Central Pacific Financial Corp. Reports Results For Second Quarter 2020

Rhea-AI Summary

Central Pacific Financial Corp. (NYSE: CPF) reported a Q2 2020 net income of $9.9 million, down from $13.5 million a year prior, impacted by a $10.6 million provision for credit losses amid COVID-19 challenges. The company’s net interest income rose to $49.3 million, boosted by Paycheck Protection Program loans, though net interest margin fell to 3.26%. Total assets reached $6.63 billion, a 12% increase YoY, with total loans growing 17.8% driven by PPP loans. A quarterly dividend of $0.23 per share was declared, payable on September 15, 2020.

Positive

• Net interest income increased to $49.3 million, up from $45.4 million YoY.
• Total assets grew to $6.63 billion, a 12% increase from a year ago.
• Total loans rose 17.8% year-over-year, primarily due to PPP loans.
• Quarterly dividend of $0.23 per share declared.

Negative

• Net income decreased from $13.5 million in Q2 2019 to $9.9 million in Q2 2020.
• Provision for credit losses significantly increased to $10.6 million from $1.4 million YoY.
• Nonperforming assets increased to $4.7 million, up from $1.3 million YoY.

HONOLULU, July 29, 2020 /PRNewswire/ -- Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank, today reported net income in the second quarter of 2020 of $9.9 million, or fully diluted earnings per share ("EPS") of $0.35, compared to net income in the second quarter of 2019 of $13.5 million, or EPS of $0.47, and net income in the first quarter of 2020 of $8.3 million, or EPS of $0.29. Our operating results continue to be impacted by a higher provision for credit loss expense due to deteriorating economic conditions brought on by the current COVID-19 pandemic. During the second quarter of 2020, the Company recorded a provision for credit loss expense of $10.6 million, compared to $1.4 million in the second quarter of 2019 and $9.3 million in the first quarter of 2020.

"Central Pacific is strong and well-positioned to manage through the challenging operating environment. Our credit quality, capital and liquidity are solid, which enables us to support our customers and the community during this time of great need," said Paul Yonamine, Chairman and Chief Executive Officer.

"Through the Paycheck Protection Program, we've been able to help save thousands of local jobs in our community. We are proud of our employees that stepped up during this tremendous effort and continue to work diligently to help our customers navigate the current challenges," said Catherine Ngo, President.

On July 28, 2020, the Company's Board of Directors declared a quarterly cash dividend of $0.23 per share on its outstanding common shares. The dividend will be payable on September 15, 2020 to shareholders of record at the close of business on August 31, 2020.

Earnings Highlights
Net interest income for the second quarter of 2020 was $49.3 million, compared to $45.4 million in the year-ago quarter and $47.8 million in the previous quarter. Net interest margin for the second quarter of 2020 was 3.26%, compared to 3.33% in the year-ago quarter and 3.43% in the previous quarter. The increases in net interest income from the year-ago and sequential quarters were due to growth in the loan portfolio, primarily attributable to loans originated under the Paycheck Protection Program ("PPP"), combined with lower rates paid on interest-bearing liabilities, partially offset by lower yields earned on the loan and investment securities portfolios. Net interest income for the second quarter of 2020 included $2.5 million in PPP net interest income and net loan fees, which are accreted into income over the term of the loans and accelerated when the loans are forgiven or paid-off. The declines in net interest margin, yields earned on the loans and investment securities portfolios and rates paid on interest-bearing liabilities from the year-ago and sequential quarters is primarily attributable to the five rate cuts by the Federal Reserve from August 2019 through March 2020. During the quarter, the Company had an average PPP loan balance of $379.9 million, which earned approximately 2.61% in net interest income and net loan fees.

Other operating income for the second quarter of 2020 totaled $10.7 million, compared to $10.1 million in the year-ago quarter and $8.9 million in the previous quarter. The increase in other operating income from the year-ago quarter was primarily due to higher mortgage banking income of $1.9 million and higher income from bank-owned life insurance of $0.5 million. These increases were partially offset by lower other service charges and fees of $1.0 million and lower service charges on deposit accounts of $0.9 million as certain service charges were suspended during the quarter to support our customers through the pandemic. In addition, there was less transactional activity due to the pandemic. The increase in other operating income from the previous quarter was primarily due to higher mortgage banking income of $3.2 million, combined with higher income from bank-owned life insurance of $1.4 million, partially offset by lower other service charges and fees of $2.0 million and lower service charges on deposit accounts of $0.9 million. The lower other charges and fees was primarily due to $1.3 million in income related to an interest rate swap recognized in the previous quarter, combined with the aforementioned suspension of service charges and lower transaction activity. The higher mortgage banking income compared to the year-ago and sequential quarters was primarily due to higher gains on sales of residential mortgage loans of $3.6 million and $3.8 million, respectively, partially offset by higher amortization of mortgage servicing rights of $1.1 million and $0.1 million, respectively, and lower net servicing fees of $0.6 million and $0.2 million, respectively. The higher amortization of mortgage servicing rights was primarily attributable to the recent decline in market interest rates. The higher income from bank-owned life insurance compared to the year-ago and sequential quarters was primarily attributable to current quarter gains in the equity markets.

Other operating expense for the second quarter of 2020 totaled $36.4 million, which increased from $36.1 million in the year-ago quarter and increased from $36.2 million in the previous quarter. The increase from the year-ago quarter was primarily due to higher legal and professional services of $0.5 million and higher computer software expense of $0.5 million, partially offset by lower entertainment and promotions of $0.9 million (included in other). The lower entertainment and promotions was primarily due to expenses related to a core deposit gathering campaign in the year-ago quarter. The increase from the previous quarter was primarily due to higher salaries and employee benefits of $0.3 million and higher legal and professional services of $0.2 million, partially offset by lower advertising expense of $0.2 million.

The efficiency ratio for the second quarter of 2020 was 60.76%, compared to 65.09% in the year-ago quarter and 63.90% in the previous quarter.

