Exhibit 99
Investor Contact: | Amy Chamberlain | Media Contact: Ann Takiguchi Marcos |
| Investor Relations Officer | VP & PR/Communications Officer |
| (808) 544-0618 | (808) 544-0685 |
| amy.chamberlain@centralpacificbank.com | ann.takiguchi@centralpacificbank.com |
| | | |
NEWS RELEASE
CENTRAL PACIFIC FINANCIAL CORP. REPORTS RECORD QUARTERLY NET INCOME
HONOLULU, July 26, 2005 – Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank, today reported net income for the second quarter of 2005 of $17.9 million, or $0.58 per diluted share, compared to $8.7 million, or $0.53 per diluted share reported in the second quarter of 2004 and $17.2 million or $0.59 per diluted share reported in the first quarter of 2005.
Operating earnings, defined as the Company’s net income before deduction of nonrecurring merger-related expenses, net of tax, for the second quarter of 2005 was $18.2 million, or $0.59 per diluted share, as compared to $8.8 million, or $0.54 per diluted share, recorded in the second quarter of 2004 and $18.1 million, or $0.62 per diluted share, in the first quarter of 2005.
Second Quarter Highlights
• Record quarterly net income of $17.9 million.
• Net interest margin of 4.65% increased by 34 basis points from the second quarter of 2004 and by 6 basis points from the first quarter of 2005.
• Efficiency ratio improved to 50.04% from 52.85% in the year ago quarter and 57.17% in the first quarter of 2005.
• CPF was added to the S&P SmallCap 600 Index effective May 16, 2005.
• CPF signed a letter of intent in June to acquire residential mortgage loan broker Hawaii HomeLoans, Inc.
“The Company’s strong second quarter results were driven by strong deposit growth, expansion in net interest margin and increased efficiency,” commented Clint Arnoldus, Chief Executive Officer. “We are optimistic about the second half of the year as we expect to continue to grow our balance sheet, further improve our efficiency and expand our residential mortgage operations. The pending acquisition of Hawaii HomeLoans, a premier mortgage brokerage company in Hawaii, will complement our residential development financing activities to provide new growth opportunities for the Bank.”
Financial Highlights
The Company’s merger with CB Bancshares, Inc. (“CBBI”) was accounted for under the purchase accounting method, and CBBI’s revenues and expenses are included in the consolidated financials from September 15, 2004, the date of closing. The financial results for the second quarter of 2004 did not include CBBI’s revenues and expenses and, accordingly, the second quarter of 2005 and the second quarter of 2004 may not be reasonably comparable.
Net interest income for the second quarter of 2005 was $48.5 million, up 114.5% from the $22.6 million in the second quarter of last year and 4.7% over the first quarter of 2005. The year-over-year growth in net interest income was attributable to a 97.9% increase in average interest earning assets (primarily due to the merger with CBBI) and a 34
basis point increase in the net interest margin. The sequential quarter increase was driven by a $163.8 million increase in average interest earning assets and a 6 basis point increase in the net interest margin.
The second quarter 2005 net interest margin of 4.65% increased over the 4.31% reported in the second quarter of 2004 and the 4.59% in the first quarter of 2005.
Provision for loan and lease losses in the second quarter of 2005 was $1.0 million, compared to $300,000 in the second quarter of 2004 and $917,000 in the first quarter of 2005. The higher provision from the year ago period is consistent with the post-merger level of net loan charge-offs and nonperforming assets.
Other operating income was $8.8 million for the current quarter, compared to $4.1 million in the second quarter of 2004 and $9.3 million in the first quarter of 2005. Excluding the $1.5 million in net gains on sales of investment securities recorded in the first quarter of 2005, the sequential quarter increase was 13.7%. This increase was primarily driven by increases in retail brokerage fees and net gains on sales of residential mortgage loans.
Other operating expense for the second quarter of 2005 was $28.7 million, compared to $14.1 million in the same quarter last year and down $2.2 million from the first quarter of 2005. The second and first quarters of 2005 included merger-related expenses of $524,000 and $1.5 million, respectively. Excluding these expenses, other operating expense declined 4% on a sequential quarter basis.
