Exhibit 99
Investor Contact: | | David Morimoto | Media Contact: | Ann Takiguchi Marcos |
| | SVP & Treasurer | | VP & PR/Communications Manager |
| | (808) 544-0627 | | (808) 544-0685 |
| | david.morimoto@centralpacificbank.com | | ann.takiguchi@centralpacificbank.com |
| | | | | |
NEWS RELEASE
CENTRAL PACIFIC FINANCIAL CORP. REPORTS 12% INCREASE IN NET INCOME
HONOLULU, April 25, 2006 – Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank, today reported net income for the first quarter of 2006 of $19.3 million, or $0.63 per diluted share, compared to $17.2 million, or $0.59 per diluted share reported in the first quarter of 2005 and $19.4 million or $0.63 per diluted share reported in the fourth quarter of 2005. The net income for the first quarter of 2006 included an after-tax charge of $1.3 million, or $0.04 per diluted share, in retirement expenses for a former senior executive.
Operating earnings, defined as the Company’s net income excluding nonrecurring merger-related expenses, net of tax, for the first quarter of 2006 was $19.3 million, or $0.63 per diluted share, as compared to the $18.1 million, or $0.62 per diluted share, recorded during the same period of 2005. There were no nonrecurring merger-related expenses in either the first quarter of 2006 or the fourth quarter of 2005, compared to $1.5 million in the first quarter of 2005.
First Quarter Highlights
• Loans and leases increased by $384.7 million, or up 11.9% from a year ago.
• Nonperforming assets to total assets improved to 0.12%, compared to 0.21% at March 31, 2005, and 0.24% at December 31, 2005.
• Deposits increased by $296.9 million, or up 8.8% from a year ago.
“Excluding the retirement expenses, Central Pacific earned $20.6 million, or $0.67 per diluted share, in the first quarter of 2006. This represents increases of 19.9% and 13.6%, respectively, over the same quarter last year,” commented Clint Arnoldus, President and Chief Executive Officer. “Additionally, our August 2005 acquisition of Central Pacific HomeLoans increased our other operating income to 19% of revenues. We believe we are well-positioned to achieve our strategic goals and to continue our strong financial performance.”
Financial Highlights
Net interest income for the first quarter of 2006 was $52.2 million, up 12.7% over the $46.3 million in the first quarter of last year and virtually unchanged from the fourth quarter of 2005. The year-over-year growth in net interest income was attributable to a 12.5% increase in average interest earning assets and the recognition of $662,000 in interest income on the payoff of two nonaccrual loans, which contributed 6 basis points to the net interest margin. Net interest income in the fourth quarter of 2005 included a $680,000 prepayment penalty received on a government agency mortgage-backed security that was prepaid. Excluding the nonaccrual interest and prepayment penalty, the net interest margin was 4.54% for the first quarter of 2006, compared to 4.63% for the fourth quarter of 2005. The decline in the net interest margin reflects a slight increase in the proportion of long-term debt relative to total interest-bearing liabilities and the shift of customer deposits from savings and money market accounts into higher-rate time deposits.
Provision for loan and lease losses in the first quarter of 2006 was $525,000, compared to $917,000 in the first quarter of 2005 and $1.0 million in the fourth quarter of 2005 due to the improvement in asset quality.
Other operating income totaled $12.2 million for the current quarter, compared to $9.3 million in the year-ago quarter and $11.5 million in the fourth quarter of 2005. The increase from the year-ago period was primarily due to an increase in residential loan sale activity from Central Pacific HomeLoans, Inc. (“CPHL”) and an increase in service charge fee income, offset by a decrease in investment securities gains.
Other operating expense for the first quarter of 2006 was $33.8 million, compared to $30.9 million in the same quarter last year and $32.8 million in the fourth quarter of 2005. First quarter 2006 expenses included $2.2 million in special retirement expenses, $492,000 in stock option expense, $260,000 for stock awards issued to directors in 2006 and $929,000 in interest accrued on various tax-related contingencies, offset by a $537,000 partial refund of an FDIC assessment paid in 2005. The first quarter of 2005 included nonrecurring merger-related expenses of $1.5 million, and the fourth quarter of 2005 reflected the accrual of $714,000 in interest on the tax-related contingencies. Excluding the aforementioned expenses, other operating expense decreased by 5.0% on a sequential quarter basis.
