Central Pacific Financial (CPF) - 2024 Q2 - Quarterly Results

Executive Summary & Q2 2024 Highlights Central Pacific Financial Corp. reported strong second-quarter 2024 financial results, with net income increasing by 22.2% sequentially to $15.8 million, driven by NIM expansion and core deposit growth Q2 2024 Financial Performance Overview Central Pacific Financial Corp. reported strong second-quarter 2024 financial results, with net income increasing by 22.2% sequentially to $15.8 million, driven by NIM expansion and core deposit growth | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :------ | :----------- | | Net Income | $15.8M | $12.9M | +22.2% | $14.5M | +8.97% | | Diluted EPS | $0.58 | $0.48 | +20.83% | $0.53 | +9.43% | | Net Interest Margin (NIM) | 2.97% | 2.83% | +14 bps | - | - | | Total Loans | $5.38B | $5.40B | -$17.8M | - | - | | Core Deposits | $5.91B | $5.90B | +$16.7M | - | - | | Total Deposits | $6.58B | $6.62B | -$36.4M | - | - | | Net Charge-offs | $3.8M | $4.5M | -$0.8M | - | - | | Total Risk-Based Capital Ratio | 15.1% | - | - | - | - | | Common Equity Tier 1 Ratio | 11.9% | - | - | - | - | | Quarterly Cash Dividend per Share | $0.26 | - | - | - | - | Management Commentary CEO Arnold Martines highlighted the strong second-quarter financial results, noting it was the highest net income in the last five quarters, driven by NIM expansion, core deposit growth, and improved net charge-offs, alongside solid liquidity and capital growth - CEO Arnold Martines stated that Q2 2024 net income was the highest in the last five quarters, attributing success to NIM expansion, core deposit growth, and improved net charge-offs[2] - The company maintained solid liquidity and further grew its capital levels[2] - Central Pacific Bank was recognized by Forbes Magazine as one of America's Best Banks and the Best-In-State Bank for Hawaii in 2024[2] Board of Directors Update Mr. Arnold Martines was appointed Chairman of the Board for both the Company and the Bank, succeeding Ms. A. Catherine Ngo, who remains a board member - Mr. Arnold Martines was appointed Chairman of the Board of Central Pacific Financial Corp. and Central Pacific Bank[3] - Mr. Martines replaces Ms. A. Catherine Ngo, who continues to serve as a member of the Board of Directors[3] Financial Performance The company's financial performance in Q2 2024 was marked by increased net interest income and margin, reduced credit loss provisions, and improved efficiency, contributing to overall profitability Net Interest Income and Margin (NIM) Net interest income increased sequentially due to higher average yields on investment securities and loans, while interest-bearing liability costs remained stable, leading to a 14 bps increase in NIM | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :------------------ | :------ | :------ | :----------- | :------ | :----------- | | Net Interest Income | $51.9M | $50.2M | +3.5% | $52.7M | -1.5% | | Net Interest Margin | 2.97% | 2.83% | +14 bps | 2.96% | +1 bp | - The sequential increase in net interest income and NIM was primarily due to higher average yields earned on investment securities and loans[4] - Interest-bearing liability costs remained relatively stable[4] Provision for Credit Losses The provision for credit losses decreased significantly both sequentially and year-over-year, reflecting an improvement in credit quality outlook | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | :------ | :----------- | | Provision for Credit Losses | $2.2M | $3.9M | -43.59% | $4.3M | -48.72% | | Provision for Loans | $2.4M | - | - | - | - | | Credit for Off-Balance Sheet | -$0.2M | - | - | - | - | Other Operating Income Total other operating income increased sequentially and year-over-year, primarily driven by higher mortgage banking income and investment services fees | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :--------------------- | :------ | :------ | :----------- | :------ | :----------- | | Total Other Operating Income | $12.1M | $11.2M | +8.04% | $10.4M | +16.35% | | Mortgage Banking Income | +$0.4M | - | - | - | - | | Investment Services Fees | +$0.6M | - | - | - | - | Operating Expenses and Efficiency Ratio Total other operating expenses saw a slight increase, mainly due to