Central Pacific Financial Corp. Reports $10.7 Million Net Income

Oct 25, 2012, 08:00 ET from Central Pacific Financial Corp.

HONOLULU, Oct. 25, 2012 /PRNewswire/ -- Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank (the "Bank"), today reported net income for the third quarter of 2012 of $10.7 million, or $0.26 per diluted share, compared to net income in the third quarter of 2011 of $11.6 million, or $0.28 per diluted share, and net income in the second quarter of 2012 of $10.8 million, or $0.26 per diluted share. 

"We are pleased with the significant and consistent progress of our company, which is reflected in a seventh consecutive quarter of profitability since our recapitalization," said John C. Dean, President and Chief Executive Officer.  "Continued improvement in our credit risk profile evidenced by a significant decrease in our nonperforming assets and stable growth in our core deposits have contributed to another solid performance in the third quarter."

Significant Highlights and Third Quarter Results

  • Reported seventh consecutive profitable quarter since the company's recapitalization with net income of $10.7 million, compared to net income of $10.8 million in the second quarter of 2012.
  • For the sixth consecutive quarter, the Company did not incur credit costs as it reduced its allowance for loan and lease losses (ALLL) by an amount greater than net foreclosed asset expense, write-downs of loans held for sale and changes to the reserve for unfunded commitments.  The reduction in the ALLL resulted in a credit to the provision for loan and lease losses of $5.0 million, compared to a credit of $6.6 million for the second quarter of 2012.
  • Reduced nonperforming assets by $30.0 million to $140.3 million at September 30, 2012 from $170.3 million at June 30, 2012.
  • The ALLL, as a percentage of total loans and leases, decreased to 4.59% at September 30, 2012, compared to 4.94% at June 30, 2012.  In addition, the Company had an ALLL, as a percentage of nonperforming assets, of 69.08% at September 30, 2012, compared to 60.95% at June 30, 2012.
  • Increased the loans and leases portfolio by $9.0 million to $2.11 billion at September 30, 2012, compared to $2.10 billion at June 30, 2012.
  • Completed an investment portfolio repositioning to reduce net interest income volatility and enhance the potential for prospective earnings and an improved net interest margin. Sold $124.7 million in available-for-sale investment securities with an average yield of 0.60% and reinvested the proceeds in $133.2 million of similarly typed investment securities with an average yield of 1.88%. The new securities were classified in the held-to-maturity portfolio and a pre-tax gain of $0.7 million was realized on the transaction.
  • Increased total deposits by $59.3 million to $3.62 billion at September 30, 2012, compared to $3.56 billion at June 30, 2012.
  • Maintained a strong capital position with Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios of 23.34%, 24.63%, and 14.06%, respectively, as of September 30, 2012, compared to 23.04%, 24.32%, and 14.12%, respectively, as of June 30, 2012.  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 third quarter of 2012 was $29.6 million, compared to $29.8 million in the year-ago quarter and $30.3 million in the second quarter of 2012.  Net interest margin was 3.02%, compared to 3.05% in the year-ago quarter and 3.17% in the second quarter of 2012. The decrease in both net interest income and the net interest margin from both the year-ago and sequential quarters was primarily due to lower yields on the Company's interest-earning assets resulting from the continuing lower interest rate environment.

The provision for loan and lease losses for the third quarter of 2012 was a credit of $5.0 million, compared to a credit of $19.1 million in the year-ago quarter and a credit of $6.6 million in the second quarter of 2012.  The credit to the provision for loan and lease losses was the result of continued improvement in the Company's credit risk profile, as evidenced by the previously mentioned decrease in nonperforming assets and further reductions in the historical quarterly charge-off data used to calculate the ALLL.

Other operating income for the third quarter of 2012 totaled $15.9 million, compared to $11.5 million in the year-ago quarter and $13.6 million in the second quarter of 2012. The increase from the year-ago quarter was primarily due to higher gains on sales of residential mortgage loans of $3.5 million, higher rental income from foreclosed properties of $1.1 million and higher investment securities gains of $0.8 million, partially offset by lower service charges on deposit accounts of $0.4 million. The sequential quarter increase was primarily due to higher gains on sales of residential mortgage loans of $1.3 million and higher investment securities gains of $0.8 million.

