(2,488)


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


43,384



42,140



42,533



43,010



42,121



128,057



127,367


Total other operating income


10,820



9,630



8,954



9,043



9,569



29,404



27,453


Total other operating expense


34,139



33,724



33,518



34,511



33,511



101,381



97,306


Income before taxes


20,065



18,046



17,969



17,542



18,179



56,080



57,514


Income tax expense


4,872



3,822



3,692



13,254



6,367



12,386



20,598


Net income


15,193



14,224



14,277



4,288



11,812



43,694



36,916


Basic earnings per common share


$

0.52



$

0.48



$

0.48



$

0.14



$

0.39



$

1.48



$

1.21


Diluted earnings per common share


0.52



0.48



0.48



0.14



0.39



1.47



1.20


Dividends declared per common share


0.21



0.21



0.19



0.18



0.18



0.61



0.52

















PERFORMANCE RATIOS















Return on average assets (ROA) [1]


1.06

%


1.00

%


1.01

%


0.31

%


0.85

%


1.03

%


0.90

%

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


12.54



11.83



11.60



3.35



9.16



11.99



9.57


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


12.55



11.85



11.64



3.37



9.22



12.01



9.64


Average shareholders' equity to average assets


8.49



8.49



8.73



9.12



9.30



8.57



9.38


Efficiency ratio [2]


63.05



64.48



65.37



66.54



64.99



64.28



63.88


Net interest margin (NIM) [1]


3.20



3.20



3.21



3.27



3.25



3.20



3.28


Dividend payout ratio [3]


40.38



43.75



39.58



128.57



46.15



41.50



43.33

















SELECTED AVERAGE BALANCES















Average loans and leases, including loans held for sale


$

3,941,511



$

3,836,739



$

3,789,338



$

3,719,684



$

3,625,455



$

3,856,420



$

3,589,124


Average interest-earning assets


5,418,924



5,376,115



5,334,276



5,279,360



5,216,089



5,376,748



5,150,302


Average assets


5,709,825



5,663,697



5,638,205



5,605,728



5,545,909



5,670,838



5,479,085


Average deposits


5,063,061



5,041,164



5,000,108



4,936,743



4,893,778



5,035,009



4,819,635


Average interest-bearing liabilities


3,802,028



3,776,053



3,746,012



3,686,222



3,613,872



3,774,903



3,613,575


Average shareholders' equity


484,737



480,985



492,184



511,277



515,580



485,942



514,137


Average tangible shareholders' equity


484,391



479,959



490,453



508,886



512,554



484,912



510,414


 



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES


Financial Highlights


(Unaudited)

TABLE 1 (CONTINUED)





Sep 30,


Jun 30,


Mar 31,


Dec 31,


Sep 30,

(dollars in thousands)


2018


2018


2018


2017


2017

REGULATORY CAPITAL











Central Pacific Financial Corp











Leverage capital


$

590,627



$

586,799



$

579,221



$

578,607



$

585,950


Tier 1 risk-based capital


590,627



586,799



579,221



578,607



585,950


Total risk-based capital


639,157



636,755



629,179



628,068



634,677


Common equity tier 1 capital


500,627



496,799



489,221



490,861



497,828


Central Pacific Bank











Leverage capital


571,949



569,128



568,409



565,412



569,990


Tier 1 risk-based capital


571,949



569,128



568,409



565,412



569,990


Total risk-based capital


620,479



619,084



618,240



614,732



618,576


Common equity tier 1 capital


571,949



569,128



568,409



565,412



569,990













REGULATORY CAPITAL RATIOS











Central Pacific Financial Corp











Leverage capital ratio


10.3

%


10.3

%


10.3

%


10.4

%


10.6

%

Tier 1 risk-based capital ratio


14.2



14.4



14.5



14.7



15.1


Total risk-based capital ratio


15.4



15.7



15.8



15.9



16.3


Common equity tier 1 capital ratio


12.0



12.2



12.3



12.4



12.8


Central Pacific Bank











Leverage capital ratio


10.0



10.0



10.1



10.1



10.3


Tier 1 risk-based capital ratio


13.8



14.0



14.3



14.4



14.7


Total risk-based capital ratio


15.0



15.3



15.5



15.6



16.0


Common equity tier 1 capital ratio


13.8



14.0



14.3



14.4



14.7





Sep 30,


Jun 30,


Mar 31,


Dec 31,


Sep 30,

(dollars in thousands, except for per share amounts)


