Exhibit 99
Investor Contact: | | David Morimoto | | Media Contact: Ann Takiguchi Marcos |
| | SVP & Treasurer | | VP & PR/Communications Officer |
| | (808) 544-0627 | | (808) 544-0685 |
| | david.morimoto@centralpacificbank.com | | ann.takiguchi@centralpacificbank.com |
NEWS RELEASE
CENTRAL PACIFIC FINANCIAL CORP. REPORTS RECORD NET INCOME
HONOLULU, January 24, 2006 – Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank, today reported net income for the fourth quarter of 2005 of $19.4 million, or $0.63 per diluted share, compared to $13.1 million, or $0.46 per diluted share reported in the fourth quarter of 2004 and $18.0 million or $0.58 per diluted share reported in the third quarter of 2005. For the 2005 year, net income was $72.5 million, or $2.38 per diluted share, as compared to $37.4 million, or $1.87 per diluted share, recorded in 2004.
Operating earnings, defined as the Company’s net income excluding nonrecurring merger-related expenses, net of tax, for the fourth quarter of 2005 was $19.4 million, or $0.63 per diluted share, as compared to the $16.4 million, or $0.57 per diluted share, recorded during the same period of 2004. There were no nonrecurring merger-related expenses in the fourth quarter of 2005, compared to $5.4 million in the fourth quarter of 2004. Operating earnings for the year ended December 31, 2005 was $75.8 million, or $2.49 per diluted share, as compared to $43.7 million, or $2.18 per diluted share, recorded in 2004.
Fourth Quarter Highlights
• Record quarterly and full year net income of $19.4 million and $72.5 million, respectively.
• Loans and leases increased by $186.1 million, or 5.5% unannualized, on a sequential quarter basis.
• Deposits increased by $171.4 million, or 4.9% unannualized, on a sequential quarter basis.
• Net interest margin was 4.69%, compared to 4.60% for the same period last year, and 4.60% for the third quarter of 2005.
• Efficiency ratio was 48.42%, compared to 59.49% in the year ago quarter, and 48.71% in the third quarter of 2005.
• Nonperforming assets to total assets was 0.24%, compared to 0.23% at December 31, 2004, and 0.28% at September 30, 2005.
“Central Pacific closed 2005 with another strong quarter with loans and deposits each increasing by more than $170 million, net interest margin expanding to 4.69% and efficiency ratio improving to 48.42%,” commented Clint Arnoldus, Chief Executive Officer. “The improvement in these financial metrics resulted in record quarterly and full year net income of $19.4 million and $72.5 million, respectively. We believe we are well-positioned to achieve our strategic goals and to continue our strong financial performance.”
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 year ended December 31, 2004 did not include CBBI’s revenues and expenses
prior to September 15, 2004 and, accordingly, certain 2005 year and 2004 year financial data may not be reasonably comparable.
Net interest income for the fourth quarter of 2005 was $52.3 million, up 12.9% over the $46.3 million in the fourth quarter of last year and 5.4% over the third quarter of 2005. The year-over-year growth in net interest income was primarily attributable to a 10.4% increase in average interest earning assets and a nine basis point increase in the net interest margin. The sequential quarter increase in net interest income was driven by a $150.4 million increase in average interest earning assets and a nine basis point increase in the net interest margin. The fourth quarter of 2005 net interest income included a $680,000 prepayment penalty received on a government agency mortgage-backed security that was prepaid. Excluding this prepayment penalty, the net interest margin was 4.63% for the fourth quarter of 2005 and 4.62% for the year ended December 31, 2005.
Provision for loan and lease losses in the fourth quarter of 2005 was $1.0 million, compared to $950,000 in the fourth quarter of 2004 and $1.0 million in the third quarter of 2005.
Other operating income was $11.5 million for the current quarter, compared to $9.1 million in the fourth quarter of 2004 and $11.5 million in the third quarter of 2005. The increase from the year ago period was primarily due to the addition of residential loan sale activity from Central Pacific HomeLoans, Inc. (“CPHL”) and an increase in service charge fee income.