The effective tax rate was 35.14% for the current quarter, compared to 29.49% in the second quarter of 2004 and 27.54% in the first quarter of 2005. In the first quarter of 2005, the Company recognized $1.8 million in state tax credits from its investments in high-technology businesses in Hawaii. The Company expects its effective tax rate to approximate 33% over the final two quarters of 2005.
Asset Quality
At June 30, 2005, nonperforming assets totaled $16.1 million or 0.33% of total assets, as compared to $8.7 million or 0.35% of total assets at June 30, 2004, and $9.9 million or 0.21% of total assets at March 31, 2005. The sequential quarter increase was primarily the result of the addition of $6.6 million in loans to a borrower who filed for bankruptcy in the second quarter. These loans are fully collateralized and management does not anticipate any losses at this time.
The allowance for loan and lease losses as a percentage of total loans and leases was 1.61% at June 30, 2005, as compared to 1.54% at June 30, 2004 and 1.60% at March 31, 2005.
Net loan charge-offs totaled $967,000 or 0.12% of average loans during the quarter, as compared to net charge-offs totaling $214,000, or 0.06% of average loans, in the second quarter of 2004 and net loan recoveries of $3,000 in the first quarter of 2005.
Balance Sheet Analysis
Total assets increased to $4.9 billion at June 30, 2005, compared to $2.5 billion at June 30, 2004 and $4.8 billion at March 31, 2005.
Total loans and leases of $3.2 billion, increased by $1.6 billion over the $1.6 billion as of June 30, 2004 and declined by $30.7 million from March 31, 2005. During the second quarter of 2005, loan paydowns included prepayments in the commercial real estate portfolio that were $130 million higher than expected. The higher than expected prepayments were generally related to the sale of the underlying collateral by the borrower.
Investment securities of $1.1 billion, increased $439.1 million or 66.7% over June 30, 2004 and $179.4 million, or 19.5% over March 31, 2005. The sequential quarter increase was the result of deposit growth outpacing loan growth during the quarter.
2
Quarter-end total deposits were $3.5 billion, increasing from $1.9 billion at June 30, 2004 and $3.4 billion at March 31, 2005.
Shareholders’ equity of $657.5 million increased from the $199.7 million reported at June 30, 2004 and the $640.8 million reported at March 31, 2005.
Business and Earnings Outlook
While economic and business conditions remain favorable, management has reduced its 2005 EPS guidance to $2.40 to $2.45 to reflect the higher than expected second quarter loan prepayments.
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 1-888-202-2422 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 6848620. 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 $4.9 billion in assets. Central Pacific Bank, its primary subsidiary, operates 37 branches and more than 90 ATMs throughout Hawaii. For additional information, please visit our 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, 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 may 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
3
Commission filings, including the company’s Form 10-K for the last fiscal year. The company does not update any of its forward-looking statements.
#####
4
