Central Pacific Financial Corp. Reports Mixed Q3 Results, Net Income Up 1.2% Year-Over-Year

Central Pacific Financial Corp. (CPF) reported its financial results for the third quarter and nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period. Total assets decreased to $7.42 billion from $7.64 billion at the end of 2023, primarily due to a reduction in loans and the use of excess liquidity to pay off high-cost government time deposits. Total loans, net of deferred costs, fell by $96.4 million, driven by declines in consumer and residential mortgage loans, although commercial mortgage loans saw an increase.

For the third quarter, CPF's net income was $13.3 million, slightly up from $13.1 million in the same quarter of 2023. The nine-month net income decreased to $42.1 million from $43.8 million year-over-year. The company reported a basic earnings per share of $0.49 for Q3 2024, unchanged from the prior year, while diluted earnings per share also remained steady at $0.49.

Net interest income for Q3 2024 increased to $54.0 million, a rise of $1.9 million from the previous year, attributed to higher average yields on interest-earning assets. However, net interest income for the nine months ended September 30, 2024, decreased to $156.4 million, down from $159.5 million in the same period in 2023. The overall interest expense surged by 45.3% to $72.2 million, reflecting the high interest rate environment.

Total other operating income for Q3 2024 rose to $12.7 million, a 26.7% increase from $10.0 million in Q3 2023, driven by higher income from bank-owned life insurance and service charges. Conversely, total other operating expenses increased to $46.7 million, up from $39.6 million, primarily due to higher salaries and expenses related to strategic evaluations.

The company’s total equity improved to $543.7 million from $503.8 million at the end of 2023, with a book value per share of $20.09. CPF's regulatory capital ratios remained robust, with total risk-based capital at 15.3%, well above the minimum required levels.

Strategically, CPF has maintained a focus on liquidity, with $326.6 million in cash and approximately $2.55 billion in total other liquidity sources. The company has also implemented measures to ensure adequate liquidity in response to regional banking pressures. The Board of Directors approved a new share repurchase plan of up to $20 million in January 2024, with $19.1 million remaining available for repurchase as of September 30, 2024.