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Financial Performance - For the three months ended September 30, 2025, the Company reported net income of $18.6 million, or $0.69 per diluted share, compared to net income of $13.3 million, or $0.49 per diluted share for the same period in 2024[216]. - The Company's pre-provision net revenue (PPNR) for the three months ended September 30, 2025 was $27.8 million, compared to $19.9 million for the same period in 2024[218]. - For the nine months ended September 30, 2025, net income was $54.6 million, or $2.01 per diluted share, compared to net income of $42.1 million, or $1.55 per diluted share for the same period in 2024[216]. - Adjusted net income for Q3 2025 was $19,741 thousand, up 25.5% from $15,667 thousand in Q3 2024[225]. - Adjusted diluted earnings per share (EPS) increased to $0.73 in Q3 2025, compared to $0.58 in Q3 2024, representing a 25.9% growth[226]. Efficiency and Ratios - Return on average assets (ROA) for the three months ended September 30, 2025 was 1.01%, up from 0.72% in the same period of 2024[220]. - Return on average shareholders' equity (ROE) for the three months ended September 30, 2025 was 12.89%, compared to 10.02% for the same period in 2024[220]. - The efficiency ratio (non-GAAP) improved to 62.84% for the three months ended September 30, 2025, down from 70.12% in the same period of 2024[224]. - The adjusted return on average assets (ROA) improved to 1.08% in Q3 2025, up from 0.85% in Q3 2024[227]. - The adjusted return on average shareholders' equity (ROE) increased to 13.67% in Q3 2025, compared to 11.75% in Q3 2024[227]. - The efficiency ratio improved to 60.81% in Q3 2025, down from 65.51% in Q3 2024, indicating enhanced operational efficiency[230]. Credit Losses and Provisions - The Company recorded a provision for credit losses of $4.2 million during the three months ended September 30, 2025, compared to a provision of $2.8 million during the same period in 2024[217]. - The Company recorded a provision for credit losses on loans of $3.4 million and net charge-offs of $2.7 million, compared to a provision of $3.0 million and net charge-offs of $3.6 million in the same period of 2024[287]. - The Company's Allowance for Credit Losses (ACL) on loans totaled $60.4 million as of September 30, 2025, compared to $59.2 million as of December 31, 2024, and $61.6 million as of September 30, 2024[286]. Loan Portfolio and Assets - The Company aims to maintain a strong and diversified loan portfolio, primarily in Hawaii, with selective expansion into mainland markets[210]. - As of September 30, 2025, loans, net of deferred costs, totaled $5.37 billion, an increase of $34.4 million, or 0.6%, from $5.33 billion as of December 31, 2024[277]. - The Hawaii loan portfolio decreased by $100.7 million, or 2.2%, primarily due to decreases in home equity loans of $66.1 million and residential mortgage loans of $53.0 million[278]. - The U.S. Mainland loan portfolio increased by $135.1 million, or 18.0%, driven by increases in commercial mortgage loans of $108.0 million and construction loans of $41.5 million[280]. - Nonperforming assets totaled $14.3 million, or 0.19% of total assets, as of September 30, 2025, compared to $11.0 million, or 0.15% of total assets as of December 31, 2024[283]. Deposits and Equity - Total deposits were $6.58 billion as of September 30, 2025, a decrease of $66.3 million, or 1.0%, from $6.64 billion as of December 31, 2024[294]. - Core deposits totaled $5.98 billion as of September 30, 2025, a decrease of $59.0 million from $6.04 billion as of December 31, 2024, representing 90.9% of total deposits[295]. - Total shareholders' equity was $588.1 million as of September 30, 2025, compared to $538.4 million as of December 31, 2024, primarily due to net income of $54.6 million[300]. - The ratio of total shareholders' equity to total assets was 7.92% as of September 30, 2025, compared to 7.21% as of December 31, 2024[301]. Economic Conditions and Tourism - Visitor spending in Hawaii reached $14.62 billion for the eight months ended August 31, 