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights - June 30, 2005
(Unaudited)
| | Three Months Ended | | | | Six Months Ended | | | |
| | June 30, | | % | | June 30, | | % | |
(in thousands, except per share data) | | 2005 | | 2004 | | Change | | 2005 | | 2004 | | Change | |
| | | | | | | | | | | | | |
INCOME STATEMENT | | | | | | | | | | | | | |
Net income | | $ | 17,902 | | $ | 8,668 | | 106.5 | % | $ | 35,107 | | $ | 16,578 | | 111.8 | % |
Net income, excluding merger-related expenses | | 18,217 | | 8,822 | | 106.5 | % | 36,318 | | 16,821 | | 115.9 | % |
Per share data: | | | | | | | | | | | | | |
Diluted: | | | | | | | | | | | | | |
Net income | | 0.58 | | 0.53 | | 9.4 | % | 1.17 | | 1.01 | | 15.8 | % |
Net income - adjusted (1) | | 0.59 | | 0.54 | | 9.3 | % | 1.21 | | 1.02 | | 18.6 | % |
Cash dividends | | 0.19 | | 0.16 | | 18.8 | % | 0.35 | | 0.32 | | 9.4 | % |
| | | | | | | | | | | | | |
PERFORMANCE RATIOS | | | | | | | | | | | | | |
Return on average assets (2) | | 1.49 | % | 1.50 | % | | | 1.48 | % | 1.47 | % | | |
Return on average assets - adjusted (1), (2) | | 1.50 | % | 1.53 | % | | | 1.51 | % | 1.49 | % | | |
Return on average shareholders’ equity (2) | | 10.95 | % | 17.05 | % | | | 11.21 | % | 16.41 | % | | |
Return on average shareholders’ equity - adjusted (1), (2) | | 11.00 | % | 17.35 | % | | | 11.40 | % | 16.65 | % | | |
Net income to average tangible shareholders’ equity (2) | | 22.12 | % | 17.05 | % | | | 23.81 | % | 16.41 | % | | |
Net income to average tangible shareholders’ equity - adjusted (1), (2) | | 22.51 | % | 17.35 | % | | | 24.64 | % | 16.65 | % | | |
Efficiency ratio | | 50.04 | % | 52.85 | % | | | 53.50 | % | 53.72 | % | | |
Efficiency ratio - adjusted (1) | | 49.13 | % | 51.89 | % | | | 51.69 | % | 52.96 | % | | |
Net interest margin (2) | | 4.65 | % | 4.31 | % | | | 4.62 | % | 4.42 | % | | |
Dividend payout ratio | | 32.20 | % | 29.63 | % | | | 29.41 | % | 31.07 | % | | |
| | | | | | | | | | | | | |
| | | | | | | | June 30, | | % | |
| | | | | | | | 2005 | | 2004 | | Change | |
BALANCE SHEET | | | | | | | | | | | | | |
Total assets | | | | | | | | $ | 4,918,781 | | $ | 2,498,829 | | 96.8 | % |
Loans | | | | | | | | 3,205,124 | | 1,619,086 | | 98.0 | % |
Loans, net | | | | | | | | 3,153,467 | | 1,594,152 | | 97.8 | % |
Deposits | | | | | | | | 3,506,152 | | 1,931,829 | | 81.5 | % |
Shareholders’ equity | | | | | | | | 657,466 | | 199,684 | | 229.3 | % |
Book value per share | | | | | | | | 21.62 | | 12.40 | | 74.4 | % |
Market value per share | | | | | | | | 35.60 | | 27.50 | | 29.5 | % |
Tangible equity ratio | | | | | | | | 7.19 | % | 7.99 | % | | |
| | | | | | | | | | | | | |
| | Three Months Ended | | | | Six Months Ended | | | |
| | June 30, | | % | | June 30, | | % | |
| | 2005 | | 2004 | | Change | | 2005 | | 2004 | | Change | |
SELECTED AVERAGE BALANCES | | | | | | | | | | | | | |
Total assets | | $ | 4,810,755 | | $ | 2,306,806 | | 108.5 | % | $ | 4,754,607 | | $ | 2,258,754 | | 110.5 | % |
Interest-earning assets | | 4,250,967 | | 2,148,142 | | 97.9 | % | 4,169,518 | | 2,101,192 | | 98.4 | % |
Loans, net of unearned interest | | 3,246,132 | | 1,481,473 | | 119.1 | % | 3,204,319 | | 1,465,154 | | 118.7 | % |
Other real estate | | 1 | | 1,101 | | -99.9 | % | 87 | | 550 | | -84.2 | % |
Deposits | | 3,409,997 | | 1,798,305 | | 89.6 | % | 3,363,133 | | 1,775,684 | | 89.4 | % |
