Central Pacific Financial Corp. Reports $9.0 Million Fourth Quarter Earnings

Jan 30, 2014, 08:00 ET from Central Pacific Financial Corp.

HONOLULU, Jan. 30, 2014 /PRNewswire/ -- Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank (the "Bank"), today reported net income for the fourth quarter of 2013 of $9.0 million, or $0.21 per diluted share, compared to net income in the fourth quarter of 2012 of $12.4 million, or $0.29 per diluted share, and net income in the third quarter of 2013 of $10.2 million, or $0.24 per diluted share. For the year ended December 31, 2013, the Company's net income was $170.8 million, or $4.04 per diluted share, compared to net income of $47.4 million, or $1.13 per diluted share in the previous year. Net income for the year ended December 31, 2013 included a non-cash income tax benefit of $119.8 million in the first quarter of 2013 related to the reversal of a significant portion of a valuation allowance established against the Company's net deferred tax assets during the third quarter of 2009.  Excluding this income tax benefit, net income for the year ended December 31, 2013 was $51.0 million, or $1.21 per diluted share.

"We remain on track with our business plan and are pleased to report another solid earnings performance for the quarter," said John C. Dean, President and Chief Executive Officer. "We are encouraged by the improving market conditions in Hawaii, which contributed to our strong loan growth and improved net interest margin."

The Company's Board of Directors declared a quarterly cash dividend of $0.08 per share on the Company's outstanding common shares. The dividend will be payable on or about March 17, 2014 to shareholders of record at the close of business on February 28, 2014. This represents the third consecutive quarterly cash dividend.

Significant Highlights and Fourth Quarter Results

  • Reported twelfth consecutive profitable quarter since the Company's recapitalization, with net income of $9.0 million, compared to net income in the third quarter of 2013 of $10.2 million.
  • Increased the loans and leases portfolio by $146.3 million to $2.63 billion at December 31, 2013, compared to $2.48 billion at September 30, 2013.
  • Improved our net interest margin from 3.19% in the third quarter of 2013 to 3.29% in the fourth quarter of 2013.
  • Increased total deposits by $29.9 million to $3.94 billion at December 31, 2013, compared to $3.91 billion at September 30, 2013.
  • Recorded a provision for loan and lease losses of $0.8 million, compared to a credit to the provision for loan and lease losses of $3.2 million recorded in the third quarter of 2013.
  • Reduced nonperforming assets by $12.2 million to $46.8 million at December 31, 2013 from $59.0 million at September 30, 2013.
  • The ALLL, as a percentage of total loans and leases, decreased to 3.27% at December 31, 2013, compared to 3.43% at September 30, 2013.  The Company's ALLL, as a percentage of nonperforming assets, increased to 183.80% at December 31, 2013 from 144.33% at September 30, 2013 and the Company's ALLL, as a percentage of nonaccrual loans, increased to 206.62% at December 31, 2013 from 159.94% at September 30, 2013.
  • Maintained a strong capital position with Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios of 20.25%, 21.52%, and 13.64%, respectively, as of December 31, 2013, compared to 21.30%, 22.58%, and 13.96%, respectively, as of September 30, 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 fourth quarter of 2013 was $35.5 million, compared to $29.4 million in the year-ago quarter and $33.8 million in the third quarter of 2013.  Net interest margin was 3.29%, compared to 3.00% in the year-ago quarter and 3.19% in the third quarter of 2013. The sequential quarter increase in net interest income and net interest margin was primarily due to an overall increase in the Company's interest earning assets, including a net increase of $114.1 million in its average loan portfolio, partially offset by a net decrease of $36.8 million in its average investment securities portfolio and an increase in the taxable equivalent yield on the investment securities portfolio to 2.43% in the fourth quarter of 2013, compared to 2.18% in the third quarter of 2013.

The provision for loan and lease losses for the fourth quarter of 2013 was $0.8 million, compared to a credit to the provision for loan and lease losses of $2.3 million in the year-ago quarter and a credit of $3.2 million in the third quarter of 2013.