2025, a 4.5% increase from $14.00 billion in the same period in 2024[234]. - The number of visitors to Hawaii increased by 0.7% to 6.6 million during the eight months ended August 31, 2025, compared to 6.5 million in the same period in 2024[233]. - The company’s performance is sensitive to local economic conditions, particularly those affecting real estate and tourism in Hawaii[232]. - Hawaii's tourism sector is projected to decline by approximately 1.3% in visitor arrivals to 9.58 million in 2025, down from 9.71 million in 2024[235]. - Visitor spending is expected to decrease by about 1.4% to $20.19 billion in 2025, compared to $20.48 billion in 2024[235]. Regulatory and Capital Management - The Company’s regulatory capital ratios exceeded the required Capital Conservation Buffer (CCB) as of September 30, 2025[319]. - The Company had $309.9 million in cash and approximately $2.33 billion in total other liquidity sources as of September 30, 2025[331]. - The Company’s estimated net interest income sensitivity for a +300 bps rate change is 1.71% (gradual) and 3.20% (instantaneous) as of September 30, 2025[326]. - The Company performed regular liquidity stress testing to evaluate its ability to withstand potential liquidity stress events[328]. - The Company has access to various funding sources, including proceeds from loan maturities and investment securities, as well as secondary funding sources like the FHLB[330]. Internal Controls and Governance - The Company's management evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective as of the end of the reporting period[334]. - There were no changes in the Company's internal control over financial reporting that materially affected its financial reporting during the covered period[335].

Financial Data and Key Metrics Changes - The company reported net income of $18.6 million or $0.69 per diluted share, with adjusted net income of $19.7 million or $0.73 per diluted share after excluding one-time costs [8][10] - Return on Assets (ROA) was 1.01% and Return on Equity (ROE) was 12.89%, indicating disciplined execution [8] - Net interest income increased by 2.5% to $61.3 million, and net interest margin expanded by 5 basis points to 3.49% [8][9] Business Line Data and Key Metrics Changes - Loans increased by $77 million, while deposits grew by $33 million, bringing total deposits to $6.6 billion [6][7] - The Hawaii loan portfolio saw growth in commercial, commercial mortgage, and construction loans, offset by declines in residential mortgage and home equity [6][19] - Average yields on total loans increased by 5 basis points to 5.01% compared to the prior quarter [6] Market Data and Key Metrics Changes - The company anticipates full-year loan growth in the low single-digit percentage range for 2025, with a healthy loan pipeline [6][7] - Deposit growth is expected to remain flat year-over-year in the fourth quarter due to known outflows, but optimism for low single-digit growth in 2026 remains [25][26] Company Strategy and Development Direction - The company focuses on optimizing bottom-line returns while maintaining high liquidity and prudent capital levels [5] - A strategic partnership with Kyoto Shinkin Bank was announced to enhance growth prospects for small and mid-sized customers [4] - The company aims to enhance products, build a strong team, strengthen the balance sheet, and grow the business prudently [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of Hawaii's economy despite softness in tourism due to U.S. trade policies [3] - The company is cautiously optimistic about future loan growth, particularly in Hawaii, as interest rates are expected to moderate [19][44] - Management emphasized a commitment to disciplined growth and long-term value creation for shareholders [7][12] Other Important Information - The board increased the fourth-quarter dividend by 3.7% to $0.28 per share, payable on December 15 [11] - The company plans to redeem $55 million of subordinated debt at par on November 1 [11][12] - Total risk-based capital was reported at 15.7%, with a target Common