Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CENTRAL PACIFIC FINANCIAL CORP | form8-k.htm |
| FOR IMMEDIATE RELEASE | |||
| Investor Contact: | David Morimoto | Media Contact: |
Wayne
Kirihara
|
| SVP & Treasurer | SVP - Corporate Communications | ||
| (808) 544-3627 | (808) 544-3687 | ||
| david.morimoto@centralpacificbank.com | wayne.kirihara@centralpacificbank.com | ||
NEWS
RELEASE
CENTRAL
PACIFIC BANK AGREES TO CONSENT ORDER WITH FDIC
Loan
Sales in Progress to Reduce Credit Risk
HONOLULU, DECEMBER 11, 2009 –
Central Pacific Financial Corp. (NYSE: CPF) announced today that its primary
subsidiary, Central Pacific Bank (CPB), agreed to a Stipulation to the Issuance
of a Consent Order with the Federal Deposit Insurance Corporation (FDIC) and the
Hawaii Division of Financial Institutions (HDFI). The Consent Order requires CPB
to improve its capital position, asset quality, liquidity, and management
oversight, among other matters.
CPB will
continue to offer a full range of financial products and services, and its
deposits continue to be insured by the FDIC. The bank elected to
continue its participation in the extended FDIC insurance program, which in
addition to the $250,000 coverage per depositor, provides unlimited insurance
coverage on transactional accounts earning less than a one-half percent interest
rate.
The
Consent Order requires CPB to take numerous actions that include increasing its
Tier 1 Capital to maintain a minimum leverage capital ratio of 10% and total
risk-based capital ratio of 12%, as well as the development of a contingency
plan if those ratios are not attained by March 31, 2010. An adequate
allowance for loan and lease losses must be maintained at all times, and the
amount of commercial real estate loans, particularly land development and
construction loans, must be reduced systematically. The company has
filed a Form 8-K with the U.S. Securities and Exchange Commission reporting this
Consent Order, which can be referenced for more information.
“We have
been in close communication with our regulators, and as previously disclosed,
expected to agree to this Consent Order,” said Ronald K. Migita, Chairman,
President, and Chief Executive Officer. “With a major loan sale
completed this week, we have already made progress toward the regulatory order
and are fully committed to meeting the requirements of the
agreement.”
On
December 8, 2009, CPB completed the sale of a $47.5 million package of
commercial real estate loans at par value. Additional loans,
primarily commercial real estate loans, with an aggregate book value of $62
million as of Sept. 30, 2009, have also been sold or are contracted to be sold
in this quarter at a net discount of 10% of book value. The company
has engaged an outside loan review firm, Alvarez & Marsal, to conduct an
independent review of its commercial real estate loan portfolio and expects to
continue pursuing sales of certain loans, in addition to loan restructurings and
renegotiations with its borrowers, over the coming quarters. “The
loan review and loan sales are important steps in reaching our capital and asset
quality goals in order to comply with the Consent Order,” said
Migita.
The
company continues to work with its financial advisors, Sandler O’Neill +
Partners, L.P. and RBC Capital Markets, to evaluate options for raising
additional capital, including private placements of equity securities and public
stock offerings. Central Pacific Financial Corp. shareholders
approved increasing the number of authorized shares of common stock on October
22, 2009, which provides the company with added flexibility in addressing their
capital needs.
CPB
recently announced its plan to exit the California market, where many of its
commercial real estate loans are located, and to focus on business development
in Hawaii. The bank has not made a loan in California for more than
18 months and intends to wind down or dispose of its existing California loan
portfolio over the next two years.
“Hawaii
is our market, and despite the local economic conditions, our core deposit base
has grown by 17% from a year ago,” Migita stated. “We are committed
to continue being a leading force in supporting home ownership and small
businesses in Hawaii.”
About
Central Pacific Financial Corp.
Central
Pacific Financial Corp. is a Hawaii based financial institution with $5.2
billion in assets. Central Pacific Bank, its primary subsidiary,
operates 37 branches, a residential mortgage subsidiary, and more than 100 ATMs
throughout the State of Hawaii. For additional information, please
visit the Company’s website at http://www.centralpacificbank.com.
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Forward-Looking
Statements
This
document may contain forward-looking statements concerning projections of
revenues, income, earnings per share, capital expenditures, dividends, capital
structure, or other financial items, concerning plans and objectives of
management for future operations, concerning future economic performance, or
concerning 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”, “intends”, “expects”, “anticipates”, “forecasts”
or words of similar meaning. 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 materially differ from
projections for a variety of reasons, to include, but not limited to: the impact
of local, national, and international economies and events, including natural
disasters, 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; the impact of legislation
affecting the banking industry including the Emergency Economic Stabilization
Act of 2008; the impact of competitive products, services, pricing, and other
competitive forces; movements in interest rates; loan delinquency rates and
changes in asset quality generally; the price of the Company’s stock; and
volatility in the financial markets and uncertainties concerning the
availability of debt or equity financing. 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/A for the last fiscal
year. The Company does not update any of its forward-looking
statements.
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