Central Pacific Financial Corp. (NYSE:CPF) Q1 2018 Earnings Conference Call - Final Transcript

Apr 25, 2018 • 01:00 pm ET


Central Pacific Financial Corp. (NYSE:CPF) Q1 2018 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Central Pacific Financial Corp. First Quarter 2018 Conference Call. Today's presentation, all parties will be in a listen only mode. Following the presentation, the conference will be open for questions. This call is being recorded and will be available for replay, shortly after its completion on the Company's website at www.centralpacificbank.com.

I'd like to turn the call over to Mr. David Morimoto, Executive Vice President, Chief Financial Officer. Please go ahead.

David Morimoto

Thank you, Laura, and thank you all for joining us as we review our financial results for the first quarter of 2018. With me this morning are, Catherine Ngo, President and Chief Executive Officer; and Anna Hu, Executive Vice President and Chief Credit Officer.

During the course of today's call, management may make forward-looking statements. While we believe these statements are based on reasonable assumptions, they involve risks that may cause actual results to differ materially from those projected. For a complete discussion of risks related to forward-looking statements, please refer to our recent filings with the SEC.

And now, I'll turn the call over to Catherine.

Catherine Ngo

Thank you, David, and good morning, everyone. First quarter net income of $14.3 million reflected an increase of 9.2% on a year-over-year basis. On sequential quarter basis, the dramatic change in net income was primarily due to the $7.4 million non-cash income tax expense taken in the previous quarter, related to the revaluation of our net deferred tax assets or DTA. As a result of the newly implemented tax reform legislation, the current quarter net income included an income tax benefit of $700,000 that resulted from a further refinement of our estimated DTA evaluation.

Loan and deposit growth continued to be stable in the first quarter. Total loans increased by 1.2% from the previous quarter-end and by 7.6% from the same period a year-ago. Loan growth from the previous quarter included an increase in Hawaii by 1.8% and a decrease on the mainland US by 3.5%. The key drivers of loan growth on a sequential quarter basis were the increases of 3.2% in the home equity loans and line, 2.9% in commercial mortgages, and 2.5% in commercial and industrial loans. Asset quality remained strong with non-performing assets at 0.06% of total assets.

Total deposits and core deposits increased by 0.5% and 0.4%, respectively compared to the previous quarter, and by 4.2% and 5.1% compared to the first quarter of last year. With respect to core deposits on a sequential quarter basis, there was a slight shift from non-interest bearing demand to interest bearing demand money market and savings, deposits.

With the competitive pricing for loans and deposits in our marketplace, we have experienced the compression in our net interest margin during the quarter. This is an area that we are placing a priority on addressing.

The quarterly cash dividend was increased for the second consecutive quarter to $0.21 from $0.19 per share in the previous quarter or by 10.5%