Central Pacific Financial Corp. Reports Third Quarter 2010 Results
Finalizing Terms of Investments With Lead Investors
HONOLULU, Nov. 2, 2010 /PRNewswire-FirstCall/ -- Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank, today reported a net loss for the third quarter of 2010 of $72.5 million, or $2.46 per diluted share, compared to a net loss of $183.1 million, or $6.38 per diluted share in the third quarter of 2009 and a net loss of $16.1 million, or $0.60 per diluted share in the second quarter of 2010. The net loss for the third quarter of 2009 included a non-cash goodwill impairment charge of $50.0 million and a non-cash charge of $61.4 million related to the establishment of a valuation allowance against the Company's net deferred tax assets.
The net loss for the third quarter of 2010 included a provision for loan and lease losses of $79.9 million, compared to $20.4 million in the second quarter of 2010 and $142.5 million in the third quarter of 2009. The current quarter's provision reflects an increase to the Company's allowance for loan and lease losses related to its commercial and residential mortgage portfolios at September 30, 2010.
The Company also announced that it has been working with a private equity investor and believes it is close to agreeing with the investor on the material terms for an investment of approximately $98 million of a contemplated $325 million capital raise and is in the process of seeking to finalize an agreement for such an investment by the end of the week. The Company is also in negotiations with another private equity investor for an investment of a similar amount. There is no assurance that either or both such contemplated investment agreements will be agreed upon or executed, or that if executed, the conditions to such investments will be satisfied. Those conditions are expected to include, among others, investments by additional investors for the balance of the $325 million capital raise, exchange of the TARP preferred stock for common stock on terms agreeable to the investors and agreed upon by the U.S. Department of Treasury, regulatory approvals, receipt of NYSE waiver of its listing rule requiring shareholder approval of the capital raise (or, in the event that the NYSE does not provide such waiver, receipt of shareholder approval of the capital raise) and other conditions. The $98 million investment would represent 24.9% of the common equity interests of the Company (assuming the exchange of the TARP preferred stock on terms consistent with such agreement). The company also plans to conduct a $20 million share rights offering after the closing of the capital raise that will allow existing shareholders or their transferees to purchase common shares at the same purchase price as the other investors.
Third Quarter Highlights
- Completed the sale of Mainland commercial real estate and construction loans in September, 2010 with an aggregate book value of $124.1 million, of which $41.2 million were nonperforming at the time of the sale. In conjunction with the sale, the Company received net proceeds of $110.8 million, which represented a discount of approximately 10.7% compared to the aggregate book value of the loans sold.
- Reduced nonperforming assets by $94.5 million to $372.7 million at September 30, 2010 from $467.2 million at June 30, 2010.
- Recognized total credit costs of $76.2 million, compared to $21.8 million in the second quarter of 2010 and $145.1 million in the third quarter of 2009. Total credit costs include the provision for loan and lease losses as discussed above, foreclosed asset expense, write-downs of loans held for sale, and changes to the reserve for unfunded commitments.
- Significantly increased the allowance for loan and lease losses at September 30, 2010 to 9.19% as a percentage of total loans and leases from 7.69% at June 30, 2010, and to 58.39% as a percentage of nonperforming assets from 43.23% at June 30, 2010.
- Effected a reduction in total loans and leases from $2.6 billion at June 30, 2010 to $2.4 billion at September 30, 2010.
- Continued to improve the Company's liquidity position with cash and cash equivalents totaling $924.4 million at September 30, 2010, compared to $916.7 million at June 30, 2010. The Company lowered its loan to deposit ratio to 74.3% at September 30, 2010, from 81.8% at June 30, 2010.
- Had tier 1 risk-based capital, total risk-based capital, and leverage capital ratios as of September 30, 2010 of 7.23%, 8.57%, and 4.39%, respectively, compared to 9.08%, 10.41%, and 6.07%, respectively, as of June 30, 2010.
- Appointed Larry Rodriguez as Executive Vice President and Chief Financial Officer on August 26, 2010. Rodriguez has over 40 years of experience in the financial services industry, served as Managing Partner of Ernst & Young, LLP's Hawaii office, and has been a consultant to the Company since January 2010.
"We continue to make progress on our recovery plan milestones and are working to reduce our credit risk exposure and improve our asset quality, notwithstanding the additional allowance for loan and lease losses recorded this quarter," said John C. Dean, Executive Chairman of the Board. "Our recovery plan, particularly our efforts to raise capital to meet the capital ratios required by our consent order, is our top priority and those efforts remain on track."
