Attached files
| file | filename |
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| 8-K - FORM 8-K - CENTRAL PACIFIC FINANCIAL CORP | form8-k.htm |
| Investor Contact: | David Morimoto | Media Contact: |
Wayne Kirihara
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| SVP & Treasurer | SVP - Corporate Communications | ||
| (808) 544-3627 | (808) 544-3687 | ||
| david.morimoto@centralpacificbank.com | wayne.kirihara@centralpacificbank.com | ||
NEWS RELEASE
CENTRAL PACIFIC FINANCIAL CORP. REPORTS
FOURTH CONSECUTIVE PROFITABLE QUARTER
HONOLULU, HI, January 25, 2012 – Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank (the “Bank”), today reported net income for the fourth quarter of 2011 of $12.1 million, or $0.29 per diluted share, compared to a net loss in the fourth quarter of 2010 of $2.1 million, or $2.78 per diluted share, and net income in the third quarter of 2011 of $11.6 million, or $0.28 per diluted share. For the year ended December 31, 2011, the Company’s net income was $36.6 million, or $3.31 per diluted share, compared to a net loss of $251.0 million, or $171.13 per diluted share in the previous year.
"In a year where we believe we have made tremendous progress in executing our recovery plan, we are pleased to end 2011 with our fourth consecutive profitable quarter," said John C. Dean, President and Chief Executive Officer. "As we saw during the year, continued improvement in our credit risk profile and further reductions in our nonperforming assets allowed us to once again meaningfully reduce our allowance for loan and lease losses, which contributed greatly to our profitable quarter."
Significant Highlights and Fourth Quarter Results
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Reported fourth consecutive profitable quarter with net income of $12.1 million, compared to net income of $11.6 million in the third quarter of 2011.
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For the third consecutive quarter, the Company did not incur credit costs as it reduced its allowance for loan and lease losses (ALLL) by an amount greater than net foreclosed asset expense, write-downs of loans held for sale and the increase to the reserve for unfunded commitments. The reduction in the ALLL resulted in a credit to the provision for loan and lease losses of $11.2 million, compared to a credit of $19.1 million during the third quarter of 2011.
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Reduced nonperforming assets by $27.7 million to $195.6 million at December 31, 2011 from $223.3 million at September 30, 2011.
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The ALLL, as a percentage of total loans and leases, decreased to 5.91% at December 31, 2011, compared to 6.96% at September 30, 2011. In addition, the Company had an ALLL, as a percentage of nonperforming assets, of 62.42% at December 31, 2011, compared to 64.23% at September 30, 2011.
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Agreed to contribute $3.5 million to the Central Pacific Bank Foundation (the “Foundation”) to continue the Company’s longstanding commitment to support its local communities. During the third quarter of 2011, the Company agreed to contribute $5.0 million to the Foundation.
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Increased Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios as of December 31, 2011 to 22.94%, 24.24%, and 13.78%, respectively, compared to 22.63%, 23.94%, and 13.19%, respectively, as of September 30, 2011. The Company’s capital ratios continue to exceed the minimum levels required to be considered “well-capitalized” for regulatory purposes.
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Earnings Highlights
Net interest income for the fourth quarter of 2011 was $30.8 million, compared to $27.0 million in the year-ago quarter and $29.8 million in the third quarter of 2011. Net interest margin was 3.25%, compared to 2.76% in the year-ago quarter and 3.05% in the third quarter of 2011. The improvement reflects the Company’s continued redeployment of its excess liquidity into higher yielding assets and further declines in its overall funding costs. The current quarter decrease in the Company’s funding costs was largely attributable to the previously reported prepayment of long-term borrowings at the Federal Home Loan Bank of Seattle totaling $120.5 million with a weighted average interest rate of 4.36% during the third quarter of 2011.
The provision for loan and lease losses for the fourth quarter of 2011 was a credit of $11.2 million, compared to a credit of $19.1 million in the third quarter of 2011 and a charge of $0.4 million in the fourth quarter of 2010. The reduction was the result of further improvement in the Company’s credit risk profile as evidenced by continued declines in nonperforming assets during the quarter, which is described more fully below.
Other operating income for the fourth quarter of 2011 totaled $15.2 million, compared to $19.9 million in the year-ago quarter and $11.5 million in the third quarter of 2011. The decrease from the year-ago quarter was primarily due to the recognition of a $7.7 million gain on the sale of a building during the fourth quarter of 2010, partially offset by the recognition of a $1.0 million gain on the sale of investment securities during the fourth quarter of 2011. The sequential-quarter increase was primarily due to higher gains on sales of residential mortgage loans of $2.5 million and the previously mentioned investment securities gain, partially offset by lower unrealized gains on interest rate locks of $1.1 million.