The Company’s efficiency ratio for the first quarter of 2006 was 50.42%, compared with 54.23% for the year-ago quarter and 48.42% for the fourth quarter of 2005. Excluding the impact of the retirement expenses recognized in the first quarter of 2006, the efficiency ratio was 47.11% and showed continued improvement from prior periods. “The improvement in our efficiency ratio from the year ago period is primarily attributable to the revenue and expense synergies from our merger with CB Bancshares,” remarked Arnoldus.
The effective tax rate was 35.65% for the current quarter, compared to 27.54% in the first quarter of 2005 and 35.34% in the fourth 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 35% in the coming quarters.
Asset Quality
Net loan charge-offs in the first quarter of 2006 totaled $405,000, compared to net loan recoveries of $3,000 in the year-ago period and net loan charge-offs of $809,000 in the fourth quarter of 2005.
At March 31, 2006, nonperforming assets totaled $6.1 million, or 0.12% of total assets, compared to $9.9 million or 0.21% of total assets at March 31, 2005 and $12.6 million or 0.24% of total assets at year-end 2005. The improvement in nonperforming asset levels during the first quarter of 2006 reflects the full payoff of $5.2 million in nonaccrual loans.
The allowance for loan and lease losses as a percentage of total loans and leases was 1.47% at March 31, 2006, compared to 1.60% at March 31, 2005 and 1.49% at year-end 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 were $5.2 billion at March 31, 2006, compared to $4.8 billion at March 31, 2005 and $5.2 billion at December 31, 2005.
Total loans and leases of $3.6 billion at March 31, 2006 increased by $384.7 million or 11.9% from March 31, 2005 and by $67.7 million or 1.9% from December 31, 2005. Our mainland loan production offices contributed approximately $99.9 million in loan growth during the first quarter of 2006, while our Hawaii lending activity was adversely impacted by higher than expected loan prepayments and the payoff of $12.2 million in nonaccrual and delinquent loans.
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Investment securities of $911.7 million at March 31, 2006 increased by $42.4 million from March 31, 2005 and decreased by $13.5 million from year-end 2005.
Total deposits of $3.7 billion at March 31, 2006 increased by $296.9 million or 8.8% over March 31, 2005 and by $37.0 million from December 31, 2005. The slow growth in deposits during the first quarter was attributed in part to seasonal fluctuations, particularly in commercial demand deposit accounts.
Shareholders’ equity of $686.5 million at March 31, 2006, increased from $640.8 million at March 31, 2005 and $676.2 million at December 31, 2005.
Business and Earnings Outlook
Based on current economic and business conditions, management reaffirms its forecast for 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 (10:00 a.m. Hawaii Time) to discuss its quarterly results. To participate in the call, please call 1-800-289-0573 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: 3164899) 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 38 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 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
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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 that 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 - March 31, 2006
