Exhibit
99.1
|
Investor
Contact:
|
Dean Hirata
|
Media
Contact:
|
Ann Takiguchi Marcos
|
|
|
EVP & Chief Financial Officer
|
|
VP & PR/Communications Officer
|
|
|
(808) 535-2583
|
|
(808) 544-0685
|
|
|
dhirata@cb-hi.net
|
|
ann.takiguchi@centralpacificbank.com
|
NEWS
RELEASE
CENTRAL PACIFIC FINANCIAL CORP.
REPORTS THIRD QUARTER RESULTS
HONOLULU,
October 26, 2004 — Central Pacific Financial Corp. (NYSE: CPF), parent company
of Central Pacific Bank and City Bank, today reported net income for the third
quarter and first nine months of 2004 of $7.7 million, or $0.42 per share, and
$24.3 million, or $1.42 per share, respectively.
Third
quarter net income excluding merger-related expenses increased by 19.6% to
$10.4 million, or $0.57 per share, from the $8.7 million, or $0.53 per share,
recorded during the same period of 2003.
For the first nine months of 2004, net income excluding merger-related
expenses was $27.2 million, or $1.59 per share, up from the $25.7 million or
$1.57 recorded last year.
The
Company’s merger with CB Bancshares, Inc. (the “Merger”) was accounted for
under the purchase accounting method, and CB Bancshares results are included in
the consolidated financials from September 15, 2004, the date of closing.
Third Quarter Highlights
• Merger with CB Bancshares, Inc. closed on
September 15, 2004.
• CPF was recognized as the 17th
highest performing mid-tier bank in the country for 2003 by U.S. Banker in its
August 2004 issue.
• Total assets increased by 116%, loans
increased by 115% and deposits increased by 91% from September 30, 2003, due
primarily to the Merger.
• Market capitalization increased to $771
million from $393 million a year ago, due primarily to the Merger.
• Excluding merger-related expenses, return
on average stockholders’ equity was 17.05% and return on average assets was
1.49% for the quarter ended September 30, 2004.
“The
Company’s strong third quarter results were driven by organic loan and deposit
growth, an expanding net interest margin and sound asset quality,” commented
Clint Arnoldus, Chief Executive Officer of CPF.
“We believe the completion of our merger with CB Bancshares provides the
Company with numerous revenue and expense synergy opportunities. We look forward to the fourth quarter of 2004
and the years ahead as we utilize our expanded resources to better serve our
existing and prospective clients.”
Financial Highlights
Third
quarter revenues (net interest income before provision plus other operating
income) increased by 23.1% to $33.5 million, compared to $27.2 million in the
third quarter of 2003. Net interest
income before provision for loan losses was $28.6 million, up 22.6% from the
third quarter of 2003. The increase in
net interest income was the result of a 31.8% increase in average
interest-earning assets as the net interest margin declined to 4.54% from the
4.89% reported
Central
Pacific Financial Corp. Reports Third Quarter Results
October
26, 2004
Page
2 of 3
in
the third quarter of last year. The net
interest margin pressure abated in the third quarter of 2004 as the quarterly
net interest margin improved by 23 basis points from the prior quarter.
Provision
for loan losses in the third quarter of 2004 was $533,000, compared to $500,000
reported in the same period last year.
Other
operating income increased 25.9% to $4.9 million in the third quarter of 2004,
compared to $3.9 million reported in the third quarter of 2003. Increases in income from fiduciary activities
and service charges on deposit accounts contributed to the improvement.
Other
operating expense increased 54.6% to $22.1 million in the third quarter of
2004, compared to $14.3 million reported in 2003. Salaries and employee benefits totaled $11.3
million, a 48.3% increase from the $7.6 million reported in the third quarter
of 2003. In the third quarter of 2004,
retention bonuses related to the Merger totaling $2.0 million were paid to
certain executives of Central Pacific Bank.
Other operating expense, excluding salaries and benefits, grew to $10.8
million, an increase of 61.9% over the $6.7 million reported in the year ago
period. This increase was primarily a
result of the Merger.
The
effective tax rate for the third quarter of 2004 was 29.62%, compared to 33.55%
in the prior year. The Company’s
investments in high-technology businesses in Hawaii generated net tax benefits
of $390,000 in the third quarter of 2004 and $244,000 in the third quarter of
2003.