2018


2018


2018


2017


2017

BALANCE SHEET











Loans and leases


$

3,978,027



$

3,881,581



$

3,816,146



$

3,770,615



$

3,636,370


Total assets


5,728,640



5,681,519



5,651,287



5,623,708



5,569,230


Total deposits


5,003,680



4,979,099



4,980,431



4,956,354



4,927,497


Long-term debt


92,785



92,785



92,785



92,785



92,785


Total shareholders' equity


478,151



480,668



484,108



500,011



509,846


Total shareholders' equity to total assets


8.35

%


8.46

%


8.57

%


8.89

%


9.15

%

Tangible common equity to tangible assets [4]


8.35

%


8.45

%


8.54

%


8.86

%


9.11

%












ASSET QUALITY











Allowance for loan and lease losses


$

46,826



$

48,181



$

49,217



$

50,001



$

51,217


Non-performing assets


3,026



3,509



3,438



3,626



5,970


Allowance to loans and leases outstanding


1.18

%


1.24

%


1.29

%


1.33

%


1.41

%

Allowance to non-performing assets


1,547.46

%


1,373.07

%


1,431.56

%


1,378.96

%


857.91

%












PER SHARE OF COMMON STOCK OUTSTANDING











Book value per common share


$

16.34



$

16.30



$

16.30



$

16.65



$

16.89


Tangible book value per common share


16.34



16.28



16.25



16.59



16.80


Closing market price per common share


26.43



28.65



28.46



29.83



32.18


_________________________________________________________

[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:




September 30,


June 30,


March 31,


December 31,


September 30,

(Dollars in thousands)


2018


2018


2018


2017


2017

Tangible Common Equity Ratio:











Total shareholders' equity


$

478,151



$

480,668



$

484,108



$

500,011



$

509,846


Less: Other intangible assets




(669)



(1,337)



(2,006)



(2,674)


Tangible common equity


$

478,151



$

479,999



$

482,771



$

498,005



$

507,172













Total assets


$

5,728,640



$

5,681,519



$

5,651,287



$

5,623,708



$

5,569,230


Less: Other intangible assets




(669)



(1,337)



(2,006)



(2,674)


Tangible assets


$

5,728,640



$

5,680,850



$

5,649,950



$

5,621,702



$

5,566,556













Tangible common equity to tangible assets


8.35

%


8.45

%


8.54

%


8.86

%


9.11

%


 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES


Consolidated Balance Sheets


(Unaudited)


TABLE 3














Sep 30,


Jun 30,


Mar 31,


Dec 31,


Sep 30,

(Dollars in thousands, except share data)


2018


2018


2018


2017


2017

ASSETS











Cash and due from financial institutions


$

82,668



$

75,547



$

59,905



$

75,318



$

90,080


Interest-bearing deposits in other financial institutions


7,051



13,948



5,875



6,975



18,195


Investment securities:











Available-for-sale debt securities, at fair value [1]


1,233,002



1,279,969



1,326,092



1,304,066



1,349,311


Held-to-maturity debt securities, at fair value of: $146,466 at September 30, 2018, $152,330 at June 30, 2018, $171,399 at March 31, 2018, $189,201 at December 31, 2017, and $195,714 at September 30, 2017


152,852



158,156



177,078



191,753



197,672


Equity securities, at fair value [1]


