Central Pacific Financial Corp. Reports $14.3 Million Second Quarter Earnings

REINSTATES QUARTERLY CASH DIVIDEND

25 Jul, 2013, 08:00 ET from Central Pacific Financial Corp.

HONOLULU, July 25, 2013 /PRNewswire/ -- Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank (the "Bank"), today reported net income for the second quarter of 2013 of $14.3 million, or $0.34 per diluted share, compared to net income in the second quarter of 2012 of $10.8 million, or $0.26 per diluted share, and net income in the first quarter of 2013 of $137.3 million, or $3.25 per diluted share.  Net income in the first quarter of 2013 included a non-cash income tax benefit of $119.8 million related to the reversal of a significant portion of a valuation allowance previously established against the Company's net deferred tax assets. Excluding this income tax benefit, net income for the first quarter of 2013 was $17.5 million, or $0.41 per diluted share.

"We are pleased to report another strong quarter of profitability," said John C. Dean, President and Chief Executive Officer.  "While our improved credit risk profile continues to positively impact our financial results, we were especially encouraged by the continuing improvement in our core earnings and our ability to meaningfully grow both loans and deposits during the past few quarters."

In addition, the Company's Board of Directors declared a quarterly cash dividend of $0.08 per share on the Company's outstanding common shares. The dividend will be payable on September 16, 2013 to shareholders of record at the close of business on August 30, 2013.

"As a result of our strong capital position and earnings consistency, we elected to reinstate dividend payments at this time, subject to ongoing Board review," said Dean.  "We greatly appreciate the support and confidence of our shareholders over the past several years."

Significant Highlights and Second Quarter Results

  • Reported tenth consecutive profitable quarter since the Company's recapitalization with net income of $14.3 million, compared to net income in the first quarter of 2013 of $17.5 million, excluding the $119.8 million non-cash income tax benefit described above.
  • Declared quarterly cash dividend of $0.08 per share on the Company's outstanding common shares payable on September 16, 2013.
  • For the ninth consecutive quarter, the Company did not incur credit costs. We recorded a credit to the provision for loan and lease losses of $0.2 million, compared to a credit of $6.6 million for the first quarter of 2013.
  • Reduced nonperforming assets by $14.4 million to $60.9 million at June 30, 2013 from $75.3 million at March 31, 2013.
  • The ALLL, as a percentage of total loans and leases, decreased to 3.67% at June 30, 2013, compared to 3.82% at March 31, 2013.  In addition, the Company's ALLL, as a percentage of nonperforming assets, increased to 143.05% at June 30, 2013 from 115.27% at March 31, 2013 and the Company's ALLL, as a percentage of nonaccrual loans, increased to 162.95% at June 30, 2013 from 133.06% at March 31, 2013.
  • Increased the loans and leases portfolio by $98.5 million to $2.37 billion at June 30, 2013, compared to $2.27 billion at March 31, 2013.
  • Increased total deposits by $91.0 million to $3.86 billion at June 30, 2013, compared to $3.76 billion at March 31, 2013.
  • Maintained a strong capital position with Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios of 21.55%, 22.83%, and 14.24%, respectively, as of June 30, 2013, compared to 22.16%, 23.43%, and 14.36%, respectively, as of March 31, 2013.  The Company's capital ratios continue to be well in excess of the minimum levels required for a "well-capitalized" regulatory designation.

Earnings Highlights Net interest income for the second quarter of 2013 was $33.2 million, compared to $30.3 million in the year-ago quarter and $30.7 million in the first quarter of 2013.  Net interest margin was 3.23%, compared to 3.17% in the year-ago quarter and 3.06% in the first quarter of 2013. The sequential quarter increase in net interest income and the net interest margin was primarily due to the recovery of interest on loans previously placed on nonaccrual status totaling $1.7 million and an overall increase in the Company's interest earning assets, including net increases of $98.5 million and $69.4 million in its loan and investment securities portfolios, respectively.