Earnings Highlights
Net interest income was $27.4 million, compared to $43.5 million in the year-ago quarter and $29.2 million in the second quarter of 2010. The net interest margin was 2.74%, compared to 3.56% in the year-ago quarter and 2.90% in the second quarter of 2010. The Company's net interest margin continues to be negatively impacted by its ongoing efforts to maximize balance sheet liquidity by maintaining elevated levels of cash and cash equivalents and further reductions in its commercial real estate loan portfolio. Net interest income reflects the reversal of interest on certain nonaccrual loans totaling $0.9 million during the current quarter, compared to $2.0 million in the year-ago quarter and $0.5 million in the second quarter of 2010. Excluding the effects of interest reversals on nonaccrual loans, the net interest margin was 2.82% for the current quarter, compared to 3.72% in the year-ago quarter and 2.95% in the second quarter of 2010.
Other operating income totaled $11.7 million, compared to $15.4 million in the year-ago quarter and $12.7 million in the second quarter of 2010. The decrease from the year-ago quarter was primarily due to: (1) a non-cash gain related to the ineffective portion of a cash flow hedge of $1.3 million recorded in the third quarter of 2009, (2) lower service charges on deposit accounts of $1.3 million, (3) lower gains on sales of residential mortgage loans of $1.0 million, and (4) lower income from bank-owned life insurance of $0.5 million, partially offset by (5) higher loan servicing fees of $0.7 million. The sequential-quarter decrease was primarily due to: (1) lower unrealized gains on outstanding interest rate locks of $1.0 million and (2) lower income from bank-owned life insurance of $0.8 million, partially offset by (3) higher gains on sales of residential mortgage loans of $0.7 million.
Other operating expense totaled $31.7 million, compared to $89.5 million in the year-ago quarter and $37.6 million in the second quarter of 2010. The decrease from the year-ago quarter reflects: (1) the $50.0 million non-cash goodwill impairment charge recorded in the third quarter of 2009, (2) lower credit related charges (which includes write-downs of loans held for sale, foreclosed asset expense, and changes in the reserve for unfunded commitments) totaling $6.3 million, and (3) lower salaries and employee benefits of $2.2 million. The sequential-quarter decrease was primarily due to lower credit related charges of $4.9 million and lower legal and professional services of $2.1 million.
The efficiency ratio was 81.7% (excluding foreclosed asset income of $1.0 million), compared to 55.8% in the year-ago quarter (excluding the $50.0 million non-cash goodwill impairment charge and foreclosed asset expense of $5.5 million) and 86.5% (excluding foreclosed asset expense of $0.4 million and the write-down of loans held for sale of $0.2 million) in the second quarter of 2010.
The Company continues to recognize a full valuation allowance against its net deferred tax assets, which resulted in no income tax benefit being recognized during the third quarter of 2010.
Balance Sheet Highlights
Total assets at September 30, 2010 were $4.2 billion, compared to $5.2 billion and $4.3 billion at September 30, 2009 and June 30, 2010, respectively.
Total loans and leases at September 30, 2010 were $2.4 billion, compared to $3.5 billion and $2.6 billion at September 30, 2009 and June 30, 2010, respectively. The current quarter decrease was primarily due to decreases in the Mainland loan portfolio of $198.0 million and the Hawaii construction and commercial mortgage loan portfolios of $67.7 million. The decrease in the Mainland loan portfolio reflects the current quarter sale of Mainland commercial real estate and construction loans with an aggregate book value of $124.1 million as described above.
Total deposits at September 30, 2010 were $3.2 billion, compared to $3.9 billion at September 30, 2009 and $3.2 billion at June 30, 2010. Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $2.8 billion at September 30, 2010. This represents a decrease of $342.0 million from a year ago and an increase of $10.2 million from June 30, 2010. Significant changes included decreases in noninterest-bearing demand deposits and time deposits during the quarter of $15.9 million and $58.5 million, respectively, while interest-bearing demand deposits and savings and money market deposits increased during the third quarter by $40.6 million and $12.6 million, respectively.
Total shareholders' equity was $80.5 million at September 30, 2010, compared to $436.6 million and $156.5 million at September 30, 2009 and June 30, 2010, respectively.
