CENTRAL PACIFIC FINANCIAL CORP. HONOLULU, Jan. 29, 2015 /PRNewswire/ -- Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank (the "Bank"), today reported net income for the fourth quarter of 2014 of $13.3 million, or $0.37 per diluted share, compared to net income in the fourth quarter of 2013 of $10.3 million, or $0.24 per diluted share, and net income in the third quarter of 2014 of $8.2 million, or $0.23 per diluted share. For the year ended December 31, 2014, the Company's net income was $40.5 million, or $1.07 per diluted share, compared to net income of $172.1 million, or $4.07 per diluted share in the previous year. Net income for the year ended December 31, 2013 included a non-cash income tax benefit of $119.8 million in the first quarter of 2013 related to the reversal of a significant portion of a valuation allowance established against the Company's net deferred tax assets during the third quarter of 2009. Excluding this income tax benefit, net income for the year ended December 31, 2013 was $52.3 million, or $1.24 per diluted share.
"We ended the year with continued meaningful gains in loans and deposits, an expanding net interest margin, as well as improvement in our credit quality," said John C. Dean, Chairman and CEO. "We are pleased with the progress made throughout 2014 and believe we are well positioned for continued growth in the coming year."
In January 2015, the Company's Board of Directors declared a quarterly cash dividend of $0.12 per share on the Company's outstanding common shares, a 20% increase from $0.10 per share in the fourth quarter of 2014. The dividend will be payable on March 16, 2015 to shareholders of record at the close of business on February 27, 2015. This represents the seventh consecutive quarterly cash dividend.
During the fourth quarter of 2014, the Company repurchased 676,354 shares of common stock at a total cost of $13.0 million under its share repurchase program. The average cost was $19.28 per share repurchased.
In January 2015, the Company's Board of Directors increased the authorization under the share repurchase program by an additional $25.0 million. This authorization, combined with the previously announced authorization of $30.0 million, brings the total repurchase authority to $55.0 million. From January 2 through January 28, 2015, the Company repurchased an additional 473,829 shares of common stock at an average cost of $19.64 per share repurchased. Remaining buyback authority under the share repurchase program was $29.2 million at January 28, 2015.
Significant Highlights and Fourth Quarter Results
-- Reported net income of $13.3 million, compared to net income in the
third quarter of 2014 of $8.2 million.
-- Increased the loans and leases portfolio by $57.4 million to $2.93
billion at December 31, 2014, compared to $2.87 billion at September 30,
2014.
-- Increased total deposits by $62.2 million to $4.11 billion at December
31, 2014, compared to $4.05 billion at September 30, 2014.
-- Increased the net interest margin to 3.33% at December 31, 2014,
compared to 3.30% at September 30, 2014.
-- Recorded a credit to the provision for loan and lease losses of $5.4
million in the fourth quarter of 2014, compared to a credit to the
provision for loan and lease losses of $1.7 million in the third quarter
of 2014.
-- Nonperforming assets decreased by $3.3 million to $42.0 million at
December 31, 2014 from $45.3 million at September 30, 2014.
-- Maintained a strong capital position with Tier 1 risk-based capital,
total risk-based capital, and leverage capital ratios of 16.97%, 18.24%,
and 12.03%, respectively, as of December 31, 2014, compared to 17.19%,
18.46%, and 11.87%, respectively, as of September 30, 2014. 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 2014 was $36.2 million, compared to $35.5 million in the year-ago quarter and in the third quarter of 2014. Net interest margin was 3.33%, compared to 3.29% in the year-ago quarter and 3.30% in the third quarter of 2014. The sequential quarter increase in net interest income and net interest margin was primarily due to a $65.3 million increase in higher-yielding average loans and leases. The taxable equivalent yield on the investment securities portfolio increased to 2.64% in the current quarter, compared to 2.57% last quarter. The taxable equivalent yield on the loans and leases portfolio decreased to 3.94% in the current quarter from 3.96% last quarter.
In the fourth quarter of 2014, we recorded a credit to the provision for loan and lease losses of $5.4 million, compared to a credit of $1.3 million in the year-ago quarter and a credit of $1.7 million in the third quarter of 2014. The credit to the provision for loan and lease losses was primarily attributable to improving trends in credit quality.