Other operating income for the fourth quarter of 2013 totaled $12.2 million, compared to $16.9 million in the year-ago quarter and $11.9 million in the third quarter of 2013. The decrease from the year-ago quarter was primarily due to lower net gains on sales of residential mortgage loans of $4.5 million and lower gains on sales of foreclosed assets of $3.8 million, partially offset by lower unrealized losses on loans held for sale and interest rate locks of $1.4 million, a gain on the extinguishment of trust preferred debt of $1.0 million, and higher investment securities gains of $0.5 million. The sequential quarter increase was primarily due to a gain on the extinguishment of trust preferred debt of $1.0 million and higher investment securities gains of $0.5 million, partially offset by lower unrealized gains on loans held for sale and interest rate locks of $1.2 million.

Other operating expense for the fourth quarter of 2013 totaled $35.3 million, compared to $36.1 million in the year-ago quarter and $36.5 million in the third quarter of 2013.  The decrease from the year-ago quarter was primarily due to lower legal and professional services of $1.5 million, and lower amortization of intangible assets of $1.3 million, partially offset by higher salaries and employee benefits of $2.5 million. The sequential quarter decrease was primarily attributable to a premium paid on the repurchase of preferred stock of two subsidiaries in the third quarter of 2013 of $1.9 million and lower legal and professional services of $0.5 million, partially offset by higher salaries and employee benefits of $1.2 million. Salaries and employee benefits in the current quarter included severance, early retirement and retention benefits, which were related to our previously announced efficiency initiative that included a voluntary early retirement program and a reduction of select positions totaling $1.8 million, compared to $1.3 million in the previous quarter. There will be additional expenses related to this initiative in 2014 as some employees must render service through 2014 as a condition to receiving their benefits.

The efficiency ratio for the fourth quarter of 2013 was 72.50% (excluding amortization expense related to certain intangible assets totaling $0.7 million, gains on sales of investment securities of $0.5 million, net gains on sales of foreclosed assets of $0.1 million, and foreclosed asset expense of $43,000), compared to 81.70% in the year-ago quarter (excluding net gains on sales of foreclosed assets of $3.8 million,  amortization expense related to certain intangible assets totaling $0.7 million, and foreclosed asset expense of $0.4 million) and 78.02% in the third quarter of 2013 (excluding amortization expense related to certain intangible assets totaling $0.7 million, net gains on sales of foreclosed assets of $0.3 million, and foreclosed asset income of $12,000).

In the fourth quarter of 2013, the Company recorded income tax expense of $2.6 million, compared to income tax expense of $2.2 million in the third quarter of 2013. As of December 31, 2013, the Company's net deferred tax assets totaled $138.1 million.

Balance Sheet Highlights

Total assets at December 31, 2013 of $4.74 billion increased by $369.6 million from December 31, 2012, and decreased by $4.6 million from September 30, 2013.

Total loans and leases at December 31, 2013 of $2.63 billion increased by $426.7 million and $146.3 million from December 31, 2012 and September 30, 2013, respectively.  The increase in total loans and leases from the third quarter of 2013 was due to an increase in the consumer, residential mortgage, commercial, and construction and development loan portfolios of $85.1 million, $42.3 million, $30.5 million, and $2.4 million, respectively, offset by a decrease in the commercial mortgage loan and leases portfolios of $13.7 million and $0.3 million, respectively.

Total deposits at December 31, 2013 were $3.94 billion, and increased by $255.4 million and $29.9 million from December 31, 2012 and September 30, 2013, respectively.  Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $3.09 billion at December 31, 2013.  This represents an increase of $86.6 million from a year ago and a decrease of $11.0 million from September 30, 2013.  Changes in total deposits during the quarter included an increase in time deposits and noninterest-bearing demand deposits of $33.4 million and $12.8 million, respectively, offset by a decrease in interest-bearing demand deposits and savings and money market deposits of $10.8 million and $5.5 million, respectively.

Total shareholders' equity was $658.8 million at December 31, 2013, compared to $504.8 million and $653.5 million at December 31, 2012 and September 30, 2013, respectively.

Asset Quality

Nonperforming assets at December 31, 2013 totaled $46.8 million, or 0.99% of total assets, compared to $59.0 million, or 1.24% of total assets at September 30, 2013.  The sequential-quarter change reflects net decreases in U.S. Mainland construction and development assets of $12.0 million, Hawaii residential mortgage assets of $0.8 million, Hawaii construction and development assets of $0.5 million, and U.S. Mainland commercial mortgage assets of $0.1 million, partially offset by a net increase in Hawaii commercial mortgage assets of $1.4 million.