Asset Quality
Nonperforming assets at September 30, 2010 totaled $372.7 million, or 8.93% of total assets, compared to $467.2 million, or 10.92%, of total assets at June 30, 2010. The sequential-quarter decrease reflects sales of nonperforming assets (including the aforementioned sale of Mainland commercial real estate and construction loans) of $63.4 million, paydowns of $51.9 million, and charge-offs and write-downs totaling $43.0 million. Partially offsetting these reductions were additions of $19.1 million in Hawaii construction loans, $9.2 million in Hawaii residential mortgage loans, $1.6 million in Hawaii commercial loans, $1.4 million in Hawaii commercial mortgage loans, $16.6 million in Mainland construction loans, and $15.9 million in Mainland commercial mortgage loans.
Loans delinquent for 90 days or more still accruing interest decreased from $1.9 million at June 30, 2010 to $1.1 million at September 30, 2010. However, loans delinquent for 30 days or more still accruing interest increased from $12.9 million at June 30, 2010 to $23.3 million at September 30, 2010.
Net loan charge-offs in the third quarter of 2010 totaled $64.3 million, compared to $103.7 million in the year-ago quarter and $30.1 million in the second quarter of 2010. Significant current quarter amounts included net charge-offs of Mainland commercial construction loans totaling $22.2 million, Mainland commercial mortgage loans totaling $15.2 million, Hawaii residential construction loans totaling $13.0 million, and Hawaii commercial construction loans totaling $11.3 million.
The allowance for loan and lease losses, as a percentage of total loans and leases, increased to 9.19% at September 30, 2010 from 7.69% at June 30, 2010.
Construction and Development Loans
At September 30, 2010, the construction and development loan portfolio (excluding owner-occupied loans) totaled $454.5 million, or 19.2%, of the total loan portfolio. Of this amount, $331.0 million were located in Hawaii and $123.5 million were located on the Mainland. This portfolio decreased by $135.4 million from June 30, 2010 and by $523.6 million from September 30, 2009.
The allowance for loan and lease losses established for these loans was $87.5 million at September 30, 2010, or 19.2%, of the total outstanding balance, compared to $90.4 million, or 15.3%, of the total outstanding balance at June 30, 2010. Of this amount, $65.3 million related to construction and development loans in Hawaii and $22.2 million related to construction and development loans on the Mainland.
Nonperforming construction and development assets in Hawaii totaled $201.2 million at September 30, 2010, or 4.8%, of total assets. At September 30, 2010, this balance was comprised of portfolio loans totaling $183.9 million and foreclosed properties totaling $17.3 million. Nonperforming assets related to this sector totaled $254.5 million at June 30, 2010.
Nonperforming construction and development assets on the Mainland totaled $89.9 million at September 30, 2010, or 2.2%, of total assets. At September 30, 2010, this balance was comprised of portfolio loans totaling $60.0 million and foreclosed properties totaling $29.9 million. Nonperforming assets related to this sector totaled $117.3 million at June 30, 2010.
Capital Levels
At September 30, 2010, the Company's Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios were 7.23%, 8.57%, and 4.39%, respectively, compared to 9.08%, 10.41%, and 6.07%, respectively, at June 30, 2010. The declines in the Company's capital ratios are largely the result of the previously mentioned increase in the allowance for loan and lease losses.
Non-GAAP Financial Measures
This press release contains certain references to financial measures that have been adjusted to exclude certain expenses and other specified items. These financial measures differ from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP") in that they exclude unusual or non-recurring charges, losses, credits or gains. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Management believes that financial presentations excluding the impact of these items provide useful supplemental information that is important to a proper understanding of the Company's core business results by investors. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies.
Conference Call
The Company's management will host a conference call today at 1:00 p.m. Eastern Time (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 December 1, 2010 by dialing 1-877-344-7529 (passcode: 445138) and on the Company's website.
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with $4.2 billion in assets. Central Pacific Bank, its primary subsidiary, operates 35 branches, over 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.
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" 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 regulatory actions on the Company including the Consent Order by the FDIC and the Hawaii Division of Financial Institutions; 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; 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; 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 projections, please see the Company's publicly available Securities and Exchange Commission filings, including the Company's 2009 Form 10-K and 2010 Form 10-Qs. The Company does not update any of its forward-looking statements.