Other operating expense for the fourth quarter of 2011 totaled $45.2 million, compared to $48.6 million in the year-ago quarter and $48.8 million in the third quarter of 2011. The decrease from the year-ago quarter was primarily attributable to a nonrecurring loss on the early extinguishment of debt of $5.7 million recorded in the fourth quarter of 2010, a lower provision for repurchased residential mortgage loans of $4.3 million, and lower FDIC insurance expense of $1.7 million, partially offset by higher salaries and employee benefits of $4.3 million and higher charitable contributions of $3.5 million. The sequential quarter decrease was primarily attributable to a nonrecurring loss on the early extinguishment of debt of $6.2 million recorded in the third quarter of 2011 and lower charitable contributions of $1.6 million, partially offset by higher net credit-related charges (which includes changes in the reserve for unfunded commitments and foreclosed asset expense) of $4.6 million and higher salaries and employee benefits of $1.5 million
The efficiency ratio for the fourth quarter of 2011 was 92.0% (excluding gains on sale of investment securities of $1.0 million and foreclosed asset expense of $3.0 million), compared to 80.0% in the year-ago quarter (excluding the loss on early extinguishment of debt of $5.7 million, foreclosed asset expense of $4.1 million and write-downs of loans held for sale of $0.5 million) and 99.1% (excluding the loss on early extinguishment of debt of $6.2 million and foreclosed asset expense of $0.8 million) in the third quarter of 2011.
The Company continues to recognize a full valuation allowance against its net deferred tax assets and did not record any income tax benefit or expense during the fourth quarter of 2011.
Balance Sheet Highlights
Total assets at December 31, 2011 of $4.1 billion increased by $194.8 million and $13.7 million from December 31, 2010 and September 30, 2011, respectively.
Total loans and leases at December 31, 2011 of $2.1 billion decreased by $105.0 million from December 31, 2010 and increased by $5.0 million from September 30, 2011. The increase in total loans and leases from the third quarter of 2011 was primarily due to an increase in the residential mortgage loan portfolio of $39.1 million, partially offset by a decrease in the construction and development portfolio of $35.0 million.
Total deposits at December 31, 2011 were $3.4 billion, compared to $3.1 billion and $3.3 billion at December 31, 2010 and September 30, 2011, respectively. Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $2.8 billion at December 31, 2011. This represents a decrease of $9.9 million from a year ago and an increase of $49.3 million from September 30, 2011. Significant changes in total deposits during the quarter included an increase in non-interest bearing demand deposits, time deposits, savings and money market deposits, and interest bearing demand deposits of $47.5 million, $30.0 million, $14.2 million and $3.7 million, respectively.
Total shareholders’ equity was $456.4 million at December 31, 2011, compared to $66.1 million and $440.9 million at December 31, 2010 and September 30, 2011, respectively.
Asset Quality
Nonperforming assets at December 31, 2011 totaled $195.6 million, or 4.73% of total assets, compared to $223.3 million, or 5.42% of total assets at September 30, 2011. The sequential-quarter decrease in the Company’s nonperforming assets was primarily attributable to loan pay-downs and pay-offs totaling $17.3 million, sales of foreclosed properties totaling $9.0 million, charge-offs totaling $5.2 million, write-downs totaling $2.0 million and transfers of loans back to accrual status totaling $6.2 million. The sequential-quarter decrease reflects net reductions in Hawaii construction and development assets totaling $25.7 million and Hawaii residential mortgage assets totaling $9.0 million, partially offset by net increases in Hawaii commercial mortgage assets totaling $2.3 million and Mainland construction and development assets totaling $1.8 million.
Loans delinquent for 90 days or more still accruing interest totaled $28,000 at December 31, 2011, compared to $0.4 million at September 30, 2011. In addition, loans delinquent for 30 days or more still accruing interest totaled $5.4 million at December 31, 2011, compared to $4.5 million at September 30, 2011.
Net loan charge-offs in the fourth quarter of 2011 totaled $10.1 million, compared to $25.2 million in the year-ago quarter and $4.4 million in the third quarter of 2011. Net charge-offs included the following significant amounts: Mainland construction and development loans totaling $6.6 million and Hawaii construction and development loans totaling $3.4 million.
The ALLL, as a percentage of total loans and leases, was 5.91% at December 31, 2011, compared to 6.96% at September 30, 2011. The ALLL, as a percentage of nonperforming assets, was 62.42% at December 31, 2011, compared to 64.23% at September 30, 2011.
Construction and Development Loans
At December 31, 2011, the construction and development loan portfolio (excluding owner-occupied loans) totaled $148.4 million, or 7.2%, of the total loan portfolio. Of this amount, $74.8 million were located in Hawaii and $73.6 million were located on the Mainland. This portfolio decreased by $32.9 million from September 30, 2011 and by $151.5 million from December 31, 2010. The sequential quarter decrease was attributable to decreases in the Hawaii and Mainland construction and development loan portfolios (excluding owner-occupied loans) of $23.7 million and $9.2 million, respectively.
The ALLL established for these loans was $21.9 million at December 31, 2011, or 14.8%, of the total outstanding balance, compared to $27.3 million, or 15.0%, of the total outstanding balance at September 30, 2011. Of this amount, $12.3 million related to construction and development loans in Hawaii and $9.6 million related to construction and development loans on the Mainland.