Interest-bearing liabilities | | 3,458,062 | | 1,729,879 | | 99.9 | % | 3,420,168 | | 1,689,089 | | 102.5 | % |
Shareholders’ equity | | 654,118 | | 203,358 | | 221.7 | % | 626,520 | | 202,050 | | 210.1 | % |
| | | | | | | | | | | | | |
| | | | | | | | June 30, | | % | |
| | | | | | | | 2005 | | 2004 | | Change | |
NONPERFORMING ASSETS | | | | | | | | | | | | | |
Nonaccrual loans | | | | | | | | $ | 16,087 | | $ | 7,224 | | 122.7 | % |
Other real estate | | | | | | | | — | | 1,518 | | — | |
Total nonperforming assets | | | | | | | | 16,087 | | 8,742 | | 84.0 | % |
Loans delinquent for 90 days or more (still accruing interest) | | | | | | | | 469 | | 14,357 | | -96.7 | % |
Restructured loans (still accruing interest) | | | | | | | | 707 | | — | | — | |
Total nonperforming assets, loans delinquent for 90 days or more (still accruing interest) and restructured loans (still accruing interest) | | | | | | | | $ | 17,263 | | $ | 23,099 | | -25.3 | % |
| | | | | | | | | | | | | |
| | Three Months Ended | | | | Six Months Ended | | | |
| | June 30, | | | | June 30, | | | |
| | 2005 | | 2004 | | | | 2005 | | 2004 | | | |
Loan charge-offs | | $ | 2,031 | | $ | 262 | | 675.2 | % | $ | 3,410 | | $ | 577 | | 491.0 | % |
Recoveries | | 1,064 | | 48 | | 2116.7 | % | 2,447 | | 137 | | 1686.1 | % |
Net loan charge-offs (recoveries) | | $ | 967 | | $ | 214 | | 351.9 | % | $ | 963 | | $ | 440 | | 118.9 | % |
Net loan charge-offs to average loans (2) | | 0.12 | % | 0.06 | % | | | 0.06 | % | 0.06 | % | | |
| | | | | | | | | | | | | |
| | | | | | | | June 30, | | | |
| | | | | | | | 2005 | | 2004 | | | |
ASSET QUALITY RATIOS | | | | | | | | | | | | | |
Nonaccrual loans to total loans | | | | | | | | 0.50 | % | 0.45 | % | | |
Nonperforming assets to total assets | | | | | | | | 0.33 | % | 0.35 | % | | |
Nonperforming assets, loans delinquent for 90 days or more (still accruing interest) and restructured loans (still accruing interest) to total loans & other real estate | | | | | | | | 0.54 | % | 1.43 | % | | |
Allowance for loan and lease losses to total loans and leases | | | | | | | | 1.61 | % | 1.54 | % | | |
Allowance for loan and lease losses to nonaccrual loans | | | | | | | | 321.51 | % | 345.16 | % | | |
(1) | Excludes nonrecurring merger-related expenses, net of tax (see Reconciliation of Non-GAAP Financial Measures) |
(2) | Annualized |
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
| | Three Months Ended June 30, | | Six Months Ended June 30, | |
(in thousands, except per share data) | | 2005 | | 2004 | | 2005 | | 2004 | |
| | | | | | | | | |
Net income (a) | | $ | 17,902 | | $ | 8,668 | | $ | 35,107 | | $ | 16,578 | |
Nonrecurring merger-related expenses, net of tax | | 315 | | 154 | | 1,211 | | 243 | |
Net income, excluding nonrecurring merger-related expenses (b) | | $ | 18,217 | | $ | 8,822 | | $ | 36,318 | | $ | 16,821 | |
| | | | | | | | | |
Basic earnings per share | | $ | 0.59 | | $ | 0.54 | | $ | 1.19 | | $ | 1.03 | |
Nonrecurring merger-related expenses, net of tax | | 0.01 | | 0.01 | | 0.04 | | 0.02 | |
Basic earnings per share, excluding nonrecurring merger-related expenses | | $ | 0.60 | | $ | 0.55 | | $ | 1.23 | | $ | 1.05 | |
| | | | | | | | | |
Diluted earnings per share | | $ | 0.58 | | $ | 0.53 | | $ | 1.17 | | $ | 1.01 | |
Nonrecurring merger-related expenses, net of tax | | 0.01 | | 0.01 | | 0.04 | | 0.01 | |