(Unaudited)
| | Three Months Ended | | | |
| | March 31, | | % | |
(in thousands, except per share data) | | 2006 | | 2005 | | Change | |
| | | | | | �� | |
INCOME STATEMENT | | | | | | | |
Net income | | $ | 19,339 | | $ | 17,205 | | 12.4 | % |
Operating earnings (1) | | 19,339 | | 18,101 | | 6.8 | % |
Per share data: | | | | | | | |
Diluted: | | | | | | | |
Net income | | 0.63 | | 0.59 | | 6.8 | % |
Net income - adjusted (1) | | 0.63 | | 0.62 | | 1.6 | % |
Cash dividends | | 0.21 | | 0.16 | | 31.3 | % |
| | | | | | | |
PERFORMANCE RATIOS | | | | | | | |
Return on average assets (2) | | 1.49 | % | 1.46 | % | | |
Return on average assets - adjusted (1), (2) | | 1.49 | % | 1.54 | % | | |
Return on average shareholders’ equity (2) | | 11.26 | % | 11.50 | % | | |
Return on average shareholders’ equity - adjusted (1), (2) | | 11.26 | % | 12.10 | % | | |
Net income to average tangible shareholders’ equity (2) | | 22.22 | % | 25.91 | % | | |
Operating earnings to average tangible shareholders’ equity - adjusted (1), (2) | | 22.22 | % | 27.26 | % | | |
Efficiency ratio (3) | | 50.42 | % | 54.23 | % | | |
Efficiency ratio - adjusted (1) (3) | | 50.42 | % | 51.49 | % | | |
Net interest margin (2) | | 4.60 | % | 4.59 | % | | |
Dividend payout ratio | | 32.81 | % | 26.67 | % | | |
| | | | | | | | | |
| | March 31, | | % | |
| | 2006 | | 2005 | | Change | |
BALANCE SHEET | | | | | | | |
Total assets | | $ | 5,249,157 | | $ | 4,781,023 | | 9.8 | % |
Loans and leases | | 3,620,478 | | 3,235,788 | | 11.9 | % |
Loans and leases, net | | 3,567,421 | | 3,184,165 | | 12.0 | % |
Deposits | | 3,679,200 | | 3,382,259 | | 8.8 | % |
Shareholders’ equity | | 686,536 | | 640,816 | | 7.1 | % |
Book value per share | | 22.53 | | 21.11 | | 6.7 | % |
Market value per share | | 36.72 | | 33.65 | | 9.1 | % |
Tangible equity ratio | | 7.24 | % | 6.97 | % | | |
| | | | | | | | | |
| | Three Months Ended | | | |
| | March 31, | | % | |
| | 2006 | | 2005 | | Change | |
SELECTED AVERAGE BALANCES | | | | | | | |
Total assets | | $ | 5,185,813 | | $ | 4,697,835 | | 10.4 | % |
Interest-earning assets | | 4,598,582 | | 4,087,164 | | 12.5 | % |
Loans and leases, net of unearned interest | | 3,586,977 | | 3,162,041 | | 13.4 | % |
Other real estate | | — | | 174 | | -100.0 | % |
Deposits | | 3,604,750 | | 3,315,749 | | 8.7 | % |
Interest-bearing liabilities | | 3,739,685 | | 3,381,853 | | 10.6 | % |
Shareholders’ equity | | 686,858 | | 598,615 | | 14.7 | % |
| | | | | | | | | |
| | March 31, | | % | |
| | 2006 | | 2005 | | Change | |
NONPERFORMING ASSETS | | | | | | | |
Nonaccrual loans and leases | | $ | 6,106 | | $ | 9,915 | | -38.4 | % |
Other real estate | | — | | 0 | | 0.0 | % |
Total nonperforming assets | | 6,106 | | 9,915 | | -38.4 | % |
Loans and leases delinquent for 90 days or more (still accruing interest) | | 3,000 | | 7,011 | | -57.2 | % |
Restructured loans and leases (still accruing interest) | | 698 | | 710 | | -1.7 | % |
Total nonperforming assets, loans and leaes delinquent for 90 days or more (still accruing interest) and restructured loans and leases (still accruing interest) | | $ | 9,804 | | $ | 17,636 | | -44.4 | % |
| | Three Months Ended | | | |
| | March 31, | | | |
| | 2006 | | 2005 | | | |
Loan and lease charge-offs | | $ | 1,085 | | $ | 1,379 | | -21.3 | % |
Recoveries | | 680 | | 1,382 | | -50.8 | % |