Other operating income for the fourth quarter of 2014 totaled $10.2 million, compared to $12.2 million in the year-ago quarter and $11.5 million in the third quarter of 2014. The decrease from the year-ago quarter was primarily due to a gain on the early extinguishment of trust preferred debt of $1.0 million and investment securities gains of $0.5 million recorded in the fourth quarter of 2013. The sequential quarter decrease was primarily due to a partial recovery of a previous counterparty loss on a financing transaction of $0.6 million recorded in the third quarter of 2014 and lower net gains on sales of residential mortgage loans of $0.3 million.
Other operating expense for the fourth quarter of 2014 totaled $32.7 million, compared to $35.3 million in the year-ago quarter and $35.2 million in the third quarter of 2014. The decrease from the year-ago quarter was primarily attributable to lower salaries and employee benefits of $2.9 million, partially offset by higher reserves for unfunded loan commitments of $0.4 million. The lower salaries and employee benefits is primarily due to a staff right-sizing initiative that began in 2013 and included a voluntary early retirement program and a reduction of select positions. In the year-ago quarter there was $1.8 million in severance, early retirement, and retention expenses related to this initiative, compared to a credit of $0.3 million in the current quarter. The sequential quarter decrease was primarily attributable to Waikiki branch consolidation and relocation costs of $1.3 million recorded last quarter and lower foreclosed asset expense of $1.1 million, partially offset by higher salaries and employee benefits of $0.9 million. Salaries and employee benefits in the current quarter included additional accruals for restricted stock awards and incentive compensation totaling $1.3 million.
The efficiency ratio for the fourth quarter of 2014 was 70.59%, compared to 73.99% in the year-ago quarter and 75.00% in the third quarter of 2014. The efficiency ratio in the third quarter of 2014 was significantly impacted by the aforementioned branch consolidation and relocation costs and significant foreclosed asset expenses during the quarter.
In the fourth quarter of 2014, the Company recorded income tax expense of $5.8 million, compared to an income tax expense of $3.4 million in the year-ago quarter and income tax expense of $5.2 million in the third quarter of 2014. The effective tax rate for the fourth quarter of 2014 was 30.3%, compared to 38.9% in the third quarter of 2014. Our income tax expense and effective tax rate in the fourth quarter of 2014 was impacted by solar tax credits of $0.4 million and a credit true-up adjustment of our net deferred tax assets of $0.5 million. Our income tax expense and effective tax rate in the third quarter of 2014 increased due to a 2013 income tax return true-up adjustment of $0.9 million which was primarily related to a premium paid on the repurchase of preferred stock of two subsidiaries. As of December 31, 2014, the Company's net deferred tax assets totaled $104.4 million.
Balance Sheet Highlights
Total assets at December 31, 2014 of $4.85 billion increased by $111.8 million from December 31, 2013, and increased by $102.7 million from September 30, 2014.
Total loans and leases at December 31, 2014 of $2.93 billion increased by $301.6 million and $57.4 million from December 31, 2013 and September 30, 2014, respectively. The increase in total loans and leases from the third quarter of 2014 was primarily due to an increase in the residential mortgage and commercial and industrial loan portfolios of $30.5 million and $21.4 million, respectively.
Total deposits at December 31, 2014 were $4.11 billion, and increased by $174.1 million and $62.2 million from December 31, 2013 and September 30, 2014, respectively. Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $3.31 billion at December 31, 2014. This represents an increase of $212.9 million and $29.3 million from a year ago and from September 30, 2014, respectively. Changes in total deposits during the quarter included net increases in noninterest-bearing demand deposits, time deposits, and savings and money market deposits of $38.1 million, $25.1 million, and $13.0 million, respectively, offset by a net decrease in interest-bearing demand deposits of $14.1 million.
Total shareholders' equity was $568.0 million at December 31, 2014, compared to $660.1 million and $569.0 million at December 31, 2013 and September 30, 2014, respectively. The sequential quarter decrease is due primarily to repurchases of $13.0 million in common stock under the Company's stock repurchase program, partially offset by net income of $13.3 million in the current quarter.
Asset Quality
Nonperforming assets at December 31, 2014 totaled $42.0 million, or 0.87% of total assets, compared to $45.3 million, or 0.95% of total assets at September 30, 2014. The sequential-quarter change in nonperforming assets reflects a net decrease in U.S. Mainland commercial and industrial assets of $2.5 million, Hawaii construction and development assets of $1.1 million, and Hawaii commercial mortgage assets of $0.4 million, partially offset by a net increase in Hawaii residential mortgage assets of $0.9 million.
