CENTRAL PACIFIC FINANCIAL CORP. 
By HONOLULU, Jan. 31, 2013 /PRNewswire/ -- Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank (the "Bank"), today reported net income for the fourth quarter of 2012 of $12.4 million, or $0.29 per diluted share, compared to net income in the fourth quarter of 2011 of $12.1 million, or $0.29 per diluted share, and net income in the third quarter of 2012 of $10.7 million, or $0.26 per diluted share. For the year ended December 31, 2012, the Company's net income was $47.4 million, a 30% increase over net income of $36.6 million in the previous year. On a diluted per share basis, net income was $1.13 and $3.31 for 2012 and 2011, respectively. Net income per diluted share in 2011 included the impact of a one-time accounting adjustment from the previously reported exchange of the Company's preferred stock issued to the U.S. Department of Treasury for common stock as part of its recapitalization.
"We are pleased at the progress our Company continued to make in 2012," said John C. Dean, President and Chief Executive Officer. "The 30% increase in net income, year over year, is a reflection of significant improvements in our credit risk profile. In addition, we were also encouraged by the fact that we enjoyed strong growth in both loans and core deposits during the quarter."
Significant Highlights and Fourth Quarter Results
-- Reported eighth consecutive profitable quarter since the company's
recapitalization with net income of $12.4 million, compared to net
income of $10.7 million in the third quarter of 2012.
-- For the seventh consecutive quarter, the Company did not incur credit
costs as it reduced its allowance for loan and lease losses (ALLL) by an
amount greater than net foreclosed asset expense, write-downs of loans
held for sale and changes to the reserve for unfunded commitments. The
reduction in the ALLL resulted in a credit to the provision for loan and
lease losses of $2.3 million, compared to a credit of $5.0 million for
the third quarter of 2012.
-- Reduced nonperforming assets by $50.3 million to $90.0 million at
December 31, 2012 from $140.3 million at September 30, 2012.
-- The ALLL, as a percentage of total loans and leases, decreased to 4.37%
at December 31, 2012, compared to 4.59% at September 30, 2012. In
addition, the Company's ALLL, as a percentage of nonperforming assets,
increased significantly to 107.10% at December 31, 2012 from 69.08% at
September 30, 2012 and the Company's ALLL, as a percentage of nonaccrual
loans, increased to 121.53% at December 31, 2012 from 104.30% at
September 30, 2012.
-- Increased the loans and leases portfolio by $93.8 million to $2.20
billion at December 31, 2012, compared to $2.11 billion at September 30,
2012.
-- Increased total deposits by $59.2 million to $3.68 billion at December
31, 2012, compared to $3.62 billion at September 30, 2012.
-- Maintained a strong capital position with Tier 1 risk-based capital,
total risk-based capital, and leverage capital ratios of 22.54%, 23.83%,
and 14.32%, respectively, as of December 31, 2012, compared to 23.34%,
24.63%, and 14.06%, respectively, as of September 30, 2012. The
Company's capital ratios continue to be well in excess of the minimum
levels required for a "well-capitalized" regulatory designation.
Earnings Highlights
Net interest income for the fourth quarter of 2012 was $29.4 million, compared to $30.8 million in the year-ago quarter and $29.6 million in the third quarter of 2012. Net interest margin was 3.00%, compared to 3.25% in the year-ago quarter and 3.02% in the third quarter of 2012. The decrease in both net interest income and the net interest margin from both the year-ago and sequential quarters was primarily due to lower yields on the Company's interest-earning assets resulting from the continuing lower interest rate environment.
The provision for loan and lease losses for the fourth quarter of 2012 was a credit of $2.3 million, compared to a credit of $11.2 million in the year-ago quarter and a credit of $5.0 million in the third quarter of 2012. The credit to the provision for loan and lease losses was the result of continued improvement in the Company's credit risk profile, as evidenced by the previously mentioned decrease in nonperforming assets and further reductions in the historical quarterly charge-off data used to calculate the ALLL.