Nonperforming construction and development assets in Hawaii totaled $75.1 million at December 31, 2011, or 1.8%, of total assets. At December 31, 2011, this balance was comprised of portfolio loans totaling $22.1 million, loans held for sale totaling $12.4 million and foreclosed properties totaling $40.6 million. Nonperforming assets related to this sector totaled $100.3 million at September 30, 2011.
Nonperforming construction and development assets on the Mainland totaled $48.0 million at December 31, 2011, or 1.2%, of total assets. At December 31, 2011, this balance was comprised of portfolio loans totaling $33.0 million and foreclosed properties totaling $15.0 million. Nonperforming assets related to this sector totaled $46.2 million at September 30, 2011.
Capital Levels
At December 31, 2011, the Company’s Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios were 22.94%, 24.24%, and 13.78%, respectively, compared to 22.63%, 23.94%, and 13.19%, respectively, at September 30, 2011. The Company’s capital ratios continue to exceed the minimum levels required by both the Memorandum of Understanding between the bank and its regulators (the “MOU”) and the levels required to be considered “well-capitalized” for regulatory purposes.
Reverse Split
Except as otherwise specified, the share and per share amounts for historical periods have been restated to give the effect to the Reverse Stock Split effected on February 2, 2011.
Non-GAAP Financial Measures
This press release contains certain references to financial measures that have been adjusted to exclude certain expenses and other specified items. These financial measures differ from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) in that they exclude unusual or non-recurring charges, losses, credits or gains. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Management believes that financial presentations excluding the impact of these items provide useful supplemental information that is important to a proper understanding of the Company’s core business results by investors. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies.
Conference Call
The Company’s management will host a conference call today at 12:00 p.m. Eastern Time (7:00 a.m. Hawaii Time) to discuss the quarterly results. Individuals are encouraged to listen to the live webcast of the presentation by visiting the investor relations page of the Company's website at http://investor.centralpacificbank.com. Alternatively, investors may participate in the live call by dialing 1-877-317-6789. A playback of the call will be available through February 27, 2012 by dialing 1-877-344-7529 (passcode: 10008748) and on the Company's website.
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $4.1 billion in assets. Central Pacific Bank, its primary subsidiary, operates 34 branches, 120 ATMs, and a residential mortgage subsidiary in 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/loss, earnings/loss 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”, “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 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 regulatory actions on the Company and the Bank including the Memorandum of Understanding entered into with the FDIC and the DFI on May 5, 2011; the impact of legislation affecting the banking industry including the Emergency Economic Stabilization Act of 2008 and the Dodd-Frank Act Wall Street Reform and Consumer Protection Act and any regulations promulgated thereunder; the impact of competitive products, services, pricing, and other competitive forces; movements in interest rates; loan delinquency rates and changes in asset quality generally; threats to the security of our technology software and hardware; changes in our organization and management; changes in tax and accounting policies and practices; volatility in the financial markets and uncertainties concerning the availability of debt or equity financing; and the impact of regulatory supervision. For further information on factors that could cause actual results to materially differ from forward-looking statements, please see the Company’s publicly available Securities and Exchange Commission filings, including the Company’s 2010 Form 10-K and 2011 Form 10-Qs. The Company does not update any of its forward-looking statements except as required by law.
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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
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Financial Highlights - December 31, 2011
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(Unaudited)
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Three Months Ended
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Year Ended
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December 31,
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December 31,
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(in thousands, except per share data)
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2011
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2010
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2011
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2010
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INCOME STATEMENT
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Net income (loss)
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$ | 12,095 | $ | (2,085 | ) | $ | 36,571 | $ | (250,953 | ) | |||||||||||
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Per common share data:
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Basic earnings (loss) per share (after preferred stock
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of preferred stock to common stock)
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0.29 | (2.78 | ) | 3.36 | (171.13 | ) | |||||||||||||||
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Diluted earnings (loss) per share (after preferred stock
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of preferred stock to common stock)
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0.29 | (2.78 | ) | 3.31 | (171.13 | ) | |||||||||||||||
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PERFORMANCE RATIOS
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Return (loss) on average assets (1)
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1.19 | % | (0.20 | ) % | 0.90 | % | (5.74 | ) % | |||||||||||||
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Return (loss) on average shareholders' equity (1)
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10.78 | (9.90 | ) | 9.83 | (140.73 | ) | |||||||||||||||
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Net income (loss) to average tangible shareholders' equity (1)
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11.27 | (13.47 | ) | 10.41 | (193.24 | ) | |||||||||||||||
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Efficiency ratio (2)
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91.99 | 79.99 | 92.06 | 82.88 | |||||||||||||||||
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Net interest margin (1)
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3.25 | 2.76 | 3.09 | 2.91 | |||||||||||||||||
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December 31,
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REGULATORY CAPITAL RATIOS
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2011 | 2010 | |||||||||||||||||||
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Central Pacific Financial Corp.