Net loan and lease charge-offs (recoveries) | | $ | 405 | | $ | (3 | ) | -13600.0 | % |
Net loan and lease charge-offs to average loans and leases (2) | | 0.05 | % | 0.00 | % | | |
| | March 31, | |
| | 2006 | | 2005 | |
ASSET QUALITY RATIOS | | | | | |
Nonaccrual loans and leases to total loans and leases | | 0.17 | % | 0.31 | % |
Nonperforming assets to total assets | | 0.12 | % | 0.21 | % |
Nonperforming assets, loans and leases delinquent for 90 days or more (still accruing interest) and restructured loans and leases (still accruing interest) to total loans and leases & other real estate | | 0.27 | % | 0.55 | % |
Allowance for loan and lease losses to total loans and leases | | 1.47 | % | 1.60 | % |
Allowance for loan and lease losses to nonaccrual loans and leases | | 868.93 | % | 520.66 | % |
(1) Excludes nonrecurring merger-related expenses (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 | |
(in thousands, except per share data) | | March 31, 2005 | |
| | | |
Net income (a) | | $ | 17,205 | |
Nonrecurring merger-related expenses, net of tax | | 896 | |
Net income, excluding nonrecurring merger-related expenses (b) | | $ | 18,101 | |
| | | |
Basic earnings per share | | $ | 0.60 | |
Nonrecurring merger-related expenses, net of tax | | 0.03 | |
Basic earnings per share, excluding nonrecurring merger-related expenses | | $ | 0.63 | |
| | | |
Diluted earnings per share | | $ | 0.59 | |
Nonrecurring merger-related expenses, net of tax | | 0.03 | |
Diluted earnings per share, excluding nonrecurring merger-related expenses | | $ | 0.62 | |
| | | |
Return on average assets | | 1.46 | % |
Nonrecurring merger-related expenses, net of tax | | 0.08 | |
Return on average assets, excluding nonrecurring merger-related expenses | | 1.54 | % |
| | | |
Return on average equity | | 11.50 | % |
Nonrecurring merger-related expenses, net of tax | | 0.60 | |
| | | |
Return on average equity, excluding nonrecurring merger-related expenses | | 12.10 | % |
| | | |
Net income to average tangible equity: | | | |
| | | |
Average shareholders’ equity | | $ | 598,615 | |
Average intangible assets | | (332,962 | ) |
Total tangible equity (c) | | $ | 265,653 | |
| | | |
Net income to average tangible equity [ (a) annualized / (c) ] | | 25.91 | % |
Net income, excluding nonrecurring merger-related expenses, to average tangible equity [ (b) annualized / (c) ] | | 27.26 | % |
| | | |
Efficiency ratio: | | | |
| | | |
Net interest income on a fully taxable equivalent basis | | $ | 46,861 | |
Other operating income (excluding investment securities gains (losses) | | 7,742 | |
Total operating revenue (d) | | $ | 54,603 | |
| | | |
Other operating expense before amortization of intangible assets (e) | | $ | 29,609 | |
Nonrecurring merger-related expenses | | (1,492 | ) |
Total other operating expense, excluding nonrecurring merger-related expenses (f) | | $ | 28,117 | |
| | | |
Efficiency ratio [ (e) / (d) ] | | 54.23 | % |
Efficiency ratio, excluding nonrecurring merger-related expenses [ (f) / (d) ] | | 51.49 | % |
| | | |
Effective tax rate: | | | |
| | | |
Net income before taxes (g) | | $ | 23,745 | |
Nonrecurring merger-related expenses | | 1,492 | |
Net income before taxes, excluding nonrecurring merger-related expenses (h) | | $ | 25,237 | |
| | | |
Income taxes (i) | | $ | 6,540 | |
Tax impact of nonrecurring merger-related expenses | | 596 | |