885



844



753



825



794


Total investment securities


1,386,739



1,438,969



1,503,923



1,496,644



1,547,777


Loans held for sale


4,460



9,096



7,492



16,336



10,828


Loans and leases


3,978,027



3,881,581



3,816,146



3,770,615



3,636,370


Less allowance for loan and lease losses


46,826



48,181



49,217



50,001



51,217


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


3,931,201



3,833,400



3,766,929



3,720,614



3,585,153


Premises and equipment, net


46,184



47,004



47,436



48,348



48,339


Accrued interest receivable


16,755



16,606



16,070



16,581



15,434


Investment in unconsolidated subsidiaries


15,283



9,362



6,478



7,088



7,101


Other real estate owned


414



595



595



851



851


Mortgage servicing rights


15,634



15,756



15,821



15,843



16,093


Core deposit premium




669



1,337



2,006



2,674


Bank-owned life insurance


157,085



156,945



156,611



156,293



155,928


Federal Home Loan Bank stock


10,965



10,246



9,007



7,761



6,484


Other assets


54,201



53,376



53,808



53,050



64,293


Total assets


$

5,728,640



$

5,681,519



$

5,651,287



$

5,623,708



$

5,569,230


LIABILITIES AND EQUITY











Deposits:











Noninterest-bearing demand


$

1,403,534



$

1,365,010



$

1,349,029



$

1,395,556



$

1,383,548


Interest-bearing demand


935,130



952,991



946,464



933,054



911,273


Savings and money market


1,503,465



1,502,284



1,533,483



1,481,876



1,476,017


Time


1,161,551



1,158,814



1,151,455



1,145,868



1,156,659


Total deposits


5,003,680



4,979,099



4,980,431



4,956,354



4,927,497


Federal Home Loan Bank advances and other short-term borrowings


105,000



87,000



56,000



32,000




Long-term debt


92,785



92,785



92,785



92,785



92,785


Other liabilities


49,024



41,967



37,963



42,534



39,078


Total liabilities


5,250,489



5,200,851



5,167,179



5,123,673



5,059,360


Equity:











Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding none at:  September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017, and September 30, 2017











Common stock, no par value, authorized 185,000,000 shares; issued and outstanding:  29,270,398 at September 30, 2018, 29,489,954 at June 30, 2018, 29,707,122 at March 31, 2018, 30,024,222 at December 31, 2017, and 30,188,748 at September 30, 2017


478,721



485,402



493,794



503,988



509,243


Additional paid-in capital


87,939



86,949



86,497



86,098



85,300


Accumulated deficit


(61,406)



(70,435)



(78,454)



(89,036)



(87,913)


Accumulated other comprehensive income (loss)


(27,103)



(21,248)



(17,729)



(1,039)



3,216


Total shareholders' equity


478,151



480,668



484,108



500,011



509,846


Non-controlling interest








24



24


Total equity


478,151



480,668



484,108



500,035



509,870


Total liabilities and equity


$

5,728,640



$

5,681,519



$

5,651,287



$

5,623,708



$

5,569,230



[1] Financial information for prior quarters has been revised to reflect the impact of the adoption of ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities



 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES


Consolidated Statements of Income


(Unaudited)



TABLE 4







Three Months Ended


Nine Months Ended



Sep 30,


Jun 30,


Mar 31,


Dec 31,


Sep 30,


Sep 30,

(Dollars in thousands, except per share data)


2018


2018


2018


2017


2017


2018


2017

Interest income:















Interest and fees on loans and leases


$

40,531



$

38,699



$

37,390



$

37,447



$

36,289



$

116,620



$

106,777


Interest and dividends on investment securities:















Taxable investment securities


8,490



8,717



8,843



8,777



8,540



26,050



25,156


Tax-exempt investment securities


920



933



933



955



966



2,786



2,919


Dividend income on investment securities


26



3



15



13



12



44



36


Interest on deposits in other financial institutions


109



117



84



58



163



310



298


Dividend income on Federal Home Loan Bank stock


60



40



45



26



23



145



100


Total interest income


50,136



48,509



47,310



47,276



45,993



145,955



135,286


Interest expense:















Interest on deposits:















Demand


181



193



180



170



177



554



471


Savings and money market


593



459



369



302



281



1,421



797


Time


4,744



4,034



3,425



2,967



2,637



12,203



6,490


Interest on short-term borrowings


146



48



43



97



9



237



86


Interest on long-term debt


1,147



1,103



971



916



894



3,221



2,563


Total interest expense


6,811



5,837



4,988



4,452



3,998



17,636



10,407


Net interest income


43,325



42,672



42,322



42,824



41,995



128,319



124,879


Provision (credit) for loan and lease losses


(59)



532



(211)



(186)



(126)



262



(2,488)