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
||||||||||||||
Financial Highlights - September 30, 2010 |
||||||||||||||
(Unaudited) |
||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||
September 30, |
% |
September 30, |
% |
|||||||||||
(in thousands, except per share data) |
2010 |
2009 |
Change |
2010 |
2009 |
Change |
||||||||
INCOME STATEMENT |
||||||||||||||
Net income (loss) |
$ (72,544) |
$ (183,141) |
(60.4) |
% |
$ (248,868) |
$ (214,954) |
15.8 |
% |
||||||
Per share data: |
||||||||||||||
Diluted (after dividends on preferred stock): |
||||||||||||||
Net income (loss) |
(2.46) |
(6.38) |
(61.4) |
(8.42) |
(7.67) |
9.8 |
||||||||
Cash dividends |
- |
- |
0.0 |
- |
- |
0.0 |
||||||||
PERFORMANCE RATIOS |
||||||||||||||
Return (loss) on average assets (1) |
(6.84) |
% |
(13.59) |
% |
(7.45) |
% |
(5.26) |
% |
||||||
Return (loss) on average shareholders' equity (1) |
(192.08) |
(121.43) |
(158.00) |
(45.71) |
||||||||||
Net income (loss) to average tangible shareholders' equity (1) |
(226.71) |
(172.29) |
(217.23) |
(63.99) |
||||||||||
Efficiency ratio (2) |
81.72 |
55.82 |
83.94 |
59.87 |
||||||||||
Net interest margin (1) |
2.74 |
3.56 |
2.95 |
3.72 |
||||||||||
September 30, |
||||||||||||||
REGULATORY CAPITAL RATIOS |
2010 |
2009 |
||||||||||||
Central Pacific Financial Corp. |
||||||||||||||
Tier 1 risk-based capital |
7.23 |
% |
10.94 |
% |
||||||||||
Total risk-based capital |
8.57 |
12.24 |
||||||||||||
Leverage capital |
4.39 |
8.11 |
||||||||||||
Central Pacific Bank |
||||||||||||||
Tier 1 risk-based capital |
7.69 |
% |
10.79 |
% |
||||||||||
Total risk-based capital |
9.03 |
12.90 |
||||||||||||
Leverage capital |
4.67 |
8.02 |
||||||||||||
September 30, |
% |
|||||||||||||
2010 |
2009 |
Change |
||||||||||||
BALANCE SHEET |
||||||||||||||
Total assets |
$ 4,173,241 |
$ 5,171,510 |
(19.3) |
% |
||||||||||
Loans and leases, net of unearned interest |
2,367,320 |
3,457,682 |
(31.5) |
|||||||||||
Net loans and leases |
2,149,718 |
3,252,768 |
(33.9) |
|||||||||||
Deposits |
3,187,333 |
3,860,931 |
(17.4) |
|||||||||||
Total shareholders' equity |
80,506 |
436,639 |
(81.6) |
|||||||||||
Book value per common share |
(1.63) |
10.16 |
(116.0) |
|||||||||||
Tangible book value per common share |
(2.38) |
5.93 |
(140.1) |
|||||||||||
Market value per common share |
1.43 |
2.52 |
(43.3) |
|||||||||||
Tangible common equity ratio |
(1.74) |
% |
3.57 |
% |
||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||
September 30, |
% |
September 30, |
% |
|||||||||||
2010 |
2009 |
Change |
2010 |
2009 |
Change |
|||||||||
SELECTED AVERAGE BALANCES |
||||||||||||||
Total assets |
$ 4,242,497 |
$ 5,388,922 |
(21.3) |
% |
$ 4,455,432 |
$ 5,451,285 |
(18.3) |
% |
||||||
Interest-earning assets |
3,998,032 |
4,917,174 |
(18.7) |
4,163,994 |
4,944,667 |
(15.8) |
||||||||
Loans and leases, net of unearned interest |
2,642,538 |
3,672,714 |
(28.0) |
2,836,099 |
3,848,970 |
(26.3) |
||||||||
Other real estate |
44,179 |
20,307 |
117.6 |
36,101 |
17,366 |
107.9 |
||||||||
Deposits |
3,176,303 |
3,863,544 |
(17.8) |
3,296,737 |
3,953,913 |
(16.6) |
||||||||
Interest-bearing liabilities |
3,436,383 |
4,125,662 |
(16.7) |
3,591,028 |
4,151,790 |
(13.5) |
||||||||
Total shareholders' equity |
151,068 |
603,268 |
(75.0) |
210,012 |
627,016 |
(66.5) |
||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
||||||||||||||
Financial Highlights - September 30, 2010 |
||||||||||||||
(Unaudited) |
||||||||||||||