In the second quarter of 2020, the Company recorded income tax expense of $3.0 million, compared to $4.4 million in the year-ago quarter and $2.8 million in the previous quarter. The effective tax rate for the second quarter of 2020 was 23.0%, compared to 24.6% in the year-ago quarter and 25.3% in the previous quarter. The decrease in the effective tax rate was primarily due to higher tax-exempt bank-owned life insurance income in the current quarter, compared to the year-ago and sequential quarters.

Balance Sheet Highlights
Total assets at June 30, 2020 of $6.63 billion increased by $713.0 million, or 12.0% from June 30, 2019, and increased by $524.4 million, or 8.6% from March 31, 2020.

Total loans at June 30, 2020 of $5.00 billion increased by $756.3 million, or 17.8%, and $491.4 million, or 10.9% from June 30, 2019 and March 31, 2020, respectively. The year-over-year increase in total loans was driven by the origination of PPP loans totaling $526.4 million, net of deferred fees and costs, combined with broad-based growth in almost all other loan categories. The sequential quarter increase in total loans was primarily due to PPP loans and an increase in residential mortgage loans of $25.0 million, partially offset by decreases in other commercial and consumer loans.

Total deposits at June 30, 2020 of $5.79 billion increased by $817.8 million, or 16.4% from June 30, 2019, and increased by $658.6 million, or 12.8% from March 31, 2020.  The sequential quarter increase in total deposits was primarily attributable to the increases in noninterest-bearing demand deposits of $420.5 million, savings and money market deposits of $252.5 million and interest-bearing demand deposits of $49.0 million. This increase was offset by a decrease in total time deposits of $63.3 million. Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $5.02 billion at June 30, 2020.  This represents an increase of $925.2 million, or 22.6% from June 30, 2019, and $719.3 million, or 16.7% from March 31, 2020. The deposit of PPP funds into both new and existing deposit accounts largely contributed to the increase in core deposits. The Company's loan-to-deposit ratio was 86.4% at June 30, 2020, compared to 85.3% at June 30, 2019 and 87.9% at March 31, 2020.

Asset Quality
Nonperforming assets at June 30, 2020 totaled $4.7 million, or 0.07% of total assets, compared to $1.3 million, or 0.02% of total assets at June 30, 2019, and $3.6 million, or 0.06% of total assets at March 31, 2020. During the second quarter of 2020, the Company had $1.8 million in additions to nonperforming loans.

Loans delinquent for 90 days or more still accruing interest totaled $1.2 million at June 30, 2020, compared to $0.3 million and $1.6 million at June 30, 2019 and March 31, 2020, respectively.

Loan payment forbearances or deferrals were made for borrowers impacted by the COVID-19 pandemic with loan balances totaling $567.9 million or 12.7% of the total loan portfolio, excluding PPP loans, as of June 30, 2020.

Net charge-offs in the second quarter of 2020 totaled $2.9 million, compared to net charge-offs of $0.4 million in the year-ago quarter, and net charge-offs of $1.2 million in the previous quarter.

In the second quarter of 2020, the Company recorded a provision for credit losses on loans of $10.6 million, compared to a provision of $1.4 million in the year-ago quarter and a provision of $9.3 million in the previous quarter. In addition, the Company recorded a provision for off-balance sheet credit exposures (included in other operating expense) of $0.6 million, compared to a provision of $0.5 million in the year-ago quarter and a provision of $1.8 million in the previous quarter. The increase in the provision for credit losses from the year-ago and sequential quarters was primarily due to negative economic conditions brought on by the COVID-19 pandemic. The allowance for credit losses, as a percentage of total loans at June 30, 2020 was 1.35%, compared to 1.14% at June 30, 2019 and 1.32% at March 31, 2020. Excluding the PPP loans, the allowance for credit losses, as a percentage of total loans at June 30, 2020 was 1.50%.

Capital
Total shareholders' equity was $544.3 million at June 30, 2020, compared to $515.7 million and $533.8 million at June 30, 2019 and March 31, 2020, respectively.

The Company maintained its strong capital position and its capital ratios continue to exceed the levels required to be considered a "well-capitalized" institution for regulatory purposes under Basel III. At June 30, 2020, the Company's leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 8.9%, 12.5%, 13.6%, and 11.4%, respectively, compared to 9.5%, 12.3%, 13.4%, and 11.3%, respectively, at March 31, 2020.

Conference Call
The Company's management will host a conference call today at 1:00 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://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 August 29, 2020 by dialing 1-877-344-7529 (passcode: 10146483) and on the Company's website. Information which may be discussed in the conference call is provided in an earnings supplement presentation on the Company's website at http://ir.centralpacificbank.com.

About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $6.6 billion in assets.  Central Pacific Bank, its primary subsidiary, operates 35 branches (nine of which are temporarily closed to protect the health and well-being of the Company's employees and customers from COVID-19) and 76 ATMs in the state of Hawaii, as of June 30, 2020.  For additional information, please visit the Company's website at http://www.cpb.bank.

Forward-Looking Statements
This document may contain forward-looking statements concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, the payment or nonpayment of dividends, capital position, credit losses, net interest margin or other financial items; statements of plans, objectives and expectations of Central Pacific Financial Corp. or its management or Board of Directors, including those relating to business plans, use of capital resources, products or services and regulatory developments and regulatory actions; statements of future economic performance including anticipated performance results from our RISE2020 initiative; or any statements of the assumptions underlying or relating to any of the foregoing. Words such as "believes," "plans," "anticipates," "expects," "intends," "forecasts," "hopes," "targeting," "continue," "remain," "will," "should," "estimates," "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