Loans delinquent for 90 days or more still accruing interest totaled $15,000 at December 31, 2013, compared to $37,000 at September 30, 2013.  In addition, loans delinquent for 30 days or more still accruing interest totaled $7.2 million at December 31, 2013, compared to $3.7 million at September 30, 2013.

Net charge-offs in the fourth quarter of 2013 totaled $0.1 million, compared to net recoveries of $1.8 million in the fourth quarter of 2012, and net recoveries of $1.3 million in the third quarter of 2013.

The ALLL, as a percentage of total loans and leases, was 3.27% at December 31, 2013, compared to 3.43% at September 30, 2013.  The ALLL, as a percentage of nonperforming assets, was 183.80% at December 31, 2013, compared to 144.33% at September 30, 2013.  The ALLL, as a percentage of nonaccrual loans, was 206.62% at December 31, 2013, compared to 159.94% at September 30, 2013.

Capital Levels

At December 31, 2013, the Company's Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios were 20.25%, 21.52%, and 13.64%, respectively, compared to 21.30%, 22.58%, and 13.96%, respectively, at September 30, 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 (8:00 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 February 28, 2014 by dialing 1-877-344-7529 (passcode: 10039122) 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 112 ATMs in the state of Hawaii, as of December 31, 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 - December 31, 2013

(Unaudited)

Three Months Ended

Year Ended

December 31,

December 31,

(in thousands, except per share data)

2013

2012

2013

2012

INCOME STATEMENT

Net income

$        9,026

$      12,410

$    170,806

$      47,421

Per common share data:

Basic earnings per share

0.21

0.30

4.07

1.14

Diluted earnings per share 

0.21

0.29

4.04

1.13

Cash dividends declared

0.08

-

0.16

-

PERFORMANCE RATIOS

Return on average assets (1)

0.76

%

1.16

%

3.70

%

1.13

%

Return on average shareholders' equity (1)

5.45

9.81

27.49

9.81

Net income to average tangible shareholders' equity (1) 

5.57

10.13

28.14

10.17

Efficiency ratio (2)

72.50

81.70

74.97

78.89

Net interest margin (1)

3.29

3.00

3.19

3.10

December 31,

REGULATORY CAPITAL RATIOS

2013

2012

Central Pacific Financial Corp.

Tier 1 risk-based capital 

20.25

%

22.54

%

Total risk-based capital

21.52

23.83

Leverage capital

13.64

14.32

Central Pacific Bank 

Tier 1 risk-based capital 

19.58

%

21.47

%

Total risk-based capital

20.85

22.75

Leverage capital

13.18

13.65

December 31,

%

2013

2012

Change

BALANCE SHEET

Total assets

$  4,739,929

$  4,370,368

8.5

%

Loans and leases

2,630,601

2,203,944

19.4

Net loans and leases

2,544,671

2,107,531

20.7

Deposits

3,936,173

3,680,772

6.9

Total shareholders' equity

658,844

504,822

30.5

Book value per common share

15.64

12.06

29.7

Tangible book value per common share

15.34

11.69

31.2

Market value per common share

20.08

15.59

28.8

Tangible common equity ratio (3)

13.67

%

11.24

%

21.6

CENTRAL PACIFIC FINANCIAL CORP.  AND SUBSIDIARIES

Financial Highlights - December 31, 2013

(Unaudited)

Three Months Ended

Year Ended

December 31,

%

December 31,

%

2013

2012

Change

2013

2012

Change

SELECTED AVERAGE BALANCES

Total assets

$  4,746,897

$  4,293,042

10.6

%

$  4,610,822

$  4,207,655

9.6

%

Interest-earning assets

4,368,386

3,983,983

9.6

4,235,052

3,898,677

8.6

Loans and leases, including loans held for sale

2,553,574

2,172,818

17.5

2,394,955

2,130,758

12.4

Other real estate

5,166

28,692

(82.0)

7,767

46,913

(83.4)