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Tier 1 risk-based capital
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22.94 | % | 7.64 | % | |||||||||||||||||
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Total risk-based capital
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24.24 | 8.98 | |||||||||||||||||||
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Leverage capital
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13.78 | 4.42 | |||||||||||||||||||
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Central Pacific Bank
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Tier 1 risk-based capital
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21.63 | % | 8.36 | % | |||||||||||||||||
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Total risk-based capital
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22.93 | 9.70 | |||||||||||||||||||
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Leverage capital
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13.00 | 4.83 | |||||||||||||||||||
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December 31,
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%
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Change
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BALANCE SHEET
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Total assets
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$ | 4,132,865 | $ | 3,938,051 | 4.9 | % | |||||||||||||||
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Loans and leases, net of unearned interest
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2,064,447 | 2,169,444 | (4.8 | ) | |||||||||||||||||
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Net loans and leases
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1,942,354 | 1,976,590 | (1.7 | ) | |||||||||||||||||
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Deposits
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3,443,528 | 3,132,947 | 9.9 | ||||||||||||||||||
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Total shareholders' equity
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456,440 | 66,052 | 591.0 | ||||||||||||||||||
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Book value per common share
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10.93 | (42.18 | ) | N/A | |||||||||||||||||
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Tangible book value per common share
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10.48 | (56.55 | ) | N/A | |||||||||||||||||
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Market value per common share
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12.92 | 30.60 | (57.8 | ) | |||||||||||||||||
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Tangible common equity ratio (3)
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10.63 | % | (2.20 | ) % | N/A | ||||||||||||||||
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Three Months Ended
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Year Ended
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December 31,
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%
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December 31,
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%
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| 2011 | 2010 |
Change
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2011 | 2010 |
Change
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SELECTED AVERAGE BALANCES
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Total assets
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$ | 4,064,411 | $ | 4,109,582 | (1.1) | % | $ | 4,054,628 | $ | 4,368,259 | (7.2 | ) % | |||||||||
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Interest-earning assets
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3,787,703 | 3,909,134 |
(3.1)
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3,822,410 | 4,099,755 | (6.8 | ) | ||||||||||||||
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Loans and leases, net of unearned interest
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2,114,686 | 2,359,977 |
(10.4)
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2,121,544 | 2,716,090 | (21.9 | ) | ||||||||||||||
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Other real estate
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62,685 | 53,549 |
17.1
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53,033 | 40,499 | 30.9 | |||||||||||||||
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Deposits
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3,348,719 | 3,146,779 |
6.4
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3,212,540 | 3,258,940 | (1.4 | ) | ||||||||||||||
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Interest-bearing liabilities
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2,846,075 | 3,353,362 |
(15.1)
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2,925,423 | 3,531,123 | (17.2 | ) | ||||||||||||||
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Total shareholders' equity
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448,759 | 84,281 |
432.5
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371,922 | 178,321 | 108.6 | |||||||||||||||
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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
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Financial Highlights - December 31, 2011
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(Unaudited)
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(in thousands, except per share data)
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December 31,
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%
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2011
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2010
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Change
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NONPERFORMING ASSETS
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Nonaccrual loans (including loans held for sale)
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$ | 133,913 | $ | 245,304 | (45.4 | ) % | ||||||||||||||||
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Other real estate, net
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61,681 | 57,507 | 7.3 | |||||||||||||||||||
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Total nonperforming assets
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195,594 | 302,811 | (35.4 | ) | ||||||||||||||||||
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Loans delinquent for 90 days or more (still accruing interest)
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28 | 8,531 | (99.7 | ) | ||||||||||||||||||
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Restructured loans (still accruing interest)
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8,263 | 13,401 | (38.3 | ) | ||||||||||||||||||
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Total nonperforming assets, loans delinquent for 90 days or more (still
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accruing interest) and restructured loans (still accruing interest)
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$ | 203,885 | $ | 324,743 | (37.2 | ) | ||||||||||||||||
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Three Months Ended
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Year Ended
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December 31,
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%
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December 31,
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%
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2011
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2010
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Change
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2011 | 2010 |
Change
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Loan charge-offs
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$ | 11,275 | $ | 30,205 | (62.7 | ) % | $ | 41,543 | $ | 199,962 | (79.2 | ) % | ||||||||||
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Recoveries
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1,153 | 5,051 | (77.2 | ) | 11,472 | 27,989 | (59.0 | ) | ||||||||||||||
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Net loan charge-offs
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$ | 10,122 | $ | 25,154 | (59.8 | ) | $ | 30,071 | $ | 171,973 | (82.5 | ) | ||||||||||
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Net loan charge-offs to average loans (1)
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1.91 | % | 4.26 | % | 1.42 | % | 6.33 | % | ||||||||||||||
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December 31,
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ASSET QUALITY RATIOS
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Nonaccrual loans (including loans held for sale) to total loans and leases and loans held for sale
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6.33 | % | 10.96 | % | ||||||||||||||||||
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Nonperforming assets to total assets
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4.73 | 7.69 | ||||||||||||||||||||
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Nonperforming assets, loans delinquent for 90 days or more (still accruing interest) and restructured
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loans (still accruing interest) to total loans and leases, loans held for sale & other real estate
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9.37 | 14.14 | ||||||||||||||||||||
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Allowance for loan and lease losses to total loans and leases
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5.91 | 8.89 | ||||||||||||||||||||
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Allowance for loan and lease losses to nonaccrual loans (including loans held for sale)
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91.17 | 78.62 | ||||||||||||||||||||
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(1)
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Annualized
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(2)
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The efficiency ratio is a non-GAAP financial measure which should be read and used in conjunction with the Company's GAAP financial information. Comparison of our efficiency ratio with those of other companies may not be possible because other companies may calculate the efficiency ratio differently. Our efficiency ratio is derived by dividing other operating expense (excluding amortization, impairment and write-down of intangible assets, goodwill, loans held for sale and foreclosed property, loss on early extinguishment of debt, loss on investment transaction and loss on sale of commercial real estate loans) by net operating revenue (net interest income on a taxable equivalent basis plus other operating income before securities transactions). See Reconciliation of Non-GAAP Financial Measures.