Other operating income for the fourth quarter of 2012 totaled $13.0 million, compared to $15.2 million in the year-ago quarter and $15.9 million in the third quarter of 2012. The decrease from the year-ago quarter was primarily due to lower rental income from foreclosed properties of $1.9 million, lower unrealized gains on interest rate locks of $1.1 million, lower investment securities gains of $1.0 million, lower service charges on deposit accounts of $0.8 million and lower income from bank-owned life insurance of $0.5 million, partially offset by higher gains on sales of residential mortgage loans of $2.3 million. The sequential quarter decrease was primarily due to lower unrealized gains on interest rate locks of $2.1 million, lower investment securities gains of $0.8 million, lower rental income from foreclosed properties of $0.6 million and lower service charges on deposit accounts of $0.5 million, partially offset by higher gains on sales of residential mortgage loans of $1.3 million.
Other operating expense for the fourth quarter of 2012 totaled $32.3 million, compared to $45.2 million in the year-ago quarter and $39.8 million in the third quarter of 2012. The decrease from the year-ago quarter was primarily due to lower net credit-related charges (which includes changes in the reserve for unfunded commitments, write-downs of loans held for sale and foreclosed asset expense) of $9.2 million, lower charitable contributions of $3.1 million and a lower provision for repurchased residential mortgage loans of $1.5 million. The sequential quarter decrease was primarily attributable to lower net credit-related charges of $9.9 million, partially offset by a lower credit to the provision for repurchased residential mortgage loans of $0.7 million and higher salaries and employee benefits of $0.6 million.
The efficiency ratio for the fourth quarter of 2012 was 81.7% (excluding foreclosed asset income of $3.5 million, and amortization expense related to certain intangible assets totaling $0.7 million), compared to 92.0% in the year-ago quarter (excluding foreclosed asset expense of $3.0 million and amortization expense related to certain intangible assets totaling $0.7 million) and 78.51% (excluding foreclosed asset expense of $2.9 million, loss on sale of loans held for sale of $0.8 million and amortization expense related to certain intangible assets totaling $0.7 million) in the third quarter of 2012.
The Company continues to recognize a full valuation allowance against its net deferred tax assets and did not record any net income tax benefit or expense during the fourth quarter of 2012.
Balance Sheet Highlights
Total assets at December 31, 2012 of $4.37 billion increased by $237.5 million and $60.8 million from December 31, 2011 and September 30, 2012, respectively.
Total loans and leases at December 31, 2012 of $2.20 billion increased by $139.5 million and $93.8 million from December 31, 2011 and September 30, 2012, respectively. The increase in total loans and leases from the third quarter of 2012 was due to an increase in the residential mortgage, commercial and consumer loan portfolios of $50.0 million, $34.8 million and $20.0 million, respectively, partially offset by a decrease in the construction and development, leases and commercial mortgage loan portfolios of $8.1 million, $1.6 million and $1.3 million, respectively.
Total deposits at December 31, 2012 were $3.68 billion, compared to $3.44 billion and $3.62 billion at December 31, 2011 and September 30, 2012, respectively. Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $3.01 billion at December 31, 2012. This represents an increase of $220.4 million from a year ago and an increase of $63.3 million from September 30, 2012. Changes in total deposits during the quarter included an increase in non-interest bearing demand deposits, interest-bearing demand deposits and savings and money market deposits of $39.5 million, $24.5 million and $8.8 million, respectively, offset by a decrease in time deposits of $13.7 million.
Total shareholders' equity was $504.8 million at December 31, 2012, compared to $456.4 million and $501.0 million at December 31, 2011 and September 30, 2012, respectively.
Asset Quality
Nonperforming assets at December 31, 2012 totaled $90.0 million, or 2.06% of total assets, compared to $140.3 million, or 3.26% of total assets at September 30, 2012. The sequential-quarter change reflects net decreases in Hawaii construction and development assets of $33.9 million, Mainland construction and development assets of $9.0 million, Hawaii residential mortgage assets of $6.5 million, Mainland commercial mortgage assets of $0.4 million, Hawaii commercial mortgage assets totaling $0.3 million, Hawaii lease assets of $0.2 million and Hawaii commercial assets of $0.1 million.
Loans delinquent for 90 days or more still accruing interest totaled $0.5 million at both December 31, 2012 and September 30, 2012. In addition, loans delinquent for 30 days or more still accruing interest totaled $10.4 million at December 31, 2012, compared to $5.7 million at September 30, 2012.
Net recoveries in the fourth quarter of 2012 totaled $1.8 million, compared to net charge-offs of $10.1 million and $1.9 million in the year-ago quarter and third quarter of 2012, respectively.