Other operating expense for the fourth quarter of 2005 was $32.8 million, compared to $35.4 million in the same quarter last year and $32.3 million in the third quarter of 2005. The fourth quarter of 2004 and the third quarter of 2005 include nonrecurring merger-related expenses of $5.4 million and $3.5 million, respectively. Excluding merger-related expenses, other operating expense increased 13.9% on a sequential quarter basis. This increase was primarily the result of inclusion of a full quarter of CPHL operating expenses and a $714,000 interest accrual on state and federal tax assessments.
The Company’s fourth quarter efficiency ratio was 48.42%, compared with 59.49% for the fourth quarter of 2004, and 48.71% for the third quarter of 2005. “The improvement in our efficiency ratio from the year ago period is primarily attributable to the revenue and expense synergies from our merger with CBBI,” remarked Arnoldus.
The effective tax rate was 35.34% for the current quarter, compared to 30.81% in the fourth quarter of 2004 and 35.05% in the third quarter of 2005.
Asset Quality
Net loan charge-offs in the fourth quarter of 2005 amounted to $809,000, compared to net loan charge-offs of $126,000 in the fourth quarter of 2004 and net loan recoveries of $88,000 in the third quarter of 2005.
At December 31, 2005, nonperforming assets totaled $12.6 million or 0.24% of total assets, as compared to $10.9 million or 0.23% of total assets at December 31, 2004, and $14.0 million or 0.28% of total assets at September 30, 2005.
The allowance for loan and lease losses as a percentage of total loans and leases was 1.49% at December 31, 2005, as compared to 1.64% at December 31, 2004 and 1.57% at September 30, 2005.
“Our allowance for loan and lease losses reflects our solid asset quality ratios and the continued strength in the economy,” commented Arnoldus.
Balance Sheet Analysis
Total assets increased to $5.2 billion at December 31, 2005, compared to $4.7 billion at December 31, 2004 and $5.0 billion at September 30, 2005.
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Total loans and leases of $3.6 billion at December 31, 2005, increased by $452.9 million from December 31, 2004 and increased by $186.1 million from September 30, 2005. Approximately 75% of the fourth quarter loan growth was generated from our mainland loan production offices, while the remainder was sourced in Hawaii.
Investment securities of $925.3 million at December 31, 2005, increased by $74.5 million or 8.8% over December 31, 2004 and decreased by $24.1 million, or 2.5% from September 30, 2005.
Total deposits of $3.6 billion at December 31, 2005, increased by $315.2 million over December 31, 2004 and increased by $171.4 million from September 30, 2005.
Shareholders’ equity of $676.2 million at December 31, 2005, increased from the $567.9 million reported at December 31, 2004 and the $665.0 million reported at September 30, 2005.
Business and Earnings Outlook
Based on current economic and business conditions, management forecasts 2006 diluted operating earnings per share to increase 7 to 10 percent over 2005.
Conference Call Information
Central Pacific Financial Corp. will conduct a conference call today at 4:00 p.m. Eastern Time (11:00 a.m. Hawaii Time) to discuss its quarterly results. To participate in the call, please call 1-800-818-5264 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 (passcode: 6042454) and on the Company’s website.
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is the fourth largest financial institution in Hawaii with more than $5.0 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”, “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
3
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 changes in asset quality generally; 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. The Company does not update any of its forward-looking statements.
