Central Pacific Financial Posts $22.8 Million in Third-Quarter Net Income
Key Facts
Central Pacific Financial reported on October 28 net income of $22.8 million and diluted earnings of $0.88 per share for the third quarter of 2026. In the year-earlier period, net income was $18.6 million and reported diluted earnings per share were $0.69. Excluding operations center integration expenses from the prior-period comparison, earnings per share were $0.73, the basis that explains the difference in the earnings growth rate from the reported comparison. The company said results included an increase in net interest income and margin during the quarter. The figures put the improvement in profitability in the context of the annual comparison and developments in lending and investment activity.
Net interest income was $64.5 million in the third quarter, up 5.2% from the same period a year earlier and 2.6% from the second quarter of 2026. Net interest margin reached 3.62%, an increase of 13 basis points year over year and 5 basis points from the previous quarter. The company attributed the quarterly improvement mainly to higher loan yields, along with an increase in average investment securities balances and the yields earned on them. In its statement, it said the increase was driven "primarily by higher loan yields and higher average balances and yields earned on investment securities." These factors reflect the sources of improvement the company identified in interest income and margin.
On efficiency, the efficiency ratio fell to 58.27% in the third quarter from 59.62% in the second quarter. Return on average assets was 1.22%, while return on average equity was 15.28%. The provision for credit losses declined to $1.9 million, compared with $4.4 million in the previous quarter and $4.2 million a year earlier. Nonperforming assets were also $14.0 million, or 0.19% of total assets, as of September 30, compared with $16.5 million and 0.22% on June 30. These indicators show developments in efficiency, credit provisions and asset quality during the period.
The company ended the quarter with deposits of $6.66 billion on September 30, down 0.5% from the previous quarter but up 1.3% from a year earlier. On the earnings call, it said higher-cost time deposits declined by $49.2 million during the quarter. Total loans were $5.31 billion, up about $5 million from the previous quarter but still about $54 million below the year-earlier level. Funded loan production was about $229 million, compared with $204 million in loans exiting the portfolio. The figures show differing movements in deposits and loans, with a modest quarterly increase in total loans.
The company continued returning capital to shareholders, repurchasing 294,110 shares during the quarter at a total cost of $11.2 million. A further $22.0 million remained available under the repurchase authorization on September 30. The board had raised the quarterly cash dividend 3.3% to $0.31 per share on October 27. The dividend is payable to shareholders of record on November 30, 2026, with payment scheduled for December 15. The steps combine share repurchases and an increased cash dividend, according to the earnings statement.
The leverage ratio was 9.7% on September 30, and the Common Equity Tier 1 capital ratio was 12.7%. Risk-based Tier 1 capital was also 13.6%, and total risk-based capital was 14.8%. Central Pacific Bank operates 27 branches and 56 ATMs in Hawaii, where the holding company is headquartered. The company had about $7.45 billion in assets on September 30. Looking ahead, the CEO said fourth-quarter net interest margin could be in the mid-3.60% range, and the expected expense growth for 2026 was narrowed to 2.0–2.5%.
In trading, CPF shares closed at $37.89 on October 28, after closing at $37.77, $37.69, $37.73 and $37.82 on October 22, 23, 26 and 27, respectively. A report published on October 28 had listed the share price at $37.42, down 1.06% from the previous close of $37.82. The company operates in Hawaii through its bank's network of branches and ATMs. The results provided details on earnings, margin, credit and funding, as well as the cash dividend and capital. The statement sets the dividend record and payment dates as November 30 and December 15, 2026.