Loans delinquent for 90 days or more still accruing interest totaled $77,000 at December 31, 2014, compared to $62,000 at September 30, 2014. In addition, loans delinquent for 30 days or more still accruing interest totaled $5.8 million at December 31, 2014, compared to $4.1 million at September 30, 2014.
Net charge-offs in the fourth quarter of 2014 totaled $3.4 million, compared to net charge-offs of $0.1 million in the fourth quarter of 2013, and net recoveries of $1.0 million in the third quarter of 2014. Net charge-offs during the fourth quarter of 2014 included charge-offs of two U.S. Mainland commercial and industrial loans to a single borrower on nonaccrual status totaling $2.5 million.
The ALLL, as a percentage of total loans and leases, was 2.53% at December 31, 2014, compared to 2.88% at September 30, 2014. The ALLL, as a percentage of nonperforming assets, was 176.14% at December 31, 2014, compared to 182.90% at September 30, 2014. The ALLL, as a percentage of nonaccrual loans, was 189.42% at December 31, 2014, compared to 198.67% at September 30, 2014.
Capital Levels
At December 31, 2014, the Company's Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios were 16.97%, 18.24%, and 12.03%, respectively, compared to 17.19%, 18.46%, and 11.87%, respectively, at September 30, 2014. 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 1:00 p.m. Eastern Time (8:00 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://ir.centralpacificbank.com. Alternatively, investors may participate in the live call by dialing 1-877-505-7644. A playback of the call will be available through February 28, 2015 by dialing 1-877-344-7529 (passcode: 10059029) and on the Company's website.
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $4.85 billion in assets. Central Pacific Bank, its primary subsidiary, operates 36 branches and 110 ATMs in the state of Hawaii, as of December 31, 2014. 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 any regulatory orders we are or may become subject to; oversupply of inventory and adverse conditions in the Hawaii and California real estate markets and any 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, deterioration in asset quality, and 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 destabilizing factors in the financial industry and deterioration of the real estate market, as well as the impact from any declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular; our ability to continue making progress on our recovery plan; 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 legal proceedings or regulatory or other governmental inquiries and proceedings and the resolution thereof, 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 and developments; 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 any of the foregoing items. For further information on factors that could cause actual results to materially differ from projections, please see the Company's publicly available Securities and Exchange Commission filings, including the Company's Form 10-K for the last fiscal year and, in particular, the discussion of "Risk Factors" set forth therein. The Company does not update any of its forward-looking statements except as required by law.
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Three Months Ended Year Ended
December 31, September 30, December 31, December 31, December 31,
(dollars in thousands,
except for per share
amounts) 2014 2014 2013 2014 2013
INCOME STATEMENT
Net interest income $36,184 $35,532 $35,496 $143,418 $133,109
Provision (credit) for
loan and lease losses (5,371) (1,722) (1,333) (6,414) (11,310)
Total other operating
income 10,212 11,463 12,173 43,823 54,945
Total other operating
expense 32,749 35,246 35,271 132,813 139,536
Net income 13,265 8,230 10,295 40,453 172,075
Basic earnings per common
share $0.37 $0.23 $0.24 $1.08 $4.10
Diluted earnings per
common share 0.37 0.23 0.24 1.07 4.07
Dividends declared per
common share 0.10 0.10 0.08 0.36 0.16
PERFORMANCE RATIOS
Return on average assets
(1) 1.11% 0.69% 0.87% 0.85% 3.73%
Return on average
shareholders' equity (1) 9.28 5.78 6.22 6.80 27.70
Return on average
tangible shareholders'
equity (1) 9.46 5.90 6.35 6.93 28.34
Efficiency ratio (2) 70.59 75.00 73.99 70.93 74.20
Net interest margin (1) 3.33 3.30 3.29 3.32 3.19
Dividend payout ratio (3) 27.03 43.48 33.33 33.33 3.90
Average shareholders'
equity to average assets 11.97 11.99 13.95 12.50 13.47
SELECTED AVERAGE BALANCES
Average loans and leases,
including loans held for
sale $2,914,253 $2,848,983 $2,553,574 $2,798,826 $2,394,955
Average interest-earning
assets 4,397,741 4,354,108 4,368,386 4,380,314 4,235,052
Average assets 4,775,307 4,745,514 4,746,897 4,759,816 4,610,822
Average deposits 4,052,316 4,004,666 3,928,031 3,989,066 3,804,662
Average interest-bearing
liabilities 3,148,376 3,168,016 3,152,826 3,175,510 3,061,652
Average shareholders'
equity 571,514 569,118 662,106 595,210 621,282
December 31, September 30, December 31,
2014 2014 2013
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp.