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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights - December 31, 2005
(Unaudited)
| | Three Months Ended
December 31, | | % | | Year Ended
December 31, | | % | |
(in thousands, except per share data) | | 2005 | | 2004 | | Change | | 2005 | | 2004 | | Change | |
| | | | | | | | | | | | | |
INCOME STATEMENT | | | | | | | | | | | | | |
Net income | | $ | 19,355 | | $ | 13,132 | | 47.4 | % | $ | 72,459 | | $ | 37,394 | | 93.8 | % |
Operating earnings (1) | | 19,355 | | 16,386 | | 18.1 | % | 75,789 | | 43,653 | | 73.6 | % |
Per share data: | | | | | | | | | | | | | |
Diluted: | | | | | | | | | | | | | |
Net income | | 0.63 | | 0.46 | | 37.0 | % | 2.38 | | 1.87 | | 27.3 | % |
Operating earnings (1) | | 0.63 | | 0.57 | | 10.5 | % | 2.49 | | 2.18 | | 14.2 | % |
Cash dividends | | 0.19 | | 0.16 | | 18.8 | % | 0.73 | | 0.64 | | 14.1 | % |
| | | | | | | | | | | | | |
PERFORMANCE RATIOS | | | | | | | | | | | | | |
Return on average assets (2) | | 1.52 | % | 1.12 | % | | | 1.48 | % | 1.25 | % | | |
Return on average assets - adjusted (1), (2) | | 1.52 | % | 1.40 | % | | | 1.55 | % | 1.46 | % | | |
Return on average shareholders’ equity (2) | | 11.47 | % | 9.38 | % | | | 11.16 | % | 12.37 | % | | |
Return on average shareholders’ equity - adjusted (1), (2) | | 11.47 | % | 11.71 | % | | | 11.67 | % | 14.44 | % | | |
Net income to average tangible shareholders’ equity (2) | | 22.83 | % | 23.64 | % | | | 22.88 | % | 18.45 | % | | |
Operating earnings to average tangible shareholders’ equity - (1), (2) | | 22.83 | % | 29.50 | % | | | 23.93 | % | 21.54 | % | | |
Efficiency ratio (3) | | 48.42 | % | 59.49 | % | | | 49.59 | % | 57.77 | % | | |
Efficiency ratio - adjusted (1) (3) | | 48.42 | % | 49.89 | % | | | 47.27 | % | 50.59 | % | | |
Net interest margin (2) | | 4.69 | % | 4.60 | % | | | 4.63 | % | 4.51 | % | | |
Dividend payout ratio | | 29.69 | % | 34.04 | % | | | 30.17 | % | 33.68 | % | | |
| | | | | | | | | | | | | | | | | |
| | December 31, | | % | |
| | 2005 | | 2004 | | Change | |
BALANCE SHEET | | | | | | | |
Total assets | | $ | 5,239,139 | | $ | 4,651,902 | | 12.6 | % |
Loans | | 3,552,749 | | 3,099,830 | | 14.6 | % |
Loans, net | | 3,499,813 | | 3,049,127 | | 14.8 | % |
Deposits | | 3,642,244 | | 3,327,026 | | 9.5 | % |
Shareholders’ equity | | 676,234 | | 567,862 | | 19.1 | % |
Book value per share | | 22.22 | | 20.17 | | 10.2 | % |
Market value per share | | 35.92 | | 36.17 | | -0.7 | % |
Tangible equity ratio | | 6.85 | % | 5.40 | % | | |
| | | | | | | | | |
| | Three Months Ended
December 31, | | % | | Year Ended
December 31, | | % | |
| | 2005 | | 2004 | | Change | | 2005 | | 2004 | | Change | |
SELECTED AVERAGE BALANCES | | | | | | | | | | | | | |
Total assets | | $ | 5,086,142 | | $ | 4,672,658 | | 8.8 | % | $ | 4,883,225 | | $ | 3,000,778 | | 62.7 | % |
Interest-earning assets | | 4,518,036 | | 4,092,572 | | 10.4 | % | 4,307,292 | | 2,719,565 | | 58.4 | % |
Loans, net of unearned interest | | 3,491,932 | | 3,124,812 | | 11.7 | % | 3,301,277 | | 1,986,872 | | 66.2 | % |
Other real estate | | — | | 580 | | -100.0 | % | 43 | | 722 | | -94.0 | % |