Income taxes, excluding tax impact of nonrecurring merger-related expenses (j) | | $ | 7,136 | |
| | | |
Effective tax rate [ (i) / (g) ] | | 27.54 | % |
Effective tax rate, excluding tax impact of merger-related expenses [ (j) / (h) ] | | 28.28 | % |
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
CONSOLIDATED BALANCE SHEETS | | March 31, | | December 31, | | March 31, | |
(in thousands, except per share data) | | 2006 | | 2005 | | 2005 | |
| | | | | | | |
ASSETS | | | | | | | |
Cash and due from banks | | $ | 114,452 | | $ | 154,927 | | $ | 113,065 | |
Interest-bearing deposits in other banks | | 6,737 | | 9,813 | | 6,512 | |
Federal funds sold | | — | | — | | — | |
Investment securities: | | | | | | | |
Held to maturity, at cost (fair value of $69,030 at March 31, 2006, $70,651 at December 31, 2005, and $97,602 at March 31, 2005) | | 70,657 | | 71,843 | | 98,590 | |
Available for sale, at fair value | | 841,083 | | 853,442 | | 770,784 | |
Total investment securities | | 911,740 | | 925,285 | | 869,374 | |
| | | | | | | |
Loans held for sale | | 34,362 | | 60,538 | | 32,273 | |
Loans and leases | | 3,620,478 | | 3,552,749 | | 3,235,788 | |
Less allowance for loan and lease losses | | 53,057 | | 52,936 | | 51,623 | |
Net loans and leases | | 3,567,421 | | 3,499,813 | | 3,184,165 | |
| | | | | | | |
Premises and equipment | | 72,860 | | 72,568 | | 77,098 | |
Accrued interest receivable | | 22,535 | | 22,006 | | 19,154 | |
Investment in unconsolidated subsidiaries | | 11,522 | | 12,417 | | 11,367 | |
Due from customers on acceptances | | 307 | | 530 | | 222 | |
Other real estate | | — | | — | | — | |
Goodwill | | 295,403 | | 303,358 | | 289,848 | |
Core deposit premium | | 34,821 | | 35,795 | | 40,761 | |
Mortgage servicing rights | | 11,918 | | 11,820 | | 3,651 | |
Bank-owned life insurance | | 99,241 | | 68,325 | | 66,737 | |
Federal Home Loan Bank stock | | 48,797 | | 48,797 | | 48,797 | |
Other assets | | 17,041 | | 13,147 | | 17,999 | |
Total assets | | $ | 5,249,157 | | $ | 5,239,139 | | $ | 4,781,023 | |
| | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
Deposits: | | | | | | | |
Noninterest-bearing demand | | $ | 695,292 | | $ | 730,952 | | $ | 652,309 | |
Interest-bearing demand | | 433,385 | | 442,879 | | 418,020 | |
Savings and money market | | 1,103,215 | | 1,091,057 | | 1,116,899 | |
Time | | 1,447,308 | | 1,377,356 | | 1,195,031 | |
Total deposits | | 3,679,200 | | 3,642,244 | | 3,382,259 | |
| | | | | | | |
Short-term borrowings | | 52,125 | | 82,734 | | 97,610 | |
Long-tem debt | | 753,564 | | 749,258 | | 586,419 | |
Bank acceptances outstanding | | 307 | | 530 | | 222 | |
Minority interest | | 13,528 | | 13,157 | | 13,258 | |
Other liabilities | | 63,897 | | 74,982 | | 60,439 | |
Total liabilities | | 4,562,621 | | 4,562,905 | | 4,140,207 | |
| | | | | | | |
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 30,473,826 shares at March 31, 2006, 30,436,862 shares at December 31, 2005, and 30,352,184 shares at March 31, 2005 | | 427,657 | | 428,012 | | 427,009 | |
Surplus | | 48,790 | | 46,432 | | 45,848 | |
Retained earnings | | 231,285 | | 218,341 | | 180,414 | |
Deferred stock awards | | — | | (612 | ) | (317 | ) |
Accumulated other comprehensive loss | | (21,196 | ) | (15,939 | ) | (12,138 | ) |
Total shareholders’ equity | | 686,536 | | 676,234 | | 640,816 | |
| | | | | | | |