The provision for loan and lease losses for the second quarter of 2013 was a credit of $0.2 million, compared to a credit of $6.6 million in the year-ago quarter and a credit of $6.6 million in the first quarter of 2013.  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 second quarter of 2013 totaled $17.8 million, compared to $13.6 million in the year-ago quarter and $13.0 million in the first quarter of 2013. The increase from the year-ago quarter was primarily due to higher net gains on sales of foreclosed assets of $7.7 million and higher other service charges and fees totaling $0.5 million, partially offset by lower unrealized gains on interest rate locks of $1.5 million, lower rental income from foreclosed properties of $0.8 million, lower service charges on deposit accounts of $0.7 million, lower income from bank-owned life insurance of $0.6 million, and lower net gains on sales of residential mortgage loans of $0.5 million. The sequential quarter increase was primarily due to higher net gains on sales of foreclosed assets of $7.1 million and higher other service charge and fees of $0.3 million, partially offset by lower unrealized gains on interest rate locks of $1.3 million, lower gains on sales of residential mortgage loans of $1.2 million, and lower income from bank-owned life insurance of $0.2 million.

Other operating expense for the second quarter of 2013 totaled $35.0 million, compared to $39.7 million in the year-ago quarter and $32.8 million in the first quarter of 2013.  The decrease from the year-ago quarter was primarily due to lower legal and professional fees of $1.9 million, an accrual totaling $1.8 million related to the settlement of a legal proceeding against the Company recorded in the second quarter of 2012, lower 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 $1.6 million, lower amortization of other intangible assets of $0.9 million, and lower FDIC insurance expense of $0.7 million, partially offset by a higher provision for repurchased residential mortgage loans of $1.7 million, higher salaries and employee benefits of $0.6 million, and higher net occupancy expense of $0.4 million. The sequential quarter increase was primarily attributable to a higher provision for repurchased residential mortgage loans of $1.6 million and higher net credit-related charges of $1.1 million.

The efficiency ratio for the second quarter of 2013 was 76.68% (excluding net gains on sales of foreclosed assets of $7.7 million, foreclosed asset expense of $0.7 million, and amortization expense related to certain intangible assets totaling $0.7 million), compared to 80.41% in the year-ago quarter (excluding foreclosed asset expense of $2.6 million and amortization expense related to certain intangible assets totaling $1.6 million) and 72.74% (excluding foreclosed asset expense of $0.3 million, amortization expense related to certain intangible assets totaling $0.7 million, and net gains on sales of foreclosed assets of $0.6 million) in the first quarter of 2013.

In the second quarter of 2013, the Company recorded income tax expense of $1.9 million, which was attributable to the income tax liability generated from the sale of a foreclosed property at a gain of $7.2 million. In the first quarter of 2013, the Company recorded a non-cash income tax benefit of $119.8 million related to the reversal of a significant portion of a valuation allowance previously established against its net deferred tax assets during the third quarter of 2009. As of June 30, 2013, the Company's net deferred tax assets totaled $144.1 million.

Balance Sheet Highlights Total assets at June 30, 2013 of $4.7 billion increased by $479.7 million and $125.7 million from June 30, 2012 and March 31, 2013, respectively.

Total loans and leases at June 30, 2013 of $2.4 billion increased by $271.9 million and $98.5 million from June 30, 2012 and March 31, 2013, respectively.  The increase in total loans and leases from the first quarter of 2013 was due to an increase in the residential mortgage, consumer, and commercial mortgage loan portfolios of $60.4 million, $48.0 million, and $0.5 million, respectively, offset by a decrease in the construction and development, leases, and commercial loan portfolios of $8.5 million, $1.5 million, and $0.5 million, respectively.

Total deposits at June 30, 2013 were $3.9 billion, compared to $3.6 billion and $3.8 billion at June 30, 2012 and March 31, 2013, respectively.  Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $3.04 billion at June 30, 2013.  This represents an increase of $162.8 million from a year ago and an increase of $30.7 million from March 31, 2013.  Changes in total deposits during the quarter included an increase in time deposits, interest-bearing demand deposits, savings and money market deposits, and non-interest bearing demand deposits of $47.8 million, $28.2 million, $11.7 million, and $3.3 million, respectively.