While we believe 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 differ materially from those statements or projections for a variety of reasons, including, but not limited to: the adverse effects of the COVID-19 pandemic virus on local, national and international economies, including, but not limited to, the adverse impact on tourism and construction in the State of Hawaii, our borrowers, customers, third-party contractors, vendors and employees as well as the effects of government programs and initiatives in response to COVID-19; the increase in inventory or adverse conditions in the real estate market and deterioration 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; our ability to successfully implement our RISE2020 initiative; the impact of local, national, and international economies and events (including natural disasters such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, earthquakes and pandemic virus and disease, including COVID-19) 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 domestic economic conditions, including any destabilization 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; 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 (the "Dodd-Frank Act"), changes in capital standards, other regulatory reform and federal and state legislation, including but not limited to regulations promulgated by the Consumer Financial Protection Bureau (the "CFPB"), government-sponsored enterprise reform, and any related rules and regulations which affect 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, the results of regulatory examinations or reviews and the effect of, and our ability to comply with, any regulatory orders or actions we are or may become subject to; ability to successfully implement our initiatives to lower our efficiency ratio; 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 (the "FRB" or the "Federal Reserve"); inflation, interest rate, securities market and monetary fluctuations, including the anticipated replacement of the London Interbank Offered Rate ("LIBOR") Index and the impact on our loans and debt which are tied to that index; negative trends in our market capitalization and adverse changes in the price of the Company's common stock; political instability; acts of war or terrorism;  pandemic virus and disease, including COVID-19; changes in consumer spending, borrowings and savings habits; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; cybersecurity and data privacy breaches and the consequence therefrom; the ability to address deficiencies in our internal controls over financial reporting or disclosure controls and procedures; 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 ("FASB") and other accounting standard setters and the cost and resources required to implement such changes; our ability to attract and retain key personnel; changes in our organization, compensation and benefit plans; and our success at managing the risks involved in the foregoing items.

For further information with respect to factors that could cause actual results to materially differ from the expectations or projections stated in the forward-looking statements, 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. We urge investors to consider all of these factors carefully in evaluating the forward-looking statements contained in this Form 8-K. Forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events except as required by law.

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights
(Unaudited)															TABLE 1
		Three Months Ended																				Six Months Ended
(Dollars in thousands,		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,
except for per share amounts)		2020				2020				2019				2019				2019				2020				2019
CONDENSED INCOME STATEMENT
Net interest income		$	49,259			$	47,830			$	47,934			$	45,649			$	45,378			$	97,089			$	90,491
Provision for credit losses [1]		10,640				9,329				2,098				1,532				1,404				19,969				2,687
Net interest income after provision for credit losses [1]		38,619				38,501				45,836				44,117				43,974				77,120				87,804
Total other operating income		10,692				8,886				9,768				10,266				10,094				19,578				21,767
Total other operating expense		36,427				36,240				36,242				34,934				36,107				72,667				70,455
Income before taxes		12,884				11,147				19,362				19,449				17,961				24,031				39,116
Income tax expense		2,967				2,821				5,165				4,895				4,427				5,788				9,545
Net income		9,917				8,326				14,197				14,554				13,534				18,243				29,571
Basic earnings per common share		$	0.35			$	0.30			$	0.50			$	0.51			$	0.47			$	0.65			$	1.03
Diluted earnings per common share		0.35				0.29				0.50				0.51				0.47				0.65				1.03
Dividends declared per common share		0.23				0.23				0.23				0.23				0.23				0.46				0.44
PERFORMANCE RATIOS
Return on average assets (ROA) [2]		0.61		%		0.55		%		0.95		%		0.99		%		0.92		%		0.58		%		1.01		%
Return on average shareholders' equity (ROE) [2]		7.34				6.21				10.70				11.11				10.73				6.77				11.84
Average shareholders' equity to average assets		8.36				8.93				8.87				8.87				8.62				8.64				8.57
Efficiency ratio [1] [3]		60.76				63.90				62.81				62.48				65.09				62.29				62.76
Net interest margin (NIM) [2]		3.26				3.43				3.43				3.30				3.33				3.34				3.33
Dividend payout ratio [4]		65.71				79.31				46.00				45.10				48.94				70.77				42.72
SELECTED AVERAGE BALANCES
Average loans, including loans held for sale		$	4,902,905			$	4,462,347			$	4,412,247			$	4,293,455			$	4,171,558			$	4,682,626			$	4,127,917
Average interest-earning assets		6,073,361				5,621,043				5,595,142				5,527,532				5,485,977				5,847,202				5,475,237
Average assets		6,468,129				6,007,237				5,978,797				5,907,207				5,856,465				6,237,592				5,833,326
Average deposits		5,614,595				5,121,696				4,998,897				4,987,414				4,977,781				5,368,056				4,978,124
Average interest-bearing liabilities		4,082,699				3,917,332				3,947,924				3,920,304				3,897,619				4,000,016				3,859,784
Average shareholders' equity		540,802				536,721				530,464				524,083				504,749				538,762				499,720

