Central Pacific Financial Reports Fourth Quarter Earnings of $20.2 Million and Full Year 2022 Earnings of $73.9 Million

Central Pacific Monetary Corp. (NYSE: CPF) (the “Firm”), mother or father firm of Central Pacific Financial institution (the “Financial institution” or “CPB”), in the present day reported web revenue for the fourth quarter of 2022 of $20.2 million, in comparison with $16.7 million within the earlier quarter and $22.3 million within the year-ago quarter. Totally diluted earnings per share (“EPS”) of $0.74 for the fourth quarter of 2022 mirrored a 21% enhance from $0.61 within the earlier quarter and a 8% lower from $0.80 within the year-ago quarter. For the 2022 yr, web revenue was $73.9 million, or EPS of $2.68, in comparison with web revenue of $79.9 million, or EPS of $2.83 final yr.

“We ended the 2022 yr efficiently with sturdy mortgage, deposit and web curiosity revenue development,” mentioned Arnold Martines, President and Chief Govt Officer. “On the similar time, we continued to have stable asset high quality, liquidity and capital positions. We imagine the Hawaii economic system can be resilient and fare higher than the remainder of the nation due to our sturdy housing and tourism markets, in addition to the big navy presence in our State. I wish to thank our hard-working and dedicated workforce of staff, in addition to our prospects for his or her ongoing assist of our financial institution.”

Earnings Highlights

Internet curiosity revenue for the fourth quarter of 2022 was $56.3 million, a rise of $0.9 million, or 1.7% from the earlier quarter, and a rise of $3.2 million, or 6.0% from the year-ago quarter. The sequential quarter enhance in web curiosity revenue is primarily as a consequence of larger asset yields and continued sturdy mortgage development which outpaced the rise in charges paid on deposits. Internet curiosity revenue within the fourth quarter of 2022 included $0.1 million in web PPP curiosity revenue and costs, in comparison with $0.7 million and $4.7 million, within the earlier and year-ago quarters, respectively. Internet curiosity revenue for the 2022 yr included $3.6 million in web PPP curiosity revenue and costs, in comparison with $26.4 million for the 2021 yr.

Internet curiosity margin (“NIM”) for the fourth quarter of 2022 was 3.17%, which remained unchanged from the earlier quarter and elevated by 9 foundation factors (“bps”) from the year-ago quarter. NIM, excluding PPP loans, of three.16% elevated by 3 bps from the earlier quarter. The rise in NIM, excluding PPP loans, was primarily attributable to larger yields earned through the quarter on funding securities and core loans, or whole loans excluding PPP loans, partially offset by will increase in charges paid on deposits and borrowings. Extra data on common balances, curiosity revenue and bills and yields and charges is introduced in Tables 4, 5 and 10.

Within the fourth quarter of 2022, the Firm recorded a provision for credit score losses of $0.6 million, in comparison with a provision of $0.4 million within the earlier quarter and a launch of the credit score loss reserves of $7.7 million within the year-ago quarter.

Different working revenue for the fourth quarter of 2022 totaled $11.6 million, in comparison with $9.6 million within the earlier quarter and $11.6 million within the year-ago quarter. The rise from the earlier quarter was primarily as a consequence of larger revenue from bank-owned life insurance coverage. Extra data on different working revenue is introduced in Desk 3.

Different working expense for the fourth quarter of 2022 totaled $40.4 million, in comparison with $42.0 million within the earlier quarter and $42.4 million within the year-ago quarter. The lower in different working expense from the earlier quarter was primarily as a consequence of decrease web occupancy and promoting bills. Extra data on different working expense is introduced in Desk 3.

The effectivity ratio for the fourth quarter of 2022 was 59.56%, in comparison with 64.62% within the earlier quarter and 65.61% within the year-ago quarter.

The efficient tax price for the fourth quarter of 2022 was 24.9%, in comparison with 26.2% within the earlier quarter and 25.4% within the year-ago quarter.

Stability Sheet Highlights

Whole belongings at December 31, 2022 of $7.43 billion elevated by $95.1 million, or 1.3% from $7.34 billion at September 30, 2022, and elevated by $13.7 million, or 0.2% from $7.42 billion at December 31, 2021.

Whole loans, web of deferred charges and prices, at December 31, 2022 of $5.56 billion elevated by $133.3 million, or 2.5% from $5.42 billion at September 30, 2022, and elevated by $453.8 million, or 8.9%, from $5.10 billion at December 31, 2021. Loans by kind and geographic distribution are summarized in Desk 6.

Whole deposits at December 31, 2022 of $6.74 billion elevated by $179.8 million or 2.7% from $6.56 billion at September 30, 2022, and elevated by $97.1 million, or 1.5%, from $6.64 billion at December 31, 2021. Core deposits, which embrace demand deposits, financial savings and cash market deposits and time deposits as much as $250,000, totaled $6.08 billion at December 31, 2022, and elevated by $38.8 million from September 30, 2022. Core deposit and whole deposit balances are summarized in Desk 7.