Equity Tier 1 (CET1) ratio of 11% to 12% [14][12] Q&A Session Summary Question: What drove the declines in loans in Hawaii and future growth confidence? - Management noted that declines were primarily in residential mortgage and home equity due to the interest rate environment, but there is a healthy loan pipeline and optimism for future growth [19] Question: Insights on expense management and investments? - Management highlighted ongoing investments in technology and people to drive efficiency and support strategic execution [22][24] Question: Competitive landscape for deposits and ability to reduce costs? - Management expressed cautious optimism for deposit growth, anticipating challenges in the fourth quarter but expecting low single-digit growth in 2026 [25][26] Question: Margin guidance and interest-bearing deposit costs? - Management confirmed that the spot rate on total deposits was 100 basis points, with expectations for net interest margin expansion [29] Question: Update on mainland loan growth and SNIC exposure? - Growth was noted in industrial and multifamily sectors, with total SNIC exposure around $526 million [32][34] Question: Capital management and potential for capital return? - Management indicated a proactive approach to capital return while prioritizing loan growth and share repurchases based on market conditions [42][44] Question: Opportunities with the new Japanese bank partner? - Management expressed excitement about the partnership with Kyoto Shinkin Bank, aiming to facilitate economic opportunities between Hawaii and the Kyoto region [46]

Financial Performance - 3Q 2025 - Net income for 3Q25 was $186 million, or $069 per diluted share[31] - Non-GAAP net income for 3Q25 was $197 million, or $073 per diluted share[31] - Return on assets (ROA) was 101%[31] - Return on equity (ROE) was 1289%[31] - Net interest margin (NIM) was 349%[31] - Efficiency ratio was 6284%, or 6081% non-GAAP[31] - Tangible common equity (TCE) ratio was 792%, or 794% non-GAAP[31] Strategic Focus & Growth Drivers - Central Pacific Bank (CPB) is the 4th largest financial institution in Hawaii with $74 billion in total assets[9, 11] - The company is focused on strengthening its brand and reputation to enhance customer trust and loyalty[13] - The company aims to maintain a quarterly cash dividend with approximately 40% payout[29] Balance Sheet & Loan Portfolio - Total deposits as of September 30, 2025, were $658 billion[39] - 29% of the deposit portfolio is noninterest-bearing demand deposits[40, 43] - The loan portfolio is diversified, with 80% secured by real estate[49] - 29% of the loan portfolio contractually reprices within 1 year[54]

Core Insights - Central Pacific Financial (CPF) reported quarterly earnings of $0.73 per share, missing the Zacks Consensus Estimate of $0.74 per share, but showing an increase from $0.58 per share a year ago, resulting in an earnings surprise of -1.35% [1] - The company posted revenues of $74.81 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.41% and up from $66.58 million year-over-year [2] - The stock has underperformed the market with a gain of about 4.2% since the beginning of the year compared to the S&P 500's gain of 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.77 on revenues of $75.55 million, and for the current fiscal year, it is $2.85 on revenues of $291.8 million [7] - The estimate revisions trend for Central Pacific Financial was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Zacks Industry Rank for Banks - West is currently in the top 11% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net income for Q3 2025 was $18.6 million, or $0.69 per diluted share, compared to $18.3 million, or $0.67 in the prior quarter, and $13.3 million, or $0.49 in the same quarter last year[2]. - Adjusted net income (non-GAAP) for Q3 2025 was $19.7 million, or $0.73 per diluted share, excluding $1.5 million in pre-tax expenses related to operations center consolidation[4]. - Net income for Q3 2025 reached $18,574,000, reflecting a slight increase from $18,271,000 in Q2 2025 and a