Tier 1 leverage capital ratio 12.03% 11.87% 20.30%
Tier 1 risk-based capital ratio 16.97 17.19 21.57
Total risk-based capital ratio 18.24 18.46 13.68
Central Pacific Bank
Tier 1 leverage capital ratio 11.57 11.26 19.63
Tier 1 risk-based capital ratio 16.33 16.30 20.90
Total risk-based capital ratio 17.59 17.57 13.22
BALANCE SHEET
Loans and leases $2,932,198 $2,874,755 $2,630,601
Total assets 4,852,987 4,750,269 4,741,198
Total deposits 4,110,300 4,048,096 3,936,173
Long-term debt 92,785 92,785 92,799
Total shareholders' equity 568,041 569,042 660,113
Total shareholders' equity to total assets 11.70% 11.98% 13.92%
Tangible common equity to tangible assets (4) 11.52 11.78 13.69
ASSET QUALITY
Allowance for loan and lease losses $74,040 $82,838 $83,820
Non-performing assets 42,035 45,292 46,751
Allowance to loans and leases outstanding 2.53% 2.88% 3.19%
Allowance to non-performing assets 176.14 182.90 179.29
PER SHARE OF COMMON STOCK
Book value per common share $16.12 $15.85 $15.68
Tangible book value per common share 15.84 15.55 15.37
Market value per common share 21.50 17.93 20.08
(1) Annualized
(2) Efficiency ratio is defined as
total operating expense divided by
total revenue (net interest income
and total other operating income).
(3) Dividend payout ratio is
defined as dividends declared per
share divided by diluted earnings
per share.
(4) The tangible common equity
ratio is a non-GAAP measure which
should be read in conjunction with
the Company's GAAP financial
information. Comparison of our
ratio with those of other
companies may not be possible
because other companies may
calculate the ratio differently.
See Reconciliation of Non-GAAP
Financial Measures.
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Three Months Ended Year Ended
------------------ ----------
December 31, September 30, December 31, December 31, December 31,
(Dollars in
thousands, except
per share data) 2014 2014 2013 2014 2013
---- ---- ---- ---- ----
Adjusted Net Income
Reported net income $13,265 $8,230 $10,295 $40,453 $172,075
Release of
valuation
allowance on net
deferred tax
assets - - - - (119,802)
Adjusted net income $13,265 $8,230 $10,295 $40,453 $52,273
======= ====== ======= ======= =======
Adjusted Diluted Earnings Per Share
Diluted earnings
per share $0.37 $0.23 $0.24 $1.07 $4.07
Release of
valuation
allowance on net
deferred tax
assets - - - - (2.83)
Adjusted diluted
earnings per share $0.37 $0.23 $0.24 $1.07 $1.24
===== ===== ===== ===== =====
December 31, September 30, December 31,
2014 2014 2013
---- ---- ----
Tangible Common Equity Ratio
Total shareholders'
equity $568,041 $569,042 $660,113
Less: Other
intangible assets (10,029) (10,698) (12,704)
------- ------- -------
Tangible common
equity $558,012 $558,344 $647,409
======== ======== ========
Total assets $4,852,987 $4,750,269 $4,741,198
Less: Other
intangible assets (10,029) (10,698) (12,704)
------- ------- -------
Tangible assets $4,842,958 $4,739,571 $4,728,494
========== ========== ==========
Tangible common
equity to tangible
assets 11.52% 11.78% 13.69%
===== ===== =====
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, September 30, December 31,
(In thousands, except share data) 2014 2014 2013
---- ---- ----
ASSETS
Cash and due from banks $72,316 $76,047 $45,092
Interest-bearing deposits in other banks 13,691 14,074 4,256
Investment securities:
Available for sale 1,229,018 1,184,564 1,407,999
Held to maturity (fair value of $235,597
at December 31, 2014, $235,929 at
September 30, 2014 and $238,705 at
December 31, 2013)
238,287 242,141 252,047
Total investment securities 1,467,305 1,426,705 1,660,046
--------- --------- ---------
