Central Pacific Financial Corp (CPF) Reports Q3 Earnings of $13.1 Million

• CPF reported a net income of $13.1 million, or $0.49 per diluted share for Q3 2023

• Total loans decreased by $12.0 million, while total deposits increased by $69.0 million in the third quarter

• The company maintains a solid liquidity position with $438.7 million in cash on balance sheet

• The Board of Directors approved a quarterly cash dividend of $0.26 per share

Central Pacific Financial Corp (NYSE:CPF) released its earnings report for the third quarter of 2023 on October 25, 2023. The company reported a net income of $13.1 million, or $0.49 per diluted share, a decrease from the previous quarter’s net income of $14.5 million, or EPS of $0.53, and the year-ago quarter’s net income of $16.7 million, or EPS of $0.61.

Financial Performance and Challenges

Despite the decrease in net income, CPF maintained a solid liquidity position with $438.7 million in cash on the balance sheet and $2.47 billion in total other liquidity sources. The company’s total loans decreased by $12.0 million in the third quarter, while total deposits increased by $69.0 million. The total deposit cost was 1.08% in the third quarter.

Financial Achievements

CPF’s Board of Directors approved a quarterly cash dividend of $0.26 per share. The company’s return on assets (ROA) was 0.70%, return on equity (ROE) was 10.95%, and net interest margin (NIM) was 2.88% for the quarter. The ratio of nonperforming assets to total assets was 0.09% at the end of September 2023.

Income Statement and Balance Sheet Highlights

Net interest income was $51.9 million for the third quarter of 2023, a decrease of $0.8 million, or 1.5% from the previous quarter, and a decrease of $3.4 million, or 6.2% from the year-ago quarter. The provision for credit losses was $4.9 million in the third quarter of 2023, compared to a provision of $4.3 million in the previous quarter and a provision of $0.4 million in the year-ago quarter.

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Company’s Analysis and Commentary

“In the third quarter, Central Pacific continued our focus on maintaining strong liquidity and capital given the ongoing market uncertainties,” said Arnold Martines, President and Chief Executive Officer. “We are pleased with our success in growing our deposit portfolio while managing our total deposit costs. Our asset quality remained strong, our loan portfolio is well-diversified and we continue to effectively manage our expenses.”

Important Financial Tables

CPF’s total assets of $7.64 billion at the end of September 2023 increased by $70.3 million, or 0.9% from $7.57 billion at the end of June 2023, and increased by $300.3 million, or 4.1% from $7.34 billion at the end of September 2022. Total loans, net of deferred fees and costs, of $5.51 billion at the end of September 2023 decreased by $12.0 million, or 0.2% from $5.52 billion at the end of June 2023, and increased by $86.5 million, or 1.6% from $5.42 billion at the end of September 2022.

Looking Ahead

CPF remains committed to maintaining strong liquidity and capital amidst ongoing market uncertainties. The company’s focus on growing its deposit portfolio, managing deposit costs, maintaining strong asset quality, and effectively managing expenses will continue to guide its operations in the coming quarters.

This article first appeared on GuruFocus.