HONOLULU--(BUSINESS WIRE)--After 20 years of faithful service, Christine Camp, president and CEO of the Avalon Group, has decided to step down from the boards of Central Pacific Financial (CPF) and Central Pacific Bank (CPB), effective immediately. Camp has a long tenure with the bank, having served on the boards since 2004. “I have been fortunate to be a part of the CPB family for 20 years and, throughout that time, the one constant has been the bank’s commitment to its customers, employees and the comm ...

Financial Overview - As of December 31, 2023, the company reported total assets of $7.64 billion, total loans of $5.44 billion, total deposits of $6.85 billion, and shareholders' equity of $503.8 million[55]. - The company operates 27 bank branches and 58 ATMs throughout Hawaii, with a significant presence on the island of Oahu[56]. - The company derives income primarily from interest and fees on loans, interest on investment securities, and fees from deposit services[57]. - The company has $50.0 million in trust preferred securities, $55.0 million in subordinated notes, and $50.0 million in FHLB long-term advances as of December 31, 2023[135]. Loan Portfolio - Approximately 78% of the loan portfolio consists of real estate-related loans, including residential mortgage loans, home equity loans, commercial mortgage loans, and construction loans[45]. - The Bank's total construction, land development, and other land loans represented less than 100% of its total risk-based capital as of December 31, 2023[107]. - The Bank's total commercial real estate (CRE) loans represented less than 300% of its total risk-based capital and have increased by less than 50% over the prior 36 months[107]. Regulatory Compliance - The company is subject to various regulatory capital requirements, including the Basel III Capital Rule, which mandates minimum risk-based and leverage capital ratios[67][68]. - The company is committed to maintaining compliance with the Community Reinvestment Act (CRA) to support the credit needs of the communities in which it operates[78]. - The company anticipates an increased focus on regulatory compliance and supervision in 2024 due to ongoing developments in the banking industry[74]. - The Company is subject to regulatory restrictions on dividends, which depend on management's assessment of future capital requirements and other factors[87]. - The final CRA rule, effective April 1, 2024, includes new tests and data collection requirements for banks with total assets exceeding $2 billion[102]. Cybersecurity and Technology - The SEC adopted rules in July 2023 requiring registrants to disclose material cybersecurity incidents and describe their cybersecurity risk management strategies[94]. - Federal regulators emphasize the need for multiple layers of cybersecurity controls to protect against compromised customer credentials and ensure business continuity after cyberattacks[112]. - The company must notify regulators within 36 hours of any significant computer-security incidents that disrupt banking operations, with potential regulatory sanctions for non-compliance[113]. - The Company maintains a comprehensive Information Security and Cybersecurity Program to protect its information assets and manage cybersecurity risks[145]. - The Board of Directors oversees cybersecurity risk, with specific management by the Executive Committee and relevant officers[146]. - The Company’s systems are regularly targeted by cyber-attacks, but no significant incidents have adversely affected operations or customers to date[147]. - Annual examinations by financial regulators assess the Company's Information Technology and Information Security Departments, ensuring proper risk management[149]. Human Resources - As of December 31, 2023, the average employee had 9 years of service, with 35% of the staff having been with the Bank for ten years or more[109]. - The company employed 737 individuals, with 90% of the workforce being ethnically diverse and 64% female[127]. - Competition for qualified employees in the banking industry is intense, particularly in the Hawaii market, impacting recruitment efforts[140]. Economic and Environmental Risks - The company faces potential adverse effects from inflation, interest rate fluctuations, and economic conditions in Hawaii, particularly in the real estate market[53]. - The company is subject to extensive environmental regulations, which may lead to significant compliance costs affecting financial condition and results of operations[131]. - Climate change presents immediate and long-term risks, including operational, credit, transition, and reputational risks that could adversely affect the Company[142]. - The Company is creating governance processes around climate change-related risks and integrating these considerations into its risk governance framework[143]. - The Company faces potential increased expenses from strategic planning and regulatory scrutiny related to climate change responses[143]. - Natural disasters and external events, including pandemics, could materially affect the Company's financial condition and results of operations[141]. Legal and Reputational Risks - The company faces potential reputational damage and financial liability from legal claims, which could increase legal and professional service costs[132]. - The company is required to maintain effective anti-money laundering programs, with significant penalties for non-compliance that could adversely affect business operations[130]. - Publicized cybersecurity issues could damage the Company's reputation and adversely affect its business and financial condition[140]. Financial Assessments - The FDIC has set the Designated Reserve Ratio (DRR) at 2.00%, with an increase in assessment rates effective January 1, 2023, to restore the reserve ratio to at least 1.35% by September 30, 2029[83]. - A special assessment finalized by the FDIC in November 2023 will equal approximately 13.4 basis points annually based on uninsured deposits, collected over eight quarterly assessment periods[92]. - The company is currently subject to FDIC insurance premiums, which may increase if there are additional bank failures, potentially adversely affecting earnings and stock value[111].