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(3)
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The tangible common equity ratio is a non-GAAP financial measure which should be read and used in conjunction with the Company's GAAP financial information. Comparison of our tangible common equity ratio with those of other companies may not be possible because other companies may calculate the tangible common equity ratio differently. Our tangible common equity ratio is derived by dividing common shareholders' equity, less intangible assets (excluding mortgage servicing rights (MSRs)) by total assets, less intangible assets (excluding MSRs).
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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
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Reconciliation of Non-GAAP Financial Measures
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(Unaudited)
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Quarter Ended
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Quarter Ended
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Quarter Ended
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(Dollars in thousands, except per share data)
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December 31, 2011
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September 30, 2011
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December 31, 2010
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Efficiency Ratio
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Total operating expenses as a percentage of net operating revenue
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100.14 | % | 117.84 | % | 103.37 | % | ||||
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Amortization of other intangible assets
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(1.59 | ) | (1.74 | ) | (1.53 | ) | ||||
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Foreclosed asset expense
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(6.56 | ) | (2.02 | ) | (8.65 | ) | ||||
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Write down of assets
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- | 0.07 | (1.11 | ) | ||||||
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Loss on early extinguishment of debt
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- | (15.04 | ) | (12.09 | ) | |||||
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Efficiency ratio
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91.99 | % | 99.11 | % | 79.99 | % | ||||
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Year Ended
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Year Ended
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December 31, 2011
|
December 31, 2010
|
|||||||||
|
Total operating expenses as a percentage of net operating revenue
|
103.01 | % | 152.25 | % | ||||||
|
Goodwill impairment
|
- | (58.53 | ) | |||||||
|
Amortization of other intangible assets
|
(1.72 | ) | (1.64 | ) | ||||||
|
Foreclosed asset expense
|
(2.73 | ) | (5.13 | ) | ||||||
|
Write down of assets
|
(2.77 | ) | (0.83 | ) | ||||||
|
Loss on early extinguishment of debt
|
(3.73 | ) | (3.24 | ) | ||||||
|
Efficiency ratio
|
92.06 | % | 82.88 | % | ||||||
|
Tangible Common Equity Ratio
|
December 31, 2011
|
December 31, 2010
|
||||||||
|
Total shareholders' equity
|
$ | 456,440 | $ | 66,052 | ||||||
|
Less: Preferred stock
|
- | (130,458 | ) | |||||||
|
Less: Other intangible assets
|
(19,053 | ) | (21,927 | ) | ||||||
|
Tangible common equity
|
437,387 | (86,333 | ) | |||||||
|
Total assets
|
4,132,865 | 3,938,051 | ||||||||
|
Less: Other intangible assets
|
(19,053 | ) | (21,927 | ) | ||||||
|
Tangible assets
|
4,113,812 | 3,916,124 | ||||||||
|
Tangible common equity / Tangible assets
|
10.63 | % | (2.20 | ) % | ||||||
|
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
|
|||||||||||
|