(in thousands, except per share data) |
||||||||||||||
September 30, |
% |
|||||||||||||
2010 |
2009 |
Change |
||||||||||||
NONPERFORMING ASSETS |
||||||||||||||
Nonaccrual loans (including loans held for sale) |
$ 320,711 |
$ 397,386 |
(19.3) |
% |
||||||||||
Other real estate, net |
51,958 |
21,093 |
146.3 |
|||||||||||
Total nonperforming assets |
372,669 |
418,479 |
(10.9) |
|||||||||||
Loans delinquent for 90 days or more (still accruing interest) |
1,127 |
27,742 |
(95.9) |
|||||||||||
Restructured loans (still accruing interest) |
13,669 |
7,125 |
91.8 |
|||||||||||
Total nonperforming assets, loans delinquent for 90 days or more (still accruing interest) |
$ 387,465 |
$ 453,346 |
(14.5) |
|||||||||||
and restructured loans (still accruing interest) |
||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||
September 30, |
September 30, |
|||||||||||||
2010 |
2009 |
2010 |
2009 |
|||||||||||
Loan charge-offs |
$ 79,047 |
$ 104,153 |
(24.1) |
% |
$ 169,757 |
$ 159,911 |
6.2 |
% |
||||||
Recoveries |
14,797 |
500 |
2859.4 |
22,938 |
1,377 |
1565.8 |
||||||||
Net loan charge-offs (recoveries) |
$ 64,250 |
$ 103,653 |
(38.0) |
$ 146,819 |
$ 158,534 |
(7.4) |
||||||||
Net loan charge-offs to average loans (1) |
9.73 |
% |
11.29 |
% |
6.90 |
% |
5.49 |
% |
||||||
September 30, |
||||||||||||||
2010 |
2009 |
|||||||||||||
ASSET QUALITY RATIOS |
||||||||||||||
Nonaccrual loans (including loans held for sale) to total loans and leases and loans held for sale |
13.24 |
% |
11.30 |
% |
||||||||||
Nonperforming assets to total assets |
8.93 |
8.09 |
||||||||||||
Nonperforming assets, loans delinquent for 90 days or more (still accruing interest) and restructured loans |
||||||||||||||
to total loans and leases, loans held for sale & other real estate |
15.66 |
12.81 |
||||||||||||
Allowance for loan and lease losses to total loans and leases |
9.19 |
5.93 |
||||||||||||
Allowance for loan and lease losses to nonaccrual loans (including loans held for sale) |
67.85 |
51.57 |
||||||||||||
(1) Annualized |
||||||||||||||
(2) 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 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). |
||||||||||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
|||||||
Reconciliation of Non-GAAP Financial Measures |
|||||||
(Unaudited) |
|||||||
Quarter Ended |
Quarter Ended |
Quarter Ended |
|||||
(Dollars in thousands, except per share data) |
September 30, 2010 |
June 30, 2010 |
September 30, 2009 |
||||
Net Interest Margin |
|||||||
Annualized net interest income for the quarter as a percentage of |
|||||||
quarter-to-date average interest earning assets |
2.74 |
% |
2.90 |
% |
3.56 |
% |
|
Reversal of interest on nonaccrual loans |
0.08 |
0.05 |
0.16 |
||||
Net interest margin, excluding reversal of interest on nonaccrual loans |
2.82 |
% |
2.95 |
% |
3.72 |
% |
|
Efficiency Ratio |
|||||||
Total operating expenses as a percentage of net operating revenue |
80.96 |
% |
89.51 |
% |
150.24 |
% |
|
Goodwill impairment |
- |
- |
(83.94) |
||||
Amortization of other intangible assets |
(1.84) |
(1.71) |
(1.21) |
||||
Foreclosed asset expense |
2.60 |
(0.96) |
(9.27) |
||||
Write down of assets |
- |
(0.39) |
- |
||||
Efficiency ratio |
81.72 |
% |
86.45 |
% |
55.82 |
% |
|
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
(Unaudited) |
|||||||
September 30, |
June 30, |
September 30, |
|||||
(in thousands, except per share data) |
2010 |
2010 |
2009 |
||||
ASSETS |
|||||||