Asset Quality
Nonaccrual
loans at September 30, 2004 increased to $11.6 million, or 0.38% of loans,
compared to $1.8 million, or 0.13% of loans, a year ago. Excluding the impact of the Merger,
nonaccrual loans totaled $6.8 million at September 30, 2004, which represented
a decrease of $401,000 from the prior quarter.
Nonaccrual loans to three borrowers totaling $6.6 million at September
30, 2004 are primarily secured by commercial property.
Net
loan charge-offs totaled $611,000 in the third quarter of 2004, compared to
$1.1 million in the year ago period. At
September 30, 2004, the allowance for loan and lease losses was $49.9 million
or 1.63% of outstanding loans and leases.
The coverage ratio of allowance to nonaccrual loans stood at 430% at
September 30, 2004.
Balance Sheet Analysis
Total
assets at September 30, 2004 grew to $4.6 billion, a 116.4% increase over the
$2.1 billion reported a year ago.
Excluding the impact of the Merger, total assets grew by $424.7 million,
a 19.9% increase from September 30, 2003.
Investment
securities increased to $904.3 million, up 68.3% from $537.1 million reported
last year. Excluding the impact of the
Merger, investment securities increased by $51.4 million, up 9.6% from
September 30, 2003.
Total
loans and leases increased by 114.7% to $3.1 billion, compared to $1.4 billion
at September 30, 2003. Excluding the
impact of the Merger, total loans and leases increased by $239.5 million, a
16.8% increase from September 30, 2003.
Total
deposits grew to $3.3 billion, an increase of 90.5% over the $1.7 billion
reported at September 30, 2003.
Excluding the impact of the Merger, total deposits grew by $192.2
million, an increase of 11.1% over September 30, 2003.
Shareholders’
equity increased by 198.4% to $559.4 million, compared to $187.5 million at
September 30, 2003. Excluding the impact
of the Merger, shareholders’ equity increased by $26.3 million, up 14.0% from a
year ago. Tangible capital ratio was
5.18% at September 30, 2004, compared to 8.77% a year ago. While no common shares were repurchased
during the third quarter of 2004, the Company maintains a stock repurchase
program with available authorization totaling $12.3 million.
Central
Pacific Financial Corp. Reports Third Quarter Results
October
26, 2004
Page
3 of 3
Business and Earnings Outlook
Based
on current economic and business conditions, management reaffirms its 2005 EPS
guidance of $2.50 to $2.60.
Conference Call Information
Central
Pacific Financial Corp. will conduct a conference call today at 4:00 p.m.
Eastern Time (10:00 a.m. Hawaii Time) to discuss its quarterly results. To participate in the call, please call
1-800-545-9704 or visit the investor relations page of the Company’s website at
http://investor.centralpacificbank.com.
A playback of the call will be available by dialing 1-888-203-1112 and
entering the passcode 877859.
Additionally, a replay will be available on the Company’s website.
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is
the fourth largest financial institution in Hawaii with approximately $4.6
billion in assets. Its primary
subsidiaries are Central Pacific Bank and City Bank, with a combined 45 branch
offices statewide, including five supermarket branches and more than 100
ATMs. For additional information, please
visit our web site at http://www.centralpacificbank.com.
**********
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 generally include the
words “believes”, “plans”, “intends”, “expects”, “anticipates” 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 on the company’s business and operations and on tourism, the
military, and other major industries operating within the Hawaii market; the
impact of legislation affecting the banking industry; the impact of competitive
products, services, pricing, and other competitive forces; movements in
interest rates; loan delinquency rates; and trading of the company’s
stock. For further information on
factors which 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 for the last fiscal year. Be advised, the company does not update any
of its forward-looking statements.
