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PARENT COMPANY AND REGULATORY RESTRICTIONS | 12 Months Ended
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Dec. 31, 2023
Condensed Financial Information Disclosure [Abstract] |
PARENT COMPANY AND REGULATORY RESTRICTIONS | 22. PARENT COMPANY AND REGULATORY RESTRICTIONS The retained earnings of the parent company, Central Pacific Financial Corp., included $316.0 million and $339.4 million of equity in undistributed losses of Central Pacific Bank as of December 31, 2023 and 2022. The Company and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Prompt corrective action regulations provide five classifications: well-capitalized, adequately capitalized, under-capitalized, significantly under-capitalized, and critically under-capitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If under-capitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. The Bank was categorized as "well-capitalized" and maintained the required capital conservation buffer under the regulatory framework for prompt corrective action as of December 31, 2023 and 2022. There are no conditions or events since then that management believes have changed the institution’s category. The following table sets forth actual and required capital and capital ratios for the Company and the Bank, as well as the minimum capital adequacy requirements applicable generally to all financial institutions as of the dates indicated.
| Actual |  | Minimum required for capital adequacy purposes |  | Minimum required to be well-capitalized
(Dollars in thousands) | Amount |  | Ratio |  | Amount |  | Ratio (1) |  | Amount |  | Ratio
Central Pacific Financial Corp. |  |  |  |  |  |  |  |  |  |  |
As of December 31, 2023 |  |  |  |  |  |  |  |  |  |  |
Tier 1 capital to avg. assets (leverage ratio) | $ | 676,536 |  |  | 8.8 | % |  | $ | 305,843 |  |  | 4.0 | % |  | N/A |  | N/A
Tier 1 capital to risk-weighted assets | 676,536 |  |  | 12.4 |  |  | 328,609 |  |  | 6.0 |  |  | N/A |  | N/A
Total capital to risk-weighted assets | 799,175 |  |  | 14.6 |  |  | 438,146 |  |  | 8.0 |  |  | N/A |  | N/A
Common equity tier 1 ("CET1") capital to risk-weighted assets | 626,536 |  |  | 11.4 |  |  | 246,457 |  |  | 4.5 |  |  | N/A |  | N/A
As of December 31, 2022 |  |  |  |  |  |  |  |  |  |  |
Tier 1 capital to avg. assets (leverage ratio) | 642,302 |  |  | 8.5 |  |  | 301,053 |  |  | 4.0 |  |  | N/A |  | N/A
Tier 1 capital to risk-weighted assets | 642,302 |  |  | 12.2 |  |  | 340,151 |  |  | 6.0 |  |  | N/A |  | N/A
Total capital to risk-weighted assets | 764,283 |  |  | 14.5 |  |  | 453,535 |  |  | 8.0 |  |  | N/A |  | N/A
CET1 capital to risk-weighted assets | 592,302 |  |  | 11.2 |  |  | 255,113 |  |  | 4.5 |  |  | N/A |  | N/A
Central Pacific Bank |  |  |  |  |  |  |  |  |  |  |
As of December 31, 2023 |  |  |  |  |  |  |  |  |  |  |
Tier 1 capital to avg. assets (leverage ratio) | $ | 704,512 |  |  | 9.2 | % |  | $ | 305,375 |  |  | 4.0 | % |  | $ | 381,719 |  |  | 5.0 | %
Tier 1 capital to risk-weighted assets | 704,512 |  |  | 12.9 |  |  | 327,902 |  |  | 6.0 |  |  | 437,203 |  |  | 8.0 |
Total capital to risk-weighted assets | 772,151 |  |  | 14.1 |  |  | 437,203 |  |  | 8.0 |  |  | 546,503 |  |  | 10.0 |
CET1 capital to risk-weighted assets | 704,512 |  |  | 12.9 |  |  | 245,926 |  |  | 4.5 |  |  | 355,227 |  |  | 6.5 |
As of December 31, 2022 |  |  |  |  |  |  |  |  |  |  |
Tier 1 capital to avg. assets (leverage ratio) | 675,331 |  |  | 8.9 |  |  | 300,584 |  |  | 4.0 |  |  | 375,730 |  |  | 5.0 |
Tier 1 capital to risk-weighted assets | 675,331 |  |  | 12.8 |  |  | 339,422 |  |  | 6.0 |  |  | 452,563 |  |  | 8.0 |
Total capital to risk-weighted assets | 742,312 |  |  | 14.0 |  |  | 452,563 |  |  | 8.0 |  |  | 565,704 |  |  | 10.0 |
CET1 capital to risk-weighted assets | 675,331 |  |  | 12.8 |  |  | 254,567 |  |  | 4.5 |  |  | 367,708 |  |  | 6.5 |
(1) Under the Basel III Capital Rules, the Company and the Bank must also maintain a 2.5% Capital Conservation Buffer ("CCB") to avoid becoming subject to restrictions on capital distributions and certain discretionary bonus payments to management. The CCB is calculated as a ratio of CET1 capital to risk-weighted assets, and effectively increases the required minimum risk-based capital ratios.