The ALLL, as a percentage of total loans and leases, was 4.37% at December 31, 2012, compared to 4.59% at September 30, 2012. The ALLL, as a percentage of nonperforming assets, was 107.10% at December 31, 2012, compared to 69.08% at September 30, 2012. The ALLL, as a percentage of nonaccrual loans, was 121.53% at December 31, 2012, compared to 104.30% at September 30, 2012.
Capital Levels
At December 31, 2012, the Company's Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios were 22.54%, 23.83%, and 14.32%, respectively, compared to 23.34%, 24.63%, and 14.06%, respectively, at September 30, 2012. The Company's capital ratios continue to exceed the levels required to be considered a "well-capitalized" institution for regulatory purposes.
Non-GAAP Financial Measures
This press release contains certain references to financial measures that have been adjusted to exclude certain expenses and other specified items. These financial measures differ from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP") in that they exclude unusual or non-recurring charges, losses, credits or gains. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Management believes that financial presentations excluding the impact of these items provide useful supplemental information that is important to a proper understanding of the Company's core business results by investors. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies.
Conference Call
The Company's management will host a conference call today at 12:00 p.m. Eastern Time (7:00 a.m. Hawaii Time) to discuss the quarterly results. Individuals are encouraged to listen to the live webcast of the presentation by visiting the investor relations page of the Company's website at http://investor.centralpacificbank.com. Alternatively, investors may participate in the live call by dialing 1-888-317-6016. A playback of the call will be available through February 28, 2013 by dialing 1-877-344-7529 (passcode: 10023257) and on the Company's website.
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $4.37 billion in assets. Central Pacific Bank, its primary subsidiary, operates 34 branches and 116 ATMs in the state of Hawaii, as of December 31, 2012. For additional information, please visit the Company's website at http://www.centralpacificbank.com.
Forward-Looking Statements
This document may contain forward-looking statements concerning projections of revenues, income/loss, earnings/loss per share, capital expenditures, dividends, capital structure, or other financial items, plans and objectives of management for future operations, future economic performance, or any of the assumptions underlying or relating to any of the foregoing. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts, and may include the words "believes," "plans," "expects," "anticipates," "forecasts," "intends," "hopes," "should," "estimates," or words of similar meaning. While the Company believes that our forward-looking statements and the assumptions underlying them are reasonably based, such statements and assumptions are by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect. Accordingly, actual results could materially differ from projections for a variety of reasons, to include, but not limited to: the effect of, and our failure to comply with all of the requirements of, the Memorandum of Understanding with the Federal Deposit Insurance Corporation ("FDIC") and the Hawaii Division of Financial Institutions ("DFI"), effective May 5, 2011, the Written Agreement with the Federal Reserve Bank of San Francisco and DFI, dated July 2, 2010, and any further regulatory orders we are or may become subject to; our ability to continue making progress on our recovery plan; oversupply of inventory and adverse conditions in the Hawaii and California real estate markets and recurring weakness in the construction industry; adverse changes in the financial performance and/or condition of our borrowers and, as a result, increased loan delinquency rates, further deterioration in asset quality and further losses in our loan portfolio; the impact of local, national, and international economies and events (including political events, acts of war or terrorism, natural disasters such as wildfires, tsunamis and earthquakes) on the Company's business and operations and on tourism, the military and other major industries operating within the Hawaii market and any other markets in which the Company does business; deterioration or malaise in economic conditions, including the continued destabilizing factors in the financial industry and deterioration of the real estate market, as well as the impact of declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular; the impact of regulatory action on the Company and Central Pacific Bank and legislation affecting the banking industry; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, other regulatory reform, and any related rules and regulations on our business operations and competitiveness; the costs and effects of legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; the effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, securities market and monetary fluctuations; negative trends in our market capitalization and adverse changes in the price of the Company's common shares; changes in consumer spending, borrowings and savings habits; technological changes; changes in the competitive environment among financial holding companies and other financial service providers; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; our ability to attract and retain skilled executives and employees; changes in our organization, compensation and benefit plans; and our success at managing the risks involved in the foregoing items.