Financial Data and Key Metrics Changes - Net income for Q4 2023 was $14.9 million or $0.55 per diluted share, with a return on average assets of 0.79% and return on average equity of 12.55% [5] - The efficiency ratio was reported at 64.12%, indicating operational efficiency [5] - Total loan portfolio decreased by $70 million or 1.3% sequentially, primarily due to the runoff of the Mainland loan portfolio [5] - Total deposit portfolio decreased by $27 million or 0.4% sequentially, with core deposits remaining relatively flat [5] - Net interest income for Q4 was $51.1 million, a decrease of $0.8 million from the prior quarter, with a net interest margin of 2.84%, down 4 basis points sequentially [5] Business Line Data and Key Metrics Changes - The Mainland loan portfolio continued to decline, reaching $308 million or 5.7% of total loans as of December 31, down from $452 million a year ago [34] - The commercial real estate portfolio represents 25% of total loans, with low exposure in office and retail sectors [21] - Nonperforming assets were at 9 basis points of total assets, with criticized loans decreasing to 0.92% of total loans [21] Market Data and Key Metrics Changes - Hawaii's unemployment rate was 2.9% in December, outperforming the national rate of 3.7%, with expectations to remain low at 2.5% in 2024 [4] - Visitor arrivals to Maui were at 75% of the previous year, with total statewide arrivals at 90% of pre-pandemic levels [17] - The Oahu median single-family home price was $1 million, with home sale volumes down year-over-year but showing signs of recovery due to declining mortgage rates [18] Company Strategy and Development Direction - The company is focused on balanced growth and has completed several balance sheet repositioning transactions to improve future returns [17] - The management anticipates loan growth in 2024 to be in the low single-digit percentage range, with a strong loan pipeline being built [36] - The company plans to continue investing in technology initiatives to enhance customer-facing and back-office operations [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Hawaii's economic outlook despite facing some headwinds, highlighting the resilience of the local economy [18] - The company expects net interest margin to trough in the first half of the year, with anticipated benefits from interest rate swaps [5][41] - Management noted that the operating environment is expected to normalize, leading to improved loan growth opportunities [36] Other Important Information - The Board of Directors declared a quarterly cash dividend of $0.26 per share, payable on March 15 [20] - A new share repurchase plan was authorized for up to $20 million in 2024 [20] Q&A Session Summary Question: Potential impacts of Fed cuts on loan demand and deposit pricing - Management believes that rate cuts would benefit credit and potentially accelerate loan growth, particularly in the mortgage sector [36][37] Question: Deposit trends and drivers of NIB outflows - The company noted a positive trend in core deposits, with a slowdown in outflows from noninterest-bearing accounts [25] Question: Capital priorities and share repurchase plans - Management confirmed ongoing evaluation of capital management strategies, including share repurchases and balance sheet restructurings [40]

For the quarter ended December 2023, Central Pacific Financial (CPF) reported revenue of $66.31 million, down 2.3% over the same period last year. EPS came in at $0.55, compared to $0.74 in the year-ago quarter.The reported revenue represents a surprise of +8.39% over the Zacks Consensus Estimate of $61.18 million. With the consensus EPS estimate being $0.48, the EPS surprise was +14.58%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare ...

Central Pacific Financial (CPF) came out with quarterly earnings of $0.55 per share, beating the Zacks Consensus Estimate of $0.48 per share. This compares to earnings of $0.74 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 14.58%. A quarter ago, it was expected that this operator of Central Pacific Bank would post earnings of $0.52 per share when it actually produced earnings of $0.49, delivering a surprise of -5.77%.Over th ...