#####
CENTRAL PACIFIC FINANCIAL
CORP. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
%
Change
|
|
Nine Months Ended
September 30,
|
|
%
Change
|
|
|
(in thousands, except per share data)
|
|
2004
|
|
2003
|
|
|
2004
|
|
2003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME STATEMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
7,684
|
|
$
|
8,283
|
|
-7.2
|
%
|
$
|
24,262
|
|
$
|
24,843
|
|
-2.3
|
%
|
|
Net income -
adjusted (1)
|
|
10,383
|
|
8,682
|
|
19.6
|
%
|
27,205
|
|
25,698
|
|
5.9
|
%
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
0.42
|
|
0.51
|
|
-17.6
|
%
|
1.42
|
|
1.52
|
|
-6.6
|
%
|
|
Net income -
adjusted (1)
|
|
0.57
|
|
0.53
|
|
7.5
|
%
|
1.59
|
|
1.57
|
|
1.3
|
%
|
|
Cash dividends
|
|
0.16
|
|
0.16
|
|
0.0
|
%
|
0.48
|
|
0.48
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (2)
|
|
1.10
|
%
|
1.58
|
%
|
|
|
1.33
|
%
|
1.62
|
%
|
|
|
|
Return on
average assets - adjusted (1), (2)
|
|
1.49
|
%
|
1.66
|
%
|
|
|
1.49
|
%
|
1.68
|
%
|
|
|
|
Return on
average stockholders’ equity (2)
|
|
12.62
|
%
|
17.96
|
%
|
|
|
14.98
|
%
|
18.11
|
%
|
|
|
|
Return on
average stockholders’ equity - adjusted (1), (2)
|
|
17.05
|
%
|
18.82
|
%
|
|
|
16.80
|
%
|
18.73
|
%
|
|
|
|
Efficiency ratio
|
|
66.17
|
%
|
52.71
|
%
|
|
|
58.51
|
%
|
51.87
|
%
|
|
|
|
Efficiency ratio
- adjusted (1)
|
|
52.73
|
%
|
50.26
|
%
|
|
|
52.87
|
%
|
50.07
|
%
|
|
|
|
Net interest
margin (2)
|
|
4.54
|
%
|
4.89
|
%
|
|
|
4.46
|
%
|
4.88
|
%
|
|
|
|
Dividend payout
ratio
|
|
37.21
|
%
|
30.77
|
%
|
|
|
33.10
|
%
|
30.97
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
2004
|
|
2003
|
|
|
BALANCE SHEET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
|
|
|
$
|
4,612,463
|
|
$
|
2,131,766
|
|
116.4
|
%
|
|
Loans
|
|
|
|
|
|
|
|
3,061,867
|
|
1,425,858
|
|
114.7
|
%
|
|
Loans, net
|
|
|
|
|
|
|
|
3,011,988
|
|
1,401,053
|
|
115.0
|
%
|
|
Deposits
|
|
|
|
|
|
|
|
3,298,220
|
|
1,730,921
|
|
90.5
|
%
|
|
Shareholders’
equity
|
|
|
|
|
|
|
|
559,439
|
|
187,476
|
|
198.4
|
%
|
|
Book value per
share
|
|
|
|
|
|
|
|
19.96
|
|
11.69
|
|
70.7
|
%
|
|
Market value per
share
|
|
|
|
|
|
|
|
27.52
|
|
24.50
|
|
12.3
|
%
|
|
Tangible Equity
Ratio
|
|
|
|
|
|
|
|
5.18
|
%
|
8.77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
September 30,
|
|
%
Change
|
|
Nine
Months Ended
September 30,
|
|
%
Change
|
|
|
|
|
2004
|
|
2003
|
|
|
2004
|
|
2003
|
|
|
SELECTED AVERAGE
BALANCES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,795,823
|
|
$
|
2,095,669
|
|
33.4
|
%
|
$
|
2,439,084
|
|
$
|
2,043,594
|
|
19.4
|
%
|
|
Interest-earning
assets
|
|
2,569,862
|
|
1,949,876
|
|
31.8
|
%
|
2,258,556
|
|
1,897,745
|
|
19.0
|
%
|
|
Loans, net of
unearned interest
|
|
1,881,027
|
|
1,374,706
|
|
36.8
|
%
|
1,604,790
|
|
1,353,119
|
|
18.6
|
%
|
|
Other real
estate
|
|
1,204
|
|
—
|
|
0.0
|
%
|
770
|
|
630
|
|
22.2
|
%
|
|
Deposits
|
|
2,089,792
|
|
1,711,465
|
|
22.1
|
%
|
1,881,151
|
|
1,666,362
|
|
12.9
|
%
|
|
Interest-bearing
liabilities
|
|
1,701,517
|
|
1,568,882
|
|
8.5
|
%
|
1,527,664
|
|
1,535,323
|
|
-0.5
|
%
|
|
Stockholders’
equity
|
|
243,592
|
|
184,466
|
|
32.1
|
%
|
215,998
|
|
182,878
|
|
