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The Central Bank of the Pacific recorded strong loan growth and improved cash flow in the fourth quarter and said it expects Hawaii to fare better than the rest of the country as it continues to keep raising interest rates by the Federal Reserve to dampen inflation.
The state’s fourth-largest bank was due to announce this morning that its revenue fell 9.6% from the first quarter of the year but its full-year revenue rose 45% over 2021 after the Paycheck Protection Program interest and fees, and changes made. in the bank’s loan-loss provision, it is excluded.
“We had a good fourth quarter,” said President and CEO Arnold Martines, who took over as CEO on Jan. 1 for Paul Yonamine, who retired. “It’s been a really good year for us. Overall, 2022 proved to be an exceptional year for CPB from a performance perspective. … Our strategic pillars continue to be the home, small business, digital and enterprise markets of Japan … and, of course, continue to be connected to the community.”
Central Pacific Financial Corp., the holding company, reported earnings of $20.2 million, or 74 cents per share, to exceed 60 cents per share. That compares to net income of $22.3 million, or 80 cents per share, last year.
Net income was affected by $571,000 that the bank set aside last quarter for potential loan losses, compared to a year earlier when CPB released $7.7 million from his loan-loss allowance in his income statement. In addition, the bank earned $100,000 in Paycheck Protection Program interest and fees last quarter, compared to $4.7 million a year earlier.
For the full year, CPB’s earnings fell 7.5% to $73.9 million, or $2.68 per share, from $79.9 million, or $2.83 per share, in 2021. reserves and PPP interest income and fees. In 2022 the bank received $ 3.6 million in PPP interest income and fees, compared to $ 26.4 million for the whole of 2021 – almost a $ 23 million decrease. In addition, the bank issued its statement of income of only $ 1.3 million from its reserve fund in 2022 after providing $ 14.6 million in 2021.
“When you adjust for a change in terms and the change in PPP, if you exclude those two lines and you look at the main income, the main income of the bank increased to $ 29.1 million , or 45%, year after year,” said Chief Financial Officer David Morimoto. “We think that’s a really cool situation.”
Loans increased 8.9% to $5.56 billion from last year and increased 2.5% from the third quarter – an annual increase of 10%.
“We have been growing at a low annual rate, and we expect it to slow down in 2023 because of the environment,” Morimoto said. “Interest rates are high, which means residential mortgage growth is definitely going to be very subdued. We expect the national economy to slow down, although we expect Hawaii to be more prosperous due to tourism, the military and construction.
The bank’s interest rate – the spread between what the bank earns on loans and pays on deposits – rose 9 basis points to 3.17% from 3.08% in the first quarter. Its interest income rose 6% to $56.3 million from $53.1 million in the first quarter.
Martines also said that the bank will open a new branch in Kahului to replace the current branch. The new branch, at 145 Hookele Street, is less than 2 miles away from the old branch at 85 W. Kaahumanu Ave. The new branch is expected to open in mid-2024.
Central Pacific maintained its quarterly dividend at 26 cents per share. It will be paid on March 15 to shareholders of record at the close of business February 28. The bank also revealed that the board of directors authorized the repurchase of $ 25 million of its common shares.
The bank’s shares closed Tuesday down 17 cents at $20.90.
FOUR-QUARTER SHOPPING
$20.2 million
YEAR-PRIOR NET
$22.3 million