higher salaries and employee benefits, however, the efficiency ratio improved sequentially | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :---------------------- | :------ | :------ | :----------- | :------ | :----------- | | Total Other Operating Expense | $41.2M | $40.6M | +1.48% | $39.9M | +3.26% | | Efficiency Ratio | 64.26% | 66.05% | -1.79% | 63.17% | +1.09% | | Primary Driver of Expense Increase | Higher salaries and employee benefits | - | - | - | - | Income Tax Expense The effective tax rate remained relatively stable quarter-over-quarter and year-over-year | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :---------------- | :------ | :------ | :------ | | Effective Tax Rate | 23.4% | 23.5% | 23.6% | Balance Sheet Overview The balance sheet reflects a slight decrease in total assets and deposits, offset by stable core deposits and strong liquidity, while loan yields continued to improve Assets Total assets experienced a slight decrease both sequentially and year-over-year, with the company maintaining strong liquidity, covering 121% of uninsured and uncollateralized deposits | Metric | Jun 30, 2024 | Mar 31, 2024 | Change (QoQ) | Jun 30, 2023 | Change (YoY) | | :------------------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Total Assets | $7.39B | $7.41B | -0.3% | $7.57B | -2.4% | | Cash on Balance Sheet | $298.9M | - | - | - | - | | Total Other Liquidity Sources | $2.56B | - | - | - | - | | Available Liquidity as % of Uninsured Deposits | 121% | 118% | +3% | 128% | -7% | - Excess balance sheet liquidity was used to pay off $41.6 million in higher cost government time deposits during Q2 2024[9] Loans Total loans decreased slightly from the previous quarter and year-ago quarter, while average yields on loans continued to increase | Metric | Jun 30, 2024 | Mar 31, 2024 | Change (QoQ) | Jun 30, 2023 | Change (YoY) | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total Loans, net of deferred fees | $5.38B | $5.40B | -0.3% | $5.52B | -2.5% | | Average Yields on Loans | 4.80% | 4.67% | +13 bps | 4.37% | +43 bps | Deposits Total deposits decreased, primarily due to a reduction in government time deposits, however, core deposits showed a modest increase, and the average rate paid on total deposits remained relatively stable sequentially | Metric | Jun 30, 2024 | Mar 31, 2024 | Change (QoQ) | Jun 30, 2023 | Change (YoY) | | :------------------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Total Deposits | $6.58B | $6.62B | -0.5% | $6.81B | -3.3% | | Core Deposits | $5.91B | $5.90B | +0.3% | - | - | | Government Time Deposits Decrease | $41.6M | - | - | - | - | | Average Rates Paid on Total Deposits | 1.33% | 1.32% | +1 bp | 0.84% | +49 bps | | FDIC-insured or fully collateralized deposits | 64% | 65% | -1% | 65% | -1% | Asset Quality Asset quality remained stable with nonperforming assets consistent, a sequential decrease in net charge-offs, and a stable allowance for credit losses ratio Nonperforming Assets Nonperforming assets remained stable as a percentage of total assets sequentially, showing a slight decrease year-over-year | Metric | Jun 30, 2024 | Mar 31, 2024 | Jun 30, 2023 | | :-------------------------------- | :----------- | :----------- | :----------- | | Nonperforming Assets | $10.3M | $10.1M | $11.1M | | Nonperforming Assets as % of Total Assets | 0.14% | 0.14% | 0.15% | Net Charge-offs Net charge-offs decreased sequentially but increased year-over-year, with the annualized rate as a percentage of average loans also showing a sequential decrease | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :------------------------------------------ | :------ | :------ | :----------- | :------ | :----------- | | Net Charge-offs | $3.8M | $4.5M | -$0.7M | $3.4M | +$0.4M | | Annualized Net Charge-offs as % of Average Loans | 0.28% | 0.34% | -0.06% | 0.24% | +0.04% | Allowance for Credit Losses The allowance for credit losses as a percentage of total loans saw a slight sequential decrease but remained consistent year-over-year | Metric | Jun 30, 2024 | Mar 31, 2024 | Jun 30, 2023 | | :------------------------------------ | :----------- | :----------- | :----------- | | Allowance for Credit Losses as % of Total Loans | 1.16% | 1.18% | 1.16% | Capital and Dividends