Deposits

3,928,031

3,596,155

9.2

3,804,662

3,532,318

7.7

Interest-bearing liabilities

3,152,826

2,879,056

9.5

3,061,652

2,868,352

6.7

Total shareholders' equity

662,106

505,805

30.9

621,282

483,435

28.5

(in thousands, except per share data)

December 31,

%

2013

2012

Change

NONPERFORMING ASSETS

Nonaccrual loans (including loans held for sale)

$      41,588

$      79,332

(47.6)

%

Other real estate

5,163

10,686

(51.7)

Total nonperforming assets

46,751

90,018

(48.1)

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

15

503

(97.0)

Restructured loans (still accruing interest)

23,273

31,760

(26.7)

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

 and restructured loans (still accruing interest)

$      70,039

$    122,281

(42.7)

Three Months Ended

Year Ended

December 31,

%

December 31,

%

2013

2012

Change

2013

2012

Change

Loan charge-offs

$        4,503

$        4,098

9.9

%

$      12,616

$      17,429

(27.6)

%

Recoveries

4,428

5,866

(24.5)

11,333

10,634

6.6

Net loan charge-offs (recoveries)

$             75

$       (1,768)

(104.2)

$        1,283

$        6,795

(81.1)

Net loan charge-offs (recoveries) to average loans (1)

0.01

%

(0.33)

%

0.05

%

0.32

%

CENTRAL PACIFIC FINANCIAL CORP.  AND SUBSIDIARIES

Financial Highlights - December 31, 2013

(Unaudited)

December 31,

2013

2012

ASSET QUALITY RATIOS

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

1.57

%

3.54

%

Nonperforming assets to total assets

0.99

2.06

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

2.64

5.43

Allowance for loan and lease losses to total loans and leases

3.27

4.37

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

206.62

121.53

Allowance for loan and lease losses to nonperforming assets

183.80

107.10

(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)

December 31, 2013

September 30, 2013

December 31, 2012

Efficiency Ratio

Total other operating expenses

$          35,271

$           36,512

$          36,066

Less:

   Amortization of other intangible assets

668

669

669

   Foreclosed asset expense

43

(12)

364

   Write down of assets

-

-

-

Adjusted other operating expenses

$          34,560

$           35,855

$          35,033

Net interest income (tax equivalent)

$          36,031

$           34,305

$          29,910

Total other operating income

12,173

11,930

16,803

Less:

   Net gains on sales of foreclosed assets

56

276

3,834

   Net gains on sales of investment securities

482

-

-

Adjusted other operating income

$          47,666

$           45,959

$          42,879

Efficiency ratio

72.50

%

78.02

%

81.70

%

Tangible Common Equity Ratio

December 31, 2013

December 31, 2012

Total shareholders' equity

$         658,844

$         504,822

Less: Other intangible assets

(12,704)

(15,378)

Tangible common equity

646,140

489,444

Total assets

4,739,929

4,370,368

Less: Other intangible assets

(12,704)

(15,378)

Tangible assets

4,727,225

4,354,990

Tangible common equity / Tangible assets

13.67

%

11.24

%

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 December 31, 

 September 30, 

 December 31, 

(In thousands, except share data)

2013

2013

2012

ASSETS

Cash and due from banks

$

45,092

$

59,400

$

56,473

Interest-bearing deposits in other banks

4,256

37,499

120,902

Investment securities:

  Available for sale

1,407,999

1,501,948

1,536,745

  Held to maturity (fair value of $238,705 at December 31, 2013, $245,519 at September 30, 2013 and $162,528 at December 31, 2012)

252,047

255,663

161,848

      Total investment securities

1,660,046

1,757,611

1,698,593

Loans held for sale

12,370

12,437

38,283

Loans and leases

2,630,601

2,484,318

2,203,944

  Less allowance for loan and lease losses

85,930

85,228

96,413

      Net loans and leases

2,544,671

2,399,090

2,107,531

Premises and equipment, net

49,039

48,151

48,759

Accrued interest receivable

14,072

13,765

13,896

Investment in unconsolidated subsidiaries

9,127

18,558

10,975

Other real estate

5,163

5,761

10,686

Mortgage servicing rights

20,079

20,249

22,121

Other intangible assets

12,704

13,372

15,378

Bank-owned life insurance

149,604

148,903

147,411

Federal Home Loan Bank stock

46,193

46,626

47,928

Other assets

167,513

163,061

31,432

      Total assets

$

4,739,929

$

4,744,483

$

4,370,368

LIABILITIES AND EQUITY

Deposits:

  Noninterest-bearing demand

$

891,017

$

878,262

$

843,292

  Interest-bearing demand

728,619

739,421

672,838

  Savings and money market

1,207,016

1,212,488

1,186,011

  Time

1,109,521

1,076,093

978,631

      Total deposits

3,936,173

3,906,264

3,680,772

Short-term borrowings

8,015

28,000

-

Long-term debt

92,799

108,268

108,281

Other liabilities

44,037

48,415

66,536

      Total liabilities

4,081,024

4,090,947

3,855,589

Equity:

  Preferred stock, no par value, authorized 1,100,000 shares; issued and outstanding none at December 31, 2013, September 30, 2013, and December 31, 2012

-

-

-

  Common stock, no par value, authorized 185,000,000 shares; issued and outstanding 42,112,633 shares at December 31, 2013, 42,091,180 shares at September 30, 2013 and 41,867,046 shares at December 31, 2012

784,547

784,473

784,512

  Surplus

75,498

73,735

70,567

  Accumulated deficit

(185,356)

(191,014)

(349,427)

  Accumulated other comprehensive income (loss)

(15,845)

(13,718)

(830)

      Total shareholders' equity

658,844

653,476

504,822

Non-controlling interest

61

60

9,957

      Total equity

658,905

653,536

514,779

      Total liabilities and equity

$

4,739,929

$

4,744,483

$

4,370,368

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

(In thousands, except per share data)

2013

2013

2012

2013

2012

Interest income:

  Interest and fees on loans and leases

$

27,117

$

26,414

$

23,387

$

104,479

$

97,029

  Interest and dividends on investment

     securities:

        Taxable interest

8,980

8,114

6,959

31,498

28,803

        Tax-exempt interest

992

992

965

4,051

2,312

        Dividends

7

5

5

23

16

  Interest on deposits in other banks

25

21

73

203

285

  Dividends on Federal Home Loan Bank stock

12

12

-

24

-

      Total interest income

37,133

35,558

31,389

140,278

128,445

Interest expense:

  Interest on deposits:

    Demand

90

91

81

349

339

    Savings and money market

231

227

223

894

1,006

    Time

651

671

784

2,801

3,688

  Interest on short-term borrowings

3

3

-

6

-

  Interest on long-term debt

662

795

911

3,119

3,701

      Total interest expense

1,637

1,787

1,999

7,169

8,734

      Net interest income

35,496

33,771

29,390

133,109

119,711

Provision (credit) for loan and lease losses

777

(3,189)

(2,283)

(9,200)

(18,885)

      Net interest income after provision for loan and lease losses

34,719

36,960

31,673

142,309

138,596

Other operating income:

  Service charges on deposit accounts

2,091

1,776

1,648

7,041

8,367

  Other service charges and fees

4,643

4,931

4,454

18,547

17,569

  Income from fiduciary activities

748

724

669

2,855

2,599

  Equity in earnings of unconsolidated subsidiaries

57

513

188

790

574

  Fees on foreign exchange

160

149

104

508

551

  Investment securities gains

482

-

-

482

789

  Income from bank-owned life insurance

841

611

625

2,333

2,899

  Loan placement fees

162

81

143

570

690

  Net gains on sales of residential loans

1,494

1,476

6,011

9,986

17,095

  Net gains on sales of foreclosed assets

56

276

3,890

8,584

4,999

  Other

1,439

1,393

(873)

3,249

4,611

      Total other operating income

12,173

11,930

16,859

54,945

60,743

Other operating expense:

  Salaries and employee benefits

20,350

19,167

17,833

76,294

69,344

  Net occupancy 

3,672

3,802

3,761

14,323

13,920

  Equipment

888

952

958

3,676

3,966

  Amortization of other intangible assets

1,424

1,637

2,689

7,418

10,179

  Communication expense

796

907

886

3,523

3,428

  Legal and professional services

1,684

2,155

3,189

8,094

13,824

  Computer software expense

1,397

1,056

1,109

4,579

3,961

  Advertising expense

525

601

884

2,666

3,516

  Foreclosed asset expense

43

(12)