Diluted earnings per share, excluding nonrecurring merger-related expenses | | $ | 0.59 | | $ | 0.54 | | $ | 1.21 | | $ | 1.02 | |
| | | | | | | | | |
Return on average assets | | 1.49 | % | 1.50 | % | 1.48 | % | 1.47 | % |
Nonrecurring merger-related expenses, net of tax | | 0.01 | | 0.03 | | 0.03 | | 0.02 | |
Return on average assets, excluding nonrecurring merger-related expenses | | 1.50 | % | 1.53 | % | 1.51 | % | 1.49 | % |
| | | | | | | | | |
Return on average equity | | 10.95 | % | 17.05 | % | 11.21 | % | 16.41 | % |
Nonrecurring merger-related expenses, net of tax | | 0.05 | | 0.30 | | 0.19 | | 0.24 | |
| | | | | | | | | |
Return on average equity, excluding nonrecurring merger-related expenses | | 11.00 | % | 17.35 | % | 11.40 | % | 16.65 | % |
| | | | | | | | | |
Net income to average tangible equity: | | | | | | | | | |
| | | | | | | | | |
Average shareholders’ equity | | $ | 654,118 | | $ | 203,358 | | $ | 626,520 | | $ | 202,050 | |
Average intangible assets | | (330,398 | ) | — | | (331,673 | ) | — | |
Total tangible equity (c) | | $ | 323,720 | | $ | 203,358 | | $ | 294,847 | | $ | 202,050 | |
| | | | | | | | | |
Net income to average tangible equity [ (a) annualized / (c) ] | | 22.12 | % | 17.05 | % | 23.81 | % | 16.41 | % |
Net income, excluding nonrecurring merger-related expenses, to average tangible equity [ (b) annualized / (c) ] | | 22.51 | % | 17.35 | % | 24.64 | % | 16.65 | % |
| | | | | | | | | |
Efficiency ratio: | | | | | | | | | |
| | | | | | | | | |
Net interest income | | $ | 48,510 | | $ | 22,617 | | $ | 94,830 | | $ | 45,318 | |
Other operating income (excluding investment securities gains (losses) | | 8,867 | | 4,095 | | 16,609 | | 8,006 | |
Total operating revenue (d) | | $ | 57,377 | | $ | 26,712 | | $ | 111,439 | | $ | 53,324 | |
| | | | | | | | | |
Other operating expense (e) | | $ | 28,714 | | $ | 14,118 | | $ | 59,623 | | $ | 28,646 | |
Nonrecurring merger-related expenses | | (524 | ) | (257 | ) | (2,016 | ) | (404 | ) |
Total other operating expense, excluding nonrecurring merger-related expenses (f) | | $ | 28,190 | | $ | 13,861 | | $ | 57,607 | | $ | 28,242 | |
| | | | | | | | | |
Efficiency ratio [ (e) / (d) ] | | 50.04 | % | 52.85 | % | 53.50 | % | 53.72 | % |
Efficiency ratio, excluding nonrecurring merger-related
expenses [ (f) / (d) ] | | 49.13 | % | 51.89 | % | 51.69 | % | 52.96 | % |
| | | | | | | | | |
Effective tax rate: | | | | | | | | | |
| | | | | | | | | |
Net income before taxes (g) | | $ | 27,600 | | $ | 12,294 | | $ | 51,345 | | $ | 24,078 | |
Nonrecurring merger-related expenses | | 524 | | 257 | | 2,016 | | 404 | |
Net income before taxes, excluding nonrecurring merger-related
expenses (h) | | $ | 28,124 | | $ | 12,551 | | $ | 53,361 | | $ | 24,482 | |
| | | | | | | | | |
Income taxes (i) | | $ | 9,698 | | $ | 3,626 | | $ | 16,238 | | $ | 7,500 | |
Tax impact of nonrecurring merger-related expenses | | 209 | | 103 | | 805 | | 161 | |
Income taxes, excluding tax impact of nonrecurring merger-related expenses (j) | | $ | 9,907 | | $ | 3,729 | | $ | 17,043 | | $ | 7,661 | |
| | | | | | | | | |
Effective tax rate [ (i) / (g) ] | | 35.14 | % | 29.49 | % | 31.63 | % | 31.15 | % |
Effective tax rate, excluding tax impact of nonrecurring merger-related expenses [ (j) / (h) ] | | 35.23 | % | 29.71 | % | 31.94 | % | 31.29 | % |
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