Loans held for sale 9,683 5,352 12,370
Loans and leases 2,932,198 2,874,755 2,630,601
Less allowance for loan and lease losses 74,040 82,838 83,820
Net loans and leases 2,858,158 2,791,917 2,546,781
--------- --------- ---------
Premises and equipment, net 49,214 49,092 49,039
Accrued interest receivable 13,584 12,722 14,072
Investment in unconsolidated
subsidiaries 7,246 7,548 9,127
Other real estate 2,948 3,596 5,163
Mortgage servicing rights 19,668 19,800 20,079
Other intangible assets 10,029 10,698 12,704
Bank-owned life insurance 152,283 151,524 149,604
Federal Home Loan Bank stock 43,932 44,457 46,193
Other assets 132,930 136,737 166,672
Total assets $4,852,987 $4,750,269 $4,741,198
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand $1,034,146 $996,033 $891,017
Interest-bearing demand 788,272 802,336 728,619
Savings and money market 1,242,598 1,229,576 1,207,016
Time 1,045,284 1,020,151 1,109,521
--------- --------- ---------
Total deposits 4,110,300 4,048,096 3,936,173
Short-term borrowings 38,000 - 8,015
Long-term debt 92,785 92,785 92,799
Other liabilities 43,861 40,346 44,037
Total liabilities 4,284,946 4,181,227 4,081,024
--------- --------- ---------
Equity:
Preferred stock, no par value,
authorized 1,100,000 shares; issued and
outstanding none at December 31, 2014,
September 30, 2014, and December 31,
2013
- - -
Common stock, no par value, authorized
185,000,000 shares; issued and
outstanding 35,233,674 shares at
December 31, 2014, 35,903,230 shares at
September 30, 2014 and 42,107,633
shares at December 31, 2013
642,205 655,219 784,547
Surplus 79,716 77,598 75,498
Accumulated deficit (157,039) (166,740) (184,087)
Accumulated other comprehensive income
(loss) 3,159 2,965 (15,845)
----- ----- -------
Total shareholders' equity 568,041 569,042 660,113
Non-controlling interest - - 61
--- --- ---
Total equity 568,041 569,042 660,174
------- ------- -------
Total liabilities and equity $4,852,987 $4,750,269 $4,741,198
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) 2014 2014 2013 2014 2013
---- ---- ---- ---- ----
Interest income:
Interest and fees on
loans and leases $28,850 $28,364 $27,117 $112,137 $104,479
Interest and dividends on
investment
securities:
Taxable interest 7,858 7,744 8,980 33,574 31,498
Tax-exempt interest 1,000 1,002 992 3,996 4,051
Dividends 13 8 7 23 23
Interest on deposits in other
banks 9 9 25 33 203
Dividends on Federal Home Loan
Bank stock 11 12 12 46 24
--- --- --- --- ---
Total interest income 37,741 37,139 37,133 149,809 140,278
------ ------ ------ ------- -------
Interest expense:
Interest on deposits:
Demand 96 96 90 373 349
Savings and money market 229 225 231 901 894
Time 573 629 651 2,453 2,801
Interest on short-term borrowings 10 10 3 92 6
Interest on long-term debt 649 647 662 2,572 3,119
--- --- --- ----- -----
Total interest expense 1,557 1,607 1,637 6,391 7,169
----- ----- ----- ----- -----
Net interest income 36,184 35,532 35,496 143,418 133,109
Provision (credit) for loan and
lease losses (5,371) (1,722) (1,333) (6,414) (11,310)
------ ------ ------ ------ -------
Net interest income after
provision for loan and lease
losses 41,555 37,254 36,829 149,832 144,419
------ ------ ------ ------- -------
Other operating income:
Service charges on deposit
accounts 2,061 2,070 2,091 8,113 7,041
Loan servicing fees 1,460 1,446 1,479 5,798 6,057
Other service charges and fees 2,842 2,886 3,164 11,754 12,490
Income from fiduciary activities 865 797 748 3,552 2,855
Equity in earnings of
unconsolidated subsidiaries 58 11 57 480 790
Fees on foreign exchange 113 118 160 464 508
Investment securities gains - - 482 240 482
Income from bank-owned life