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights - December 31, 2012
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
(in thousands, except per share
data) 2012 2011 2012 2011
INCOME STATEMENT
Net income $12,410 $12,095 $47,421 $36,571
Per common share data:
0.30 0.29 1.14 3.36
Basic earnings per share (after
preferred stock dividends, accretion
of discount, and conversion of
preferred stock to common stock)
0.29 0.29 1.13 3.31
Diluted earnings per share (after
preferred stock dividends, accretion
of discount, and conversion of
preferred stock to common stock)
PERFORMANCE RATIOS
Return on average assets (1) 1.16% 1.19% 1.13% 0.90%
Return on average shareholders'
equity (1) 9.81 10.78 9.81 9.83
Net income to average tangible
shareholders' equity (1) 10.13 11.27 10.17 10.41
Efficiency ratio (2) 81.70 91.99 78.89 92.06
Net interest margin (1) 3.00 3.25 3.10 3.09
December 31,
REGULATORY CAPITAL RATIOS 2012 2011
Central Pacific Financial Corp.
Tier 1 risk-based capital 22.54% 22.94%
Total risk-based capital 23.83 24.24
Leverage capital 14.32 13.78
Central Pacific Bank
Tier 1 risk-based capital 21.47% 21.63%
Total risk-based capital 22.75 22.93
Leverage capital 13.65 13.00
December 31, %
2012 2011 Change
BALANCE SHEET
Total assets $4,370,368 $4,132,865 5.7%
Loans and leases 2,203,944 2,064,447 6.8
Net loans and leases 2,107,531 1,942,354 8.5
Deposits 3,680,772 3,443,528 6.9
Total shareholders' equity 504,822 456,440 10.6
Book value per common share 12.06 10.93 10.3
Tangible book value per common share 11.69 10.48 11.5
Market value per common share 15.59 12.92 20.7
Tangible common equity ratio (3) 11.24% 10.63% 5.7
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights - December 31, 2012
(Unaudited)
Three Months Ended Year Ended
December 31, % December 31, %
2012 2011 Change 2012 2011 Change
SELECTED AVERAGE BALANCES
Total assets $4,293,042 $4,064,411 5.6% $4,207,655 $4,054,628 3.8%
Interest-earning assets 3,983,983 3,787,703 5.2 3,898,677 3,822,410 2.0
Loans and leases, including loans
held for sale 2,172,818 2,114,686 2.7 2,130,758 2,121,544 0.4
Other real estate 28,692 62,685 (54.2) 46,913 53,033 (11.5)
Deposits 3,596,155 3,348,719 7.4 3,532,318 3,212,540 10.0
Interest-bearing liabilities 2,879,056 2,846,075 1.2 2,868,352 2,925,423 (2.0)
Total shareholders' equity 505,805 448,759 12.7 483,435 371,922 30.0
(in thousands, except per share data)
December 31, %
2012 2011 Change
NONPERFORMING ASSETS
Nonaccrual loans (including loans held for sale) $79,332 $133,913 (40.8)%
Other real estate 10,686 61,681 (82.7)
Total nonperforming assets 90,018 195,594 (54.0)
Loans delinquent for 90 days or more (still accruing interest) 503 28 1696.4
Restructured loans (still accruing interest) 31,760 8,263 284.4
------ -----
Total nonperforming assets, loans delinquent
for 90 days or more (still accruing interest)
and restructured loans (still
accruing interest) $122,281 $203,885 (40.0)
Three Months Ended Year Ended
December 31, % December 31, %
2012 2011 Change 2012 2011 Change
Loan charge-offs $4,098 $11,275 (63.7)% $17,429 $41,543 (58.0)%
Recoveries 5,866 1,153 408.8 10,634 11,472 (7.3)
Net loan charge-offs $(1,768) $10,122 (117.5) $6,795 $30,071 (77.4)
====================
Net loan charge-offs to average
loans (1) (0.33)% 1.91% 0.32% 1.42%
====== ==== ==== ====
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights - December 31, 2012
(Unaudited)
December 31,
2012 2011
ASSET QUALITY RATIOS
Nonaccrual loans (including loans held for sale) to total loans and leases and loans held for sale 3.54% 6.33%
Nonperforming assets to total assets 2.06 4.73
Nonperforming assets, loans delinquent for 90 days or more (still accruing interest) and restructured loans
(still accruing interest) to total loans and leases, loans
held for sale & other real estate 5.43 9.37
Allowance for loan and lease losses to total loans and leases 4.37 5.91
Allowance for loan and lease losses to nonaccrual loans (including loans held for sale) 121.53 91.17
Allowance for loan and lease losses to nonperforming assets 107.10 62.42
(1) Annualized
(2) The efficiency ratio is a non-GAAP financial measure which should be read and used in conjunction with the
Company's GAAP financial information. Comparison of our efficiency ratio with those of other companies may
not be possible because other companies may calculate the efficiency ratio differently. Our efficiency ratio
is derived by dividing other operating expense (excluding amortization, impairment and write-down of
intangible assets, goodwill, loans held for sale and foreclosed property, loss on early extinguishment of
debt, loss on investment transaction and loss on sale of commercial real estate loans) by net operating
revenue (net interest income on a taxable equivalent basis plus other operating income before securities
transactions). See Reconciliation of Non-GAAP Financial Measures.