CONSOLIDATED BALANCE SHEETS
| | June 30, | | December 31, | | June 30, | |
(in thousands, except per share data) | | 2005 | | 2004 | | 2004 | |
| | | | | | | |
ASSETS | | | | | | | |
Cash and due from banks | | $ | 118,082 | | $ | 84,869 | | $ | 67,873 | |
Interest-bearing deposits in other banks | | 1,312 | | 52,978 | | 41,247 | |
Federal funds sold | | — | | 25,600 | | 3,500 | |
Investment securities: | | | | | | | |
Held to maturity, at cost (fair value of $78,652 at June 30, 2005, $101,869 at December 31, 2004, and $31,583 at June 30, 2004) | | 78,983 | | 101,337 | | 30,756 | |
Available for sale, at fair value | | 1,018,597 | | 798,084 | | 627,683 | |
Total investment securities | | 1,097,580 | | 899,421 | | 658,439 | |
| | | | | | | |
Loans held for sale | | 22,400 | | 17,736 | | 1,382 | |
Loans and leases | | 3,205,124 | | 3,099,830 | | 1,619,086 | |
Less allowance for loan and lease losses | | 51,657 | | 50,703 | | 24,934 | |
Net loans and leases | | 3,153,467 | | 3,049,127 | | 1,594,152 | |
| | | | | | | |
Premises and equipment | | 77,525 | | 77,099 | | 57,958 | |
Accrued interest receivable | | 19,813 | | 18,298 | | 9,278 | |
Investment in unconsolidated subsidiaries | | 12,369 | | 11,536 | | 5,634 | |
Due from customers on acceptances | | 228 | | 547 | | — | |
Other real estate | | — | | 580 | | 1,518 | |
Goodwill | | 288,090 | | 284,712 | | — | |
Core deposit premium | | 39,105 | | 49,188 | | — | |
Other assets | | 88,810 | | 80,211 | | 57,848 | |
Total assets | | $ | 4,918,781 | | $ | 4,651,902 | | $ | 2,498,829 | |
| | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
Deposits: | | | | | | | |
Noninterest-bearing deposits | | $ | 663,133 | | $ | 594,401 | | $ | 456,333 | |
Interest-bearing deposits | | 2,843,019 | | 2,732,625 | | 1,475,496 | |
Total deposits | | 3,506,152 | | 3,327,026 | | 1,931,829 | |
| | | | | | | |
Short-term borrowings | | 7,169 | | 88,900 | | 17,469 | |
Long-tem debt | | 675,524 | | 587,380 | | 323,088 | |
Bank acceptances outstanding | | 228 | | 547 | | — | |
Minority interest | | 12,781 | | 12,782 | | 10,062 | |
Other liabilities | | 59,461 | | 67,405 | | 16,697 | |
Total liabilities | | 4,261,315 | | 4,084,040 | | 2,299,145 | |
| | | | | | | |
Shareholders’ equity: | | | | | | | |
Preferred stock, no par value, authorized 1,000,000 shares, none issued | | — | | — | | — | |
Common stock, no par value; authorized 100,000,000 shares; issued and outstanding 30,409,823 shares at June 30, 2005, 28,159,395 shares at December 31, 2004, and 16,107,807 shares at June 30, 2004 | | 427,415 | | 360,550 | | 10,080 | |
Surplus | | 45,848 | | 45,848 | | 45,848 | |
Retained earnings | | 192,547 | | 167,801 | | 154,064 | |
Deferred stock awards | | (299 | ) | (174 | ) | (93 | ) |
Accumulated other comprehensive income | | (8,045 | ) | (6,163 | ) | (10,215 | ) |
Total shareholders’ equity | | 657,466 | | 567,862 | | 199,684 | |
| | | | | | | |
Total liabilities and shareholders’ equity | | $ | 4,918,781 | | $ | 4,651,902 | | $ | 2,498,829 | |
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | Three Months Ended | | Six months ended | |
| | June 30, | | June 30, | |
(In thousands, except per share data) | | 2005 | | 2004 | | 2005 | | 2004 | |
| | | | | | | | | |
Interest income: | | | | | | | | | |
Interest and fees on loans and leases | | $ | 54,138 | | $ | 21,134 | | $ | 104,972 | | $ | 42,425 | |