The company strengthened its capital base with increased shareholders' equity and improved regulatory capital ratios, while maintaining a consistent quarterly cash dividend Shareholders' Equity Total shareholders' equity increased sequentially and year-over-year, indicating a strengthening capital base, with no share repurchases made during the quarter | Metric | Jun 30, 2024 | Mar 31, 2024 | Change (QoQ) | Jun 30, 2023 | Change (YoY) | | :--------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total Shareholders' Equity | $518.6M | $507.2M | +2.25% | $476.3M | +8.87% | | Share Repurchase Authorization Remaining | $19.1M | - | - | - | - | - The Company did not repurchase any shares of common stock during the second quarter of 2024[15] Regulatory Capital Ratios All regulatory capital ratios for Central Pacific Financial Corp. improved sequentially, demonstrating a robust capital position | Ratio | Jun 30, 2024 | Mar 31, 2024 | Change (QoQ) | | :-------------------------- | :----------- | :----------- | :----------- | | Leverage Ratio | 9.3% | 9.0% | +0.3% | | Tier 1 Risk-Based Capital Ratio | 12.8% | 12.6% | +0.2% | | Total Risk-Based Capital Ratio | 15.1% | 14.8% | +0.3% | | Common Equity Tier 1 Capital Ratio | 11.9% | 11.6% | +0.3% | Dividend Declaration The Board of Directors declared a quarterly cash dividend of $0.26 per share, payable in September 2024 - A quarterly cash dividend of $0.26 per share was declared on July 30, 2024[17] - The dividend is payable on September 16, 2024, to shareholders of record on August 30, 2024[17] Company Information Central Pacific Financial Corp., a Hawaii-based bank holding company, provided details on its operations and the Q2 2024 earnings conference call for investors About Central Pacific Financial Corp. Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $7.39 billion in assets as of June 30, 2024, operating 27 branches and 55 ATMs through its primary subsidiary, Central Pacific Bank - Central Pacific Financial Corp. is a Hawaii-based bank holding company[19] - As of June 30, 2024, the company had approximately $7.39 billion in assets[19] - Its primary subsidiary, Central Pacific Bank, operates 27 branches and 55 ATMs in Hawaii[19] Conference Call Details The company hosted a conference call on July 31, 2024, to discuss quarterly results, with webcast and playback options available for investors - A conference call was hosted on July 31, 2024, at 1:00 p.m. Eastern Time (7:00 a.m. Hawaii Time)[18] - Investors could listen via live webcast on the company's investor relations page or by dialing in[18] - A playback of the call is available through August 30, 2024[18] Forward-Looking Statements This section contains cautionary statements regarding forward-looking information, emphasizing that actual results may differ materially due to various risks and uncertainties, including economic conditions, regulatory changes, and market fluctuations - The document contains forward-looking statements (FLS) concerning projections of financial items, plans, objectives, and future economic performance[20] - FLS are subject to risks and uncertainties, and actual results could differ materially due to factors such as inflation, interest rate fluctuations, bank failures, economic conditions, regulatory changes, and cybersecurity breaches[21] - Investors are urged to consider risk factors detailed in the Company's Form 10-K and other SEC filings[22] Financial Tables This section provides comprehensive financial tables, including condensed income statements, balance sheets, performance ratios, and detailed breakdowns of loans and deposits, offering a complete view of the company's financial health Condensed Income Statement & Performance Ratios This section provides a condensed income statement and key performance ratios for Central Pacific Financial Corp. across multiple quarters, highlighting trends in net income, EPS, profitability, and efficiency Condensed Income Statement (Dollars in thousands, except per share amounts) | Metric | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Net interest income | $51,921 | $50,187 | $51,142 | $51,928 | $52,734 | | Provision for credit losses | 2,239 | 3,936 | 4,653 | 4,874 | 4,319 | | Total other operating income | 12,121 | 