insurance 676 810 841 2,922 2,333
Loan placement fees 81 35 162 437 570
Net gains on sales of residential
loans 1,394 1,685 1,494 5,545 9,986
Net gains on sales of foreclosed
assets 9 218 56 971 8,584
Other 653 1,387 1,439 3,547 3,249
--- ----- ----- ----- -----
Total other operating income 10,212 11,463 12,173 43,823 54,945
------ ------ ------ ------ ------
Other operating expense:
Salaries and employee benefits 17,405 16,552 20,350 67,941 76,294
Net occupancy 3,877 4,051 3,672 15,252 14,323
Equipment 888 953 888 3,582 3,676
Amortization of other intangible
assets 1,446 1,328 1,424 5,332 7,418
Communication expense 942 925 796 3,635 3,523
Legal and professional services 1,980 1,786 1,684 7,806 8,094
Computer software expense 1,735 1,659 1,397 6,327 4,579
Advertising expense 305 673 525 2,342 2,666
Foreclosed asset expense 267 1,355 43 1,710 1,036
Other 3,904 5,964 4,492 18,886 17,927
----- ----- ----- ------ ------
Total other operating expense 32,749 35,246 35,271 132,813 139,536
------ ------ ------ ------- -------
Income before income taxes 19,018 13,471 13,731 60,842 59,828
Income tax expense (benefit) 5,753 5,241 3,436 20,389 (112,247)
----- ----- ----- ------ --------
Net income $13,265 $8,230 $10,295 $40,453 $172,075
Per common share data:
Basic earnings per
share $0.37 $0.23 $0.24 $1.08 $4.10
Diluted earnings per share 0.37 0.23 0.24 1.07 4.07
Cash dividends declared 0.10 0.10 0.08 0.36 0.16
Basic weighted average shares
outstanding 35,653 35,863 42,040 37,366 41,961
Diluted weighted average shares
outstanding 36,275 36,353 42,536 37,936 42,317
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, 2014 December 31, 2013 December 31, 2014 December 31, 2013
----------------- ----------------- ----------------- -----------------
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 $14,321 0.24% $9 $39,316 0.25% $25 $13,207 0.25% $33 $81,249 0.25% $203
Taxable
investment
securities,
excluding 1,246,840 2.53 7,871 1,551,844 2.32 8,987 1,344,821 2.50 33,597 1,534,136 2.05 31,521
valuation
allowance
177,998 3.46 1,539 177,135 3.44 1,526 178,275 3.45 6,148 177,510 3.51 6,232
Tax-exempt
investment
securities,
excluding
valuation
allowance
Loans and
leases,
including
loans held
for sale 2,914,253 3.94 28,850 2,553,574 4.23 27,117 2,798,826 4.01 112,137 2,394,955 4.36 104,479
Federal Home
Loan Bank
stock 44,329 0.10 11 46,517 0.10 12 45,185 0.10 46 47,202 0.05 24
------ ------ ------ ------
Total
interest
earning
assets 4,397,741 3.47 38,280 4,368,386 3.44 37,667 4,380,314 3.47 151,961 4,235,052 3.36 142,459
Nonearning assets 377,566 378,511 379,502 375,770
Total assets $4,775,307 $4,746,897 $4,759,816 $4,610,822
============
Liabilities & Equity:
Interest-bearing liabilities:
Interest-
bearing
demand
deposits $791,811 0.05% $96 $726,449 0.05% $90 $764,504 0.05% $373 $708,658 0.05% $349
Savings and
money market
deposits 1,244,699 0.07 229 1,218,088 0.08 231 1,227,049 0.07 901 1,191,919 0.07 894
Time deposits
under
$100,000 245,209 0.42 261 272,051 0.42 285 254,572 0.42 1,069 285,042 0.46 1,301
Time deposits
$100,000 and
over 760,706 0.16 312 839,198 0.17 366 804,863 0.17 1,384 769,672 0.19 1,500
Short-term
borrowings 13,166 0.31 10 4,239 0.32 3 31,732 0.29 92 1,988 0.32 6
Long-term
debt 92,785 2.77 649 92,801 2.83 662 92,790 2.77 2,572 104,373 2.99 3,119
------ ------ ------ -------
Total
interest-
bearing
liabilities 3,148,376 0.20 1,557 3,152,826 0.21 1,637 3,175,510 0.20 6,391 3,061,652 0.23 7,169
----- ----- ----- -----
Noninterest-bearing
deposits 1,009,891 872,245 938,078 849,371
Other liabilities 45,526 59,659 51,003 73,040
Total
liabilities 4,203,793 4,084,730 4,164,591 3,984,063
------------