Interest and dividends on investment | | | | | | | | | |
securities: | | | | | | | | | |
Taxable interest | | 7,948 | | 5,546 | | 15,397 | | 10,627 | |
Tax-exempt interest | | 1,630 | | 1,018 | | 2,635 | | 2,009 | |
Dividends | | 116 | | 191 | | 407 | | 408 | |
Interest on deposits in other banks | | 58 | | 10 | | 205 | | 33 | |
Interest on Federal funds sold and securities purchased under agreements to resell | | 21 | | — | | 79 | | 9 | |
| | | | | | | | | |
Total interest income | | 63,911 | | 27,899 | | 123,695 | | 55,511 | |
| | | | | | | | | |
Interest expense: | | | | | | | | | |
Interest on deposits | | 9,005 | | 2,943 | | 16,522 | | 5,868 | |
Interest on short-term borrowings | | 313 | | 67 | | 840 | | 103 | |
Interest on long-term debt | | 6,083 | | 2,272 | | 11,503 | | 4,222 | |
| | | | | | | | | |
Total interest expense | | 15,401 | | 5,282 | | 28,865 | | 10,193 | |
| | | | | | | | | |
Net interest income | | 48,510 | | 22,617 | | 94,830 | | 45,318 | |
Provision for loan and lease losses | | 1,000 | | 300 | | 1,917 | | 600 | |
Net interest income after provision for loan and lease losses | | 47,510 | | 22,317 | | 92,913 | | 44,718 | |
| | | | | | | | | |
Other operating income: | | | | | | | | | |
Income from fiduciary activities | | 581 | | 582 | | 1,114 | | 1,131 | |
Service charges on deposit accounts | | 2,456 | | 1,368 | | 4,898 | | 2,811 | |
Other service charges and fees | | 3,028 | | 1,444 | | 5,804 | | 2,695 | |
Equity in earnings of unconsolidated subsidiaries | | 187 | | — | | 278 | | — | |
Fees on foreign exchange | | 188 | | 161 | | 406 | | 334 | |
Gains on sales of loans | | 687 | | 75 | | 1,189 | | 114 | |
Investment securities gains (losses) | | (63 | ) | — | | 1,446 | | — | |
Other | | 1,740 | | 465 | | 2,920 | | 921 | |
| | | | | | | | | |
Total other operating income | | 8,804 | | 4,095 | | 18,055 | | 8,006 | |
| | | | | | | | | |
Other operating expense: | | | | | | | | | |
Salaries and employee benefits | | 14,243 | | 7,365 | | 30,452 | | 15,571 | |
Net occupancy | | 2,289 | | 1,009 | | 5,044 | | 2,103 | |
Equipment | | 1,328 | | 631 | | 2,525 | | 1,199 | |
Amortization of core deposit premium | | 1,655 | | — | | 2,955 | | — | |
Communication expense | | 1,069 | | 459 | | 2,153 | | 887 | |
Professional services | | 1,724 | | 842 | | 4,360 | | 1,490 | |
Computer software expense | | 840 | | 500 | | 1,668 | | 1,012 | |
Advertising expense | | 493 | | 374 | | 1,258 | | 909 | |
Other | | 5,073 | | 2,938 | | 9,208 | | 5,475 | |
| | | | | | | | | |
Total other operating expense | | 28,714 | | 14,118 | | 59,623 | | 28,646 | |
| | | | | | | | | |
Income before income taxes | | 27,600 | | 12,294 | | 51,345 | | 24,078 | |
Income taxes | | 9,698 | | 3,626 | | 16,238 | | 7,500 | |
| | | | | | | | | |
Net income | | $ | 17,902 | | $ | 8,668 | | $ | 35,107 | | $ | 16,578 | |
| | | | | | | | | |
Per share data: | | | | | | | | | |
Basic earnings per share | | $ | 0.59 | | $ | 0.54 | | $ | 1.19 | | $ | 1.03 | |
Diluted earnings per share | | 0.58 | | 0.53 | | 1.17 | | 1.01 | |
Cash dividends declared | | 0.19 | | 0.16 | | 0.35 | | 0.32 | |
| | | | | | | | | |
Basic weighted average shares outstanding (000’s) | | 30,385 | | 16,098 | | 29,521 | | 16,089 | |
Diluted weighted average shares outstanding (000’s) | | 30,864 | | 16,391 | | 30,046 | | 16,401 | |