CONSOLIDATED BALANCE SHEETS
|
|||||||||||
|
(Unaudited)
|
|||||||||||
|
December 31,
|
September 30,
|
December 31,
|
|||||||||
|
(in thousands)
|
2011
|
2011
|
2010
|
||||||||
|
ASSETS
|
|||||||||||
|
Cash and due from banks
|
$ | 76,233 | $ | 68,508 | $ | 61,725 | |||||
|
Interest-bearing deposits in other banks
|
180,839 | 231,353 | 729,014 | ||||||||
|
Investment securities:
|
|||||||||||
|
Available for sale
|
1,492,994 | 1,466,970 | 702,517 | ||||||||
|
Held to maturity (fair value of $976 at December 31, 2011,
|
|||||||||||
|
$1,287 at September 30, 2011 and $2,913 at December 31, 2010)
|
931 | 1,250 | 2,828 | ||||||||
|
Total investment securities
|
1,493,925 | 1,468,220 | 705,345 | ||||||||
|
Loans held for sale
|
50,290 | 43,839 | 69,748 | ||||||||
|
Loans and leases
|
2,064,447 | 2,059,435 | 2,169,444 | ||||||||
|
Less allowance for loan and lease losses
|
122,093 | 143,430 | 192,854 | ||||||||
|
Net loans and leases
|
1,942,354 | 1,916,005 | 1,976,590 | ||||||||
|
Premises and equipment, net
|
51,414 | 52,505 | 57,390 | ||||||||
|
Accrued interest receivable
|
11,674 | 12,055 | 11,279 | ||||||||
|
Investment in unconsolidated subsidiaries
|
12,697 | 13,051 | 14,856 | ||||||||
|
Other real estate
|
61,681 | 62,720 | 57,507 | ||||||||
|
Mortgage servicing rights
|
22,933 | 22,596 | 22,712 | ||||||||
|
Other intangible assets
|
19,053 | 19,771 | 21,927 | ||||||||
|
Bank-owned life insurance
|
144,474 | 143,845 | 142,296 | ||||||||
|
Federal Home Loan Bank stock
|
48,797 | 48,797 | 48,797 | ||||||||
|
Income tax receivable
|
2,395 | 2,402 | 2,223 | ||||||||
|
Other assets
|
14,106 | 13,491 | 16,642 | ||||||||
|
Total assets
|
$ | 4,132,865 | $ | 4,119,158 | $ | 3,938,051 | |||||
|
LIABILITIES AND EQUITY
|
|||||||||||
|
Deposits:
|
|||||||||||
|
Noninterest-bearing demand
|
$ | 729,149 | $ | 681,619 | $ | 611,744 | |||||
|
Interest-bearing demand
|
569,371 | 565,635 | 639,548 | ||||||||
|
Savings and money market
|
1,136,180 | 1,121,969 | 1,089,813 | ||||||||
|
Time
|
1,008,828 | 978,810 | 791,842 | ||||||||
|
Total deposits
|
3,443,528 | 3,348,033 | 3,132,947 | ||||||||
|
Short-term borrowings
|
34 | 1,224 | 202,480 | ||||||||
|
Long-tem debt
|
158,298 | 258,347 | 459,803 | ||||||||
|
Other liabilities
|
64,585 | 60,699 | 66,766 | ||||||||
|
Total liabilities
|
3,666,445 | 3,668,303 | 3,861,996 | ||||||||
|
Equity:
|
|||||||||||
|
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding none at
|
|||||||||||
|
December 31, 2011 and September 30, 2011, and 135,000 at December 31, 2010
|
- | - | 130,458 | ||||||||
|
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding
|
|||||||||||
|
41,749,116 shares at December 31, 2011, 41,749,116 shares at September 30, 2011
|
|||||||||||
|
and 1,527,000 shares at December 31, 2010
|
784,539 | 784,172 | 404,167 | ||||||||
|
Surplus
|
66,585 | 65,479 | 63,308 | ||||||||
|
Accumulated deficit
|
(396,848 | ) | (408,943 | ) | (517,316 | ) | |||||
|
Accumulated other comprehensive income (loss)
|
2,164 | 161 | (14,565 | ) | |||||||
|
Total shareholders' equity
|
456,440 | 440,869 | 66,052 | ||||||||
|
Non-controlling interest
|
9,980 | 9,986 | 10,003 | ||||||||
|
Total equity
|
466,420 | 450,855 | 76,055 | ||||||||
|
Total liabilities and equity
|
$ | 4,132,865 | $ | 4,119,158 | $ | 3,938,051 | |||||
|
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
|
|||||||||||||||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||
|
Three Months Ended
|
Year Ended
|
||||||||||||||||||
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
||||||||||||||||
|
(In thousands, except per share data)
|
2011
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||
|
Interest income:
|
|||||||||||||||||||
|
Interest and fees on loans and leases
|
$ | 26,097 | $ | 25,962 | $ | 31,558 | $ | 107,089 | $ | 138,114 | |||||||||
|
Interest and dividends on investment securities:
|
|||||||||||||||||||
|
Taxable interest
|