Shareholders' equity 571,514 662,106 595,210 621,282
Non-controlling interest - 61 15 5,477
Total equity 571,514 662,167 595,225 626,759
------------
Total
liabilities
& equity $4,775,307 $4,746,897 $4,759,816 $4,610,822
============
Net interest income $36,723 $36,030 $145,570 $135,290
======= ======= ======== ========
Net interest margin 3.33% 3.29% 3.32% 3.19%
==== ==== ==== ====
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Loans and Leases by Geographic Distribution
December 31, September 30, June 30, March 31, December 31,
(Dollars in
thousands) 2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Hawaii:
Commercial, financial
and agricultural $287,254 $276,804 $268,037 $272,007 $255,987
Real estate:
Construction 111,010 105,619 96,138 82,769 71,585
Mortgage:
- residential 1,282,324 1,251,808 1,226,864 1,180,092 1,136,573
- commercial 587,322 579,654 568,672 554,299 555,270
Consumer 254,259 250,838 243,148 231,432 230,664
Leases 3,140 3,691 4,087 5,338 6,241
----- ----- ----- ----- -----
Total loans and
leases 2,525,309 2,468,414 2,406,946 2,325,937 2,256,320
Allowance for loan
and lease losses (62,685) (65,747) (65,367) (64,759) (66,639)
Net loans and leases $2,462,624 $2,402,667 $2,341,579 $2,261,178 $2,189,681
========== ========== ========== ========== ==========
U.S. Mainland:
Commercial, financial
and agricultural $176,509 $165,527 $164,707 $164,237 $142,729
Real estate:
Construction 3,544 3,621 3,740 3,886 4,031
Mortgage:
- commercial 115,951 116,920 129,060 129,254 147,497
Consumer 110,885 120,273 89,730 74,140 80,024
------- ------- ------ ------ ------
Total loans and
leases 406,889 406,341 387,237 371,517 374,281
Allowance for loan
and lease losses (11,355) (17,091) (18,232) (18,403) (17,181)
Net loans and leases $395,534 $389,250 $369,005 $353,114 $357,100
======== ======== ======== ======== ========
Total:
Commercial, financial
and agricultural $463,763 $442,331 $432,744 $436,244 $398,716
Real estate:
Construction 114,554 109,240 99,878 86,655 75,616
Mortgage:
- residential 1,282,324 1,251,808 1,226,864 1,180,092 1,136,573
- commercial 703,273 696,574 697,732 683,553 702,767
Consumer 365,144 371,111 332,878 305,572 310,688
Leases 3,140 3,691 4,087 5,338 6,241
----- ----- ----- ----- -----
Total loans and
leases 2,932,198 2,874,755 2,794,183 2,697,454 2,630,601
Allowance for loan
and lease losses (74,040) (82,838) (83,599) (83,162) (83,820)
Net loans and leases $2,858,158 $2,791,917 $2,710,584 $2,614,292 $2,546,781
========== ========== ========== ========== ==========
CENTRAL PACIFIC FINANCIAL CORP AND SUBSIDIARIES
Nonperforming Assets, Past Due and Restructured Loans
December 31, September 30, June 30, March 31, December 31,
(Dollars in thousands) 2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Nonaccrual loans (including
loans held for sale):
Commercial, financial and
agricultural $13,007 $15,625 $16,657 $17,067 $3,533
Real estate:
Construction 310 324 373 379 4,015
Mortgage-residential 13,048 12,691 13,608 18,161 20,271
Mortgage-commercial 12,722 13,056 6,236 13,610 13,769
Total nonaccrual loans 39,087 41,696 36,874 49,217 41,588
------ ------ ------ ------ ------
Other real estate:
Real estate:
Construction 747 1,804 3,048 3,770 3,770
Mortgage-residential 2,201 1,685 2,041 901 1,184
Mortgage-commercial - 107 158 158 209
Total other real estate 2,948 3,596 5,247 4,829 5,163
----- ----- ----- ----- -----
Total nonperforming assets 42,035 45,292 42,121 54,046 46,751
------ ------ ------ ------ ------
Loans delinquent for 90 days
or more:
Commercial, financial and
agricultural - - - 7 -
Real estate:
Mortgage-residential - - 99 - -
Consumer 77 62 20 23 -