11,244 | 15,172 | 10,047 | 10,435 | | Total other operating expense | 41,151 | 40,576 | 42,522 | 39,611 | 39,903 | | Income tax expense | 4,835 | 3,974 | 4,273 | 4,349 | 4,472 | | Net income | 15,817 | 12,945 | 14,866 | 13,141 | 14,475 | | Basic earnings per share | $0.58 | $0.48 | $0.55 | $0.49 | $0.54 | | Diluted earnings per share | $0.58 | $0.48 | $0.55 | $0.49 | $0.53 | | Dividends declared per share | $0.26 | $0.26 | $0.26 | $0.26 | $0.26 | Performance Ratios | Metric | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Return on average assets (ROA) | 0.86% | 0.70% | 0.79% | 0.70% | 0.78% | | Return on average shareholders' equity (ROE) | 12.42% | 10.33% | 12.55% | 10.95% | 12.12% | | Average shareholders' equity to average assets | 6.94% | 6.73% | 6.32% | 6.39% | 6.40% | | Efficiency ratio | 64.26% | 66.05% | 64.12% | 63.91% | 63.17% | | Net interest margin (NIM) | 2.97% | 2.83% | 2.84% | 2.88% | 2.96% | | Dividend payout ratio | 44.83% | 54.17% | 47.27% | 53.06% | 49.06% | Selected Average Balances & Regulatory Capital Ratios This section presents average balance sheet figures and regulatory capital ratios for both the holding company and the bank, illustrating capital adequacy and balance sheet composition over time Selected Average Balances (Dollars in thousands) | Metric | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Average loans, including loans held for sale | $5,385,829 | $5,400,558 | $5,458,245 | $5,507,248 | $5,543,398 | | Average interest-earning assets | 7,032,515 | 7,140,264 | 7,208,613 | 7,199,866 | 7,155,606 | | Average assets | 7,338,714 | 7,449,661 | 7,498,097 | 7,510,537 | 7,463,629 | | Average deposits | 6,542,767 | 6,659,812 | 6,730,883 | 6,738,071 | 6,674,650 | | Average interest-bearing liabilities | 4,910,998 | 5,009,542 | 5,023,321 | 4,999,820 | 4,908,120 | | Average shareholders' equity | 509,507 | 501,120 | 473,708 | 480,118 | 477,711 | Regulatory Capital Ratios (Central Pacific Financial Corp.) | Ratio | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Leverage ratio | 9.3% | 9.0% | 8.8% | 8.7% | 8.7% | | Tier 1 risk-based capital ratio | 12.8% | 12.6% | 12.4% | 11.9% | 11.8% | | Total risk-based capital ratio | 15.1% | 14.8% | 14.6% | 14.1% | 13.9% | | Common equity tier 1 capital ratio | 11.9% | 11.6% | 11.4% | 11.0% | 10.9% | Regulatory Capital Ratios (Central Pacific Bank) | Ratio | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Leverage ratio | 9.6% | 9.4% | 9.2% | 9.1% | 9.1% | | Tier 1 risk-based capital ratio | 13.3% | 13.1% | 12.9% | 12.4% | 12.3% | | Total risk-based capital ratio | 14.5% | 14.3% | 14.1% | 13.7% | 13.5% | | Common equity tier 1 capital ratio | 13.3% | 13.1% | 12.9% | 12.4% | 12.3% | Balance Sheet (End of Period) This table provides a snapshot of key balance sheet items at the end of each period, including total loans, assets, deposits, debt, and shareholders' equity, along with asset quality metrics Balance Sheet (Dollars in thousands) | Metric | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Total loans, net of deferred fees and costs | $5,383,644 | $5,401,417 | $5,438,982 | $5,508,710 | $5,520,683 | | Total assets | 7,386,952 | 7,409,999 | 7,642,796 | 7,637,924 | 7,567,592 | | Total deposits | 6,582,455 | 6,618,854 | 6,847,592 | 6,874,745 | 6,805,737 | | Long-term debt | 156,223 | 156,163 | 156,102 | 156,041 | 155,981 | | Total shareholders' equity | 518,647 | 507,203 | 503,815 | 468,598 | 476,279 | | Total shareholders' equity to total assets | 7.02% | 6.84% | 6.59% | 6.14% | 6.29% | Asset Quality (Dollars in thousands) | Metric | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Allowance for credit losses (ACL) | $62,225 | $63,532 | $63,934 | $64,517 | $63,849 | | Nonaccrual loans | 10,257 | 10,132 | 7,008 | 6,652 | 11,061 | | Non-performing assets (NPA) | 10,257 | 10,132 | 7,008 | 6,652 | 11,061 | | Ratio of ACL to total loans | 1.16% | 1.18% | 1.18% | 1.17% | 1.16% | | Ratio of NPA to total assets | 0.14% | 0.14% | 0.09% | 0.09% | 0.15% | Per Share of Common Stock Outstanding | Metric | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Book value per common share | $19.16 | $18.76 | $18.63 | $17.33 | $17.61 | | Closing market price per common share | 21.20 | 19.75 | 19.68 | 16.68 | 15.71 | Consolidated Balance