Central Pacific Financial (US:CPF)2019-11-05 18:23Financial Performance - Net income for the three months ended September 30, 2019, was $14.6 million, or $0.51 per diluted share, compared to $15.2 million, or $0.52 per diluted share for the same period in 2018[198] - Net income for the nine months ended September 30, 2019, was $44.1 million, or $1.53 per diluted share, compared to $43.7 million, or $1.47 per diluted share for the same period in 2018[198] - Return on average assets for the three months ended September 30, 2019, was 0.99%, down from 1.06% in the same period of 2018[200] - Return on average shareholders' equity for the three months ended September 30, 2019, was 11.11%, compared to 12.54% for the same period in 2018[200] Investment and Expenses - The company plans to invest approximately $40 million in the RISE2020 initiative during the remainder of 2019 and throughout 2020[214] - The company expects annual RISE2020-related expenses to approximate $7 million by the start of 2021[214] - The efficiency ratio is expected to be in the 63-65% range in 2019 and 2020, with a long-term target of 57% by the end of 2022[214] Economic Indicators - Hawaii's unemployment rate was 2.7% in September 2019, compared to 2.6% in September 2018, remaining below the national average of 3.5%[206] - Visitor arrivals to Hawaii increased by 5.2% to 7.1 million in the eight months ended August 30, 2019, but visitor spending decreased by 0.5% to $12.1 billion[204] - The median sales price for single-family homes on Oahu was $785,000, a decrease of 0.5% from $789,000 in the same prior year period[207] Asset and Liability Management - Total assets increased to $5,907,207 thousand, up from $5,709,825 thousand, reflecting a growth of $197,382 thousand[218] - Total interest-bearing liabilities reached $3,920,304 thousand, up from $3,802,028 thousand, an increase of $118,276 thousand[218] - Total equity stood at $524,083 thousand, an increase of $39,346 thousand from $484,737 thousand[218] - Total interest-earning assets amounted to $5,527,532 thousand, compared to $5,418,924 thousand, an increase of $108,608 thousand[218] Interest Income and Expense - Net interest income rose to $45,837 thousand, compared to $43,570 thousand, an increase of $2,267 thousand[218] - Interest expense for the three months ended September 30, 2019, was $8.3 million, a 22.3% increase from the same period in 2018[227] - Net interest income for the three months ended September 30, 2019, was $45.8 million, an increase of 5.2% from $43.6 million in the same period of 2018[222] - The net interest margin for the three months ended September 30, 2019, was 3.30%, an increase of 10 basis points from 3.20% in the same period of 2018[229] Loan and Lease Performance - Loans and leases, including loans held for sale, increased to $4,293,455 thousand, up from $3,941,511 thousand, a growth of $351,944 thousand[218] - Average loans and leases increased by $351.9 million for the three months ended September 30, 2019, contributing approximately $3.6 million to the increase in interest income[225] - The Hawaii loan portfolio increased by $229.7 million, or 6.3%, from December 31, 2018, primarily due to increased demand from customers[256] - The residential mortgage portfolio grew by $130.5 million, or 9.1%, while the commercial mortgage portfolio increased by $93.6 million, or 9.0%[255] Nonperforming Assets and Charge-offs - Nonperforming assets decreased to $1.36 million at September 30, 2019, down from $2.74 million at December 31, 2018, representing a reduction of 50.3%[263] - The total nonperforming assets, accruing loans delinquent for 90 days or more, and restructured loans still accruing interest totaled $10.45 million at September 30, 2019, down 35.2% from $16.14 million at December 31, 2018[263] - The total charge-offs for the three months ended September 30, 2019, were $2.63 million, compared to $2.49 million for the same period in 2018[268] Operating Income and Expenses - Total other operating income for the three months ended September 30, 2019, was $10.3 million, a decrease of $0.6 million, or 5.1%, from $10.8 million in the prior year[237] - Total other operating expense for the three months ended September 30, 2019, was $34.9 million, an increase of $0.9 million, or 2.7%, from $34.0 million in the prior year[243] - Salaries and employee benefits accounted for $20.6 million in the three months ended September 30, 2019, reflecting an 8.5% increase from $19.0 million in the prior year[243] Capital and Dividends - Shareholders' equity totaled $525.2 million at September 30, 2019, an increase from $491.7 million at December 31, 2018, driven by net income of $44.1 million[276] - The cash dividend declared on October 22, 2019, was $0.23 per share, a 9.5% increase from the previous year's $0.21 per share[280] - The total risk-based capital ratio was 13.7% as of September 30, 2019, exceeding the minimum required ratio of 8.0%[290] Liquidity Management - The bank's liquidity management aims to balance sources and uses of funds to meet cash requirements for loans and deposits[295] - The bank has additional unused borrowings available at the Federal Reserve discount window of $65.6 million as of September 30, 2019[298] - The carrying value of real estate loans securing FHLB advances was $2.42 billion as of September 30, 2019[297]