Asset High quality

Nonperforming belongings at December 31, 2022 totaled $5.3 million, or 0.07% of whole belongings, in comparison with $4.2 million, or 0.06% of whole belongings at September 30, 2022, and $5.9 million, or 0.08% of whole belongings at December 31, 2021. Extra data on nonperforming belongings, late and restructured loans is introduced in Desk 8.

Internet charge-offs within the fourth quarter of 2022 totaled $1.7 million, in comparison with web charge-offs of $1.6 million within the earlier quarter, and web recoveries of $0.9 million within the year-ago quarter.

The allowance for credit score losses, as a proportion of whole loans at December 31, 2022 was 1.15%, in comparison with 1.19% at September 30, 2022, and 1.33% at December 31, 2021. Extra data on web charge-offs and recoveries and the allowance for credit score losses is introduced in Desk 9.

Capital

Whole shareholders’ fairness was $452.9 million at December 31, 2022, in comparison with $438.5 million and $558.2 million at September 30, 2022 and December 31, 2021, respectively. The decline in shareholders’ fairness from a yr in the past was primarily as a consequence of a rise in unrealized losses on our available-for-sale funding securities portfolio which is included in collected different complete revenue, and had been pushed by the rising rate of interest surroundings.

At December 31, 2022, the Firm’s leverage capital, tier 1 risk-based capital, whole risk-based capital, and customary fairness tier 1 ratios had been 8.5%, 11.3%, 13.5%, and 10.5%, respectively, in comparison with 8.7%, 11.5%, 13.7%, and 10.6%, respectively, at September 30, 2022.

On January 24, 2023, the Firm’s Board of Administrators declared a quarterly money dividend of $0.26 per share on its excellent widespread shares. The dividend can be payable on March 15, 2023 to shareholders of report on the shut of enterprise on February 28, 2023.

On January 24, 2023, the Firm’s Board of Administrators additionally approved the repurchase of as much as $25 million of its widespread inventory occasionally within the open market or in privately negotiated transactions, pursuant to a newly approved share repurchase program (the “Repurchase Plan”). The Repurchase Plan replaces and supersedes in its entirety the share repurchase program beforehand accredited by the Firm’s Board of Administrators, which had $10.3 million in remaining repurchase authority as of December 31, 2022. Through the fourth quarter of 2022, the Firm repurchased 241,203 shares of widespread inventory, at a complete value of $4.9 million, or a median value per share of $20.41. Through the yr ended December 31, 2022, the Firm returned $49.2 million in capital to its shareholders by money dividends and share repurchases.

Key Enterprise Highlights through the fourth quarter included the next:

• Arnold Martines, a veteran of the native banking trade and Central Pacific Financial institution, was promoted to President & CEO of Central Pacific Financial institution and Central Pacific Monetary.
• Newsweek named Central Pacific Financial institution one of many Finest Banks in Hawaii.
• Jason Fujimoto, President & CEO of HPM Constructing Provide on the island of Hawaii, was named to the boards of CPB and CPF.
• The Central Pacific Financial institution Basis once more contributed generously to the area people with whole donations in 2022 of $1.3 million.
• Locally, the Financial institution launched a significant small enterprise advertising marketing campaign aimed toward a key buyer section and space of strategic focus for the Financial institution.

Convention Name

The Firm’s administration will host a convention name in the present day at 1:00 p.m. Jap Time (8:00 a.m. Hawaii Time) to debate the quarterly outcomes. People are inspired to take heed to the reside webcast of the presentation by visiting the investor relations web page of the Firm’s web site at http://ir.cpb.bank. Alternatively, traders could take part within the reside name by dialing 1-844-200-6205 (entry code: 274117). A playback of the decision can be obtainable by February 24, 2023 by dialing 1-866-813-9403 (entry code: 649427) and on the Firm’s web site. Info which can be mentioned within the convention name is offered in an earnings complement presentation on the Firm’s web site at http://ir.cpb.bank.

About Central Pacific Monetary Corp.

Central Pacific Monetary Corp. is a Hawaii-based financial institution holding firm with roughly $7.43 billion in belongings as of December 31, 2022. Central Pacific Financial institution, its major subsidiary, operates 27 branches and 64 ATMs within the state of Hawaii. For added data, please go to the Firm’s web site at http://www.cpb.bank.

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Ahead-Wanting Statements (“FLS”)

This doc could include FLS regarding: projections of revenues, bills, revenue or loss, earnings or loss per share, capital expenditures, the cost or nonpayment of dividends, capital place, credit score losses, web curiosity margin or different monetary gadgets; statements of plans, aims and expectations of Central Pacific Monetary Corp. or its administration or Board of Administrators, together with these regarding enterprise plans, use of capital sources, services or products and regulatory developments and regulatory actions; statements of future financial efficiency together with anticipated efficiency outcomes from our enterprise initiatives; or any statements of the assumptions underlying or regarding any of the foregoing. Phrases equivalent to “believes,” “plans,” “anticipates,” “expects,” “intends,” “forecasts,” “hopes,” “concentrating on,” “proceed,” “stay,” “will,” “ought to,” “estimates,” “could” and different related expressions are meant to determine FLS however usually are not the unique technique of figuring out such statements.