Cash and due from banks |
$ |
72,109 |
$ |
107,314 |
$ |
112,828 |
|
Interest-bearing deposits in other banks |
852,306 |
809,359 |
204,338 |
||||
Investment securities: |
|||||||
Trading |
22,237 |
23,909 |
- |
||||
Available for sale |
579,969 |
403,141 |
973,364 |
||||
Held to maturity (fair value of $3,420 at September 30, 2010, |
|||||||
$3,868 at June 30, 2010 and $5,461 at September 30, 2009) |
3,298 |
3,731 |
5,332 |
||||
Total investment securities |
605,504 |
430,781 |
978,696 |
||||
Loans held for sale |
54,842 |
72,726 |
60,027 |
||||
Loans and leases |
2,367,320 |
2,625,432 |
3,457,682 |
||||
Less allowance for loan and lease losses |
217,602 |
201,959 |
204,914 |
||||
Net loans and leases |
2,149,718 |
2,423,473 |
3,252,768 |
||||
Premises and equipment |
71,144 |
72,112 |
76,511 |
||||
Accrued interest receivable |
11,323 |
11,416 |
16,590 |
||||
Investment in unconsolidated subsidiaries |
15,413 |
15,830 |
17,794 |
||||
Other real estate |
51,958 |
38,042 |
21,093 |
||||
Goodwill |
- |
- |
102,689 |
||||
Other intangible assets |
22,646 |
23,364 |
25,520 |
||||
Mortgage servicing rights |
22,128 |
21,998 |
19,406 |
||||
Bank-owned life insurance |
141,587 |
140,526 |
138,757 |
||||
Federal Home Loan Bank stock |
48,797 |
48,797 |
48,797 |
||||
Other assets |
53,766 |
63,605 |
95,696 |
||||
Total assets |
$ |
4,173,241 |
$ |
4,279,343 |
$ |
5,171,510 |
|
LIABILITIES AND EQUITY |
|||||||
Deposits: |
|||||||
Noninterest-bearing demand |
$ |
590,064 |
$ |
605,927 |
$ |
647,672 |
|
Interest-bearing demand |
631,842 |
591,258 |
547,414 |
||||
Savings and money market |
1,076,213 |
1,063,638 |
1,424,518 |
||||
Time |
889,214 |
947,751 |
1,241,327 |
||||
Total deposits |
3,187,333 |
3,208,574 |
3,860,931 |
||||
Short-term borrowings |
201,674 |
201,708 |
252,807 |
||||
Long-tem debt |
616,869 |
642,202 |
558,212 |
||||
Other liabilities |
76,850 |
60,316 |
52,889 |
||||
Total liabilities |
4,082,726 |
4,112,800 |
4,724,839 |
||||
Equity: |
|||||||
Preferred stock, no par value, authorized 1,000,000 shares; |
|||||||
issued and outstanding 135,000 shares at September 30, 2010, |
|||||||
June 30, 2010, and at September 30, 2009 |
130,086 |
129,714 |
128,606 |
||||
Common stock, no par value, authorized 185,000,000 shares; |
|||||||
issued and outstanding 30,364,680 shares at September 30, 2010, 30,370,553 |
|||||||
shares at June 30, 2010 and 30,329,123 shares at September 30, 2009 |
406,291 |
406,580 |
406,312 |
||||
Surplus |
63,183 |
62,843 |
62,837 |
||||
Accumulated deficit |
(513,088) |
(438,425) |
(157,088) |
||||
Accumulated other comprehensive loss |
(5,966) |
(4,184) |
(4,028) |
||||
Total shareholders' equity |
80,506 |
156,528 |
436,639 |
||||
Non-controlling interest |
10,009 |
10,015 |
10,032 |
||||
Total equity |
90,515 |
166,543 |
446,671 |
||||
Total liabilities and equity |
$ |
4,173,241 |
$ |
4,279,343 |
$ |
5,171,510 |
|
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||
(Unaudited) |
||||||||||
Three Months Ended |
Year Ended |
|||||||||
September 30, |
June 30, |
September 30, |
September 30, |
|||||||
(In thousands, except per share data) |
2010 |
2010 |
2009 |
2010 |
2009 |
|||||
Interest income: |
||||||||||
Interest and fees on loans and leases |
$33,456 |
$ |
35,788 |
$ |
48,594 |
$ |
106,556 |
$ |
159,317 |
|
Interest and dividends on investment |
||||||||||
securities: |
||||||||||
Taxable interest |
3,885 |
3,653 |
9,768 |
15,639 |
27,555 |
|||||
Tax-exempt interest |
184 |
190 |
