Central Pacific Financial (CPF) Q4 2024 earnings summary

Executive summary

• Reported Q4 2024 net income of $11.3M ($0.42/diluted share) and full year 2024 net income of $53.4M ($1.97/share); adjusted net income was $19.0M ($0.70/share) for Q4 and $63.4M ($2.34/share) for the year, excluding notable pre-tax items.

• Completed investment portfolio repositioning, incurring a $9.9M pre-tax loss in Q4, expected to increase annual net interest income by $2.7M starting 2025.

• Core deposits increased by $74.2M in Q4, supporting strong liquidity and capital positions.

• Board approved a 3.8% increase in quarterly dividend to $0.27/share and authorized a new $30M share repurchase program for 2025.

• Central Pacific Bank became a Federal Reserve member effective January 24, 2025.

Financial highlights

• Net interest income for Q4 2024 was $55.8M, up 3.6% sequentially; net interest margin rose to 3.17%, up 10 bps sequentially and 33 bps year-over-year.

• Total deposit portfolio grew by $61M, with total cost of deposits decreasing by 11 bps to 1.21% in Q4.

• Return on assets (ROA) for Q4 was 0.62% (adjusted 1.03%); return on equity (ROE) was 8.37% (adjusted 13.82%).

• Efficiency ratio improved to 64.65% (adjusted) in Q4 2024.

• Available liquidity sources total 113% of uninsured/uncollateralized deposits.

Outlook and guidance

• Loan growth is anticipated in 2025, with a healthy Q1 pipeline and optimism for continued momentum.

• Investment portfolio repositioning and higher yielding reinvestments expected to increase NIM by 4 bps and annual net interest income by $2.7M.

• Revenue growth is expected to outpace expense growth in 2025, supporting positive operating leverage.

• Net interest margin expected to remain strong, with potential for further expansion above previous guidance.