significant rise of 39.5% compared to $13,305,000 in Q3 2024[31]. - Basic earnings per share for Q3 2025 was $0.69, up from $0.68 in Q2 2025 and $0.49 in Q3 2024, marking a year-over-year increase of 40.8%[31]. - GAAP net income for Q3 2025 was $18,574,000, up from $13,305,000 in Q3 2024, representing a 39.5% increase[50]. - Adjusted net income (non-GAAP) for Q3 2025 was $19,741,000, compared to $15,667,000 in Q3 2024, reflecting a 25.5% growth[50]. Asset and Loan Growth - Total loans reached $5.37 billion, an increase of $77.4 million, or 1.5% from the prior quarter[4][12]. - Total loans, net of deferred fees and costs, increased to $5,367,202,000 in Q3 2025 from $5,289,809,000 in Q2 2025[35]. - Total assets as of September 30, 2025, were $7,421,478,000, a slight increase from $7,369,567,000 in Q2 2025[35]. - Total loans, net of allowance for credit losses, were $5,306,809 thousand, an increase from $5,230,198 thousand in the previous quarter[40]. - Commercial and industrial loans in Hawaii increased to $464,797 thousand from $455,372 thousand in the previous quarter[40]. - Residential mortgage loans totaled $1,839,535 thousand, a decrease from $1,851,690 thousand in the previous quarter[40]. Deposit and Equity Changes - Total deposits were $6.58 billion, up $32.7 million, or 0.5% from the prior quarter[4][13]. - Total deposits reached $6,577,684 thousand, an increase from $6,544,989 thousand at the end of the previous quarter, marking a growth of 0.5%[36]. - Total shareholders' equity increased to $588.1 million, up from $568.9 million in the prior quarter[17]. - Total equity rose to $588,066 thousand, compared to $568,874 thousand at June 30, 2025, indicating a 3.4% increase[36]. - Total equity as of September 30, 2025, was $588,066,000, an increase from $543,725,000 as of September 30, 2024[53]. Efficiency and Profitability Ratios - The efficiency ratio was 62.84%, compared to 60.36% in the prior quarter; adjusted efficiency ratio (non-GAAP) was 60.81%[9]. - The efficiency ratio (non-GAAP) improved to 62.84% for the three months ended September 30, 2025, compared to 70.12% in the same period last year[48]. - Return on average assets (ROA) for Q3 2025 was 1.01%, slightly up from 1.00% in Q2 2025, demonstrating effective asset utilization[31]. - Return on average assets (ROA) was 1.01% for the three months ended September 30, 2025, up from 0.72% in the same period last year[48]. - Return on average equity (ROE) increased to 12.89% for the three months ended September 30, 2025, compared to 10.02% in the same period last year[48]. - Adjusted ROA (non-GAAP) for Q3 2025 was 1.08%, up from 0.85% in Q3 2024, showing improved asset utilization[52]. - Adjusted ROE (non-GAAP) for Q3 2025 was 13.67%, compared to 11.75% in Q3 2024, indicating stronger returns on equity[52]. Credit Quality and Loss Provisions - The provision for credit losses was $4.2 million, down from $5.0 million in the prior quarter, reflecting lower net charge-offs[6]. - The allowance for credit losses was $60,393 thousand, slightly up from $59,611 thousand in the previous quarter, indicating a 1.3% increase[36]. - Total nonperforming assets (NPAs) stood at $15,827 thousand, down from $16,959 thousand in the previous quarter, indicating improved asset quality[42]. - The ratio of total nonaccrual loans to total loans was 0.27% as of September 30, 2025, compared to 0.28% in the previous quarter[42]. - Provision for credit losses in Q3 2025 was $4,157,000, a decrease from $4,987,000 in Q2 2025, showing a reduction of 16.66%[37]. - Total charge-offs for the three months ended September 30, 2025, were $3,895 thousand, a decrease from $5,722 thousand in the previous quarter[43]. Dividend Information - The Board of Directors approved a quarterly cash dividend increase to $0.28 per share, representing a 3.7% increase from the previous quarter[20]. - The dividend declared per share was $0.27 for Q3 2025, consistent with the previous quarter and reflecting a stable dividend policy[31]. - Cash dividends declared in Q3 2025 remained steady at $0.27, consistent with Q2 2025[37].