7,179 | 7,918 | 4,060 | 27,559 | 19,699 | ||||||||||||||
|
Tax-exempt interest
|
189 | 186 | 179 | 738 | 1,068 | ||||||||||||||
|
Dividends
|
4 | 5 | 3 | 12 | 11 | ||||||||||||||
|
Interest on deposits in other banks
|
104 | 259 | 555 | 1,052 | 1,862 | ||||||||||||||
|
Total interest income
|
33,573 | 34,330 | 36,355 | 136,450 | 160,754 | ||||||||||||||
|
Interest expense:
|
|||||||||||||||||||
|
Interest on deposits:
|
|||||||||||||||||||
|
Demand
|
94 | 113 | 196 | 500 | 885 | ||||||||||||||
|
Savings and money market
|
353 | 459 | 1,055 | 2,044 | 5,514 | ||||||||||||||
|
Time
|
1,288 | 1,499 | 2,935 | 7,066 | 14,390 | ||||||||||||||
|
Interest on short-term borrowings
|
- | - | 295 | 204 | 1,177 | ||||||||||||||
|
Interest on long-term debt
|
1,026 | 2,430 | 4,855 | 8,815 | 20,135 | ||||||||||||||
|
Total interest expense
|
2,761 | 4,501 | 9,336 | 18,629 | 42,101 | ||||||||||||||
|
Net interest income
|
30,812 | 29,829 | 27,019 | 117,821 | 118,653 | ||||||||||||||
|
Provision (credit) for loan and lease losses
|
(11,215 | ) | (19,116 | ) | 406 | (40,690 | ) | 159,548 | |||||||||||
|
Net interest income (loss) after provision for loan and lease losses
|
42,027 | 48,945 | 26,613 | 158,511 | (40,895 | ) | |||||||||||||
|
Other operating income:
|
|||||||||||||||||||
|
Service charges on deposit accounts
|
2,460 | 2,501 | 2,849 | 10,024 | 11,831 | ||||||||||||||
|
Other service charges and fees
|
4,286 | 4,451 | 3,973 | 17,239 | 15,418 | ||||||||||||||
|
Income from fiduciary activities
|
658 | 636 | 831 | 2,794 | 3,204 | ||||||||||||||
|
Equity in earnings of unconsolidated subsidiaries
|
157 | 136 | 140 | 458 | 468 | ||||||||||||||
|
Fees on foreign exchange
|
180 | 198 | 157 | 664 | 659 | ||||||||||||||
|
Investment securities gains
|
1,045 | - | - | 1,306 | 831 | ||||||||||||||
|
Income from bank-owned life insurance
|
1,103 | 866 | 673 | 4,139 | 4,809 | ||||||||||||||
|
Loan placement fees
|
193 | 164 | 84 | 541 | 391 | ||||||||||||||
|
Net gains on sales of residential loans
|
3,670 | 1,177 | 3,155 | 8,050 | 8,468 | ||||||||||||||
|
Gain on sale of premises and equipment
|
- | - | 7,698 | - | 7,698 | ||||||||||||||
|
Other
|
1,483 | 1,380 | 325 | 4,966 | 3,259 | ||||||||||||||
|
Total other operating income
|
15,235 | 11,509 | 19,885 | 50,181 | 57,036 | ||||||||||||||
|
Other operating expense:
|
|||||||||||||||||||
|
Salaries and employee benefits
|
17,344 | 15,856 | 12,999 | 63,675 | 56,613 | ||||||||||||||
|
Net occupancy
|
3,559 | 3,466 | 3,847 | 13,793 | 13,650 | ||||||||||||||
|
Equipment
|
1,070 | 1,348 | 1,222 | 4,702 | 5,337 | ||||||||||||||
|
Amortization of other intangible assets
|
2,148 | 1,709 | 1,857 | 7,033 | 7,061 | ||||||||||||||
|
Communication expense
|
886 | 828 | 886 | 3,517 | 3,985 | ||||||||||||||
|
Legal and professional services
|
3,536 | 3,230 | 3,507 | 13,506 | 17,840 | ||||||||||||||
|
Computer software expense
|
923 | 894 | 993 | 3,629 | 3,625 | ||||||||||||||
|
Advertising expense
|
453 | 842 | 354 | 2,961 | 2,531 | ||||||||||||||
|
Goodwill impairment
|
- | - | - | - | 102,689 | ||||||||||||||
|
Foreclosed asset expense
|
2,959 | 835 | 4,064 | 4,557 | 8,982 | ||||||||||||||
|
Write down of assets
|
- | (31 | ) | 520 | 4,624 | 1,460 | |||||||||||||
|
Loss on early extinguishment of debt
|
- | 6,234 | 5,685 | 6,234 | 5,685 | ||||||||||||||
|
Other
|
12,289 | 13,617 | 12,649 | 43,890 | 37,636 | ||||||||||||||
|
Total other operating expense
|
45,167 | 48,828 | 48,583 | 172,121 | 267,094 | ||||||||||||||
|
Income (loss) before income taxes
|
12,095 | 11,626 | (2,085 | ) | 36,571 | (250,953 | ) | ||||||||||||
|
Income tax expense
|
- | - | - | - | - | ||||||||||||||
|
Net income (loss)
|
$ | 12,095 | $ | 11,626 | $ | (2,085 | ) | $ | 36,571 | $ | (250,953 | ) | |||||||
|
Per common share data:
|
|||||||||||||||||||
|
Basic earnings (loss) per share
|
$ | 0.29 | $ | 0.28 | $ | (2.78 | ) | $ | 3.36 | $ | (171.13 | ) | |||||||
|
Diluted earnings (loss) per share
|