Total shareholders' equity was $642.0 million at June 30, 2013, compared to $480.5 million and $650.1 million at June 30, 2012 and March 31, 2013, respectively.

Asset Quality Nonperforming assets at June 30, 2013 totaled $60.9 million, or 1.29% of total assets, compared to $75.3 million, or 1.64% of total assets at March 31, 2013.  The sequential-quarter change reflects net decreases in Mainland commercial mortgage assets of $6.4 million, Mainland construction and development assets of $3.5 million, Hawaii residential mortgage assets of $2.4 million, Hawaii construction and development assets of $1.3 million, and Hawaii commercial assets of $0.8 million.

Loans delinquent for 90 days or more still accruing interest totaled $17,000 at June 30, 2013.  We did not have any loans delinquent for 90 days or more still accruing interest at March 31, 2013.  In addition, loans delinquent for 30 days or more still accruing interest totaled $1.5 million at June 30, 2013, compared to $8.8 million at March 31, 2013.

Net recoveries in the second quarter of 2013 totaled $0.5 million, compared to net charge-offs of $3.9 million and $3.0 million in the second quarter of 2012 and first quarter of 2013, respectively.

The ALLL, as a percentage of total loans and leases, was 3.67% at June 30, 2013, compared to 3.82% at March 31, 2013.  The ALLL, as a percentage of nonperforming assets, was 143.05% at June 30, 2013, compared to 115.27% at March 31, 2013.  The ALLL, as a percentage of nonaccrual loans, was 162.95% at June 30, 2013, compared to 133.06% at March 31, 2013.

Capital Levels At June 30, 2013, the Company's Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios were 21.55%, 22.83%, and 14.24%, respectively, compared to 22.16%, 23.43%, and 14.36%, respectively, at March 31, 2013.  The Company's capital ratios continue to exceed the levels required to be considered a "well-capitalized" institution for regulatory purposes.

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

Conference Call The Company's management will host a conference call today at 1:00 p.m. Eastern Time (7:00 a.m. Hawaii Time) to discuss the quarterly results.  Individuals are encouraged to listen to the live webcast of the presentation by visiting the investor relations page of the Company's website at http://investor.centralpacificbank.com.  Alternatively, investors may participate in the live call by dialing 1-888-317-6016.  A playback of the call will be available through August 27, 2013 by dialing 1-877-344-7529 (passcode: 10030912) and on the Company's website.

About Central Pacific Financial Corp. Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $4.7 billion in assets.  Central Pacific Bank, its primary subsidiary, operates 35 branches and 117 ATMs in the state of Hawaii, as of June 30, 2013.  For additional information, please visit the Company's website at http://www.centralpacificbank.com.

Forward-Looking Statements This document may contain forward-looking statements concerning projections of revenues, income/loss, earnings/loss per share, capital expenditures, dividends, capital structure, or other financial items, plans and objectives of management for future operations, future economic performance, or any of the assumptions underlying or relating to any of the foregoing.  Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts, and may include the words "believes," "plans," "expects," "anticipates," "forecasts," "intends," "hopes," "should," "estimates," or words of similar meaning.  While the Company believes that our forward-looking statements and the assumptions underlying them are reasonably based, such statements and assumptions are by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect.  Accordingly, actual results could materially differ from projections for a variety of reasons, to include, but not limited to:  the effect of, and our failure to comply with any regulatory orders we are or may become subject to; 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 any weakness in the construction industry;  adverse changes in the financial performance and/or condition of our borrowers and, as a result, increased loan delinquency rates,  deterioration in asset quality and further losses in our loan portfolio; the impact of local, national, and international economies and events (including political events, acts of war or terrorism, natural disasters such as wildfires, tsunamis and earthquakes) on the Company's business and operations and on tourism, the military and other major industries operating within the Hawaii market and any other markets in which the Company does business; deterioration or malaise in economic conditions, including destabilizing factors in the financial industry and deterioration of the real estate market, as well as the impact from any declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular;  the impact of regulatory action on the Company and Central Pacific Bank and legislation affecting the banking industry; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, other regulatory reform, and any related rules and regulations on our business operations and competitiveness; the costs and effects of legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews;  the effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, securities market and monetary fluctuations;  negative trends in our market capitalization and adverse changes in the price of the Company's common shares; changes in consumer spending, borrowings and savings habits; technological changes; changes in the competitive environment among financial holding companies and other financial service providers; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; our ability to attract and retain skilled executives and employees; changes in our organization, compensation and benefit plans; and our success at managing the risks involved in the foregoing items. For further information on factors that could cause actual results to materially differ from projections, please see the Company's publicly available Securities and Exchange Commission filings, including the Company's Form 10-K for the last fiscal year and, in particular, the discussion of "Risk Factors" set forth therein. The Company does not update any of its forward-looking statements except as required by law.