(3) The tangible common equity ratio is a non-GAAP financial measure which should be read and used in
conjunction with the Company's GAAP financial information. Comparison of our tangible common equity ratio
with those of other companies may not be possible because other companies may calculate the tangible common
equity ratio differently. Our tangible common equity ratio is derived by dividing common shareholders'
equity, less intangible assets (excluding mortgage servicing rights (MSRs)) by total assets, less intangible
assets (excluding MSRs).
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Quarter Ended Quarter Ended Quarter Ended
(Dollars in thousands, except per share data) December 31, 2012 September 30, 2012 December 31, 2011
-------------------------------------------- ----------------- ------------------ -----------------
Efficiency Ratio
Total operating expenses as a percentage of net operating revenue 75.17% 88.17% 100.14%
Amortization of other intangible assets (1.56) (1.48) (1.59)
Foreclosed asset expense 8.09 (6.35) (6.56)
Write down of assets - (1.83) -
Loss on early extinguishment of debt - - -
--- --- ---
Efficiency ratio 81.70% 78.51% 91.99%
===== ===== =====
Year Ended Year Ended
December 31, 2012 December 31, 2011
----------------- -----------------
Total operating expenses as a percentage of net operating revenue 83.52% 103.01%
Amortization of other intangible assets (2.09) (1.72)
Foreclosed asset expense (1.07) (2.73)
Write down of assets (1.47) (2.77)
Loss on early extinguishment of debt - (3.73)
--- -----
Efficiency ratio 78.89% 92.06%
===== =====
Tangible Common Equity Ratio December 31, 2012 December 31, 2011
----------------- -----------------
Total shareholders' equity $504,822 $456,440
Less: Other intangible assets (15,378) (19,053)
------- -------
Tangible common equity 489,444 437,387
======= =======
Total assets 4,370,368 4,132,865
Less: Other intangible assets (15,378) (19,053)
------- -------
Tangible assets 4,354,990 4,113,812
========= =========
Tangible common equity / Tangible assets 11.24% 10.63%
===== =====
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, September 30, December 31,
(In thousands, except share data) 2012 2012 2011
---- ---- ----
ASSETS
Cash and due from banks $56,473 $61,078 $76,233
Interest-bearing deposits in other banks 120,902 159,595 180,839
Investment securities:
Available for sale 1,536,745 1,499,546 1,492,994
Held to maturity (fair value of $162,528 at December 31, 2012,
$165,012 at September 30, 2012 and $976 at December 31, 2011) 161,848 163,733 931
Total investment securities 1,698,593 1,663,279 1,493,925
--------- --------- ---------
Loans held for sale 38,283 24,080 50,290
Loans and leases 2,203,944 2,110,163 2,064,447
Less allowance for loan and lease losses 96,413 96,928 122,093
Net loans and leases 2,107,531 2,013,235 1,942,354
--------- --------- ---------
Premises and equipment, net 48,759 49,424 51,414
Accrued interest receivable 13,896 13,198 11,674
Investment in unconsolidated subsidiaries 10,975 11,244 12,697
Other real estate 10,686 47,378 61,681
Mortgage servicing rights 22,121 22,726 22,933
Other intangible assets 15,378 16,047 19,053
Bank-owned life insurance 147,411 146,680 144,474
Federal Home Loan Bank stock 47,928 48,363 48,797
Other assets 31,432 33,291 16,501
Total assets $4,370,368 $4,309,618 $4,132,865
========== ========== ==========
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand $843,292 $803,796 $729,149
Interest-bearing demand 672,838 648,331 569,371
Savings and money market 1,186,011 1,177,164 1,136,180
Time 978,631 992,299 1,008,828
------- ------- ---------