937 |
889 |
3,254 |
|||||
Dividends |
3 |
2 |
2 |
8 |
7 |
|||||
Interest on deposits in other banks |
510 |
467 |
106 |
1,307 |
117 |
|||||
Interest on federal funds sold and securities |
||||||||||
purchased under agreements to resell |
- |
- |
3 |
- |
9 |
|||||
Total interest income |
38,038 |
40,100 |
59,410 |
124,399 |
190,259 |
|||||
Interest expense: |
||||||||||
Demand |
181 |
250 |
364 |
689 |
1,040 |
|||||
Savings and money market |
1,323 |
1,487 |
3,250 |
4,459 |
9,527 |
|||||
Time |
3,666 |
3,808 |
6,218 |
11,455 |
24,331 |
|||||
Interest on short-term borrowings |
387 |
306 |
144 |
882 |
416 |
|||||
Interest on long-term debt |
5,112 |
5,053 |
5,982 |
15,280 |
18,960 |
|||||
Total interest expense |
10,669 |
10,904 |
15,958 |
32,765 |
54,274 |
|||||
Net interest income |
27,369 |
29,196 |
43,452 |
91,634 |
135,985 |
|||||
Provision for loan and lease losses |
79,893 |
20,412 |
142,496 |
159,142 |
243,570 |
|||||
Net interest income (loss) after provision for loan and lease losses |
(52,524) |
8,784 |
(99,044) |
(67,508) |
(107,585) |
|||||
Other operating income: |
||||||||||
Service charges on deposit accounts |
2,793 |
2,982 |
4,052 |
8,982 |
11,537 |
|||||
Other service charges and fees |
4,110 |
3,850 |
3,549 |
11,445 |
10,453 |
|||||
Income from fiduciary activities |
751 |
811 |
874 |
2,373 |
2,843 |
|||||
Equity in earnings of unconsolidated subsidiaries |
197 |
102 |
134 |
328 |
613 |
|||||
Fees on foreign exchange |
171 |
175 |
170 |
502 |
431 |
|||||
Investment securities gains (losses) |
- |
- |
(169) |
831 |
(2,883) |
|||||
Income from bank-owned life insurance |
1,062 |
1,890 |
1,599 |
4,136 |
4,183 |
|||||
Loan placement fees |
130 |
92 |
188 |
307 |
748 |
|||||
Net gains on sales of residential loans |
2,036 |
1,332 |
3,060 |
5,313 |
11,608 |
|||||
Other |
400 |
1,503 |
1,982 |
2,934 |
6,189 |
|||||
Total other operating income |
11,650 |
12,737 |
15,439 |
37,151 |
45,722 |
|||||
Other operating expense: |
||||||||||
Salaries and employee benefits |
14,370 |
14,408 |
16,582 |
43,614 |
50,526 |
|||||
Net occupancy |
3,196 |
3,310 |
3,260 |
9,803 |
9,640 |
|||||
Equipment |
1,333 |
1,305 |
1,497 |
4,115 |
4,571 |
|||||
Amortization of intangible assets |
2,215 |
1,581 |
1,582 |
5,204 |
4,553 |
|||||
Communication expense |
1,041 |
846 |
1,087 |
3,099 |
3,201 |
|||||
Legal and professional services |
3,267 |
5,416 |
2,957 |
14,333 |
8,519 |
|||||
Computer software expense |
856 |
873 |
818 |
2,632 |
2,570 |
|||||
Advertising expense |
574 |
764 |
948 |
2,177 |
2,416 |
|||||
Goodwill impairment |
- |
- |
50,000 |
102,689 |
50,000 |
|||||
Foreclosed asset expense |
(1,017) |
403 |
5,523 |
4,918 |
7,952 |
|||||
Write down of assets |
- |
166 |
- |
940 |
1,339 |
|||||
Other |
5,835 |
8,554 |
5,239 |
24,987 |
27,722 |
|||||
Total other operating expense |
31,670 |
37,626 |
89,493 |
218,511 |
173,009 |
|||||
Loss before income taxes |
(72,544) |
(16,105) |
(173,098) |
(248,868) |
(234,872) |
|||||
Income tax expense (benefit) |
- |
- |
10,043 |
- |
(19,918) |
|||||
Net loss |
$(72,544) |
$ |
(16,105) |
$ |
(183,141) |
$ |
(248,868) |
$ |
(214,954) |
|
Per common share data: |
||||||||||
Basic and diluted loss per share |
$(2.46) |
$ |
(0.60) |
$ |
(6.38) |
$ |
(8.42) |
$ |
(7.67) |
|
Basic and diluted weighted average shares outstanding |
30,309 |
30,307 |
29,030 |
30,295 |
28,801 |
|||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
||||||||||||||||||
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent) |