 

CENTRAL PACIFIC FINANCIAL CORP.  AND SUBSIDIARIES

Financial Highlights - June 30, 2013

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

(in thousands, except per share data)

2013

2012

2013

2012

INCOME STATEMENT

Net income

$      14,267

$      10,812

$   151,576

$     24,290

Per common share data:

Basic earnings per share 

0.34

0.26

3.62

0.58

Diluted earnings per share

0.34

0.26

3.59

0.58

PERFORMANCE RATIOS

Return on average assets (1)

1.24

%

1.04

%

6.72

%

1.18

%

Return on average shareholders' equity (1)

8.70

9.12

51.46

10.37

Net income to average tangible shareholders' equity (1) 

8.90

9.48

52.79

10.80

Efficiency ratio (2)

76.68

80.41

74.72

77.71

Net interest margin (1)

3.23

3.17

3.15

3.20

June 30,

REGULATORY CAPITAL RATIOS

2013

2012

Central Pacific Financial Corp.

Tier 1 risk-based capital 

21.55

%

23.04

%

Total risk-based capital

22.83

24.32

Leverage capital

14.24

14.12

Central Pacific Bank 

Tier 1 risk-based capital 

20.35

%

21.89

%

Total risk-based capital

21.63

23.18

Leverage capital

13.40

13.43

June 30,

%

2013

2012

Change

BALANCE SHEET

Total assets

$ 4,706,756

$ 4,227,070

11.3

%

Loans and leases

2,373,077

2,101,163

12.9

Net loans and leases

2,285,972

1,997,349

14.5

Deposits

3,855,666

3,562,317

8.2

Total shareholders' equity

642,035

480,513

33.6

Book value per common share

15.25

11.48

32.9

Tangible book value per common share

14.92

11.08

34.7

Market value per common share

18.00

14.12

27.5

Tangible common equity ratio (3)

13.38

%

11.02

%

21.4

 

CENTRAL PACIFIC FINANCIAL CORP.  AND SUBSIDIARIES

Financial Highlights - June 30, 2013

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

%

June 30,

%

(in thousands, except per share data)

2013

2012

Change

2013

2012

Change

SELECTED AVERAGE BALANCES

Total assets

$  4,594,615

$  4,163,033

10.4

%

$  4,510,797

$  4,132,725

9.1

%

Interest-earning assets

4,176,895

3,858,276

8.3

4,141,306

3,829,764

8.1

Loans and leases, including loans held for sale

2,324,107

2,121,045

9.6

2,291,709

2,108,477

8.7

Other real estate

8,654

51,378

(83.2)

9,489

54,829

(82.7)

Deposits

3,752,684

3,500,162

7.2

3,715,568

3,469,797

7.1

Interest-bearing liabilities

3,013,978

2,855,941

5.5

2,989,677

2,841,025

5.2

Total shareholders' equity

655,932

474,041

38.4

589,049

468,297

25.8

June 30,

%

2013

2012

Change

NONPERFORMING ASSETS

Nonaccrual loans (including loans held for sale)