Sheets (Detailed) This table provides a detailed breakdown of the company's assets, liabilities, and equity over the past five quarters, offering a comprehensive view of its financial position Consolidated Balance Sheets (Dollars in thousands) | Metric | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :------------------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | ASSETS | | | | | | | Cash and due from financial institutions | $103,829 | $98,410 | $116,181 | $108,818 | $129,071 | | Interest-bearing deposits in other financial institutions | 195,062 | 214,472 | 406,256 | 329,913 | 181,913 | | Total investment securities | 1,292,586 | 1,285,781 | 1,279,548 | 1,265,306 | 1,314,017 | | Loans, net of allowance for credit losses | 5,321,419 | 5,337,885 | 5,375,048 | 5,444,193 | 5,456,834 | | Total assets | $7,386,952 | $7,409,999 | $7,642,796 | $7,637,924 | $7,567,592 | | LIABILITIES | | | | | | | Total deposits | $6,582,455 | $6,618,854 | $6,847,592 | $6,874,745 | $6,805,737 | | Long-term debt, net | 156,223 | 156,163 | 156,102 | 156,041 | 155,981 | | Total liabilities | 6,868,305 | 6,902,796 | 7,138,981 | 7,169,326 | 7,091,313 | | EQUITY | | | | | | | Total shareholders' equity | 518,647 | 507,203 | 503,815 | 468,598 | 476,279 | | Total liabilities and equity | $7,386,952 | $7,409,999 | $7,642,796 | $7,637,924 | $7,567,592 | Interest Income & Expense, Yields and Rates (Three Months) This table details the average balances, interest income/expense, and corresponding yields/rates for interest-earning assets and interest-bearing liabilities over the past five quarters, providing insight into net interest margin drivers Interest Income & Expense, Yields and Rates (Three Months Ended, Dollars in thousands) | Metric | Jun 30, 2024 | Mar 31, 2024 | Jun 30, 2023 | | :------------------------------------------------ | :----------- | :----------- | :----------- | | Interest-earning assets: | | | | | Interest and fees on loans | $64,422 | $62,819 | $60,455 | | Total interest income | 75,840 | 74,402 | 69,324 | | Average Yield on Total interest-earning assets | 4.34% | 4.19% | 3.89% | | Interest expense: | | | | | Interest on deposits | 21,640 | 21,932 | 14,013 | | Total interest expense | 23,919 | 24,215 | 16,590 | | Average Rate on Total interest-bearing liabilities | 1.96% | 1.94% | 1.36% | | Net interest income | 51,921 | 50,187 | 52,734 | | Net interest margin | 2.97% | 2.83% | 2.96% | Interest Income & Expense, Yields and Rates (Six Months) This table presents the average balances, interest income/expense, and corresponding yields/rates for interest-earning assets and interest-bearing liabilities for the six months ended June 30, 2024, and June 30, 2023, offering a half-year comparison Interest Income & Expense, Yields and Rates (Six Months Ended, Dollars in thousands) | Metric | Jun 30, 2024 | Jun 30, 2023 | | :------------------------------------------------ | :----------- | :----------- | | Interest-earning assets: | | | | Interest and fees on loans | $127,241 | $118,724 | | Total interest income | 150,575 | 136,535 | | Average Yield on Total interest-earning assets | 4.26% | 3.85% | | Interest expense: | | | | Interest on deposits | 43,572 | 24,026 | | Total interest expense | 48,134 | 29,202 | | Average Rate on Total interest-bearing liabilities | 1.95% | 1.21% | | Net interest income | 102,441 | 107,333 | | Net interest margin | 2.90% | 3.02% | Loans by Geographic Distribution This table breaks down the loan portfolio by geographic region (Hawaii and U.S. Mainland) and loan type, showing trends in commercial, real estate, and consumer lending over the past five quarters Loans by Geographic Distribution (Dollars in thousands) | Loan Type | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | HAWAII: | | | | | | | Commercial and industrial | $415,538 | $420,009 | $421,736 | $406,433 | $374,601 | | Real estate: Construction | 147,657 | 145,213 | 163,337 | 174,057 | 168,012 | | Residential mortgage | 1,913,177 | 1,924,889 | 1,927,789 | 1,930,740 | 1,942,906 | | Home equity | 706,811 | 729,210 | 736,524 | 753,980 | 750,760 | | Commercial mortgage | 1,150,703 | 1,103,174 | 1,063,969 | 1,045,625 | 1,037,826 | | Consumer | 287,295 | 306,563 | 322,346 | 338,248 | 327,790 | | Total loans, net