Deposits | | 3,518,425 | | 3,323,615 | | 5.9 | % | 3,428,777 | | 2,243,737 | | 52.8 | % |
Interest-bearing liabilities | | 3,668,171 | | 3,410,840 | | 7.5 | % | 3,512,492 | | 2,228,973 | | 57.6 | % |
Shareholders’ equity | | 675,135 | | 559,728 | | 20.6 | % | 648,999 | | 302,400 | | 114.6 | % |
| | | | | | | | | | | | | | | | | |
| | December 31, | | % | |
| | 2005 | | 2004 | | Change | |
NONPERFORMING ASSETS | | | | | | | |
Nonaccrual loans | | $ | 12,551 | | $ | 10,290 | | 22.0 | % |
Other real estate | | — | | 580 | | -100.0 | % |
Total nonperforming assets | | 12,551 | | 10,870 | | 15.5 | % |
Loans delinquent for 90 days or more (still accruing interest) | | 7,906 | | 393 | | 1911.7 | % |
Restructured loans (still accruing interest) | | 703 | | 701 | | 0.3 | % |
Total nonperforming assets, loans delinquent for 90 days or more (still accruing interest) and restructured loans (still accruing interest) | | $ | 21,160 | | $ | 11,964 | | 76.9 | % |
| | Three Months Ended
December 31, | | | | Year Ended
December 31, | | | |
| | 2005 | | 2004 | | | | 2005 | | 2004 | | | |
Loan charge-offs | | $ | 1,457 | | $ | 1,541 | | -5.5 | % | $ | 6,208 | | $ | 2,931 | | 111.8 | % |
Recoveries | | 648 | | 1,415 | | -54.2 | % | 4,524 | | 1,754 | | 157.9 | % |
Net loan charge-offs (recoveries) | | $ | 809 | | $ | 126 | | 542.1 | % | $ | 1,684 | | $ | 1,177 | | 43.1 | % |
Net loan charge-offs to average loans (2) | | 0.09 | % | 0.02 | % | | | 0.05 | % | 0.06 | % | | |
| | December 31, | |
| | 2005 | | 2004 | |
ASSET QUALITY RATIOS | | | | | |
Nonaccrual loans to total loans | | 0.35 | % | 0.33 | % |
Nonperforming assets to total assets | | 0.24 | % | 0.23 | % |
Nonperforming assets, loans delinquent for 90 days or more (still accruing interest) and restructured loans (still accruing interest) to total loans & other real estate | | 0.60 | % | 0.39 | % |
Allowance for loan and lease losses to total loans and leases | | 1.49 | % | 1.64 | % |
Allowance for loan and lease losses to nonaccrual loans | | 421.77 | % | 492.74 | % |
(1) Excludes nonrecurring merger-related expenses, net of tax (see Reconciliation of Non-GAAP Financial Measures)
(2) Annualized
(3) Efficiency ratio is derived by dividing other operating expense before amortization of intangible assets by net operating income (net interest income on a fully taxable equivalent basis plus other operating income before securities transactions).
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
| | Three Months
Ended December 31, | | Year Ended
December 31, | |
(in thousands, except per share data) | | 2005 | | 2004 | | 2005 | | 2004 | |
| | | | | | | | | |
Net income (a) | | $ | 19,355 | | $ | 13,132 | | $ | 72,459 | | $ | 37,394 | |
Nonrecurring merger-related expenses, net of tax | | — | | 3,254 | | 3,330 | | 6,259 | |
Operating earnings (b) | | $ | 19,355 | | $ | 16,386 | | $ | 75,789 | | $ | 43,653 | |
| | | | | | | | | |
Basic earnings per share | | $ | 0.64 | | $ | 0.47 | | $ | 2.42 | | $ | 1.90 | |
Nonrecurring merger-related expenses, net of tax | | — | | 0.12 | | 0.11 | | 0.32 | |
Basic operating earnings per share | | $ | 0.64 | | $ | 0.59 | | $ | 2.53 | | $ | 2.22 | |
| | | | | | | | | |