Total liabilities and shareholders’ equity | | $ | 5,249,157 | | $ | 5,239,139 | | $ | 4,781,023 | |
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | Three Months Ended | |
| | March 31, | | December 31, | | March 31, | |
(In thousands, except per share data) | | 2006 | | 2005 | | 2005 | |
| | | | | | | |
Interest income: | | | | | | | |
Interest and fees on loans and leases | | $ | 64,553 | | $ | 61,503 | | $ | 50,834 | |
Interest and dividends on investment securities: | | | | | | | |
Taxable interest | | 8,563 | | 9,681 | | 7,449 | |
Tax-exempt interest | | 1,318 | | 1,349 | | 1,005 | |
Dividends | | 103 | | 50 | | 94 | |
Interest on deposits in other banks | | 173 | | 107 | | 147 | |
Interest on federal funds sold and securities purchased under agreements to resell | | 52 | | 5 | | 58 | |
Dividends on Federal Home Loan Bank stock | | — | | — | | 197 | |
| | | | | | | |
Total interest income | | 74,762 | | 72,695 | | 59,784 | |
| | | | | | | |
Interest expense: | | | | | | | |
Interest on deposits | | 13,805 | | 11,895 | | 7,517 | |
Interest on short-term borrowings | | 231 | | 699 | | 527 | |
Interest on long-term debt | | 8,534 | | 7,832 | | 5,420 | |
| | | | | | | |
Total interest expense | | 22,570 | | 20,426 | | 13,464 | |
| | | | | | | |
Net interest income | | 52,192 | | 52,269 | | 46,320 | |
Provision for loan and lease losses | | 525 | | 1,000 | | 917 | |
Net interest income after provision for loan and lease losses | | 51,667 | | 51,269 | | 45,403 | |
| | | | | | | |
Other operating income: | | | | | | | |
Income from fiduciary activities | | 677 | | 668 | | 533 | |
Service charges on deposit accounts | | 3,536 | | 3,501 | | 2,442 | |
Other service charges and fees | | 3,051 | | 2,943 | | 2,776 | |
Equity in earnings of unconsolidated subsidiaries | | 184 | | 226 | | 103 | |
Fees on foreign exchange | | 182 | | 193 | | 218 | |
Investment securities gains | | — | | 127 | | 1,509 | |
Income from bank-owned life insurance | | 924 | | 535 | | 663 | |
Gains on sales of loans | | 2,589 | | 2,488 | | 502 | |
Other | | 1,021 | | 792 | | 505 | |
| | | | | | | |
Total other operating income | | 12,164 | | 11,473 | | 9,251 | |
| | | | | | | |
Other operating expense: | | | | | | | |
Salaries and employee benefits | | 19,062 | | 16,917 | | 16,209 | |
Net occupancy | | 2,274 | | 2,106 | | 2,755 | |
Equipment | | 1,173 | | 1,152 | | 1,197 | |
Amortization of core deposit premium | | 974 | | 1,655 | | 1,300 | |
Communication expense | | 1,168 | | 1,074 | | 1,084 | |
Legal and professional services | | 1,866 | | 2,054 | | 2,636 | |
Computer software expense | | 593 | | 577 | | 828 | |
Advertising expense | | 746 | | 427 | | 765 | |
Other | | 5,923 | | 6,846 | | 4,135 | |
| | | | | | | |
Total other operating expense | | 33,779 | | 32,808 | | 30,909 | |
| | | | | | | |
Income before income taxes | | 30,052 | | 29,934 | | 23,745 | |
Income taxes | | 10,713 | | 10,579 | | 6,540 | |
| | | | | | | |
Net income | | $ | 19,339 | | $ | 19,355 | | $ | 17,205 | |
| | | | | | | |
Per share data: | | | | | | | |
Basic earnings per share | | $ | 0.64 | | $ | 0.64 | | $ | 0.60 | |
Diluted earnings per share | | 0.63 | | 0.63 | | 0.59 | |
Cash dividends declared | | 0.21 | | 0.16 | | 0.16 | |
| | | | | | | |
Basic weighted average shares outstanding (000’s) | | 30,441 | | 30,409 | | 28,628 | |
Diluted weighted average shares outstanding (000’s) | | 30,658 | | 30,930 | | 29,198 | |