0.29 | 0.28 | (2.78 | ) | 3.31 | (171.13 | ) | ||||||||||||
|
Basic weighted average shares outstanding
|
41,628 | 41,625 | 1,519 | 35,891 | 1,516 | ||||||||||||||
|
Diluted weighted average shares outstanding
|
41,709 | 41,672 | 1,519 | 36,342 | 1,516 | ||||||||||||||
|
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, 2011
|
December 31, 2010
|
December 31, 2011
|
December 31, 2010
|
|||||||||||||||||||||||||||||||
|
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
|
$ | 162,592 | 0.25 | % | $ | 104 | $ | 865,095 | 0.25 | % | $ | 555 | $ | 412,351 | 0.26 | % | $ | 1,052 | $ | 726,346 | 0.26 | % | $ | 1,862 | |||||||||||
|
Taxable investment securities, excluding
|
|||||||||||||||||||||||||||||||||||
|
valuation allowance
|
1,449,324 | 1.98 | 7,183 | 622,105 | 2.61 | 4,063 | 1,227,181 | 2.25 | 27,571 | 586,719 | 3.36 | 19,710 | |||||||||||||||||||||||
|
Tax-exempt investment securities,
|
|||||||||||||||||||||||||||||||||||
|
excluding valuation allowance
|
12,304 | 9.47 | 291 | 13,160 | 8.35 | 275 | 12,537 | 9.05 | 1,135 | 21,803 | 7.54 | 1,643 | |||||||||||||||||||||||
|
Loans and leases, net of unearned income
|
2,114,686 | 4.91 | 26,097 | 2,359,977 | 5.32 | 31,558 | 2,121,544 | 5.05 | 107,089 | 2,716,090 | 5.09 | 138,114 | |||||||||||||||||||||||
|
Federal Home Loan Bank stock
|
48,797 | - | - | 48,797 | - | - | 48,797 | - | - | 48,797 | - | - | |||||||||||||||||||||||
|
Total interest earning assets
|
3,787,703 | 3.54 | 33,675 | 3,909,134 | 3.71 | 36,451 | 3,822,410 | 3.58 | 136,847 | 4,099,755 | 3.94 | 161,329 | |||||||||||||||||||||||
|
Nonearning assets
|
276,708 | 200,448 | 232,218 | 268,504 | |||||||||||||||||||||||||||||||
|
Total assets
|
$ | 4,064,411 | $ | 4,109,582 | $ | 4,054,628 | $ | 4,368,259 | |||||||||||||||||||||||||||
|
Liabilities & Equity:
|
|||||||||||||||||||||||||||||||||||
|
Interest-bearing liabilities:
|
|||||||||||||||||||||||||||||||||||
|
Interest-bearing demand deposits
|
$ | 555,624 | 0.07 | % | $ | 94 | $ | 648,752 | 0.12 | % | $ | 196 | $ | 539,519 | 0.09 | % | $ | 500 | $ | 619,070 | 0.14 | % | $ | 885 | |||||||||||
|
Savings and money market deposits
|
1,130,165 | 0.12 | 353 | 1,085,775 | 0.39 | 1,055 | 1,117,183 | 0.18 | 2,044 | 1,092,378 | 0.50 | 5,514 | |||||||||||||||||||||||
|
Time deposits under $100,000
|
359,076 | 0.76 | 688 | 472,111 | 1.41 | 1,674 | 395,500 | 0.99 | 3,900 | 515,264 | 1.57 | 8,077 | |||||||||||||||||||||||
|
Time deposits $100,000 and over
|
611,662 | 0.39 | 600 | 347,209 | 1.44 | 1,261 | 484,734 | 0.65 | 3,166 | 450,371 | 1.40 | 6,313 | |||||||||||||||||||||||
|
Short-term borrowings
|
1,878 | 0.01 | - | 202,026 | 0.58 | 295 | 35,810 | 0.57 | 204 | 219,823 | 0.54 | 1,177 | |||||||||||||||||||||||
|
Long-term debt
|
187,670 | 2.17 | 1,026 | 597,489 | 3.22 | 4,855 | 352,677 | 2.50 | 8,815 | 634,217 | 3.17 | 20,135 | |||||||||||||||||||||||
|
Total interest-bearing liabilities
|
2,846,075 | 0.38 | 2,761 | 3,353,362 | 1.10 | 9,336 | 2,925,423 | 0.64 | 18,629 | 3,531,123 | 1.19 | 42,101 | |||||||||||||||||||||||
|
Noninterest-bearing deposits
|
692,192 | 592,932 | 675,604 | 581,857 | |||||||||||||||||||||||||||||||
|
Other liabilities
|
67,402 | 69,001 | 71,687 | 66,943 | |||||||||||||||||||||||||||||||
|
Total liabilities
|
3,605,669 | 4,015,295 | 3,672,714 | 4,179,923 | |||||||||||||||||||||||||||||||
|
Shareholders' equity
|
448,759 | 84,281 | 371,922 | 178,321 | |||||||||||||||||||||||||||||||
|
Non-controlling interest
|
9,983 | 10,006 | 9,992 | 10,015 | |||||||||||||||||||||||||||||||
|
Total equity
|
458,742 | 94,287 | 381,914 | 188,336 | |||||||||||||||||||||||||||||||
|
Total liabilities & equity
|
$ | 4,064,411 | $ | 4,109,582 | $ | 4,054,628 | $ | 4,368,259 | |||||||||||||||||||||||||||
|
Net interest income
|
$ | 30,914 | $ | 27,115 | $ | 118,218 | $ | 119,228 | |||||||||||||||||||||||||||
|
Net interest margin
|
3.25 | % | 2.76 | % | 3.09 | % | 2.91 | % | |||||||||||||||||||||||||||