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights
(Unaudited)										TABLE 1 (CONTINUED)
		June 30,				March 31,				December 31,				September 30,				June 30,
(dollars in thousands)		2020				2020				2019				2019				2019
REGULATORY CAPITAL
Central Pacific Financial Corp
Leverage capital		$	571,976			$	567,947			$	568,529			$	561,478			$	556,403
Tier 1 risk-based capital		571,976				567,947				568,529				561,478				556,403
Total risk-based capital		622,393				618,504				617,772				611,076				606,567
Common equity tier 1 capital		521,976				517,947				518,529				511,478				506,403
Central Pacific Bank
Leverage capital		559,461				556,895				556,077				550,913				544,480
Tier 1 risk-based capital		559,461				556,895				556,077				550,913				544,480
Total risk-based capital		609,811				607,402				605,320				600,511				594,644
Common equity tier 1 capital		559,461				556,895				556,077				550,913				544,480
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp
Leverage capital ratio		8.9		%		9.5		%		9.5		%		9.5		%		9.5		%
Tier 1 risk-based capital ratio		12.5				12.3				12.6				12.6				12.7
Total risk-based capital ratio		13.6				13.4				13.6				13.7				13.9
Common equity tier 1 capital ratio		11.4				11.3				11.5				11.5				11.6
Central Pacific Bank
Leverage capital ratio		8.7				9.3				9.3				9.4				9.3
Tier 1 risk-based capital ratio		12.2				12.1				12.3				12.4				12.5
Total risk-based capital ratio		13.3				13.2				13.4				13.5				13.6
Common equity tier 1 capital ratio		12.2				12.1				12.3				12.4				12.5
		June 30,				March 31,				December 31,				September 30,				June 30,
(dollars in thousands, except for per share amounts)		2020				2020				2019				2019				2019
BALANCE SHEET
Total loans, net of deferred fees and costs		$	5,003,438			$	4,511,998			$	4,449,540			$	4,367,862			$	4,247,113
Total assets		6,632,972				6,108,548				6,012,672				5,976,716				5,920,006
Total deposits		5,794,685				5,136,069				5,120,023				5,037,659				4,976,849
Long-term debt		167,491				101,547				101,547				101,547				101,547
Total shareholders' equity		544,271				533,781				528,520				525,227				515,695
Total shareholders' equity to total assets		8.21		%		8.74		%		8.79		%		8.79		%		8.71		%
ASSET QUALITY
Allowance for credit losses ("ACL") [1]		$	67,339			$	59,645			$	47,971			$	48,167			$	48,267
Non-performing assets		4,741				3,647				1,719				1,360				1,258
ACL to total loans [1]		1.35		%		1.32		%		1.08		%		1.10		%		1.14		%
ACL to total loans, excluding PPP loans [1]		1.50		%		1.32		%		1.08		%		1.10		%		1.14		%
ACL to non-performing assets [1]		1,420.35		%		1,635.45		%		2,790.63		%		3,541.69		%		3,836.80		%
PER SHARE OF COMMON STOCK OUTSTANDING
Book value per common share		$	19.33			$	18.99			$	18.68			$	18.47			$	18.05
[1] The Company adopted ASU 2016-13, "Financial Instruments-Credit Losses" ("CECL"), effective January 1, 2020 using the modified retrospective approach. Results for the reporting periods beginning after January 1, 2020 are presented under CECL, while prior period amounts continue to be reported under previous GAAP.
[2] ROA, ROE and ROTE are annualized based on a 30/360 day convention. Annualized net interest income and expense in the NIM calculation are based on the day count interest payment conventions at the interest-earning asset or interest-bearing liability level (i.e. 30/360, actual/actual).
[3] Efficiency ratio is defined as total operating expense divided by total revenue (net interest income and total other operating income).
[4] Dividend payout ratio is defined as dividends declared per share divided by diluted earnings per share.

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)										TABLE 2
		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands, except share data)		2020				2020				2019				2019				2019
ASSETS
Cash and due from financial institutions		$	102,132			$	81,972			$	78,418			$	87,395			$	83,534
Interest-bearing deposits in other financial institutions		41,201				11,021				24,554				7,803				15,173
Investment securities:
Available-for-sale debt securities, at fair value		1,168,594				1,184,023				1,126,983				1,186,875				1,254,743
Equity securities, at fair value		1,209				1,002				1,127				1,058				1,034
Total investment securities		1,169,803				1,185,025				1,128,110				1,187,933				1,255,777
Loans held for sale		10,443				3,910				9,083				7,016				6,848
Loans, net of deferred fees and costs		5,003,438				4,511,998				4,449,540				4,367,862				4,247,113
Less allowance for credit losses [1]		67,339				59,645				47,971				48,167				48,267
Loans, net of allowance for credit losses		4,936,099				4,452,353				4,401,569				4,319,695				4,198,846
Premises and equipment, net		55,032				50,447				46,343				44,095				43,600
Accrued interest receivable		19,590				16,851				16,500				16,220				17,260
Investment in unconsolidated subsidiaries		16,428				16,721				17,115				17,001				17,247
Other real estate owned		—				100				164				466				276
Mortgage servicing rights		12,771				13,345				14,718				15,058				15,266
Bank-owned life insurance		161,758				159,637				159,656				158,939				158,294
Federal Home Loan Bank ("FHLB") stock		9,229				18,109				14,983				17,183				17,824
Right of use lease asset		50,039				51,198				52,348				52,588				53,678
Other assets		48,447				47,859				49,111				45,324				36,383
Total assets		$	6,632,972			$	6,108,548			$	6,012,672			$	5,976,716			$	5,920,006
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand		$	1,851,012			$	1,430,540			$	1,450,532			$	1,399,200			$	1,351,190
Interest-bearing demand		1,067,483				1,018,508				1,043,010				998,037				1,002,706
Savings and money market		1,945,744				1,693,280				1,600,028				1,593,738				1,573,805
Time		930,446				993,741				1,026,453				1,046,684				1,049,148
Total deposits		5,794,685				5,136,069				5,120,023				5,037,659				4,976,849
FHLB advances and other short-term borrowings		—				222,000				150,000				205,000				221,000
Long-term debt		167,491				101,547				101,547				101,547				101,547
Lease liability		50,440				51,541				52,632				52,807				53,829
Other liabilities		76,050				63,561				59,950				54,476				51,086
Total liabilities		6,088,666				5,574,718				5,484,152				5,451,489				5,404,311
Shareholders' equity:
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding:  none at June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, and June 30, 2019		—				—				—				—				—
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding:  28,154,159 at June 30, 2020,  28,115,353 at March 31, 2020, 28,289,257 at December 31, 2019, 28,441,341 at September 30, 2019, and 28,567,777 at June 30, 2019		442,699				442,853				447,602				452,278				456,293
Additional paid-in capital		93,007				92,284				91,611				90,604				89,724
Accumulated deficit [1]		(16,986)				(20,428)				(19,102)				(26,782)				(34,780)
Accumulated other comprehensive income (loss)		25,551				19,072				8,409				9,127				4,458
Total shareholders' equity		544,271				533,781				528,520				525,227				515,695
Non-controlling interest		35				49				—				—				—
Total equity		544,306				533,830				528,520				525,227				515,695
Total liabilities and shareholders' equity		$	6,632,972			$	6,108,548			$	6,012,672			$	5,976,716			$	5,920,006
[1] The Company adopted ASU 2016-13, "Financial Instruments-Credit Losses" ("CECL"), effective January 1, 2020 using the modified retrospective approach. Results for the reporting periods beginning after January 1, 2020 are presented under CECL, while prior period amounts continue to be reported under previous GAAP.