Whereas we imagine that our FLS and the assumptions underlying them are moderately based mostly, such statements and assumptions are by their nature topic to dangers and uncertainties, and thus may later show to be inaccurate or incorrect. Accordingly, precise outcomes may differ materially from these statements or projections for a wide range of causes, together with, however not restricted to: the results of inflation and rising rates of interest; the opposed results of the COVID-19 pandemic virus (and ongoing pandemic variants) on native, nationwide and worldwide economies, together with, however not restricted to, the opposed affect on tourism and development within the State of Hawaii, our debtors, prospects, third-party contractors, distributors and staff in addition to the results of presidency applications and initiatives in response to COVID-19; the affect of our participation within the Paycheck Safety Program (“PPP”) and success of presidency ensures on our PPP loans; the rise in stock or opposed situations in the actual property market and deterioration within the development trade; opposed adjustments within the monetary efficiency and/or situation of our debtors and, in consequence, elevated mortgage delinquency charges, deterioration in asset high quality, and losses in our mortgage portfolio; our capacity to realize the aims of our RISE2020 initiative; our capacity to efficiently implement and obtain the aims of our Banking-as-a-Service (“BaaS”) initiatives, together with adoption of the initiatives by prospects and dangers confronted by any of our financial institution collaborations together with reputational and regulatory danger; the affect of native, nationwide, and worldwide economies and occasions (together with pure disasters equivalent to wildfires, volcanic eruptions, hurricanes, tsunamis, storms, earthquakes and pandemic viruses and illnesses) on the Firm’s enterprise and operations and on tourism, the navy, and different main industries working throughout the Hawaii market and some other markets during which the Firm does enterprise; deterioration or malaise in home financial situations, together with any destabilization within the monetary trade and deterioration of the actual property market, in addition to the affect of declining ranges of shopper and enterprise confidence within the state of the economic system normally and in monetary establishments specifically; adjustments in estimates of future reserve necessities based mostly upon the periodic assessment thereof below related regulatory and accounting necessities; the affect of the Dodd-Frank Wall Road Reform and Shopper Safety Act (the “Dodd-Frank Act”), adjustments in capital requirements, different regulatory reform and federal and state laws, together with however not restricted to rules promulgated by the Shopper Monetary Safety Bureau (the “CFPB”), government-sponsored enterprise reform, and any associated guidelines and rules which have an effect on our enterprise operations and competitiveness; the prices and results of authorized and regulatory developments, together with authorized proceedings or regulatory or different governmental inquiries and proceedings and the decision thereof, the outcomes of regulatory examinations or opinions and the impact of, and our capacity to adjust to, any rules or regulatory orders or actions we’re or could turn into topic to; capacity to efficiently implement our initiatives to decrease our effectivity ratio; the results of and adjustments in commerce, financial and monetary insurance policies and legal guidelines, together with the rate of interest insurance policies of the Board of Governors of the Federal Reserve System (the “FRB” or the “Federal Reserve”); securities market and financial fluctuations, together with the anticipated alternative of the London Interbank Supplied Charge (“LIBOR”) Index and the affect on our loans and debt that are tied to that index and uncertainties concerning potential various reference charges, together with the Secured In a single day Financing Charge (“SOFR”); destructive traits in our market capitalization and opposed adjustments within the worth of the Firm’s widespread inventory; political instability; acts of conflict or terrorism; adjustments in shopper spending, borrowings and financial savings habits; failure to take care of efficient inside management over monetary reporting or disclosure controls and procedures; cybersecurity and knowledge privateness breaches and the consequence therefrom; the flexibility to handle deficiencies in our inside controls over monetary reporting or disclosure controls and procedures; technological adjustments and developments; adjustments within the aggressive surroundings amongst monetary holding corporations and different monetary service suppliers; the impact of adjustments in accounting insurance policies and practices, as could also be adopted by the regulatory businesses, in addition to the Public Firm Accounting Oversight Board (“PCAOB”), the Monetary Accounting Requirements Board (“FASB”) and different accounting normal setters and the fee and sources required to implement such adjustments; our capacity to draw and retain key personnel; adjustments in our personnel, group, compensation and profit plans; and our success at managing the dangers concerned within the foregoing gadgets.

For additional data with respect to elements that would trigger precise outcomes to materially differ from the expectations or projections acknowledged within the FLS, please see the Firm’s publicly obtainable Securities and Trade Fee filings, together with the Firm’s Type 10-Ok for the final fiscal yr and, specifically, the dialogue of “Danger Components” set forth therein. We urge traders to think about all of those elements rigorously in evaluating the FLS contained on this doc. FLS communicate solely as of the date on which such statements are made. We undertake no obligation to replace any FLS to replicate occasions or circumstances after the date on which such statements are made, or to replicate the prevalence of unanticipated occasions besides as required by legislation.