Central Pacific Financial (CPF) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $15.8 million ($0.58 per diluted share), up 22% sequentially and 9.3% year-over-year, with strong NIM expansion and core deposit growth despite economic headwinds.

• Recognized by Forbes, Newsweek, and Honolulu Star-Advertiser as one of America's best banks and best in-state bank for Hawaii in 2024.

• Board declared a quarterly cash dividend of $0.26 per share.

• Core deposits increased by $16.7 million sequentially, while total deposits declined due to reduction in government time deposits.

• Net charge-offs decreased to $3.8 million from $4.5 million in the prior quarter.

Financial highlights

• Net interest income for Q2 2024 was $51.9 million, up $1.7 million sequentially but down 1.5% year-over-year; NIM increased to 2.97%, up 14 basis points sequentially.

• Pre-provision net revenue reached $22.9 million, up from $20.9 million in Q1 2024.

• Return on average assets was 0.86% and return on average equity was 12.42%.

• Efficiency ratio was 64.26%, reflecting higher operating expenses.

• Allowance for credit losses was $62.2 million, or 1.16% of loans.

Outlook and guidance

• Management expects modest loan growth in the second half of 2024 as net loan decline slows, with NIM guidance of 3%-3.10% incorporating two 25 basis point Fed rate cuts.

• Hawaii’s economy is projected to remain stable, supported by low unemployment (2.9%), strong real estate, and ongoing tourism recovery.

• Anticipates continued strong credit quality and stable effective tax rate in the 23%-25% range.

• The company continues to monitor interest rate trends and expects deposit mix shifts and margin pressures to persist.

• Forward-looking statements highlight risks from economic conditions, interest rates, regulatory changes, and local market factors.