Total deposits 3,680,772 3,621,590 3,443,528
Short-term borrowings - - 34
Long-tem debt 108,281 108,285 158,298
Other liabilities 66,536 68,738 64,585
Total liabilities 3,855,589 3,798,613 3,666,445
--------- --------- ---------
Equity:
Preferred stock, no par value, authorized 1,000,000 shares;
issued and outstanding none at December 31, 2012, September 30, 2012,
and December 31, 2011 - - -
Common stock, no par value, authorized 185,000,000 shares;
issued and outstanding 41,867,046 shares at December 31, 2012, 41,859,566
shares at September 30, 2012 and 41,749,116 shares at December 31, 2011 784,512 784,512 784,539
Surplus 70,567 69,094 66,585
Accumulated deficit (349,427) (361,837) (396,848)
Accumulated other comprehensive income (loss) (830) 9,273 2,164
---- ----- -----
Total shareholders' equity 504,822 501,042 456,440
Non-controlling interest 9,957 9,963 9,980
----- ----- -----
Total equity 514,779 511,005 466,420
------- ------- -------
Total liabilities and equity $4,370,368 $4,309,618 $4,132,865
========== ========== ==========
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Year Ended
------------------ ----------
December 31, September 30, December 31, December 31,
(In thousands, except per share data) 2012 2012 2011 2012 2011
---- ---- ---- ---- ----
Interest income:
Interest and fees on loans and leases $23,387 $24,241 $26,097 $97,029 $107,089
Interest and dividends on investment
securities:
Taxable interest 6,959 6,641 7,179 28,803 27,559
Tax-exempt interest 965 704 189 2,312 738
Dividends 5 4 4 16 12
Interest on deposits in other banks 73 84 104 285 1,052
--- --- --- --- -----
Total interest income 31,389 31,674 33,573 128,445 136,450
------ ------ ------ ------- -------
Interest expense:
Interest on deposits:
Demand 81 83 94 339 500
Savings and money market 223 232 353 1,006 2,044
Time 784 869 1,288 3,688 7,066
Interest on short-term borrowings - - - - 204
Interest on long-term debt 911 930 1,026 3,701 8,815
--- --- ----- ----- -----
Total interest expense 1,999 2,114 2,761 8,734 18,629
----- ----- ----- ----- ------
Net interest income 29,390 29,560 30,812 119,711 117,821
Provision (credit) for loan and lease losses (2,283) (4,982) (11,215) (18,885) (40,690)
------ ------ ------- ------- -------
Net interest income after provision
for loan and lease losses 31,673 34,542 42,027 138,596 158,511
------ ------ ------ ------- -------
Other operating income:
Service charges on deposit accounts 1,648 2,130 2,460 8,367 10,024
Other service charges and fees 4,454 4,538 4,286 17,569 17,239
Income from fiduciary activities 669 662 658 2,599 2,794
Equity in earnings of unconsolidated subsidiaries 188 171 157 574 458
Fees on foreign exchange 104 165 180 551 664
Investment securities gains - 789 1,045 789 1,306
Income from bank-owned life insurance 625 741 1,103 2,899 4,139
Loan placement fees 143 114 193 690 541
Net gains on sales of residential loans 6,011 4,713 3,670 17,095 8,050
Other (873) 1,906 1,483 4,611 4,966
---- ----- ----- ----- -----
Total other operating income 12,969 15,929 15,235 55,744 50,181
------ ------ ------ ------ ------
Other operating expense:
Salaries and employee benefits 17,833 17,256 17,344 69,344 63,675
Net occupancy 3,761 3,629 3,559 13,920 13,793
Equipment 958 1,030 1,070 3,966 4,702
Amortization of other intangible assets 2,689 2,698 2,148 10,179 7,033
Communication expense 886 872 886 3,428 3,517
Legal and professional services 3,189 2,772 3,536 13,824 13,506
Computer software expense 1,109 959 923 3,961 3,629
Advertising expense 884 906 453 3,516 2,961
Foreclosed asset expense (3,470) 2,863 2,959 1,888 4,557
Write down of assets - 827 - 2,586 4,624