Other operating expense for the third quarter of 2012 totaled $39.8 million, compared to $48.8 million in the year-ago quarter and $39.7 million in the second quarter of 2012.  The decrease from the year-ago quarter was primarily due to a one-time loss on the early extinguishment of debt recorded in the third quarter of 2011 of $6.2 million, lower charitable contributions of $5.0 million, a lower provision for repurchased residential mortgage loans of $2.5 million, and an accrual of a $1.2 million settlement of a class action lawsuit recorded in the third quarter of 2011.  These decreases were partially offset by higher net credit-related charges (which includes changes in the reserve for unfunded commitments, write-downs of loans held for sale and foreclosed asset expense) of $5.4 million, higher salaries and employee benefits of $1.4 million and higher amortization expense related to the Company's mortgage servicing rights of $1.0 million. The sequential quarter increase was primarily attributable to higher net credit-related charges of $4.8 million, partially offset by an accrual of $1.8 million related to the settlement of a legal proceeding against the Company recorded in the second quarter of 2012 and lower legal and professional services of $1.0 million.

The efficiency ratio for the third quarter of 2012 was 78.51% (excluding foreclosed asset expense of $2.9 million, loss on sale of loans held for sale of $0.8 million and amortization expense related to certain intangible assets totaling $0.7 million), compared to 99.11% in the year-ago quarter (excluding the loss on early extinguishment of debt of $6.2 million, foreclosed asset expense of $0.8 million and amortization expense related to certain intangible assets totaling $0.7 million) and 80.41% (excluding foreclosed asset expense of $2.6 million and amortization expense related to certain intangible assets totaling $1.6 million) in the second quarter of 2012.

The Company continues to recognize a full valuation allowance against its net deferred tax assets and did not record any income tax benefit or expense during the third quarter of 2012.

Balance Sheet Highlights

Total assets at September 30, 2012 of $4.31 billion increased by $190.5 million and $82.5 million from September 30, 2011 and June 30, 2012, respectively.

Total loans and leases at September 30, 2012 of $2.11 billion increased by $50.7 million and $9.0 million from September 30, 2011 and June 30, 2012, respectively.  The increase in total loans and leases from the second quarter of 2012 was due to an increase in the consumer, commercial and residential mortgage loan portfolios of $15.1 million, $13.7 million and $7.9 million, respectively, partially offset by a decrease in the commercial mortgage, construction and development and leases portfolios of $23.8 million, $2.2 million and $1.8 million, respectively.

Total deposits at September 30, 2012 were $3.62 billion, compared to $3.35 billion and $3.56 billion at September 30, 2011 and June 30, 2012, respectively.  Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $2.94 billion at September 30, 2012.  This represents an increase of $206.5 million from a year ago and an increase of $61.5 million from June 30, 2012.  Changes in total deposits during the quarter included an increase in non-interest bearing demand deposits, interest-bearing demand deposits and savings and money market deposits of $34.8 million, $21.7 million and $16.1 million, respectively, offset by a decrease in time deposits of $13.3 million.

Total shareholders' equity was $501.0 million at September 30, 2012, compared to $440.9 million and $480.5 million at September 30, 2011 and June 30, 2012, respectively.

Asset Quality

Nonperforming assets at September 30, 2012 totaled $140.3 million, or 3.26% of total assets, compared to $170.3 million, or 4.03% of total assets at June 30, 2012.  The sequential-quarter decrease reflects net decreases in Hawaii construction and development assets totaling $10.7 million, Hawaii residential mortgage assets totaling $8.7 million, Mainland construction and development assets totaling $4.2 million, Mainland commercial mortgage assets totaling $3.4 million, Hawaii commercial mortgage assets totaling $2.9 million and Hawaii commercial assets totaling $0.1 million.

Loans delinquent for 90 days or more still accruing interest totaled $0.5 million at September 30, 2012 and June 30, 2012.  In addition, loans delinquent for 30 days or more still accruing interest totaled $5.7 million at September 30, 2012, compared to $3.8 million at June 30, 2012.

Net charge-offs in the third quarter of 2012 totaled $1.9 million, compared to $4.4 million in the year-ago quarter and $3.9 million in the second quarter of 2012.

The ALLL, as a percentage of total loans and leases, was 4.59% at September 30, 2012, compared to 4.94% at June 30, 2012.  The ALLL, as a percentage of nonperforming assets, was 69.08% at September 30, 2012, compared to 60.95% at June 30, 2012.

Capital Levels

At September 30, 2012, the Company's Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios were 23.34%, 24.63%, and 14.06%, respectively, compared to 23.04%, 24.32%, and 14.12%, respectively, at June 30, 2012.  The Company's capital ratios continue to exceed the minimum levels required by both the Memorandum of Understanding between the Bank and its regulators and 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 1-877-317-6789.  A playback of the call will be available through November 26, 2012 by dialing 1-877-344-7529 (passcode: 10019312) and on the Company's website.