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
| | Three Months Ended | | Three Months Ended | | Three Months Ended | |
| | March 31, 2006 | | December 31, 2005 | | March 31, 2005 | |
| | Average | | Average | | | | Average | | Average | | | | Average | | Average | | | |
(in thousands) | | Balance | | Yield/Rate | | Interest | | Balance | | Yield/Rate | | Interest | | Balance | | Yield/Rate | | Interest | |
| | | | | | | | | | | | | | | | | | | |
Assets: | | | | | | | | | | | | | | | | | | | |
Interest earning assets: | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits in other banks | | $ | 16,946 | | 4.08 | % | $ | 173 | | $ | 11,805 | | 3.63 | % | $ | 107 | | $ | 27,107 | | 2.17 | % | $ | 147 | |
Federal funds sold & securities purchased under agreements to resell | | 4,726 | | 4.40 | % | 52 | | 499 | | 4.01 | % | 5 | | 10,347 | | 2.24 | % | 58 | |
Investment securities (1) (2) | | 941,135 | | 4.55 | % | 10,694 | | 965,003 | | 4.89 | % | 11,806 | | 839,067 | | 4.33 | % | 9,089 | |
Loans and leases, net of unearned income (3) | | 3,586,978 | | 7.20 | % | 64,553 | | 3,491,932 | | 7.05 | % | 61,503 | | 3,162,041 | | 6.43 | % | 50,834 | |
Federal Home Loan Bank stock | | 48,797 | | — | | — | | 48,797 | | — | | — | | 48,602 | | 1.62 | % | 197 | |
Total interest earning assets | | 4,598,582 | | 6.56 | % | 75,472 | | 4,518,036 | | 6.50 | % | 73,421 | | 4,087,164 | | 5.90 | % | 60,325 | |
Nonearning assets | | 587,231 | | | | | | 570,528 | | | | | | 610,671 | | | | | |
Total assets | | $ | 5,185,813 | | | | | | $ | 5,088,564 | | | | | | $ | 4,697,835 | | | | | |
| | | | | | | | | | | | | | | | | | | |
Liabilities & Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 430,858 | | 0.14 | % | $ | 149 | | $ | 431,461 | | 0.14 | % | $ | 152 | | $ | 429,040 | | 0.23 | % | $ | 249 | |
Savings and money market deposits | | 1,075,120 | | 1.00 | % | 2,680 | | 1,106,871 | | 0.91 | % | 2,506 | | 1,129,466 | | 0.50 | % | 1,409 | |
Time deposits under $100,000 | | 592,109 | | 2.44 | % | 3,613 | | 555,749 | | 2.24 | % | 3,113 | | 544,186 | | 1.87 | % | 2,538 | |
Time deposits $100,000 and over | | 839,272 | | 3.51 | % | 7,363 | | 762,326 | | 3.21 | % | 6,124 | | 609,356 | | 2.18 | % | 3,321 | |
Short-term borrowings | | 21,599 | | 4.28 | % | 231 | | 69,241 | | 4.04 | % | 699 | | 85,861 | | 2.46 | % | 527 | |
Long-term debt | | 780,727 | | 4.37 | % | 8,534 | | 742,523 | | 4.22 | % | 7,832 | | 583,944 | | 3.71 | % | 5,420 | |
Total interest-bearing liabilities | | 3,739,685 | | 2.41 | % | 22,570 | | 3,668,171 | | 2.23 | % | 20,426 | | 3,381,853 | | 1.59 | % | 13,464 | |
Noninterest-bearing deposits | | 667,391 | | | | | | 662,018 | | | | | | 603,701 | | | | | |
Other liabilities | | 91,879 | | | | | | 83,240 | | | | | | 113,666 | | | | | |
Stockholders’ equity | | 686,858 | | | | | | 675,135 | | | | | | 598,615 | | | | | |
Total liabilities & stockholders’ equity | | $ | 5,185,813 | | | | | | $ | 5,088,564 | | | | | | $ | 4,697,835 | | | | | |
| | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | | $ | 52,902 | | | | | | $ | 52,995 | | | | | | $ | 46,861 | |
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Net interest margin | | | | 4.60 | % | | | | | 4.69 | % | | | | | 4.59 | % | | |
(1) At amortized cost.
(2) Includes taxable equivalent basis adjustment based upon a statutory rate of 35%.
(3) Includes nonaccrual loans and leases.