HONOLULU--(BUSINESS WIRE)--Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $14.9 million, or fully diluted earnings per share ("EPS") of $0.55 for the fourth quarter of 2023, compared to net income of $13.1 million, or EPS of $0.49 in the previous quarter and net income of $20.2 million, or EPS of $0.74 in the year-ago quarter. For the 2023 year, net income was $58.7 million, or EPS of $2.17, compared to ...

The upcoming report from Central Pacific Financial (CPF) is expected to reveal quarterly earnings of $0.48 per share, indicating a decline of 35.1% compared to the year-ago period. Analysts forecast revenues of $61.18 million, representing a decrease of 9.9% year over year.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.Before a company announ ...

Financial Data and Key Metrics Changes - Net income for the third quarter was $13.1 million or $0.49 per diluted share, with a return on average assets of 0.70% and return on average equity of 10.95% [27] - Net interest income for the third quarter was $51.9 million, a decrease of $0.8 million from the prior quarter, primarily due to higher funding costs [27] - The net interest margin was 2.88% in the third quarter, a decline of 8 basis points sequentially [27] Business Line Data and Key Metrics Changes - The loan portfolio remained relatively flat during the quarter, with selective growth in certain portfolios [27] - Nonperforming assets were at 9 basis points of total assets, and criticized loans were at 1.09% of total loans [16] - The Mainland loan portfolio declined to 16% of total loans, with the consumer portfolio decreasing to $345 million or 6% of total loans [16] Market Data and Key Metrics Changes - In August, Hawaii saw 769,000 visitors, down 7% from a year ago, with total visitor spending at $1.58 billion, down 9% [6][7] - The statewide unemployment rate was 2.8% in September, outperforming the national rate of 3.8% [7] - Real estate values in Hawaii remained strong, with the Oahu median single-family home price at $1.1 million [7] Company Strategy and Development Direction - The company is focused on growing relationship-based deposits and managing loan growth cautiously [8] - There is a commitment to support the Maui community post-wildfires, with a focus on rebuilding and economic recovery [5] - The company is optimistic about future opportunities as the operating environment improves [27] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding net interest margin performance, projecting a trough in the first half of 2024 [19] - The company is monitoring the economic environment closely and remains selective in loan additions [28] - There are no anticipated material credit impacts from the Maui wildfires, with ongoing support for affected borrowers [28] Other Important Information - The effective tax rate was 24.9% in the third quarter, expected to remain in the 24% to 25% range going forward [9] - A quarterly cash dividend of $0.26 per share was declared, payable on December 15th [9] Q&A Session Summary Question: Margin guidance and expectations - Management is pleased with margin performance and has adjusted guidance to a range of 2.75% to 2.85% for the next couple of quarters, with hopes to stay above 2.80% [18][19] Question: Loan growth and production pipeline - New loan yields in the third quarter were 7.5%, compared to a portfolio yield of 4.5%, indicating significant upward repricing [20] Question: Balance sheet management in a higher interest rate environment - Management is cautiously optimistic about margin expansion, depending on the stabilization of deposit balances and growth in core deposits [36][40]