Diluted earnings per share | | $ | 0.63 | | $ | 0.46 | | $ | 2.38 | | $ | 1.87 | |
Nonrecurring merger-related expenses, net of tax | | — | | 0.11 | | 0.11 | | 0.31 | |
Diluted operating earnings per share | | $ | 0.63 | | $ | 0.57 | | $ | 2.49 | | $ | 2.18 | |
| | | | | | | | | |
Return on average assets | | 1.52 | % | 1.12 | % | 1.48 | % | 1.25 | % |
Nonrecurring merger-related expenses, net of tax | | — | | 0.28 | | 0.07 | | 0.21 | |
Return on average assets, excluding nonrecurring merger-related expenses | | 1.52 | % | 1.40 | % | 1.55 | % | 1.46 | % |
| | | | | | | | | |
Return on average equity | | 11.47 | % | 9.38 | % | 11.16 | % | 12.37 | % |
Nonrecurring merger-related expenses, net of tax | | — | | 2.33 | | 0.51 | | 2.07 | |
Return on average equity, excluding nonrecurring merger-related expenses | | 11.47 | % | 11.71 | % | 11.67 | % | 14.44 | % |
| | | | | | | | | |
Net income to average tangible equity: | | | | | | | | | |
| | | | | | | | | |
Average shareholders’ equity | | $ | 675,135 | | $ | 559,728 | | $ | 648,999 | | $ | 302,400 | |
Average intangible assets | | (336,087 | ) | (337,524 | ) | (332,295 | ) | (99,761 | ) |
Total tangible equity (c) | | $ | 339,048 | | $ | 222,204 | | $ | 316,704 | | $ | 202,639 | |
| | | | | | | | | |
Net income to average tangible equity [ (a) annualized / (c) ] | | 22.83 | % | 23.64 | % | 22.88 | % | 18.45 | % |
| | | | | | | | | |
Operating earnings to average tangible equity [ (b) annualized / (c) ] | | 22.83 | % | 29.50 | % | 23.93 | % | 21.54 | % |
| | | | | | | | | |
Efficiency ratio: | | | | | | | | | |
| | | | | | | | | |
Net interest income on a fully taxable equivalent basis | | $ | 52,996 | | $ | 47,034 | | $ | 199,517 | | $ | 122,575 | |
Other operating income before securities transactions | | 11,346 | | 9,261 | | 39,452 | | 22,037 | |
Total operating revenue (d) | | $ | 64,342 | | $ | 56,295 | | $ | 238,969 | | $ | 144,612 | |
| | | | | | | | | |
Other operating expense before amortization of intangible assets (e) | | $ | 31,153 | | $ | 33,490 | | $ | 118,506 | | $ | 83,550 | |
Nonrecurring merger-related expenses | | — | | (5,403 | ) | (5,545 | ) | (10,392 | ) |
Total other operating expense, excluding nonrecurring merger-related expenses (f) | | $ | 31,153 | | $ | 28,087 | | $ | 112,961 | | $ | 73,158 | |
| | | | | | | | | |
Efficiency ratio [ (e) / (d) ] | | 48.42 | % | 59.49 | % | 49.59 | % | 57.78 | % |
Efficiency ratio, excluding nonrecurring merger-related expenses [ (f) / (d) ] | | 48.42 | % | 49.89 | % | 47.27 | % | 50.59 | % |
| | | | | | | | | |
Effective tax rate: | | | | | | | | | |
| | | | | | | | | |
Income before taxes (g) | | $ | 29,934 | | $ | 18,980 | | $ | 108,986 | | $ | 53,976 | |
Nonrecurring merger-related expenses | | — | | 5,403 | | 5,545 | | 10,392 | |
Operating earnings before taxes (h) | | $ | 29,934 | | $ | 24,383 | | $ | 114,531 | | $ | 64,368 | |
| | | | | | | | | |
Income taxes (i) | | $ | 10,579 | | $ | 5,848 | | $ | 36,527 | | $ | 16,582 | |
Tax impact of nonrecurring merger-related expenses | | — | | 2,149 | | 2,215 | | 4,133 | |
Income taxes, excluding tax impact of nonrecurring merger-related expenses (j) | | $ | 10,579 | | $ | 7,997 | | $ | 38,742 | | $ | 20,715 | |