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)														TABLE 3
		Three Months Ended																				Six Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,
(Dollars in thousands, except per share data)		2020				2020				2019				2019				2019				2020				2019
Interest income:
Interest and fees on loans		$	45,915			$	46,204			$	47,488			$	45,861			$	45,540			$	92,119			$	89,308
Interest and dividends on investment securities:
Taxable investment securities		6,310				6,757				6,486				7,178				7,530				13,067				15,790
Tax-exempt investment securities		599				668				656				708				814				1,267				1,680
Dividend income on investment securities		17				17				17				14				14				34				32
Interest on deposits in other financial institutions		3				36				54				33				46				39				114
Dividend income on FHLB stock		106				132				456				186				161				238				322
Total interest income		52,950				53,814				55,157				53,980				54,105				106,764				107,246
Interest expense:
Interest on deposits:
Demand		114				176				202				207				199				290				391
Savings and money market		567				1,118				1,253				1,549				1,507				1,685				2,298
Time		2,124				3,268				3,653				4,432				4,867				5,392				9,959
Interest on short-term borrowings		74				508				1,139				1,130				1,123				582				2,016
Interest on long-term debt		812				914				976				1,013				1,031				1,726				2,091
Total interest expense		3,691				5,984				7,223				8,331				8,727				9,675				16,755
Net interest income		49,259				47,830				47,934				45,649				45,378				97,089				90,491
Provision for credit losses		10,640				9,329				2,098				1,532				1,404				19,969				2,687
Net interest income after provision for credit losses		38,619				38,501				45,836				44,117				43,974				77,120				87,804
Other operating income:
Mortgage banking income		3,566				337				1,410				1,994				1,708				3,903				3,281
Service charges on deposit accounts		1,149				2,050				2,159				2,125				2,041				3,199				4,122
Other service charges and fees		2,916				4,897				4,095				3,894				3,909				7,813				7,124
Income from fiduciary activities		1,270				1,297				1,175				1,126				1,129				2,567				2,094
Equity in earnings of unconsolidated subsidiaries		104				26				92				86				71				130				79
Net gain (loss) on sales of investment securities		—				—				—				36				—				—				—
Income from bank-owned life insurance		1,424				(19)				594				645				914				1,405				1,866
Net gain (loss) on sales of foreclosed assets		(6)				—				(162)				17				—				(6)				—
Other (refer to Table 4)		269				298				405				343				322				567				3,201
Total other operating income		10,692				8,886				9,768				10,266				10,094				19,578				21,767
Other operating expense:
Salaries and employee benefits		20,622				20,347				21,207				20,631				20,563				40,969				40,452
Net occupancy		3,645				3,672				3,619				3,697				3,525				7,317				6,983
Equipment		1,043				1,097				1,142				1,067				1,138				2,140				2,144
Communication expense		774				837				906				1,008				903				1,611				1,637
Legal and professional services		2,238				2,028				2,123				1,933				1,728				4,266				3,298
Computer software expense		3,035				2,943				2,942				2,713				2,560				5,978				5,157
Advertising expense		923				1,092				527				711				712				2,015				1,423
Foreclosed asset expense		—				67				28				15				49				67				208
Other (refer to Table 4)		4,147				4,157				3,748				3,159				4,929				8,304				9,153
Total other operating expense		36,427				36,240				36,242				34,934				36,107				72,667				70,455
Income before income taxes		12,884				11,147				19,362				19,449				17,961				24,031				39,116
Income tax expense		2,967				2,821				5,165				4,895				4,427				5,788				9,545
Net income		$	9,917			$	8,326			$	14,197			$	14,554			$	13,534			$	18,243			$	29,571
Per common share data:
Basic earnings per share		$	0.35			$	0.30			$	0.50			$	0.51			$	0.47			$	0.65			$	1.03
Diluted earnings per share		0.35				0.29				0.50				0.51				0.47				0.65				1.03
Cash dividends declared		0.23				0.23				0.23				0.23				0.23				0.46				0.44
Basic weighted average shares outstanding		28,040,802				28,126,400				28,259,294				28,424,898				28,546,564				28,083,602				28,651,852
Diluted weighted average shares outstanding		28,095,230				28,277,753				28,448,243				28,602,338				28,729,510				28,190,132				28,847,786
Note: Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Other Operating Income and Other Operating Expense - Detail
(Unaudited)														TABLE 4
The following table sets forth the components of other operating income - other for the periods indicated:
		Three Months Ended																				Six Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,
(Dollars in thousands)		2020				2020				2019				2019				2019				2020				2019
Other operating income - other:
Income recovered on nonaccrual loans previously charged-off		$	37			$	23			$	80			$	73			$	85			$	60			$	167
Other recoveries		26				40				36				42				26				66				52
Commissions on sale of checks		56				81				75				75				79				137				159
Gain on sale of MasterCard stock		—				—				—				—				—				—				2,555
Other		150				154				214				153				132				304				268
Total other operating income - other		$	269			$	298			$	405			$	343			$	322			$	567			$	3,201
The following table sets forth the components of other operating expense - other for the periods indicated:
		Three Months Ended																				Six Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,
(Dollars in thousands)		2020				2020				2019				2019				2019				2020				2019
Other operating expense - other:
Charitable contributions		$	10			$	187			$	122			$	230			$	175			$	197			$	329
FDIC insurance assessment		475				—				—				5				362				475				863
Miscellaneous loan expenses		399				300				361				274				317				699				611
ATM and debit card expenses		584				634				672				660				620				1,218				1,270
Armored car expenses		229				294				186				220				211				523				409
Entertainment and promotions		165				280				495				323				1,023				445				1,253
Stationery and supplies		220				248				305				240				279				468				504
Directors' fees and expenses		196				241				246				242				238				437				480
Directors' deferred compensation plan expense		103				(1,483)				148				(155)				133				(1,380)				568
Provision (credit) for residential mortgage loan repurchase losses		—				—				—				—				(403)				—				(403)
Provision for off-balance sheet credit exposures		573				1,798				(160)				(465)				487				2,371				654
Other		1,193				1,658				1,373				1,585				1,487				2,851				2,615
Total other operating expense - other		$	4,147			$	4,157			$	3,748			$	3,159			$	4,929			$	8,304			$	9,153
Note: Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
(Unaudited)																	TABLE 5
		Three Months Ended											Three Months Ended											Three Months Ended
		June 30, 2020											March 31, 2020											June 30, 2019
		Average				Average							Average				Average							Average				Average
(Dollars in thousands)		Balance				Yield/Rate			Interest				Balance				Yield/Rate			Interest				Balance				Yield/Rate			Interest
ASSETS
Interest-earning assets:
Interest-bearing deposits in other financial institutions		$	15,777			0.10	%		$	3			$	11,082			1.29	%		$	36			$	8,002			2.34	%		$	46
Investment securities, excluding valuation allowance:
Taxable		1,042,441				2.43			6,327				1,027,695				2.64			6,774				1,147,759				2.63			7,544
Tax-exempt		100,485				3.02			758				105,330				3.21			845				142,660				2.89			1,030
Total investment securities		1,142,926				2.48			7,085				1,133,025				2.69			7,619				1,290,419				2.66			8,574
Loans, including loans held for sale		4,902,905				3.76			45,915				4,462,347				4.16			46,204				4,171,558				4.37			45,540
Federal Home Loan Bank stock		11,753				3.62			106				14,589				3.61			132				15,998				4.02			161
Total interest-earning assets		6,073,361				3.51			53,109				5,621,043				3.85			53,991				5,485,977				3.97			54,321
Noninterest-earning assets		394,768											386,194											370,488
Total assets		$	6,468,129										$	6,007,237										$	5,856,465
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits		$	1,056,885			0.04	%		$	114			$	1,013,795			0.07	%		$	176			$	962,402			0.08	%		$	199
Savings and money market deposits		1,856,621				0.12			567				1,651,751				0.27			1,118				1,577,437				0.38			1,507
Time deposits under $100,000		161,874				0.65			261				164,274				0.70			284				173,556				0.70			305
Time deposits $100,000 and over		807,276				0.93			1,863				846,152				1.42			2,984				907,330				2.02			4,562
Total interest-bearing deposits		3,882,656				0.29			2,805				3,675,972				0.50			4,562				3,620,725				0.73			6,573
Federal Home Loan Bank advances and other short-term borrowings		63,104				0.48			74				139,813				1.46			508				175,347				2.57			1,123
Long-term debt		136,939				2.38			812				101,547				3.62			914				101,547				4.07			1,031
Total interest-bearing liabilities		4,082,699				0.36			3,691				3,917,332				0.61			5,984				3,897,619				0.90			8,727
Noninterest-bearing deposits		1,731,939											1,445,724											1,357,056
Other liabilities		112,687											107,458											97,041
Total liabilities		5,927,325											5,470,514											5,351,716
Shareholders' equity		540,802											536,721											504,749
Non-controlling interest		2											2											—
Total equity		540,804											536,723											504,749
Total liabilities and equity		$	6,468,129										$	6,007,237										$	5,856,465
Net interest income									$	49,418										$	48,007										$	45,594
Interest rate spread						3.15	%										3.24	%										3.07	%
Net interest margin						3.26	%										3.43	%										3.33	%