Leases - - - - 15
Total loans delinquent for
90 days or more 77 62 119 30 15
--- --- --- --- ---
Restructured loans still
accruing interest:
Commercial, financial and
agricultural 361 373 384 395 406
Real estate:
Construction 892 918 944 970 3,857
Mortgage-residential 17,845 17,980 18,456 18,152 16,508
Mortgage-commercial 10,405 10,671 10,941 2,312 2,502
Total restructured loans
still accruing interest 29,503 29,942 30,725 21,829 23,273
------ ------ ------ ------ ------
Total nonperforming assets,
loans delinquent for 90
days or more and
restructured loans still
accruing interest $71,615 $75,296 $72,965 $75,905 $70,039
======= ======= ======= ======= =======
Total nonaccrual loans as a
percentage of loans and
leases 1.33% 1.45% 1.32% 1.82% 1.58%
Total nonperforming assets
as a percentage of loans
and leases, 1.43% 1.57% 1.50% 2.00% 1.77%
and other real estate
Total nonperforming assets
and loans delinquent for 90
days or more as a
percentage of loans and
leases, and other real
estate 1.43% 1.58% 1.51% 2.00% 1.77%
Total nonperforming assets,
loans delinquent for 90
days or more and
restructured loans still
accruing interest as a
percentage of loans and
leases, and other real
estate 2.44% 2.62% 2.61% 2.81% 2.66%
Quarter to Quarter Changes
in Nonperforming Assets:
Balance at Beginning of
Quarter $45,292 $42,121 $54,046 $46,751 $59,049
Additions 1,986 8,824 2,485 15,000 7,099
Reductions
Payments (843) (2,209) (4,327) (2,251) (16,654)
Return to Accrual Status (190) (1,544) (9,278) (4,749) (1,145)
Sales of Foreclosed Real
Estate (1,444) (542) (817) (654) (1,496)
Charge-offs/Writedowns (2,766) (1,358) 12 (51) (102)
Total Reductions (5,243) (5,653) (14,410) (7,705) (19,397)
------ ------ ------- ------ -------
Balance at End of Quarter $42,035 $45,292 $42,121 $54,046 $46,751
======= ======= ======= ======= =======
CENTRAL PACIFIC FINANCIAL CORP AND SUBSIDIARIES
Allowance for Loan and Lease Losses
Three Months Ended Year Ended
------------------ ----------
December 31, September 30, December 31, December 31, December 31,
(Dollars in
thousands) 2014 2014 2013 2014 2013
---- ---- ---- ---- ----
Allowance for
loan and lease
losses:
Balance at
beginning of
period $82,838 $83,599 $85,228 $83,820 $96,413
Provision for
loan and lease
losses (5,371) (1,722) (1,333) (6,414) (11,310)
Charge-offs:
Commercial,
financial and
agricultural 3,083 408 611 5,046 2,812
Real estate:
Construction - - - - 358
Mortgage-
residential - - 226 139 1,083
Mortgage-
commercial - - 3,094 1,041 6,768
Consumer 1,461 991 572 3,703 1,595
Leases - - - 8 -
Total charge-
offs 4,544 1,399 4,503 9,937 12,616
----- ----- ----- ----- ------
Recoveries:
Commercial,
financial and
agricultural 397 777 466 2,326 1,387
Real estate:
Construction 196 1,100 795 2,040 3,596
Mortgage-
residential 125 244 542 992 1,107
Mortgage-
commercial 13 14 2,146 53 4,240
Consumer 384 224 138 1,152 657
Leases 2 1 341 8 346
Total recoveries 1,117 2,360 4,428 6,571 11,333
----- ----- ----- ----- ------
Net charge-offs
(recoveries) 3,427 (961) 75 3,366 1,283
----- ---- --- ----- -----
Balance at end of
period $74,040 $82,838 $83,820 $74,040 $83,820
======= ======= ======= ======= =======
Average loans and
leases, net of
unearned 2,914,253 2,848,983 2,553,574 2,798,826 2,394,955
Annualized ratio
of net charge-
offs
(recoveries) to
average loans
and leases
0.47% (0.13)% 0.01% 0.12% 0.05%
Ratio of
allowance for
loan and lease
losses to loans
and leases
outstanding
2.53% 2.88% 3.19% 2.53% 3.19%
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/central-pacific-financial-corp-reports-133-million-fourth-quarter-earnings-300027739.html
SOURCE Central Pacific Financial Corp.
