Central Pacific Financial (CPF) Q4 2024 earnings summary

Executive summary

• Reported net income of $11.3M for Q4 2024 and $53.4M for full year 2024; adjusted net income was $19.0M for Q4 and $63.4M for 2024, excluding non-recurring items.

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

• Core deposits increased by $74.2M from the prior quarter; Board approved a 3.8% increase in quarterly dividend to $0.27/share.

• Entering 2025 with optimism, supported by a resilient Hawaii economy, low unemployment (3.0%), strong construction, and tourism sectors.

• Central Pacific Bank became a member of the Federal Reserve System in January 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.

• Full year 2024 net income was $53.4M ($1.97 per share); adjusted full year net income was $63.4M ($2.34 per share).

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

• Total deposit portfolio grew by $61M, with core deposits up $74.2M; total deposit cost declined 11 bps to 1.21% in Q4.

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

Outlook and guidance

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

• Expecting net loan growth in 2025, with a healthy Q1 pipeline and proactive lending team expansion.

• Revenue growth anticipated to outpace expense growth in 2025, targeting positive operating leverage.

• Net interest margin expected to remain strong, with potential to exceed previous guidance range.

• Effective tax rate projected at 21%-23% going forward.