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
(Unaudited)												TABLE 6
		Six Months Ended											Six Months Ended
		June 30, 2020											June 30, 2019
		Average				Average							Average				Average
(Dollars in thousands)		Balance				Yield/Rate			Interest				Balance				Yield/Rate			Interest
ASSETS
Interest-earning assets:
Interest-bearing deposits in other financial institutions		$	13,430			0.59	%		$	39			$	9,682			2.38	%		$	114
Investment securities, excluding valuation allowance:
Taxable		1,035,068				2.53			13,101				1,174,596				2.69			15,822
Tax-exempt		102,907				3.12			1,604				147,899				2.88			2,127
Total investment securities		1,137,975				2.58			14,705				1,322,495				2.71			17,949
Loans, including loans held for sale		4,682,626				3.95			92,119				4,127,917				4.35			89,308
Federal Home Loan Bank stock		13,171				3.61			238				15,143				4.26			322
Total interest-earning assets		5,847,202				3.67			107,101				5,475,237				3.95			107,693
Noninterest-earning assets		390,390											358,089
Total assets		$	6,237,592										$	5,833,326
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits		$	1,035,340			0.06	%		$	290			$	956,783			0.08	%		$	391
Savings and money market deposits		1,754,186				0.19			1,685				1,525,425				0.30			2,298
Time deposits under $100,000		163,074				0.67			546				174,683				0.68			592
Time deposits $100,000 and over		826,714				1.18			4,846				944,796				2.00			9,367
Total interest-bearing deposits		3,779,314				0.39			7,367				3,601,687				0.71			12,648
Federal Home Loan Bank advances and other short-term borrowings		101,459				1.15			582				156,550				2.60			2,016
Long-term debt		119,243				2.91			1,726				101,547				4.15			2,091
Total interest-bearing liabilities		4,000,016				0.49			9,675				3,859,784				0.88			16,755
Noninterest-bearing deposits		1,588,742											1,376,437
Other liabilities		110,070											97,385
Total liabilities		5,698,828											5,333,606
Shareholders' equity		538,762											499,720
Non-controlling interest		2											—
Total equity		538,764											499,720
Total liabilities and equity		$	6,237,592										$	5,833,326
Net interest income									$	97,426										$	90,938
Interest rate spread						3.18	%										3.07	%
Net interest margin						3.34	%										3.33	%