$      53,455

$    120,949

(55.8)

%

Other real estate

7,437

49,379

(84.9)

Total nonperforming assets

60,892

170,328

(64.3)

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

17

505

(96.6)

Restructured loans (still accruing interest)

27,263

9,193

85.9

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

 and restructured loans (still accruing interest)

$      88,172

$    180,026

(56.7)

Three Months Ended

%

Six Months Ended

%

June 30,

Change

June 30,

Change

2013

2012

2013

2012

Loan charge-offs

$        2,496

$        5,925

(57.9)

%

$        7,221

$        9,887

(27.0)

%

Recoveries

3,022

2,047

47.6

4,701

3,228

45.6

Net loan charge-offs

$         (526)

$        3,878

(113.6)

$        2,520

$        6,659

(62.2)

Net loan charge-offs to average loans (1)

(0.09)

%

0.73

%

0.22

%

0.63

%

 

CENTRAL PACIFIC FINANCIAL CORP.  AND SUBSIDIARIES

Financial Highlights - June 30, 2013

(Unaudited)

June 30,

2013

2012

ASSET QUALITY RATIOS

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

2.24

%

5.67

%

Nonperforming assets to total assets

1.29

4.03

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

3.68

8.25

Allowance for loan and lease losses to total loans and leases

3.67

4.94

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

162.95

85.83

(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 assets, 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 and gains on sale of foreclosed assets).  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)

June 30, 2013

March 31, 2013

June 30, 2012

Adjusted Diluted Earnings Per Share

Diluted earnings per share

$        0.34

$         3.25

$        0.26

Release of valuation allowance on net deferred tax assets

-

(2.84)

-

Adjusted diluted earnings per share

$        0.34

$         0.41

$        0.26

Efficiency Ratio

Total operating expenses as a percentage of net operating revenue

79.81

%

74.96

%

89.98

%

Amortization of other intangible assets

(1.52)

(1.53)

(3.67)

Foreclosed asset expense

(1.61)

(0.69)

(5.90)

Write down of assets

-

-

-

Loss on early extinguishment of debt

-

-

-

Efficiency ratio

76.68

%

72.74

%

80.41

%

Tangible Common Equity Ratio

June 30, 2013

June 30, 2012

Total shareholders' equity

$   642,035

$    480,513

Less: Other intangible assets

(14,041)

(16,715)

Tangible common equity

627,994

463,798

Total assets

4,706,756

4,227,070

Less: Other intangible assets

(14,041)

(16,715)

Tangible assets

4,692,715

4,210,355

Tangible common equity / Tangible assets

13.38

%

11.02

%

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 June 30, 

 March 31, 

 June 30, 

(In thousands, except share data)

2013

2013

2012

ASSETS

Cash and due from banks

$

57,477

$

46,877

$

72,967

Interest-bearing deposits in other banks

79,697

167,632

100,544

Investment securities:

  Available for sale

1,510,861

1,537,065

1,632,524

  Held to maturity (fair value of $245,450 at June 30, 2013,

       $159,483 at March 31, 2013 and $495 at June 30, 2012)

254,981

159,363

487

      Total investment securities

1,765,842

1,696,428

1,633,011

Loans held for sale

14,674

17,293

30,831

Loans and leases

2,373,077

2,274,598

2,101,163

  Less allowance for loan and lease losses

87,105

86,806

103,814

      Net loans and leases

2,285,972

2,187,792

1,997,349

Premises and equipment, net

48,807

48,578

50,195

Accrued interest receivable

14,138

14,148

12,596

Investment in unconsolidated subsidiaries

18,844

10,078

11,538

Other real estate

7,437

10,068

49,379

Mortgage servicing rights

20,690

21,466

22,985

Other intangible assets

14,041

14,709

16,715

Bank-owned life insurance

148,292

147,975

145,940

Federal Home Loan Bank stock

47,059

47,494

48,797

Other assets

183,786

150,539

34,223

      Total assets

$

4,706,756

$

4,581,077

$

4,227,070

LIABILITIES AND EQUITY

Deposits:

  Noninterest-bearing demand

$

860,694

$

857,427

$

769,010

  Interest-bearing demand

720,741

692,537

626,613

  Savings and money market

1,180,657

1,168,989

1,161,066

  Time

1,093,574

1,045,738

1,005,628

      Total deposits

3,855,666

3,764,691

3,562,317

Short-term borrowings

-

-

-

Long-term debt

108,272

108,276

108,289

Other liabilities

90,837

48,058

65,982

      Total liabilities

4,054,775

3,921,025

3,736,588

Equity:

  Preferred stock, no par value, authorized 1,100,000 shares;

        issued and outstanding none at June 30, 2013, March 31, 2013,

        and June 30, 2012

-

-

-

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

        issued and outstanding 42,088,976 shares at June 30, 2013, 41,938,294

        shares at March 31, 2013 and 41,867,892 shares at June 30, 2012

784,473

784,519

784,512

  Surplus

72,173

71,735

67,933

  Accumulated deficit

(197,851)

(212,118)

(372,558)

  Accumulated other comprehensive income (loss)

(16,760)

5,965

626

      Total shareholders' equity

642,035

650,101

480,513

Non-controlling interest

9,946

9,951

9,969

      Total equity

651,981

660,052

490,482

      Total liabilities and equity

$

4,706,756

$

4,581,077

$

4,227,070

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended

Six months ended

June 30,

March 31,

June 30,

June 30,

(In thousands, except per share data)

2013

2013

2012

2013

2012

Interest income:

  Interest and fees on loans and leases

$

26,505

$

24,443

$

24,393

$

50,948

$

49,401

  Interest and dividends on investment

     securities:

        Taxable interest

7,373

7,031

7,589

14,404

15,203

        Tax-exempt interest

1,040

1,027

446

2,067

643

        Dividends

6

5

4

11

7

  Interest on deposits in other banks

68

89

47

157

128

      Total interest income

34,992

32,595

32,479

67,587

65,382

Interest expense:

  Interest on deposits:

    Demand

87

81

89

168

175

    Savings and money market

219

217

252

436

551

    Time

720

759

962

1,479

2,035

  Interest on long-term debt

793

869

917

1,662

1,860

      Total interest expense

1,819

1,926

2,220

3,745

4,621

      Net interest income

33,173

30,669

30,259

63,842

60,761

Provision (credit) for loan and lease losses

(227)

(6,561)

(6,630)

(6,788)

(11,620)

      Net interest income after provision

           for loan and lease losses

33,400

37,230

36,889

70,630

72,381

Other operating income:

  Service charges on deposit accounts

1,583

1,591

2,273

3,174

4,589

  Other service charges and fees

4,643

4,330

4,156

8,973

8,577

  Income from fiduciary activities

686

697

642

1,383

1,268

  Equity in earnings of unconsolidated subsidiaries

192

28

169

220

215

  Fees on foreign exchange

128

71

192

199

282

  Income from bank-owned life insurance

317

564

942

881

1,533

  Loan placement fees

178

149

193

327

433

  Net gains on sales of residential loans

2,888

4,128

3,394

7,016

6,371

  Net gains on sales of foreclosed assets

7,694

558

-

8,252

-

  Other

(497)

914

1,653

417

3,578

      Total other operating income

17,812

13,030

13,614

30,842

26,846

Other operating expense:

  Salaries and employee benefits

18,242

18,535

17,629

36,777

34,255

  Net occupancy 

3,622

3,227

3,264

6,849

6,530

  Equipment

878

958

1,021

1,836

1,978

  Amortization of other intangible assets

2,109

2,248

3,031

4,357

4,792

  Communication expense

870

950

816

1,820

1,670

  Legal and professional services

1,945

2,310

3,806

4,255

7,863

  Computer software expense

1,193

933

958

2,126

1,893

  Advertising expense

728

812

857

1,540

1,726

  Foreclosed asset expense

705

300

2,602

1,005

2,495

  Write down of assets

-

-

-

-

1,759

  Other

4,708

2,480

5,707

7,188

9,976

      Total other operating expense

35,000

32,753

39,691

67,753

74,937

  Income before income taxes

16,212

17,507

10,812

33,719

24,290

Income tax expense (benefit)