About Central Pacific Financial Corp.

Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $4.31 billion in assets.  Central Pacific Bank, its primary subsidiary, operates 34 branches and 117 ATMs in the state of Hawaii, as of September 30, 2012.  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 all of the requirements of, the Memorandum of Understanding with the Federal Deposit Insurance Corporation ("FDIC") and the Hawaii Division of Financial Institutions ("DFI"), effective May 5, 2011, the Written Agreement with the Federal Reserve Bank of San Francisco and DFI, dated July 2, 2010, and any further regulatory orders we are or may become subject to; our ability to continue making progress on our recovery plan; oversupply of inventory and adverse conditions in the Hawaii and California real estate markets and recurring 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, further 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 the continued destabilizing factors in the financial industry and deterioration of the real estate market, as well as the impact of 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 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.

CENTRAL PACIFIC FINANCIAL CORP.  AND SUBSIDIARIES

Financial Highlights - September 30, 2012

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands, except per share data)

2012

2011

2012

2011

INCOME STATEMENT

Net income 

$      10,721

$      11,626

$      35,011

$      24,476

Per common share data:

Basic earnings per share (after preferred stock dividends, accretion 

of discount, and conversion of preferred stock to common stock)

0.26

0.28

0.84

3.19

Diluted earnings per share (after preferred stock dividends, accretion 

of discount, and conversion of preferred stock to common stock)

0.26

0.28

0.83

3.16

PERFORMANCE RATIOS

Return on average assets (1)

1.00

%

1.12

%

1.12

%

0.81

%

Return on average shareholders' equity (1)

8.73

10.80

9.81

9.43

Net income to average tangible shareholders' equity (1) 

9.04

11.33

10.19

10.04

Efficiency ratio (2)

78.51

99.11

77.98

92.09

Net interest margin (1)

3.02

3.05

3.14

3.04

September 30,

REGULATORY CAPITAL RATIOS

2012

2011

Central Pacific Financial Corp.

Tier 1 risk-based capital 

23.34

%

22.63

%

Total risk-based capital

24.63

23.94

Leverage capital

14.06

13.19

Central Pacific Bank 

Tier 1 risk-based capital 

22.20

%

21.30

%

Total risk-based capital

23.49

22.61

Leverage capital

13.39

12.42

September 30,

%

2012

2011

Change

BALANCE SHEET

Total assets

$  4,309,618

$  4,119,158

4.6

%

Loans and leases

2,110,163

2,059,435

2.5

Net loans and leases

2,013,235

1,916,005

5.1

Deposits

3,621,590

3,348,033

8.2

Total shareholders' equity

501,042

440,869

13.6

Book value per common share

11.97

10.56

13.4

Tangible book value per common share

11.59

10.09

14.9

Market value per common share

14.30

10.32

38.6

Tangible common equity ratio (3)

11.30

%

10.27

%

10.0

 

 

CENTRAL PACIFIC FINANCIAL CORP.  AND SUBSIDIARIES

Financial Highlights - September 30, 2012

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

%

September 30,

%

2012

2011

Change

2012

2011

Change

SELECTED AVERAGE BALANCES

Total assets

$  4,270,497

$  4,134,767

3.3

%

$  4,178,984

$  4,051,332

3.2

%

Interest-earning assets

3,949,697

3,907,846

1.1

3,870,034

3,834,106

0.9

Loans and leases, including loans held for sale

2,132,775

2,088,518

2.1

2,116,636

2,123,855

(0.3)

Other real estate

49,474

42,016

17.8

53,031

49,781

6.5

Deposits

3,592,165

3,253,054

10.4

3,510,884

3,166,649

10.9

Interest-bearing liabilities

2,911,709

2,962,997

(1.7)

2,864,758

2,952,162

(3.0)

Total shareholders' equity

491,011

430,529

14.0

475,924

346,029

37.5

(in thousands, except per share data)

September 30,

%

2012

2011

Change

NONPERFORMING ASSETS

Nonaccrual loans (including loans held for sale)

$      92,931

$    160,603

(42.1)

%

Other real estate

47,378

62,720

(24.5)

Total nonperforming assets

140,309

223,323

(37.2)

Loans delinquent for 90 days or more (still accruing interest)

539

414

30.2

Restructured loans (still accruing interest)