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Loans by Geographic Distribution
(Unaudited)										TABLE 7
		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands)		2020				2020				2019				2019				2019
HAWAII:
Commercial, financial and agricultural:
SBA Paycheck Protection Program		$	483,827			$	—			$	—			$	—			$	—
Other		431,887				454,817				454,582				439,296				435,353
Real estate:
Construction		103,518				100,617				95,854				96,661				72,427
Residential mortgage		1,657,558				1,632,536				1,599,801				1,558,735				1,516,936
Home equity		510,962				504,686				490,734				475,565				473,151
Commercial mortgage		912,422				917,886				909,798				909,987				905,479
Consumer		350,414				367,960				373,451				369,511				353,282
Leases		—				—				—				31				52
Total loans, net of deferred fees and costs		4,450,588				3,978,502				3,924,220				3,849,786				3,756,680
Allowance for credit losses		(59,765)				(51,646)				(42,592)				(42,286)				(42,414)
Loans, net of allowance for credit losses		$	4,390,823			$	3,926,856			$	3,881,628			$	3,807,500			$	3,714,266
U.S. MAINLAND: [1]
Commercial, financial and agricultural:
SBA Paycheck Protection Program		$	42,581			$	—			$	—			$	—			$	—
Other		115,971				120,507				115,722				137,316				155,130
Real estate:
Construction		—				—				—				—				—
Residential mortgage		—				—				—				—				—
Home equity		—				—				—				—				—
Commercial mortgage		217,747				221,251				213,617				223,925				187,379
Consumer		176,551				191,738				195,981				156,835				147,924
Leases		—				—				—				—				—
Total loans, net of deferred fees and costs		552,850				533,496				525,320				518,076				490,433
Allowance for credit losses		(7,574)				(7,999)				(5,379)				(5,881)				(5,853)
Loans, net of allowance for credit losses		$	545,276			$	525,497			$	519,941			$	512,195			$	484,580
TOTAL:
Commercial, financial and agricultural:
SBA Paycheck Protection Program		$	526,408			$	—			$	—			$	—			$	—
Other		547,858				575,324				570,304				576,612				590,483
Real estate:
Construction		103,518				100,617				95,854				96,661				72,427
Residential mortgage		1,657,558				1,632,536				1,599,801				1,558,735				1,516,936
Home equity		510,962				504,686				490,734				475,565				473,151
Commercial mortgage		1,130,169				1,139,137				1,123,415				1,133,912				1,092,858
Consumer		526,965				559,698				569,432				526,346				501,206
Leases		—				—				—				31				52
Total loans, net of deferred fees and costs		5,003,438				4,511,998				4,449,540				4,367,862				4,247,113
Allowance for credit losses		(67,339)				(59,645)				(47,971)				(48,167)				(48,267)
Loans, net of allowance for credit losses		$	4,936,099			$	4,452,353			$	4,401,569			$	4,319,695			$	4,198,846
[1] U.S. Mainland includes territories of the United States

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Deposits
(Unaudited)										TABLE 8
		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands)		2020				2020				2019				2019				2019
Noninterest-bearing demand		$	1,851,012			$	1,430,540			$	1,450,532			$	1,399,200			$	1,351,190
Interest-bearing demand		1,067,483				1,018,508				1,043,010				998,037				1,002,706
Savings and money market		1,945,744				1,693,280				1,600,028				1,593,738				1,573,805
Time deposits less than $100,000		159,739				162,399				165,755				165,687				171,106
Core deposits		5,023,978				4,304,727				4,259,325				4,156,662				4,098,807
Government time deposits		509,927				523,343				533,088				552,470				574,825
Other time deposits $100,000 to $250,000		96,633				100,047				107,550				103,959				105,382
Other time deposits greater than $250,000		164,147				207,952				220,060				224,568				197,835
Total time deposits $100,000 and over		770,707				831,342				860,698				880,997				878,042
Total deposits		$	5,794,685			$	5,136,069			$	5,120,023			$	5,037,659			$	4,976,849

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Nonperforming Assets, Past Due and Restructured Loans
(Unaudited)										TABLE 9
		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands)		2020				2020				2019				2019				2019
Nonaccrual loans (including loans held for sale): [1]
Commercial, financial and agricultural		$	934			$	667			$	467			$	—			$	—
Real estate:
Residential mortgage		3,215				2,287				979				799				738
Home equity		538				545				92				95				244
Consumer		54				48				17				—				—
Total nonaccrual loans		4,741				3,547				1,555				894				982
Other real estate owned ("OREO"):
Real estate:
Residential mortgage		—				—				—				302				276
Home equity		—				100				164				164				—
Total OREO		—				100				164				466				276
Total nonperforming assets ("NPAs")		4,741				3,647				1,719				1,360				1,258
Loans delinquent for 90 days or more still accruing interest: [1]
Real estate:
Residential mortgage		726				1,221				724				—				—
Consumer		444				352				286				235				267
Total loans delinquent for 90 days or more still accruing interest		1,170				1,573				1,010				235				267
Restructured loans still accruing interest: [1]
Commercial, financial and agricultural		172				113				135				157				178
Real estate:
Residential mortgage		5,290				5,431				5,502				6,717				6,831
Commercial mortgage		1,888				1,709				1,839				1,985				2,097
Consumer		145				—				—				—				—
Total restructured loans still accruing interest		7,495				7,253				7,476				8,859				9,106
Total NPAs and loans delinquent for 90 days or more and restructured loans still accruing interest		$	13,406			$	12,473			$	10,205			$	10,454			$	10,631
Total nonaccrual loans as a percentage of total loans		0.09		%		0.08		%		0.03		%		0.02		%		0.02		%
Total NPAs as a percentage of total loans and OREO		0.09		%		0.08		%		0.04		%		0.03		%		0.03		%
Total NPAs and loans delinquent for 90 days or more still accruing interest as a percentage of total loans and OREO		0.12		%		0.12		%		0.06		%		0.04		%		0.04		%
Total NPAs and loans delinquent for 90 days or more and restructured loans still accruing interest as a percentage of total loans and OREO		0.27		%		0.28		%		0.23		%		0.24		%		0.25		%
Quarter-to-quarter changes in NPAs:
Balance at beginning of quarter		$	3,647			$	1,719			$	1,360			$	1,258			$	3,338
Additions		1,771				2,056				695				112				—
Reductions:
Payments		(367)				(60)				(34)				(51)				(2,055)
Return to accrual status		(123)				—				—				(2)				(25)
Sales of NPAs		(94)				—				(302)				—				—
Charge-offs, valuation and other adjustments		(93)				(68)				—				43				—
Total reductions		(677)				(128)				(336)				(10)				(2,080)
Balance at end of quarter		$	4,741			$	3,647			$	1,719			$	1,360			$	1,258
[1] Section 4013 of the CARES Act and the revised Interagency Statement are being applied to loan modifications related to the COVID-19 pandemic as eligible and applicable. These loan modifications are not included in the delinquent, nonaccrual or restructured loan balances presented above