18.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
2004
|
|
2003
|
|
|
|
NONPERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans
|
|
|
|
|
|
|
|
$
|
11,608
|
|
$
|
1,843
|
|
529.8
|
%
|
|
Other real
estate
|
|
|
|
|
|
|
|
580
|
|
0
|
|
0.0
|
%
|
|
Total
nonperforming assets
|
|
|
|
|
|
|
|
12,188
|
|
1,843
|
|
561.3
|
%
|
|
Loans delinquent
for 90 days or more (still accruing interest)
|
|
|
|
|
|
|
|
607
|
|
722
|
|
-15.9
|
%
|
|
Restructured
loans (still accruing interest)
|
|
|
|
|
|
|
|
715
|
|
—
|
|
—
|
|
|
Total
nonperforming assets, loans delinquent for 90 days or more (still accruing
interest) and restructured loans (still accruing interest)
|
|
|
|
|
|
|
|
$
|
13,510
|
|
$
|
2,565
|
|
426.7
|
%
|
|
|
|
Three
Months Ended
September 30,
|
|
|
|
Nine
Months Ended
September 30,
|
|
|
|
|
|
|
|
|
2004
|
|
2003
|
|
|
|
2004
|
|
2003
|
|
|
|
|
Loan charge-offs
|
|
$
|
813
|
|
$
|
1,246
|
|
-34.8
|
%
|
$
|
1,390
|
|
$
|
1,690
|
|
-17.8
|
%
|
|
Recoveries
|
|
202
|
|
126
|
|
60.3
|
%
|
339
|
|
1,598
|
|
-78.8
|
%
|
|
Net loan
charge-offs (recoveries)
|
|
$
|
611
|
|
$
|
1,120
|
|
-45.4
|
%
|
$
|
1,051
|
|
$
|
92
|
|
1042.4
|
%
|
|
Net loan
charge-offs to average loans (2)
|
|
0.13
|
%
|
0.33
|
%
|
|
|
0.09
|
%
|
0.01
|
%
|
|
|
|
|
|
September
30,
|
|
|
|
|
2004
|
|
2003
|
|
|
ASSET QUALITY
RATIOS
|
|
|
|
|
|
|
Nonaccrual loans
to total loans
|
|
0.38
|
%
|
0.13
|
%
|
|
Nonperforming
assets to total assets
|
|
0.26
|
%
|
0.09
|
%
|
|
Nonperforming
assets, loans delinquent for 90 days or more (still accruing interest) and
restructured loans (still accruing interest) to total loans & other real
estate
|
|
0.44
|
%
|
0.18
|
%
|
|
Allowance for
loan losses to total loans
|
|
1.63
|
%
|
1.74
|
%
|
|
Allowance for
loan losses to nonaccrual loans
|
|
429.70
|
%
|
1345.90
|
%
|
(1) Excludes after-tax
merger-related expenses (see Reconciliation of Non-GAAP Financial Measures)
(2) Annualized
CENTRAL PACIFIC FINANCIAL
CORP. AND SUBSIDIARIES
Reconciliation of
Non-GAAP Financial Measures
At or for the three
months and nine months ended September 30, 2004 and 2003
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
%
|
|
|
(in thousands, except per share
data)
|
|
2004
|
|
2003
|
|
Change
|
|
2004
|
|
2003
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
7,684
|
|
$
|
8,283
|
|
-7.2
|
%
|
$
|
24,262
|
|
$
|
24,843
|
|
-2.3
|
%
|
|
Merger-related
expenses, net of tax
|
|
2,699
|
|
399
|
|
576.4
|
%
|
2,943
|
|
855
|
|
244.2
|
%
|
|
Net income,
excluding merger-related expenses
|
|
$
|
10,383
|
|
$
|
8,682
|
|
19.6
|
%
|
$
|
27,205
|
|
$
|
25,698
|
|
5.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
$
|
0.43
|
|
$
|
0.52
|
|
-17.3
|
%
|
$
|
1.45
|
|
$
|
1.55
|
|
-6.5
|
%
|
|
Merger-related
expenses, net of tax
|
|
0.15
|
|
0.02
|
|
650.0
|
%
|
0.18
|
|
0.05
|
|
260.0
|
%
|
|
Basic earnings
per share, excluding merger-related expenses
|
|
$
|
0.58
|
|
$
|
0.54
|
|
7.4
|
%
|
$
|
1.63
|
|
$
|
1.60
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share
|
|
$
|
0.42
|
|
$
|
0.51
|
|
-17.6
|
%
|
$
|
1.42
|
|
$
|
1.52
|
|
-6.6
|
%
|
|
Merger-related
expenses, net of tax
|
|
0.15
|
|
0.02
|
|
650.0
|
%
|
0.17
|
|
0.05
|
|
240.0
|