| | | | | | | | | |
Effective tax rate [ (i) / (g) ] | | 35.34 | % | 30.81 | % | 33.52 | % | 30.72 | % |
Effective tax rate, excluding tax impact of merger-related expenses [ (j) / (h) ] | | 35.34 | % | 32.80 | % | 33.83 | % | 32.18 | % |
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(in thousands) | | December 31,
2005 | | December 31,
2004 | |
| | | | | |
ASSETS | | | | | |
Cash and due from banks | | $ | 154,927 | | $ | 84,869 | |
Interest-bearing deposits in other banks | | 9,813 | | 52,978 | |
Federal funds sold | | — | | 25,600 | |
Investment securities: | | | | | |
Held to maturity, at cost (fair value of $70,651 at December 31, 2005 and $101,869 at December 31, 2004) | | 71,843 | | 101,337 | |
Available for sale, at fair value | | 853,442 | | 749,484 | |
Total investment securities | | 925,285 | | 850,821 | |
| | | | | |
Loans held for sale | | 60,538 | | 17,736 | |
Loans and leases | | 3,552,749 | | 3,099,830 | |
Less allowance for loan and lease losses | | 52,936 | | 50,703 | |
Net loans and leases | | 3,499,813 | | 3,049,127 | |
| | | | | |
Premises and equipment | | 72,568 | | 77,099 | |
Accrued interest receivable | | 22,006 | | 18,298 | |
Investment in unconsolidated subsidiaries | | 12,417 | | 11,536 | |
Due from customers on acceptances | | 530 | | 547 | |
Other real estate | | — | | 580 | |
Goodwill | | 303,358 | | 284,712 | |
Core deposit premium | | 35,795 | | 49,188 | |
Other assets | | 142,089 | | 128,811 | |
Total assets | | $ | 5,239,139 | | $ | 4,651,902 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
Deposits: | | | | | |
Noninterest-bearing deposits | | $ | 730,952 | | $ | 594,401 | |
Interest-bearing deposits | | 2,911,292 | | 2,732,625 | |
Total deposits | | 3,642,244 | | 3,327,026 | |
| | | | | |
Short-term borrowings | | 82,734 | | 88,900 | |
Long-tem debt | | 749,258 | | 587,380 | |
Bank acceptances outstanding | | 530 | | 547 | |
Minority interest | | 13,157 | | 12,782 | |
Other liabilities | | 74,982 | | 67,405 | |
Total liabilities | | 4,562,905 | | 4,084,040 | |
| | | | | |
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 30,436,862 shares at December 31, 2005 and 28,159,395 shares at December 31, 2004 | | 428,012 | | 360,550 | |
Surplus | | 46,432 | | 45,848 | |
Retained earnings | | 218,341 | | 167,801 | |
Deferred stock awards | | (612 | ) | (174 | ) |
Accumulated other comprehensive loss | | (15,939 | ) | (6,163 | ) |
Total shareholders’ equity | | 676,234 | | 567,862 | |
| | | | | |
Total liabilities and shareholders’ equity | | $ | 5,239,139 | | $ | 4,651,902 | |
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | Three Months Ended
December 31, | | Twelve Months Ended
December 31, | |
(In thousands, except per share data) | | 2005 | | 2004 | | 2005 | | 2004 | |
| | | | | | | | | |
Interest income: | | | | | | | | | |
Interest and fees on loans and leases | | $ | 61,503 | | $ | 49,668 | | $ | 222,841 | | $ | 120,684 | |
Interest and dividends on investment securities: | | | | | | | | | |
Taxable interest | | 9,681 | | 7,759 | | 34,058 | | 24,181 | |
Tax-exempt interest | | 1,349 | | 1,389 | | 5,281 | | 4,466 | |
Dividends | | 50 | | 22 | | 550 | | 679 | |