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Allowance for Credit Losses on Loans
(Unaudited)														TABLE 10
		Three Months Ended																				Six Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,
(Dollars in thousands)		2020				2020				2019				2019				2019				2020				2019
Allowance for credit  losses ("ACL"):
ACL at beginning of period		$	59,645			$	47,971			$	48,167			$	48,267			$	47,267			$	47,971			$	47,916
Adoption of ASU 2016-13		—				3,566				—				—				—				3,566				—
Adjusted ACL at beginning of period		59,645				51,537				48,167				48,267				47,267				51,537				47,916
Provision for credit losses		10,640				9,329				2,098				1,532				1,404				19,969				2,687
Charge-offs:
Commercial, financial and agricultural		1,103				437				379				797				839				1,540				1,302
Real estate:
Residential mortgage		52				—				—				—				—				52				—
Home equity		—				—				—				5				—				—				—
Consumer		2,626				2,217				2,723				1,832				1,459				4,843				3,710
Total charge-offs		3,781				2,654				3,102				2,634				2,298				6,435				5,012
Recoveries:
Commercial, financial and agricultural		305				342				264				362				315				647				548
Real estate:
Construction		—				131				6				6				592				131				598
Residential mortgage		20				181				26				104				372				201				394
Home equity		—				31				—				24				9				31				18
Commercial mortgage		1				2				—				—				25				3				25
Consumer		509				746				512				506				581				1,255				1,093
Total recoveries		835				1,433				808				1,002				1,894				2,268				2,676
Net charge-offs (recoveries)		2,946				1,221				2,294				1,632				404				4,167				2,336
ACL at end of period		$	67,339			$	59,645			$	47,971			$	48,167			$	48,267			$	67,339			$	48,267
Average loans, net of deferred fees and costs		$	4,902,905			$	4,462,347			$	4,412,247			$	4,293,455			$	4,171,558			$	4,682,626			$	4,127,917
Annualized ratio of net charge- offs to average loans		0.24		%		0.11		%		0.21		%		0.15		%		0.04		%		0.18		%		0.11		%
Ratio of ACL to total loans		1.35		%		1.32		%		1.08		%		1.10		%		1.14		%		1.35		%		1.14		%
Ratio of ACL to total loans, excluding PPP loans		1.50		%		1.32		%		1.08		%		1.10		%		1.14		%		1.50		%		1.14		%

 

 

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)														TABLE 11
The Company believes that pre-tax, pre-provision earnings, a non-GAAP financial measure, is useful as a tool to help evaluate the ability to provide for credit costs through operations. The following table sets forth a reconciliation of our pre-tax pre-provision earnings for each of the dates indicated:
		Three Months Ended																				Six Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,
(Dollars in thousands)		2020				2020				2019				2019				2019				2020				2019
Net income		$	9,917			$	8,326			$	14,197			$	14,554			$	13,534			$	18,243			$	29,571
Add: Income tax expense		2,967				2,821				5,165				4,895				4,427				5,788				9,545
Income before taxes		12,884				11,147				19,362				19,449				17,961				24,031				39,116
Add: Provision for credit losses		10,640				9,329				2,098				1,532				1,404				19,969				2,687
Pre-tax pre-provision earnings		$	23,524			$	20,476			$	21,460			$	20,981			$	19,365			$	44,000			$	41,803

The following table sets forth a reconciliation of the ratios of our allowance for credit losses to total loans and total loans, excluding PPP loans, for each of the dates indicated:
		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands)		2020				2020				2019				2019				2019
Allowance for credit losses ("ACL")		$	67,339			$	59,645			$	47,971			$	48,167			$	48,267
Total loans		$	5,003,438			$	4,511,998			$	4,449,540			$	4,367,862			$	4,247,113
SBA Paycheck Protection Program ("PPP loans")		526,408				—				—				—				—
Total loans, excluding PPP loans		$	4,477,030			$	4,511,998			4,449,540				4,367,862				$	4,247,113
Ratio of ACL to total loans		1.35		%		1.32		%		1.08		%		1.10		%		1.14		%
Ratio of ACL to total loans, excluding PPP loans		1.50		%		1.32		%		1.08		%		1.10		%		1.14		%

 

 

View original content to download multimedia:http://www.prnewswire.com/news-releases/central-pacific-financial-corp-reports-results-for-second-quarter-2020-301101873.html

SOURCE Central Pacific Financial Corp.

FAQ

What were Central Pacific Financial Corp's earnings in Q2 2020?

Central Pacific Financial Corp reported a net income of $9.9 million or EPS of $0.35 in Q2 2020.

How did CPF's total assets change in Q2 2020?

Total assets increased by 12% to $6.63 billion as of June 30, 2020.

What was the provision for credit losses for CPF in Q2 2020?

The provision for credit losses in Q2 2020 was $10.6 million, significantly higher than $1.4 million in the same quarter last year.

What dividend was declared by CPF on July 28, 2020?

CPF declared a quarterly cash dividend of $0.23 per share, payable on September 15, 2020.

How much did CPF's net interest income increase in Q2 2020?

Net interest income for CPF rose to $49.3 million in Q2 2020, up from $45.4 million in Q2 2019.