Financial Performance - Net income for Q3 2023 was $13.1 million, or $0.49 per diluted share, down from $16.7 million, or $0.61 per diluted share in Q3 2022[27]. - For the nine months ended September 30, 2023, net income was $43.8 million, or $1.62 per diluted share, compared to $53.7 million, or $1.94 per diluted share in the same period of 2022[27]. - Total revenue for Q3 2023 was $61.975 million, a decrease from $64.994 million in Q3 2022[59]. - The company reported a pre-provision net revenue (PPNR) of $22.4 million for Q3 2023, compared to $23.0 million in Q3 2022[56]. Efficiency and Capital Ratios - The efficiency ratio improved to 63.91% in Q3 2023 from 64.62% in Q3 2022, primarily due to higher other operating income and lower other operating expenses[59]. - The company's capital ratios as of September 30, 2023, were 8.7% leverage, 11.9% tier 1 risk-based capital, 14.1% total risk-based capital, and 11.0% common equity tier 1 capital, all exceeding regulatory standards[61]. Economic Indicators - Hawaii's seasonally adjusted annual unemployment rate improved to 2.8% in September 2023, down from 3.7% in September 2022[36]. - Total visitor arrivals to Hawaii are projected to be approximately 9.4 million in 2023, an increase of about 1.9% from 9.2 million in 2022[64]. - Visitor spending is expected to increase approximately 1.7% to $19.57 billion in 2023, surpassing last year's record of $19.25 billion[65]. - Hawaii's economy is projected to grow with real personal income increasing by 2.9% and real gross state product by 3.4% in 2023[66]. Risk Factors and Legal Proceedings - Recent bank failures in 2023 have raised concerns about liquidity adequacy in the banking industry, potentially impacting the Company's operations and customer confidence[233]. - The Company does not expect legal proceedings to have a material adverse effect on its financial condition or operations[231]. - There have been no material changes to the previously disclosed Risk Factors in the Annual Report for the year ended December 31, 2022, except for recent developments affecting the banking industry[232]. Other Initiatives - The BaaS initiative is not expected to materially impact the Company's financial statements in 2023, with ongoing evaluations for future opportunities[67]. - The Company uses a simulation model to measure interest rate risk, indicating that net interest income fluctuations will remain within established policy limits as of September 30, 2023[227]. - The number of shares outstanding of the Company's common stock was 27,043,169 as of October 13, 2023[70]. - The company had approximately $107 million in loans to borrowers in Maui, with an estimated $78 million not impacted by the wildfires[33].

Financial Data and Key Metrics Changes - Net income for Q2 2023 was $14.5 million, or $0.53 per diluted share, with a return on average assets of 0.78% and return on average equity of 12.12% [32] - Net interest income decreased by $1.5 million from the prior quarter to $52.7 million, with a net interest margin of 2.96%, down 12 basis points [12][32] - Total deposits grew by $59 million, including core deposit growth of $10 million, with average total deposit balances increasing by $19 million sequentially [33] Business Line Data and Key Metrics Changes - The loan-to-deposit ratio declined to 81%, with a focus on moderating loan growth and being selective in new portfolio loans [11] - The total Mainland consumer portfolio decreased by $44 million from the prior quarter to $386 million, representing 7% of total loans [36] - Nonperforming assets were at 15 basis points of total assets, with criticized loans at 1.3% of total loans [14] Market Data and Key Metrics Changes - Hawaii's unemployment rate declined to 3% in June, outperforming the national rate of 3.6%, with a year-over-year increase of 17,000 jobs [29] - Visitor spending in Hawaii was robust at $1.69 billion in May, a 19% increase compared to May 2019 [7] - Real estate values remain strong, with the Oahu median single-family home price around $1.1 million [8] Company Strategy and Development Direction - The company is focused on building long-term customer relationships and generating relationship-based deposits, aiming to grow market share [10] - There is a strong emphasis on risk management and selective loan growth, particularly in the small business and construction sectors [52] - The company plans to continue investing in technology to improve efficiency and automate processes [56] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the moderation of deposit costs and the overall economic outlook for Hawaii, projecting avoidance of recession [30] - The company is monitoring the economic environment closely and believes that higher loss levels in the Mainland consumer portfolio are peaking [16][17] - The effective tax rate is expected to remain in the range of 24% to 25% going forward [13] Other Important Information - The company repurchased 23,750 shares at a total cost of $0.4 million, with a quarterly cash dividend of $0.26 per share declared [35] - The allowance for credit losses was $63.8 million, or 1.16% of outstanding loans, with a provision for credit losses of $4.3 million during the quarter [38] Q&A Session Summary Question: How is the pipeline for the rest of the portfolio decline? - Management indicated that the pipeline remains robust, but they are being selective due to the operating environment [21][43] Question: Have expectations changed on where interest-bearing deposit betas will peak? - Management noted that expectations have shifted, with a potential peak now anticipated at around 30% rather than 25% [46] Question: What segments are still providing good risk-adjusted returns? - Management highlighted small business and construction as areas with good risk-adjusted returns, with a focus on maintaining core deposits [52][52] Question: What is the core expense run rate? - Management indicated that a core expense run rate of $39 million to $40 million is appropriate, with a focus on balancing revenue and expenses [55] Question: How do you think net interest margin trends will evolve? - Management expressed cautious optimism for moderation in net interest margin pressure, projecting a range of 2.80% to 2.90% for the next couple of quarters [63]