24,869

2,858

770.2

Total nonperforming assets, loans delinquent for 90 days or more (still accruing interest)

 and restructured loans (still accruing interest)

$    165,717

$    226,595

(26.9)

Three Months Ended

Nine Months Ended

September 30,

%

September 30,

%

2012

2011

Change

2012

2011

Change

Loan charge-offs

$        3,444

$        5,943

(42.0)

%

$      13,331

$      30,268

(56.0)

%

Recoveries

1,540

1,555

(1.0)

4,768

10,319

(53.8)

Net loan charge-offs

$        1,904

$        4,388

(56.6)

$        8,563

$      19,949

(57.1)

Net loan charge-offs to average loans (1)

0.36

%

0.84

%

0.54

%

1.25

%

 

 

CENTRAL PACIFIC FINANCIAL CORP.  AND SUBSIDIARIES

Financial Highlights - September 30, 2012

(Unaudited)

September 30,

2012

2011

ASSET QUALITY RATIOS

Nonaccrual loans (including loans held for sale) to total loans and leases and loans held for sale

4.35

%

7.64

%

Nonperforming assets to total assets

3.26

5.42

Nonperforming assets, loans delinquent for 90 days or more (still accruing interest) and restructured loans

(still accruing interest) to total loans and leases, loans held for sale & other real estate

7.60

10.46

Allowance for loan and lease losses to total loans and leases

4.59

6.96

Allowance for loan and lease losses to nonaccrual loans (including loans held for sale)

104.30

89.31

Allowance for loan and lease losses to nonperforming assets

69.08

64.23

(1)

Annualized

(2)

The efficiency ratio is a non-GAAP financial measure which should be read and used in conjunction with the Company's GAAP financial information. Comparison of our efficiency ratio with those of other companies may not be possible because other companies may calculate the efficiency ratio differently. Our efficiency ratio is derived by dividing other operating expense (excluding amortization, impairment and write-down of intangible assets, goodwill, loans held for sale and foreclosed property, loss on early extinguishment of debt, loss on investment transaction and loss on sale of commercial real estate loans) by net operating revenue (net interest income on a taxable equivalent basis plus other operating income before securities transactions).  See Reconciliation of Non-GAAP Financial Measures.

(3)

The tangible common equity ratio is a non-GAAP financial measure which should be read and used in conjunction with the Company's  GAAP financial information. Comparison of our tangible common equity ratio with those of other companies may not be possible because other companies may calculate the tangible common equity ratio differently. Our tangible common equity ratio is derived by dividing common shareholders' equity, less intangible assets (excluding mortgage servicing rights (MSRs)) by total assets, less intangible assets (excluding MSRs).

 

 

 

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)

September 30, 2012

June 30, 2012

September 30, 2011

Efficiency Ratio

Total operating expenses as a percentage of net operating revenue

88.17

%

89.98

%

117.84

%

Amortization of other intangible assets

(1.48)

(3.67)

(1.74)

Foreclosed asset expense

(6.35)

(5.90)

(2.02)

Write down of assets

(1.83)

-

0.07

Loss on early extinguishment of debt

-

-

(15.04)

Efficiency ratio

78.51

%

80.41

%

99.11

%

Nine Months Ended

Nine Months Ended

September 30, 2012

September 30, 2011

Total operating expenses as a percentage of net operating revenue

86.21

%

104.07

%

Amortization of other intangible assets

(2.26)

(1.77)

Foreclosed asset expense

(4.03)

(1.31)

Write down of assets

(1.94)

(3.79)

Loss on early extinguishment of debt

-

(5.11)

Efficiency ratio

77.98

%

92.09

%

Tangible Common Equity Ratio

September 30, 2012

September 30, 2011

Total shareholders' equity

$          501,042

$          440,869

Less: Other intangible assets

(16,047)

(19,771)

Tangible common equity

484,995

421,098

Total assets

4,309,618

4,119,158

Less: Other intangible assets

(16,047)

(19,771)

Tangible assets

4,293,571

4,099,387

Tangible common equity / Tangible assets

11.30

%

10.27

%

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 September 30, 

 June 30, 

 September 30, 

(In thousands, except share data)

2012

2012

2011

ASSETS

Cash and due from banks

$

61,078

$

72,967

$

68,508

Interest-bearing deposits in other banks

159,595

100,544

231,353

Investment securities:

  Available for sale

1,499,546

1,632,524

1,466,970

  Held to maturity (fair value of $165,012 at September 30, 2012,

       $495 at June 30, 2012 and $1,287 at September 30, 2011)