Interest on deposits in other banks | | 107 | | 211 | | 349 | | 289 | |
Interest on Federal funds sold and securities purchased under agreements to resell | | 5 | | 68 | | 171 | | 90 | |
| | | | | | | | | |
Total interest income | | 72,695 | | 59,117 | | 263,250 | | 150,389 | |
| | | | | | | | | |
Interest expense: | | | | | | | | | |
Interest on deposits | | 11,895 | | 7,142 | | 38,386 | | 16,863 | |
Interest on short-term borrowings | | 699 | | 494 | | 1,858 | | 735 | |
Interest on long-term debt | | 7,832 | | 5,193 | | 26,333 | | 12,619 | |
| | | | | | | | | |
Total interest expense | | 20,426 | | 12,829 | | 66,577 | | 30,217 | |
| | | | | | | | | |
Net interest income | | 52,269 | | 46,288 | | 196,673 | | 120,172 | |
Provision for loan and lease losses | | 1,000 | | 950 | | 3,917 | | 2,083 | |
Net interest income after provision for loan and lease losses | | 51,269 | | 45,338 | | 192,756 | | 118,089 | |
| | | | | | | | | |
Other operating income: | | | | | | | | | |
Income from fiduciary activities | | 668 | | 534 | | 2,431 | | 2,224 | |
Service charges on deposit accounts | | 3,501 | | 2,668 | | 11,782 | | 7,150 | |
Other service charges and fees | | 2,943 | | 2,832 | | 12,116 | | 7,025 | |
Equity in earnings of unconsolidated subsidiaries | | 226 | | 136 | | 767 | | 173 | |
Fees on foreign exchange | | 193 | | 165 | | 787 | | 648 | |
Investment securities gains (losses) | | 127 | | (193 | ) | 1,550 | | (19 | ) |
Income from life insurance | | 534 | | 861 | | 1,924 | | 1,687 | |
Gains on sales of loans | | 2,488 | | 1,241 | | 5,811 | | 1,651 | |
Other | | 793 | | 824 | | 3,834 | | 1,479 | |
| | | | | | | | | |
Total other operating income | | 11,473 | | 9,068 | | 41,002 | | 22,018 | |
| | | | | | | | | |
Other operating expense: | | | | | | | | | |
Salaries and employee benefits | | 16,917 | | 16,393 | | 64,963 | | 43,252 | |
Net occupancy | | 2,106 | | 3,155 | | 9,666 | | 6,550 | |
Equipment | | 1,152 | | 1,131 | | 4,873 | | 3,151 | |
Amortization of core deposit premium | | 1,655 | | 1,936 | | 6,266 | | 2,581 | |
Communication expense | | 1,074 | | 834 | | 4,174 | | 2,267 | |
Legal and professional services | | 2,054 | | 4,172 | | 8,014 | | 8,660 | |
Computer software expense | | 577 | | 845 | | 2,798 | | 2,450 | |
Advertising expense | | 427 | | 1,248 | | 2,347 | | 2,885 | |
Other | | 6,846 | | 5,712 | | 21,671 | | 14,335 | |
| | | | | | | | | |
Total other operating expense | | 32,808 | | 35,426 | | 124,772 | | 86,131 | |
| | | | | | | | | |
Income before income taxes | | 29,934 | | 18,980 | | 108,986 | | 53,976 | |
Income taxes | | 10,579 | | 5,848 | | 36,527 | | 16,582 | |
| | | | | | | | | |
Net income | | $ | 19,355 | | $ | 13,132 | | $ | 72,459 | | $ | 37,394 | |
| | | | | | | | | |
Per share data: | | | | | | | | | |
Basic earnings per share | | $ | 0.64 | | $ | 0.47 | | $ | 2.42 | | $ | 1.90 | |
Diluted earnings per share | | 0.63 | | 0.46 | | 2.38 | | 1.87 | |
Cash dividends declared | | 0.19 | | 0.16 | | 0.73 | | 0.64 | |
| | | | | | | | | |
Basic weighted average shares outstanding (000’s) | | 30,409 | | 28,099 | | 29,956 | | 19,637 | |
Diluted weighted average shares outstanding (000’s) | | 30,930 | | 28,718 | | 30,487 | | 20,018 | |