Condensed financial statements of the parent company are as follows: CENTRAL PACIFIC FINANCIAL CORP. CONDENSED BALANCE SHEETS
| December 31,
(Dollars in thousands) | 2023 |  | 2022
Assets |  |  |
Cash and due from financial institutions | $ | 22,059 |  |  | $ | 16,915 |
Investment in subsidiary bank | 579,601 |  |  | 534,817 |
Other assets | 14,805 |  |  | 14,442 |
Total assets | $ | 616,465 |  |  | $ | 566,174 |
Liabilities and Equity |  |  |
Long-term debt | $ | 106,102 |  |  | $ | 105,859 |
Other liabilities | 6,548 |  |  | 7,444 |
Total liabilities | 112,650 |  |  | 113,303 |
Equity: |  |  |
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding none at December 31, 2023 and 2022 | — |  |  | — |
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding 27,045,033 and 27,025,070 shares at December 31, 2023 and 2022, respectively | 405,439 |  |  | 408,071 |
Additional paid-in capital | 102,982 |  |  | 101,346 |
Retained earnings | 117,990 |  |  | 87,438 |
Accumulated other comprehensive loss | (122,596) |  |  | (143,984) |
Total equity | 503,815 |  |  | 452,871 |
Total liabilities and equity | $ | 616,465 |  |  | $ | 566,174 |
CENTRAL PACIFIC FINANCIAL CORP. CONDENSED STATEMENTS OF INCOME
| Year Ended December 31,
(Dollars in thousands) | 2023 |  | 2022 |  | 2021
Income: |  |  |  |  |
Dividends from subsidiary bank | $ | 42,540 |  |  | $ | 47,427 |  |  | $ | 54,016 |
Interest income: |  |  |  |  |
Interest income from subsidiary bank | 3 |  |  | 3 |  |  | 3 |
Other income | 122 |  |  | 64 |  |  | 43 |
Total income | 42,665 |  |  | 47,494 |  |  | 54,062 |
Expense: |  |  |  |  |
Interest expense on long-term debt | 6,762 |  |  | 4,930 |  |  | 4,097 |
Other expenses | 3,250 |  |  | 2,317 |  |  | 3,504 |
Total expenses | 10,012 |  |  | 7,247 |  |  | 7,601 |
Income before income taxes and equity in undistributed income of subsidiaries | 32,653 |  |  | 40,247 |  |  | 46,461 |
Income tax benefit | (2,620) |  |  | (1,917) |  |  | (1,968) |
Income before equity in undistributed income of subsidiaries | 35,273 |  |  | 42,164 |  |  | 48,429 |
Equity in undistributed income of subsidiary bank | 23,396 |  |  | 31,764 |  |  | 31,465 |
Net income | $ | 58,669 |  |  | $ | 73,928 |  |  | $ | 79,894 |
CENTRAL PACIFIC FINANCIAL CORP. CONDENSED STATEMENTS OF CASH FLOWS
| Year Ended December 31,
(Dollars in thousands) | 2023 |  | 2022 |  | 2021
Cash flows from operating activities: |  |  |  |  |
Net income | $ | 58,669 |  |  | $ | 73,928 |  |  | $ | 79,894 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |
Deferred income tax (benefit) expense | 32 |  |  | (26) |  |  | 70 |
Equity in undistributed income of subsidiary bank | (23,396) |  |  | (31,764) |  |  | (31,465) |
Share-based compensation expense | 1,636 |  |  | 3,273 |  |  | 3,231 |
Net change in other assets and liabilities | (1,543) |  |  | (20) |  |  | (85) |
Net cash provided by operating activities | 35,398 |  |  | 45,391 |  |  | 51,645 |
Cash flows from investing activities: |  |  |  |  |
Proceeds from sale of investment securities | — |  |  | — |  |  | 1,653 |
Distributions from unconsolidated entities | 495 |  |  | — |  |  | — |
Net cash provided by investing activities | 495 |  |  | — |  |  | 1,653 |
Cash flows from financing activities: |  |  |  |  |
Net proceeds from issuance of common stock and stock option exercises | — |  |  | 679 |  |  | 1,236 |
Repurchases of common stock | (2,632) |  |  | (20,740) |  |  | (18,669) |
Cash dividends paid on common stock | (28,117) |  |  | (28,505) |  |  | (26,959) |
Net cash used in financing activities | (30,749) |  |  | (48,566) |  |  | (44,392) |
Net increase (decrease) in cash and cash equivalents | 5,144 |  |  | (3,175) |  |  | 8,906 |
Cash and cash equivalents at beginning of year | 16,915 |  |  | 20,090 |  |  | 11,184 |
Cash and cash equivalents at end of year | $ | 22,059 |  |  | $ | 16,915 |  |  | $ | 20,090 |

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- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-04(a)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 205 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 6 -Subparagraph (SX 210.5-04(Schedule I)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480922/205-10-S99-6 Reference 3: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 810 -SubTopic 10 -Name Accounting Standards Codification -Section 45 -Paragraph 11 -Publisher FASB -URI https://asc.fasb.org//1943274/2147481231/810-10-45-11 + Details
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