163,733

487

1,250

      Total investment securities

1,663,279

1,633,011

1,468,220

Loans held for sale

24,080

30,831

43,839

Loans and leases

2,110,163

2,101,163

2,059,435

  Less allowance for loan and lease losses

96,928

103,814

143,430

      Net loans and leases

2,013,235

1,997,349

1,916,005

Premises and equipment, net

49,424

50,195

52,505

Accrued interest receivable

13,198

12,596

12,055

Investment in unconsolidated subsidiaries

11,244

11,538

13,051

Other real estate

47,378

49,379

62,720

Mortgage servicing rights

22,726

22,985

22,596

Other intangible assets

16,047

16,715

19,771

Bank-owned life insurance

146,680

145,940

143,845

Federal Home Loan Bank stock

48,363

48,797

48,797

Other assets

33,291

34,223

15,893

      Total assets

$

4,309,618

$

4,227,070

$

4,119,158

LIABILITIES AND EQUITY

Deposits:

  Noninterest-bearing demand

$

803,796

$

769,010

$

681,619

  Interest-bearing demand

648,331

626,613

565,635

  Savings and money market

1,177,164

1,161,066

1,121,969

  Time

992,299

1,005,628

978,810

      Total deposits

3,621,590

3,562,317

3,348,033

Short-term borrowings

-

-

1,224

Long-tem debt

108,285

108,289

258,347

Other liabilities

68,738

65,982

60,699

      Total liabilities

3,798,613

3,736,588

3,668,303

Equity:

  Preferred stock, no par value, authorized 1,000,000 shares;

        issued and outstanding none at September 30, 2012, June 30, 2012,

        and September 30, 2011

-

-

-

  Common stock, no par value, authorized 185,000,000 shares;

        issued and outstanding 41,859,566 shares at September 30, 2012, 41,867,892

        shares at June 30, 2012 and 41,749,116 shares at September 30, 2011

784,512

784,512

784,172

  Surplus

69,094

67,933

65,479

  Accumulated deficit

(361,837)

(372,558)

(408,943)

  Accumulated other comprehensive income

9,273

626

161

      Total shareholders' equity

501,042

480,513

440,869

Non-controlling interest

9,963

9,969

9,986

      Total equity

511,005

490,482

450,855

      Total liabilities and equity

$

4,309,618

$

4,227,070

$

4,119,158

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

(In thousands, except per share data)

2012

2012

2011

2012

2011

Interest income:

  Interest and fees on loans and leases

$

24,241

$

24,393

$

25,962

$

73,642

$

80,992

  Interest and dividends on investment

     securities:

        Taxable interest

6,641

7,589

7,918

21,844

20,380

        Tax-exempt interest

704

446

186

1,347

549

        Dividends

4

4

5

11

8

  Interest on deposits in other banks

84

47

259

212

948

      Total interest income

31,674

32,479

34,330

97,056

102,877

Interest expense:

  Interest on deposits:

    Demand

83

89

113

258

406

    Savings and money market

232

252

459

783

1,691

    Time

869

962

1,499

2,904

5,778

  Interest on short-term borrowings

-

-

-

-

204

  Interest on long-term debt

930

917

2,430

2,790

7,789

      Total interest expense

2,114

2,220

4,501

6,735

15,868

      Net interest income

29,560

30,259

29,829

90,321

87,009

Provision (credit) for loan and lease losses

(4,982)

(6,630)

(19,116)

(16,602)

(29,475)

      Net interest income after provision for loan and lease losses

34,542

36,889

48,945

106,923

116,484

Other operating income:

  Service charges on deposit accounts

2,130

2,273

2,501

6,719

7,564

  Other service charges and fees

4,538

4,156

4,451

13,115

12,953

  Income from fiduciary activities

662

642

636

1,930

2,136

  Equity in earnings of unconsolidated subsidiaries

171

169

136

386

301

  Fees on foreign exchange

165

192

198

447

484

  Investment securities gains

789

-

-

789

261

  Income from bank-owned life insurance

741

942

866

2,274

3,036

  Loan placement fees

114

193

164

547

348

  Net gains on sales of residential loans

4,713

3,394

1,177

11,084

4,380

  Other

1,906

1,653

1,380

5,484

3,483

      Total other operating income

15,929

13,614

11,509

42,775

34,946

Other operating expense:

  Salaries and employee benefits

17,256

17,629

15,856

51,511

46,331

  Net occupancy 

3,629

3,264

3,466

10,159

10,234

  Equipment

1,030

1,021

1,348

3,008

3,632

  Amortization of other intangible assets

2,698

3,031

1,709

7,490

4,885

  Communication expense

872

816

828

2,542

2,631

  Legal and professional services

2,772

3,806

3,230

10,635

9,970

  Computer software expense

959

958

894

2,852

2,706

  Advertising expense

906

857

842

2,632

2,508

  Foreclosed asset expense

2,863

2,602

835

5,358

1,598

  Write down of assets

827

-

(31)

2,586

4,624

  Loss on early extinguishment of debt

-

-

6,234

-

6,234

  Other

5,938

5,707

13,617

15,914

31,601

      Total other operating expense

39,750

39,691

48,828

114,687

126,954

  Income before income taxes

10,721

10,812

11,626

35,011

24,476

Income tax expense

-

-

-

-

-

      Net income

$

10,721

$

10,812

$

11,626

$

35,011

$

24,476

Per common share data:

  Basic earnings per share

$

0.26

$

0.26

$

0.28

$

0.84

$

3.19

  Diluted earnings per share 

0.26

0.26

0.28

0.83

3.16

Basic weighted average shares outstanding

41,764

41,717

41,625

41,704

33,957

Diluted weighted average shares outstanding

42,016

41,959

41,672

41,961

34,272

 

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

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

Three Months Ended

Three Months Ended

Nine Months Ended

Nine Months Ended

(Dollars in thousands)

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

Average

Average

Average

Average

Average

Average

Average

Average

Balance

Yield/Rate

Interest

Balance

Yield/Rate

Interest

Balance

Yield/Rate

Interest

Balance

Yield/Rate

Interest

Assets:

Interest earning assets:

Interest-bearing deposits in other banks

$      133,963

0.25

%

$        84

$      402,804

0.25

%

$      259

$      113,968

0.25

%

$        212

$      496,519

0.26

%

$        948

Taxable investment securities, excluding 

   valuation allowance

1,527,572

1.74

6,645

1,355,332

2.34

7,923

1,531,785

1.90

21,855

1,152,319

2.36

20,388

Tax-exempt investment securities, 

   excluding valuation allowance

106,623

4.06

1,083

12,395

9.15

285

58,859

4.69

2,072

12,616

8.91

844

Loans and leases, including loans held for sale

2,132,775

4.53

24,241

2,088,518

4.94

25,962

2,116,636

4.64

73,642

2,123,855

5.09

80,992

Federal Home Loan Bank stock

48,764

-

-

48,797

-

-

48,786

-

-

48,797

-

-

Total interest earning assets 

3,949,697

3.24

32,053

3,907,846

3.51

34,429

3,870,034

3.37

97,781

3,834,106

3.59

103,172

Nonearning assets

320,800

226,921

308,950

217,226

Total assets

$   4,270,497

$   4,134,767

$   4,178,984

$   4,051,332

Liabilities & Equity:

Interest-bearing liabilities:

Interest-bearing demand deposits

$      630,209

0.05

%

$        83

$      537,723

0.08

%

$      113

$      604,990

0.06

%

$        258

$      534,092

0.10

%

$        406

Savings and money market deposits

1,172,065

0.08

232

1,116,975

0.16

459

1,159,000

0.09

783

1,112,809

0.20

1,691

Time deposits under $100,000

320,516

0.55

446

379,820

0.84

809

332,221

0.62

1,531

407,775

1.05

3,211

Time deposits $100,000 and over

680,632

0.25

423

550,360

0.50

690

658,245

0.28

1,373

441,959

0.78

2,567

Short-term borrowings

-

-

-

1,811

-

-

4

0.76

-

47,244

0.58

204

Long-term debt

108,287

3.42

930

376,308

2.56

2,430

110,298

3.38

2,790

408,283

2.55

7,789

Total interest-bearing liabilities

2,911,709

0.29

2,114

2,962,997

0.60

4,501

2,864,758

0.31

6,735

2,952,162

0.72

15,868

Noninterest-bearing deposits

788,743

668,176

756,428

670,014

Other liabilities

69,068

63,076

71,902

73,132

Total liabilities

3,769,520

3,694,249

3,693,088

3,695,308

Shareholders' equity

491,011

430,529

475,924

346,029

Non-controlling interest

9,966

9,989

9,972

9,995

Total equity

500,977

440,518

485,896

356,024

Total liabilities & equity

$   4,270,497

$   4,134,767

$   4,178,984

$   4,051,332

Net interest income 

$ 29,939

$ 29,928

$   91,046

$   87,304