%
|
|
Diluted earnings
per share, excluding merger-related expenses
|
|
$
|
0.57
|
|
$
|
0.53
|
|
7.5
|
%
|
$
|
1.59
|
|
$
|
1.57
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets
|
|
1.10
|
%
|
1.58
|
%
|
|
|
1.33
|
%
|
1.62
|
%
|
|
|
|
Merger-related
expenses, net of tax
|
|
0.39
|
|
0.08
|
|
|
|
0.16
|
|
0.06
|
|
|
|
|
Return on
average assets, excluding merger-related expenses
|
|
1.49
|
%
|
1.66
|
%
|
|
|
1.49
|
%
|
1.68
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average equity
|
|
12.62
|
%
|
17.96
|
%
|
|
|
14.98
|
%
|
18.11
|
%
|
|
|
|
Merger-related
expenses, net of tax
|
|
4.43
|
|
0.86
|
|
|
|
1.82
|
|
0.62
|
|
|
|
|
Return on
average equity, excluding merger-related expenses
|
|
17.05
|
%
|
18.82
|
%
|
|
|
16.80
|
%
|
18.73
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
28,566
|
|
$
|
23,306
|
|
|
|
$
|
73,884
|
|
$
|
68,003
|
|
|
|
|
Other operating
income
|
|
4,770
|
|
3,762
|
|
|
|
12,776
|
|
11,090
|
|
|
|
|
Total operating
revenue (a)
|
|
$
|
33,336
|
|
$
|
27,068
|
|
|
|
$
|
86,660
|
|
$
|
79,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating
expense (b)
|
|
$
|
22,059
|
|
$
|
14,267
|
|
|
|
$
|
50,705
|
|
$
|
41,022
|
|
|
|
|
Merger-related
expenses
|
|
(4,482
|
)
|
(663
|
)
|
|
|
(4,886
|
)
|
(1,420
|
)
|
|
|
|
Total other
operating expense, excluding merger-related expenses (c)
|
|
$
|
17,577
|
|
$
|
13,604
|
|
|
|
$
|
45,819
|
|
$
|
39,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
[ (b) / (a) ]
|
|
66.17
|
%
|
52.71
|
%
|
|
|
58.51
|
%
|
51.87
|
%
|
|
|
|
Efficiency
ratio, excluding merger-related expenses [ (c) / (a) ]
|
|
52.73
|
%
|
50.26
|
%
|
|
|
52.87
|
%
|
50.07
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
before taxes (a)
|
|
$
|
10,918
|
|
$
|
12,465
|
|
|
|
$
|
34,996
|
|
$
|
37,539
|
|
|
|
|
Merger-related
expenses
|
|
4,482
|
|
663
|
|
|
|
4,886
|
|
1,420
|
|
|
|
|
Net income
before taxes, excluding merger-related expenses (b)
|
|
$
|
15,400
|
|
$
|
13,128
|
|
|
|
$
|
39,882
|
|
$
|
38,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes (c)
|
|
$
|
3,234
|
|
$
|
4,182
|
|
|
|
$
|
10,734
|
|
$
|
12,696
|
|
|
|
|
Tax impact of
merger-related expenses
|
|
1,783
|
|
264
|
|
|
|
1,943
|
|
565
|
|
|
|
|
Income taxes,
excluding tax impact of merger-related expenses (d)
|
|
$
|
5,017
|
|
$
|
4,446
|
|
|
|
$
|
12,677
|
|
$
|
13,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate [ (c) / (a) ]
|
|
29.62
|
%
|
33.55
|
%
|
|
|
30.67
|
%
|
33.82
|
%
|
|
|
|
Effective tax
rate, excluding tax impact of merger-related expenses [ (d) / (b) ]
|
|
32.58
|
%
|
33.87
|
%
|
|
|
31.79
|
%
|
34.04
|
%
|
|
|
CENTRAL PACIFIC
FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
|
CONSOLIDATED BALANCE SHEETS
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
|
Annual Change
|
|
|
(in thousands, except per share
data)
|
|
2004
|
|
2003
|
|
2003
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due
from banks
|
|
$
|
114,645
|
|
$
|
63,851
|
|
$
|
63,155
|
|
$
|
51,490
|
|
81.5
|
%
|
|
Interest-bearing
deposits in other banks
|
|
33,672
|
|
5,145
|
|
3,371
|
|
30,301
|
|
898.9
|
%
|
|
Federal funds
sold
|
|
3,160
|
|
2,000
|
|
—
|
|
3,160
|
|
N.M.