420

1,036

6,887

  Write down of assets

-

-

-

-

2,586

  Other

4,492

6,247

4,393

17,927

20,307

      Total other operating expense

35,271

36,512

36,122

139,536

151,918

  Income before income taxes

11,621

12,378

12,410

57,718

47,421

Income tax expense (benefit)

2,595

2,174

-

(113,088)

-

      Net income

$

9,026

$

10,204

$

12,410

$

170,806

$

47,421

Per common share data:

  Basic earnings per share

$

0.21

$

0.24

$

0.30

$

4.07

$

1.14

  Diluted earnings per share 

0.21

0.24

0.29

4.04

1.13

  Cash dividends declared

0.08

0.08

-

0.16

-

Basic weighted average shares outstanding

42,040

42,028

41,766

41,961

41,720

Diluted weighted average shares outstanding

42,536

42,421

42,183

42,317

42,084

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

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

Three Months Ended

Three Months Ended

Year Ended

Year Ended

(Dollars in thousands)

December 31, 2013

December 31, 2012

December 31, 2013

December 31, 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

$      39,316

0.25

%

$        25

$    115,841

0.25

%

$        73

$      81,249

0.25

%

$        203

$    114,438

0.25

%

$        285

Taxable investment securities, excluding

   valuation allowance

1,551,844

2.32

8,987

1,489,529

1.87

6,964

1,534,136

2.05

31,521

1,521,164

1.89

28,819

Tax-exempt investment securities,

   excluding valuation allowance

177,135

3.44

1,526

157,536

3.77

1,485

177,510

3.51

6,232

83,663

4.25

3,557

Loans and leases, including loans held for sale

2,553,574

4.23

27,117

2,172,818

4.29

23,387

2,394,955

4.36

104,479

2,130,758

4.55

97,029

Federal Home Loan Bank stock

46,517

0.10

12

48,259

-

-

47,202

0.05

24

48,654

-

-

Total interest earning assets

4,368,386

3.44

37,667

3,983,983

3.20

31,909

4,235,052

3.36

142,459

3,898,677

3.33

129,690

Nonearning assets

378,511

309,059

375,770

308,978

Total assets

$ 4,746,897

$ 4,293,042

$ 4,610,822

$ 4,207,655

Liabilities & Equity:

Interest-bearing liabilities:

Interest-bearing demand deposits

$    726,449

0.05

%

$        90

$    648,630

0.05

%

 

$       81

$    708,658

0.05

%

$        349

$    615,960

0.05

%

$        339

Savings and money market deposits

1,218,088

0.08

231

1,178,745

0.08

223

1,191,919

0.07

894

1,163,963

0.09

1,006

Time deposits under $100,000

272,051

0.42

285

308,619

0.52

405

285,042

0.46

1,301

326,288

0.59

1,937

Time deposits $100,000 and over

839,198

0.17

366

634,748

0.24

379

769,672

0.19

1,500

652,339

0.27

1,751

Short-term borrowings

4,239

0.32

3

32

0.63

-

1,988

0.32

6

11

0.67

-

Long-term debt

92,801

2.83

662

108,282

3.34

911

104,373

2.99

3,119

109,791

3.37

3,701

Total interest-bearing liabilities

3,152,826

0.21

1,637

2,879,056

0.28

1,999

3,061,652

0.23

7,169

2,868,352

0.30

8,734

Noninterest-bearing deposits

872,245

825,413

849,371

773,768

Other liabilities

59,659

72,807

73,040

72,131

Total liabilities

4,084,730

3,777,276

3,984,063

3,714,251

Shareholders' equity

662,106

505,805

621,282

483,435

Non-controlling interest

61

9,961

5,477

9,969

Total equity

662,167

515,766

626,759

493,404

Total liabilities & equity

$ 4,746,897

$ 4,293,042

$ 4,610,822

$ 4,207,655

Net interest income

$ 36,030

$ 29,910

$ 135,290

$ 120,956

Net interest margin

3.29

%

3.00

%

3.19

%

3.10

%

 

SOURCE Central Pacific Financial Corp.



RELATED LINKS

http://www.centralpacificbank.com