1,945

(119,802)

-

(117,857)

-

      Net income

$

14,267

$

137,309

$

10,812

$

151,576

$

24,290

Per common share data:

  Basic earnings per share

$

0.34

$

3.28

$

0.26

$

3.62

$

0.58

  Diluted earnings per share 

0.34

3.25

0.26

3.59

0.58

Basic weighted average shares outstanding

41,957

41,816

41,717

41,886

41,674

Diluted weighted average shares outstanding

42,320

42,297

41,959

42,235

41,959

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

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

Three Months Ended

Three Months Ended

Six Months Ended

Six Months Ended

(Dollars in thousands)

June 30, 2013

June 30, 2012

June 30, 2013

June 30, 2012

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

$    108,612

0.25

%

$        68

$      77,385

0.25

%

$        47

$    126,593

0.25

%

$      157

$    103,860

0.25

%

$      128

Taxable investment securities, excluding 

   valuation allowance

1,516,992

1.95

7,379

1,555,361

1.95

7,593

1,497,547

1.93

14,415

1,533,916

1.98

15,210

Tax-exempt investment securities, 

   excluding valuation allowance

179,724

3.56

1,600

55,688

4.93

686

177,798

3.58

3,180

34,714

5.70

989

Loans and leases, including loans held for sale

2,324,107

4.57

26,505

2,121,045

4.62

24,393

2,291,709

4.47

50,948

2,108,477

4.70

49,401

Federal Home Loan Bank stock

47,460

-

-

48,797

-

-

47,659

-

-

48,797

-

-

Total interest earning assets 

4,176,895

3.41

35,552

3,858,276

3.40

32,719

4,141,306

3.33

68,700

3,829,764

3.44

65,728

Nonearning assets

417,720

304,757

369,491

302,961

Total assets

$ 4,594,615

$ 4,163,033

$ 4,510,797

$ 4,132,725

Liabilities & Equity:

Interest-bearing liabilities:

Interest-bearing demand deposits

$    703,165

0.05

%

$        87

$    614,480

0.06

%

$        89

$    688,495

0.05

%

$      168

$    592,242

0.06

%

$      175

Savings and money market deposits

1,179,152

0.07

219

1,158,955

0.09

252

1,175,573

0.07

436

1,152,396

0.10

551

Time deposits under $100,000

288,932

0.47

338

331,866

0.62

509

294,928

0.49

713

338,137

0.65

1,086

Time deposits $100,000 and over

734,456

0.21

382

642,349

0.28

453

722,405

0.21

766

646,929

0.30

949

Short-term borrowings

-

-

-

-

-

-

-

-

-

6

0.76

-

Long-term debt

108,273

2.94

793

108,291

3.41

917

108,276

3.10

1,662

111,315

3.36

1,860

Total interest-bearing liabilities

3,013,978

0.24

1,819

2,855,941

0.31

2,220

2,989,677

0.25

3,745

2,841,025

0.33

4,621

Noninterest-bearing deposits

846,979

752,512

834,167

740,093

Other liabilities

67,777

70,567

87,952

73,335

Total liabilities

3,928,734

3,679,020

3,911,796

3,654,453

Shareholders' equity

655,932

474,041

589,049

468,297

Non-controlling interest

9,949

9,972

9,952

9,975

Total equity

665,881

484,013

599,001

478,272

Total liabilities & equity

$ 4,594,615

$ 4,163,033

$ 4,510,797

$ 4,132,725

Net interest income 

$ 33,733

$ 30,499

$ 64,955

$ 61,107

Net interest margin

3.23

%

3.17

%

3.15

%

3.20

%

 

 

SOURCE Central Pacific Financial Corp.



RELATED LINKS

http://www.centralpacificbank.com