|
|
|
Investment
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Held to
maturity, at cost (fair value of $104,694 at September 30, 2004, $35,721 at
December 31, 2003, and $44,559 at September 30, 2003)
|
|
103,520
|
|
34,316
|
|
42,883
|
|
60,637
|
|
141.4
|
%
|
|
Available for
sale, at fair value
|
|
800,744
|
|
520,641
|
|
494,261
|
|
306,483
|
|
62.0
|
%
|
|
Total investment
securities
|
|
904,264
|
|
554,957
|
|
537,144
|
|
367,120
|
|
68.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for
sale
|
|
11,256
|
|
6,660
|
|
8,179
|
|
3,077
|
|
37.6
|
%
|
|
Loans and leases
|
|
3,061,867
|
|
1,443,154
|
|
1,425,858
|
|
1,636,009
|
|
114.7
|
%
|
|
Less allowance
for loan and lease losses
|
|
49,879
|
|
24,774
|
|
24,805
|
|
25,074
|
|
101.1
|
%
|
|
Net loans and
leases
|
|
3,011,988
|
|
1,418,380
|
|
1,401,053
|
|
1,610,935
|
|
115.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises and
equipment
|
|
76,786
|
|
56,125
|
|
56,244
|
|
20,542
|
|
36.5
|
%
|
|
Accrued interest
receivable
|
|
17,424
|
|
8,828
|
|
8,482
|
|
8,942
|
|
105.4
|
%
|
|
Investment in
unconsolidated subsidiaries
|
|
10,935
|
|
2,184
|
|
1,820
|
|
9,115
|
|
500.8
|
%
|
|
Due from
customers on acceptances
|
|
231
|
|
—
|
|
—
|
|
231
|
|
N.M.
|
|
|
Other real
estate
|
|
580
|
|
—
|
|
—
|
|
580
|
|
N.M.
|
|
|
Goodwill
|
|
283,872
|
|
—
|
|
—
|
|
283,872
|
|
N.M.
|
|
|
Core deposit
premium
|
|
51,124
|
|
—
|
|
—
|
|
51,124
|
|
N.M.
|
|
|
Other assets
|
|
92,526
|
|
52,138
|
|
52,318
|
|
40,208
|
|
76.9
|
%
|
|
Total assets
|
|
$
|
4,612,463
|
|
$
|
2,170,268
|
|
$
|
2,131,766
|
|
$
|
2,480,697
|
|
116.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
$
|
579,337
|
|
$
|
338,004
|
|
$
|
331,485
|
|
$
|
247,852
|
|
74.8
|
%
|
|
Interest-bearing
deposits
|
|
2,718,883
|
|
1,415,280
|
|
1,399,436
|
|
1,319,447
|
|
94.3
|
%
|
|
Total deposits
|
|
3,298,220
|
|
1,753,284
|
|
1,730,921
|
|
1,567,299
|
|
90.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
56,775
|
|
3,507
|
|
8,716
|
|
48,059
|
|
551.4
|
%
|
|
Long-tem debt
|
|
592,673
|
|
184,184
|
|
164,563
|
|
428,110
|
|
260.1
|
%
|
|
Bank acceptances
outstanding
|
|
231
|
|
—
|
|
—
|
|
231
|
|
0.0
|
%
|
|
Minority
interest
|
|
13,082
|
|
10,062
|
|
10,402
|
|
2,680
|
|
25.8
|
%
|
|
Other
liabilities
|
|
92,043
|
|
24,632
|
|
29,688
|
|
62,355
|
|
210.0
|
%
|
|
Total
liabilities
|
|
4,053,024
|
|
1,975,669
|
|
1,944,290
|
|
2,108,734
|
|
108.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock,
no par value, authorized 1,000,000 shares, none issued
|
|
—
|
|
—
|
|
—
|
|
—
|
|
N.M.