||||||||||||||||||
Three Months Ended |
Three Months Ended |
Nine Months Ended |
Nine Months Ended |
|||||||||||||||
(Dollars in thousands) |
September 30, 2010 |
September 30, 2009 |
September 30, 2010 |
September 30, 2009 |
||||||||||||||
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 |
$ 793,014 |
0.25% |
$ 510 |
$ 166,365 |
0.25% |
$ 106 |
$ 679,588 |
0.26% |
$ 1,307 |
$ 79,468 |
0.20% |
$ 117 |
||||||
Federal funds sold & securities purchased |
||||||||||||||||||
under agreements to resell |
0 |
0.00% |
0 |
10,978 |
0.13% |
3 |
0 |
0.00% |
0 |
9,552 |
0.13% |
9 |
||||||
Taxable investment securities, excluding |
||||||||||||||||||
valuation allowance |
499,863 |
3.11% |
3,888 |
924,659 |
4.23% |
9,770 |
574,793 |
3.63% |
15,647 |
846,076 |
4.34% |
27,562 |
||||||
Tax-exempt investment securities, |
||||||||||||||||||
excluding valuation allowance |
13,820 |
8.19% |
283 |
93,661 |
6.15% |
1,441 |
24,717 |
7.38% |
1,368 |
111,804 |
5.97% |
5,006 |
||||||
Loans and leases, net of unearned income |
2,642,538 |
5.03% |
33,456 |
3,672,714 |
5.26% |
48,594 |
2,836,099 |
5.02% |
106,556 |
3,848,970 |
5.53% |
159,317 |
||||||
Federal Home Loan Bank stock |
48,797 |
0.00% |
0 |
48,797 |
0.00% |
0 |
48,797 |
0.00% |
0 |
48,797 |
0.00% |
0 |
||||||
Total interest earning assets |
3,998,032 |
3.79% |
38,137 |
4,917,174 |
4.85% |
59,914 |
4,163,994 |
4.01% |
124,878 |
4,944,667 |
5.19% |
192,011 |
||||||
Nonearning assets |
244,465 |
471,748 |
291,438 |
506,618 |
||||||||||||||
Total assets |
$ 4,242,497 |
$ 5,388,922 |
$ 4,455,432 |
$ 5,451,285 |
||||||||||||||
Liabilities & Equity: |
||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||
Interest-bearing demand deposits |
$ 611,027 |
0.12% |
$ 181 |
$ 553,218 |
0.26% |
$ 364 |
$ 609,068 |
0.15% |
$ 689 |
$ 530,928 |
0.26% |
$ 1,040 |
||||||
Savings and money market deposits |
1,062,900 |
0.49% |
1,323 |
1,443,260 |
0.89% |
3,250 |
1,094,603 |
0.54% |
4,459 |
1,326,005 |
0.96% |
9,527 |
||||||
Time deposits under $100,000 |
522,688 |
1.57% |
2,069 |
595,792 |
2.28% |
3,429 |
529,807 |
1.62% |
6,403 |
657,852 |
2.60% |
12,773 |
||||||
Time deposits $100,000 and over |
405,379 |
1.56% |
1,597 |
684,272 |
1.62% |
2,789 |
485,136 |
1.39% |
5,052 |
853,791 |
1.81% |
11,558 |
||||||
Short-term borrowings |
201,907 |
0.76% |
387 |
257,079 |
0.22% |
144 |
225,820 |
0.52% |
882 |
169,725 |
0.33% |
416 |
||||||
Long-term debt |
632,482 |
3.21% |
5,112 |
592,041 |
4.01% |
5,982 |
646,594 |
3.16% |
15,280 |
613,489 |
4.13% |
18,960 |
||||||
Total interest-bearing liabilities |
3,436,383 |
1.23% |
10,669 |
4,125,662 |
1.53% |
15,958 |
3,591,028 |
1.22% |
32,765 |
4,151,790 |
1.75% |
54,274 |
||||||
Noninterest-bearing deposits |
574,309 |
587,002 |
578,123 |
585,337 |
||||||||||||||
Other liabilities |
70,725 |
62,955 |
66,251 |
77,102 |
||||||||||||||
Total liabilities |
4,081,417 |
4,775,619 |
4,235,402 |
4,814,229 |
||||||||||||||
Shareholders' equity |
151,068 |
603,268 |
210,012 |
627,016 |
||||||||||||||
Non-controlling interest |
10,012 |
10,035 |
10,018 |
10,040 |
||||||||||||||
Total equity |
161,080 |
613,303 |
220,030 |
637,056 |
||||||||||||||
Total liabilities & equity |
$ 4,242,497 |
$ 5,388,922 |
$ 4,455,432 |
$ 5,451,285 |
||||||||||||||
Net interest income |
$ 27,468 |
$ 43,956 |
$ 92,113 |
$ 137,737 |
||||||||||||||
Net interest margin |
2.74% |
3.56% |
2.95% |
3.72% |
||||||||||||||
SOURCE Central Pacific Financial Corp.
Share this article