of deferred fees and costs (Hawaii) | 4,621,181 | 4,629,058 | 4,635,701 | 4,649,083 | 4,601,895 | | U.S. MAINLAND: | | | | | | | Commercial and industrial | $169,318 | $156,087 | $153,971 | $157,373 | $170,557 | | Real estate: Construction | 23,865 | 23,356 | 22,182 | 37,455 | 32,807 | | Commercial mortgage | 314,667 | 319,088 | 318,933 | 319,802 | 329,736 | | Consumer | 254,613 | 273,828 | 308,195 | 344,997 | 385,688 | | Total loans, net of deferred fees and costs (U.S. Mainland) | 762,463 | 772,359 | 803,281 | 859,627 | 918,788 | | TOTAL: | | | | | | | Total loans, net of deferred fees and costs | $5,383,644 | $5,401,417 | $5,438,982 | $5,508,710 | $5,520,683 | | Less: Allowance for credit losses | (62,225) | (63,532) | (63,934) | (64,517) | (63,849) | | Loans, net of allowance for credit losses | $5,321,419 | $5,337,885 | $5,375,048 | $5,444,193 | $5,456,834 | Deposits Breakdown This table provides a detailed breakdown of deposit types, including noninterest-bearing, interest-bearing demand, savings, money market, and time deposits, highlighting the composition of the company's funding sources Deposits (Dollars in thousands) | Deposit Type | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Noninterest-bearing demand | $1,847,173 | $1,848,554 | $1,913,379 | $1,969,523 | $2,009,387 | | Interest-bearing demand | 1,283,669 | 1,290,321 | 1,329,189 | 1,345,843 | 1,359,978 | | Savings and money market | 2,234,111 | 2,211,966 | 2,209,733 | 2,209,550 | 2,184,652 | | Time deposits up to $250,000 | 547,212 | 544,600 | 533,898 | 465,543 | 427,864 | | Core deposits | 5,912,165 | 5,895,441 | 5,986,199 | 5,990,459 | 5,981,881 | | Government time deposits | 193,833 | 235,463 | 374,581 | 400,130 | 383,426 | | Other time deposits greater than $250,000 | 476,457 | 487,950 | 486,812 | 484,156 | 440,430 | | Total time deposits greater than $250,000 | 670,290 | 723,413 | 861,393 | 884,286 | 823,856 | | Total deposits | $6,582,455 | $6,618,854 | $6,847,592 | $6,874,745 | $6,805,737 | Nonperforming Assets and Accruing Loans 90+ Days Past Due This table provides a detailed breakdown of nonaccrual loans, other real estate owned (OREO), and accruing loans 90+ days past due, along with key ratios and quarter-to-quarter changes in nonperforming assets Nonperforming Assets and Accruing Loans 90+ Days Past Due (Dollars in thousands) | Metric | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :------------------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Nonaccrual loans: | | | | | | | Commercial and industrial | $355 | $357 | $432 | $352 | $319 | | Residential mortgage | 7,991 | 7,979 | 4,962 | 4,949 | 4,385 | | Total nonaccrual loans | 10,257 | 10,132 | 7,008 | 6,652 | 11,061 | | Total nonperforming assets ("NPAs") | 10,257 | 10,132 | 7,008 | 6,652 | 11,061 | | Accruing loans 90+ days past due: | | | | | | | Residential mortgage | 1,273 | 386 | — | 794 | 959 | | Total accruing loans 90+ days past due | 2,304 | 2,458 | 1,312 | 2,914 | 3,299 | | Total NPAs and accruing loans 90+ days past due | $12,561 | $12,590 | $8,320 | $9,566 | $14,360 | | Ratio of total nonaccrual loans to total loans | 0.19% | 0.19% | 0.13% | 0.12% | 0.20% | | Ratio of total NPAs to total assets | 0.14% | 0.14% | 0.09% | 0.09% | 0.15% | Allowance for Credit Losses on Loans This table details the activity within the allowance for credit losses, including provisions, charge-offs, and recoveries, providing insight into the company's credit loss management Allowance for Credit Losses on Loans (Dollars in thousands) | Metric | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :------------------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Balance at beginning of period | $63,532 | $63,934 | $64,517 | $63,849 | $63,099 | | Provision for credit losses on loans | 2,448 | 4,121 | 4,959 | 4,526 | 4,135 | | Total charge-offs | (5,148) | (5,520) | (6,395) | (5,112) | (4,235) | | Total recoveries | 1,393 | 997 | 853 | 1,254 | 850 | | Net charge-offs | (3,755) | (4,523) | (5,542) | (3,858) | (3,385) | | Balance at end of period | $62,225 | $63,532 | $63,934 | $64,517 | $63,849 | | Ratio of annualized net charge-offs to average loans | 0.28% | 0.34% | 0.41% | 0.28% | 0.24% | | Ratio of ACL to total loans | 1.16% | 1.18% | 1.18% | 1.17% | 1.16% |