|
|
|
Common stock, no
par value; authorized 50,000,000 shares; issued and outstanding 28,028,455
shares at September 30, 2004, 16,063,957 shares at December 31, 2003, and
16,042,618 shares at September 30, 2003
|
|
10,436
|
|
9,589
|
|
9,392
|
|
1,044
|
|
11.1
|
%
|
|
Surplus
|
|
394,605
|
|
45,848
|
|
45,848
|
|
348,757
|
|
760.7
|
%
|
|
Retained
earnings
|
|
159,168
|
|
142,635
|
|
136,109
|
|
23,059
|
|
16.9
|
%
|
|
Deferred stock
awards
|
|
(152
|
)
|
(50
|
)
|
(54
|
)
|
(98
|
)
|
-181.5
|
%
|
|
Accumulated
other comprehensive income
|
|
(4,618
|
)
|
(3,423
|
)
|
(3,819
|
)
|
(799
|
)
|
-20.9
|
%
|
|
Total
shareholders’ equity
|
|
559,439
|
|
194,599
|
|
187,476
|
|
371,963
|
|
198.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders’ equity
|
|
$
|
4,612,463
|
|
$
|
2,170,268
|
|
$
|
2,131,766
|
|
$
|
2,480,697
|
|
116.4
|
%
|
CENTRAL PACIFIC
FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Change
|
|
Nine months ended
September 30,
|
|
Change
|
|
|
(In thousands, except per share data)
|
|
2004
|
|
2003
|
|
$
|
|
%
|
|
2004
|
|
2003
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees
on loans and leases
|
|
$
|
28,591
|
|
$
|
22,905
|
|
$
|
5,686
|
|
24.8
|
%
|
$
|
71,016
|
|
$
|
67,458
|
|
$
|
3,558
|
|
5.3
|
%
|
|
Interest and
dividends on investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable interest
|
|
5,795
|
|
3,728
|
|
2,067
|
|
55.4
|
%
|
16,422
|
|
12,160
|
|
4,262
|
|
35.0
|
%
|
|
Tax-exempt
interest
|
|
1,068
|
|
1,012
|
|
56
|
|
5.5
|
%
|
3,077
|
|
2,829
|
|
248
|
|
8.8
|
%
|
|
Dividends
|
|
249
|
|
253
|
|
(4
|
)
|
-1.6
|
%
|
657
|
|
764
|
|
(107
|
)
|
-14.0
|
%
|
|
Interest on
deposits in other banks
|
|
45
|
|
8
|
|
37
|
|
462.5
|
%
|
78
|
|
73
|
|
5
|
|
6.8
|
%
|
|
Interest on
Federal funds sold and securities purchased under agreements to resell
|
|
13
|
|
3
|
|
10
|
|
333.3
|
%
|
22
|
|
30
|
|
(8
|
)
|
-26.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
income
|
|
35,761
|
|
27,909
|
|
7,852
|
|
28.1
|
%
|
91,272
|
|
83,314
|
|
7,958
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
3,853
|
|
3,258
|
|
595
|
|
18.3
|
%
|
9,721
|
|
11,296
|
|
(1,575
|
)
|
-13.9
|
%
|
|
Interest on
short-term borrowings
|
|
138
|
|
20
|
|
118
|
|
590.0
|
%
|
241
|
|
34
|
|
207
|
|
608.8
|
%
|
|
Interest on
long-term debt
|
|
3,204
|
|
1,325
|
|
1,879
|
|
141.8
|
%
|
7,426
|
|
3,981
|
|
3,445
|
|
86.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
|
7,195
|
|
4,603
|
|
2,592
|
|
56.3
|
%
|
17,388
|
|
15,311
|
|
2,077
|
|
13.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
28,566
|
|
23,306
|
|
5,260
|
|
22.6
|
%
|
73,884
|
|
68,003
|
|
5,881
|
|
8.6
|
%
|
|
Provision for
loan and lease losses
|
|
533
|
|
500
|
|
33
|
|
6.6
|
%
|
1,133
|
|
700
|
|