Loss on early extinguishment of debt - - - - 6,234
Other 4,393 5,938 12,289 20,307 43,890
----- ----- ------ ------ ------
Total other operating expense 32,232 39,750 45,167 146,919 172,121
------ ------ ------ ------- -------
Income before income taxes 12,410 10,721 12,095 47,421 36,571
Income tax expense - - - - -
--- --- --- --- ---
Net income $12,410 $10,721 $12,095 $47,421 $36,571
======= ======= ======= ======= =======
Per common share data:
Basic earnings per share $0.30 $0.26 $0.29 $1.14 $3.36
Diluted earnings per share 0.29 0.26 0.29 1.13 3.31
Basic weighted average shares outstanding 41,766 41,764 41,628 41,720 35,891
Diluted weighted average shares outstanding 42,183 42,016 41,709 42,084 36,342
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
Three Months Ended Three Months Ended Year Ended Year Ended
(Dollars in thousands) December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
----------------- ----------------- ----------------- -----------------
Average Average Average Average Average Average Average Average
Balance Yield/Rate Interest Balance Yield/Rate Interest Balance Yield/Rate Interest Balance Yield/Rate Interest
------- ---------- -------- ------- ---------- -------- ------- ---------- -------- ------- ---------- --------
Assets:
Interest earning assets:
Interest-
bearing
deposits in
other banks $115,841 0.25% $73 $162,592 0.25% $104 $114,438 0.25% $285 $412,351 0.26% $1,052
1,489,529 1.87 6,964 1,449,324 1.98 7,183 1,521,164 1.89 28,819 1,227,181 2.25 27,571
Taxable
investment
securities,
excluding
valuation
allowance
Tax-exempt
investment
securities,
excluding
valuation
allowance 157,536 3.77 1,485 12,304 9.47 291 83,663 4.25 3,557 12,537 9.05 1,135
Loans and
leases,
including loans
held for sale 2,172,818 4.29 23,387 2,114,686 4.91 26,097 2,130,758 4.55 97,029 2,121,544 5.05 107,089
Federal Home
Loan Bank stock 48,259 - - 48,797 - - 48,654 - - 48,797 - -
------ ------ ------ ------
Total
interest
earning
assets 3,983,983 3.20 31,909 3,787,703 3.54 33,675 3,898,677 3.33 129,690 3,822,410 3.58 136,847
Nonearning assets 309,059 276,708 308,978 232,218
Total assets $4,293,042 $4,064,411 $4,207,655 $4,054,628
============
Liabilities & Equity:
Interest-bearing liabilities:
Interest-
bearing demand
deposits $648,630 0.05% $81 $555,624 0.07% $94 $615,960 0.05% $339 $539,519 0.09% $500
Savings and
money market
deposits 1,178,745 0.08 223 1,130,165 0.12 353 1,163,963 0.09 1,006 1,117,183 0.18 2,044
Time deposits
under $100,000 308,619 0.52 405 359,076 0.76 688 326,288 0.59 1,937 395,500 0.99 3,900
Time deposits
$100,000 and
over 634,748 0.24 379 611,662 0.39 600 652,339 0.27 1,751 484,734 0.65 3,166
Short-term
borrowings 32 0.63 - 1,878 0.01 - 11 0.67 - 35,810 0.57 204
Long-term debt 108,282 3.34 911 187,670 2.17 1,026 109,791 3.37 3,701 352,677 2.50 8,815
------- ------- ------- -------
Total
interest-
bearing
liabilities 2,879,056 0.28 1,999 2,846,075 0.38 2,761 2,868,352 0.30 8,734 2,925,423 0.64 18,629
----- ----- ----- ------
Noninterest-bearing deposits 825,413 692,192 773,768 675,604
Other liabilities 72,807 67,402 72,131 71,687
Total
liabilities 3,777,276 3,605,669 3,714,251 3,672,714
------------
Shareholders' equity 505,805 448,759 483,435 371,922
Non-controlling interest 9,961 9,983 9,969 9,992
Total equity 515,766 458,742 493,404 381,914
------------
Total
liabilities &
equity $4,293,042 $4,064,411 $4,207,655 $4,054,628
============
Net interest income $29,910 $30,914 $120,956 $118,218
======= ======= ======== ========
Net interest margin 3.00% 3.25% 3.10% 3.09%
==== ==== ==== ====
SOURCE Central Pacific Financial Corp.
