Central Pacific Financial (US:CPF)2020-01-29 20:18Financial Data and Key Metrics Changes - Net income for Q4 2019 was $14.2 million or $0.50 per diluted share, compared to $14.6 million or $0.51 per diluted share in the previous quarter [11] - For the full year 2019, net income was $58.3 million or $2.03 per diluted share, compared to $59.5 million or $2.01 per diluted share in 2018 [11] - Return on average assets for Q4 was 0.95% and for the full year was 0.99% [11] - The efficiency ratio for Q4 was 62.81%, slightly up from 62.48% in the prior quarter [15] Business Line Data and Key Metrics Changes - Total loans increased by $82 million or 1.9% from the previous quarter and by $371 million or 9.1% year-over-year [9] - Core deposits increased by $103 million or 2.5% sequentially and by $243 million or 6.1% year-over-year [10] - Nonperforming assets were $1.7 million, representing 3 basis points of total assets [10] Market Data and Key Metrics Changes - The Hawaii economy is performing well, with annual visitor arrivals expected to exceed 10 million for the first time [8] - The company reported strong growth in construction activity and the military's growing importance in Hawaii [8] Company Strategy and Development Direction - The company is executing the RISE2020 initiative to enhance customer experience and drive long-term growth [7] - Investments in branch and ATM modernization are underway, with construction at the main branch headquarters [8] - The company aims to increase core deposits through further investments in technology and workforce [22] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the solid financial performance and positive momentum at the end of 2019 [17] - The company anticipates mid-single digit loan growth for 2020 and aims to exceed this guidance [26] - The effective tax rate is expected to be in the 24% to 26% range going forward [15] Other Important Information - The company repurchased 165,700 shares in Q4 2019 and 797,000 shares for the full year, returning $48.5 million in capital to shareholders [6] - The allowance for loan and lease losses was $48.0 million or 1.08% of outstanding loans [14] Q&A Session Summary Question: Margin performance and asset repricing - Management confirmed that the $1.1 million in nonrecurring interest was the only unusual item affecting the margin [19] - There is potential for further downward repricing on the asset side, but the company is pleased with the fourth quarter results [19] Question: Loan growth expectations for 2020 - The company is guiding for mid-single digit loan growth for 2020, with hopes to exceed this guidance [26] Question: Deposit growth strategies - The company plans to grow core deposits through cross-selling and enhancing customer relationships [27] Question: CECL preparations - The company is on track with CECL preparations and plans to disclose a range of reserves in the upcoming 10-K filing [33] Question: Capital return strategy - The company will maintain its quarterly dividend and be opportunistic with share repurchases, having approved a new $30 million repurchase plan [34]