Net interest income after provision for loan and lease losses


43,384



42,140



42,533



43,010



42,121



128,057



127,367


Other operating income:















Mortgage banking income (refer to Table 5)


1,923



1,775



1,847



1,531



1,531



5,545



5,431


Service charges on deposit accounts


2,189



1,977



2,003



2,130



2,182



6,169



6,338


Other service charges and fees


3,286



3,377



3,034



2,532



3,185



9,697



8,986


Income from fiduciary activities


1,159



1,017



956



935



911



3,132



2,739


Equity in earnings of unconsolidated subsidiaries


71



37



43



214



176



151



388


Fees on foreign exchange


220



277



211



135



101



708



394


Net gains (losses) on sales of investment securities








230







(1,640)


Income from bank-owned life insurance


1,055



501



318



614



1,074



1,874



2,774


Loan placement fees


115



220



197



170



86



532



366


Net gains on sales of foreclosed assets










19





205


Other (refer to Table 5)


802



449



345



552



304



1,596



1,472


Total other operating income


10,820



9,630



8,954



9,043



9,569



29,404



27,453


Other operating expense:















Salaries and employee benefits


19,011



18,783



18,505



18,759



18,157



56,299



53,527


Net occupancy


3,488



3,360



3,266



3,418



3,404



10,114



10,153


Equipment


1,048



1,044



1,068



1,007



969



3,160



2,778


Amortization of core deposit premium


669



668



669



668



669



2,006



2,006


Communication expense


903



746



898



924



944



2,547



2,735


Legal and professional services


1,528



1,769



1,821



2,091



1,854



5,118



5,633


Computer software expense


2,672



2,305



2,267



2,404



2,346



7,244



6,788


Advertising expense


612



617



612



1,000



626



1,841



1,408


Foreclosed asset expense


212



31



294



28



24



537



123


Other (refer to Table 5)


3,996



4,401



4,118



4,212



4,518



12,515



12,155


Total other operating expense


34,139



33,724



33,518



34,511



33,511



101,381



97,306


Income before income taxes


20,065



18,046



17,969



17,542



18,179



56,080



57,514


Income tax expense


4,872



3,822



3,692



13,254



6,367



12,386



20,598


Net income


$

15,193



$

14,224



$

14,277



$

4,288



$

11,812



$

43,694



$

36,916


Per common share data:















Basic earnings per share


$

0.52



$

0.48



$

0.48



$

0.14



$

0.39



$

1.48



$

1.21


Diluted earnings per share


0.52



0.48



0.48



0.14



0.39



1.47



1.20


Cash dividends declared


0.21



0.21



0.19



0.18



0.18



0.61



0.52


Basic weighted average shares outstanding


29,297,465



29,510,175



29,807,572



30,027,366



30,300,195



29,536,536



30,526,260


Diluted weighted average shares outstanding


29,479,812



29,714,942



30,041,351



30,271,910



30,514,459



29,743,238



30,758,989



 

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


Nine Months Ended



Sep 30,


Jun 30,


Mar 31,


Dec 31,


Sep 30,


September 30,

(Dollars in thousands)


2018


2018


2018


2017


2017


2018


2017

Mortgage banking income:















Loan servicing fees


$

1,269



$

1,289



$

1,311



$

1,316



$

1,323



$

3,869



$

4,021


Amortization of mortgage servicing rights


(519)



(437)



(457)



(745)



(476)



(1,413)



(1,543)


Net gains on sales of residential mortgage loans


1,082



959



972



968



705



3,013



3,101


Unrealized gains (losses) on loans-held-for-sale and interest rate locks


91



(36)



21



(8)



(21)



76



(148)


Total mortgage banking income


$

1,923



$

1,775



$

1,847



$

1,531



$

1,531



$

5,545



$

5,431



The following table sets forth the components of other operating income - other for the periods indicated:




Three Months Ended


Nine Months Ended



Sep 30,


Jun 30,


Mar 31,


Dec 31,


Sep 30,


September 30,

(Dollars in thousands)


2018


2018


2018


2017


2017


2018


2017

Other operating income - other:















Income recovered on nonaccrual loans previously charged-off


$

395



$

130



$

96



$

156



$

25



$

621...