433
|
|
61.9
|
%
|
|
Net interest
income after provision for loan and lease losses
|
|
28,033
|
|
22,806
|
|
5,227
|
|
22.9
|
%
|
72,751
|
|
67,303
|
|
5,448
|
|
8.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
fiduciary activities
|
|
559
|
|
448
|
|
111
|
|
24.8
|
%
|
1,690
|
|
1,290
|
|
400
|
|
31.0
|
%
|
|
Service charges
on deposit accounts
|
|
1,671
|
|
1,097
|
|
574
|
|
52.3
|
%
|
4,482
|
|
3,229
|
|
1,253
|
|
38.8
|
%
|
|
Other service
charges and fees
|
|
1,498
|
|
1,275
|
|
223
|
|
17.5
|
%
|
4,193
|
|
3,878
|
|
315
|
|
8.1
|
%
|
|
Fees on foreign
exchange
|
|
149
|
|
152
|
|
(3
|
)
|
-2.0
|
%
|
483
|
|
415
|
|
68
|
|
16.4
|
%
|
|
Investment
securities gains (losses)
|
|
174
|
|
164
|
|
10
|
|
6.1
|
%
|
174
|
|
168
|
|
6
|
|
3.6
|
%
|
|
Other
|
|
893
|
|
790
|
|
103
|
|
13.0
|
%
|
1,928
|
|
2,278
|
|
(350
|
)
|
-15.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
operating income
|
|
4,944
|
|
3,926
|
|
1,018
|
|
25.9
|
%
|
12,950
|
|
11,258
|
|
1,692
|
|
15.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and
employee benefits
|
|
11,288
|
|
7,613
|
|
3,675
|
|
48.3
|
%
|
26,859
|
|
21,893
|
|
4,966
|
|
22.7
|
%
|
|
Net occupancy
|
|
1,292
|
|
1,100
|
|
192
|
|
17.5
|
%
|
3,395
|
|
3,165
|
|
230
|
|
7.3
|
%
|
|
Equipment
|
|
821
|
|
561
|
|
260
|
|
46.3
|
%
|
2,020
|
|
1,857
|
|
163
|
|
8.8
|
%
|
|
Amortization of
core deposit premium
|
|
645
|
|
—
|
|
645
|
|
N.M.
|
|
645
|
|
—
|
|
645
|
|
N.M.
|
|
|
Other
|
|
8,013
|
|
4,993
|
|
3,020
|
|
60.5
|
%
|
17,786
|
|
14,107
|
|
3,679
|
|
26.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
operating expense
|
|
22,059
|
|
14,267
|
|
7,792
|
|
54.6
|
%
|
50,705
|
|
41,022
|
|
9,683
|
|
23.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
10,918
|
|
12,465
|
|
(1,547
|
)
|
-12.4
|
%
|
34,996
|
|
37,539
|
|
(2,543
|
)
|
-6.8
|
%
|
|
Income taxes
|
|
3,234
|
|
4,182
|
|
(948
|
)
|
-22.7
|
%
|
10,734
|
|
12,696
|
|
(1,962
|
)
|
-15.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
7,684
|
|
$
|
8,283
|
|
$
|
(599
|
)
|
-7.2
|
%
|
$
|
24,262
|
|
$
|
24,843
|
|
$
|
(581
|
)
|
-2.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
$
|
0.43
|
|
$
|
0.52
|
|
$
|
(0.09
|
)
|
-17.3
|
%
|
$
|
1.45
|
|
$
|
1.55
|
|
$
|
(0.10
|
)
|
-6.5
|
%
|
|
Diluted earnings
per share
|
|
0.42
|
|
0.51
|
|
(0.09
|
)
|
-17.6
|
%
|
1.42
|
|
1.52
|
|
(0.10
|
)
|
-6.6
|
%
|
|
Cash dividends
declared
|
|
0.16
|
|
0.16
|
|
—
|
|
0.0
|
%
|
0.48
|
|
0.48
|
|
—
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding (000’s)
|
|
17,954
|
|
16,034
|
|
1,920
|
|
12.0
|
%
|
16,715
|
|
16,016
|
|
699
|
|
4.4
|
%
|
|
Diluted weighted
average shares outstanding (000’s)
|
|
18,288
|
|
16,381
|
|
1,907
|
|
11.6
|
%
|
17,035
|
|
16,397
|
|
638
|
|
3.9
|
%
|