Core Insights - Central Pacific Financial Corp. reported a net income of $18.6 million for Q3 2025, translating to an EPS of $0.69, which shows an increase from $18.3 million and EPS of $0.67 in the previous quarter and a significant rise from $13.3 million and EPS of $0.49 in the same quarter last year [1] Financial Performance - The net income for Q3 2025 was $18.6 million, up from $18.3 million in Q2 2025, reflecting a quarter-over-quarter increase [1] - Year-over-year, the net income rose from $13.3 million in Q3 2024, indicating a strong growth trajectory [1] - The EPS for Q3 2025 was $0.69, compared to $0.67 in the prior quarter and $0.49 in the same quarter last year, showcasing improved profitability [1]

Core Viewpoint - Central Pacific Financial Corp. will announce its third quarter 2025 financial results on October 29, 2025, with a conference call scheduled for the same day to discuss the results [1][2]. Company Overview - Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $7.37 billion in assets as of June 30, 2025 [3]. - The primary subsidiary, Central Pacific Bank, operates 27 branches and 55 ATMs in Hawaii [3]. Financial Performance - The company reported a net income of $18.3 million, or fully diluted earnings per share (EPS) of $0.67 for the second quarter of 2025, an increase from $17.8 million and EPS of $0.65 in the previous quarter, and $15.8 million and EPS of $0.58 in the year-ago quarter [5]. - For the first quarter of 2025, the net income was $17.8 million, or EPS of $0.65, compared to $11.3 million and EPS of $0.42 in the previous quarter, and $12.9 million and EPS of $0.48 in the year-ago quarter [7].

Core Insights - Bank stocks are a significant indicator of the health of the American economy, often referred to as the economy's circulatory system, facilitating capital flow across various sectors [1][4] - The article discusses the characteristics of bank stocks, their importance to investors, and how to identify the best bank stocks to buy [5][17] Group 1: Definition and Importance of Bank Stocks - Bank stocks represent companies in the banking sector and are classified under the broader category of financial stocks, which includes various financial services [7][8] - They are divided into two sub-categories: diversified banks, which have a national footprint and offer a wide range of services, and regional banks, which operate in limited geographic areas [13] Group 2: Investment Rationale - Investors are drawn to bank stocks due to their critical role in the economy, although their performance can be cyclical, reflecting economic conditions [9][10] - Banks primarily earn through the interest-rate spread, charging higher interest on loans than they pay on deposits, making economic activity a key factor in their profitability [10][11] Group 3: Characteristics of Bank Stocks - Diversified banks may offer more stability due to their varied operations, while regional banks can be more volatile but may provide better short-term opportunities for active investors [14][15] - The consolidation trend in the banking industry presents potential for growth, with over 4,600 banks in the U.S. indicating room for mergers and acquisitions [16][17] Group 4: Criteria for Selecting Bank Stocks - Ideal bank stocks should be part of the S&P Composite 1500, have a long-term EPS growth rate of at least 5%, and a trailing-12-month return on equity of at least 10% [18][19][20] - Stocks should also have at least five covering analysts and a consensus Buy rating, indicating strong market interest and positive outlook [21][22]

Company Overview - Central Pacific Financial (CPF) is based in Honolulu and operates in the Finance sector, specifically through Central Pacific Bank [3] - The company's shares have experienced a price change of 8.43% this year [3] Dividend Information - CPF currently pays a dividend of $0.27 per share, resulting in a dividend yield of 3.43%, which is higher than the Banks - West industry's yield of 2.75% and the S&P 500's yield of 1.47% [3] - The annualized dividend of $1.08 represents a 3.8% increase from the previous year [4] - Over the past five years, CPF has increased its dividend three times, averaging an annual increase of 3.02% [4] - The current payout ratio for CPF is 42%, indicating that the company pays out 42% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for CPF's earnings in 2025 is $2.85 per share, reflecting a year-over-year earnings growth rate of 21.79% [5] Investment Considerations - CPF is considered a compelling investment opportunity due to its strong dividend performance and solid earnings growth prospects [6] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a stable investment outlook [6]