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1. Company Snapshot

1.a. Company Description

Central Pacific Financial Corp.operates as the holding company for Central Pacific Bank that provides commercial banking products and services to businesses, professionals, and individuals in the United States.It offers various deposit products and services, including personal and business checking and savings accounts, money market accounts, and time certificates of deposit.


The company's lending activities comprise commercial loans, financial and agricultural loans, commercial and residential mortgages, and construction loans to small and medium-sized companies, business professionals, and real estate investors and developers, as well as home equity, and consumer loans to local homebuyers and individuals.It also provides debit cards, internet and mobile banking, cash management, full-service ATMs, digital banking services, traveler's checks, safe deposit boxes, international banking services, night depository facilities, foreign exchange and wire transfers, trust services, and retail brokerage services.In addition, the company offers wealth management products and services, including non-deposit investment products, annuities, insurance, investment management, asset custody, and general consultation and planning services.


As of December 31, 2021, it operated 30 branches and 69 automated teller machines in the state of Hawaii.The company was incorporated in 1954 and is headquartered in Honolulu, Hawaii.

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1.b. Last Insights on CPF

Central Pacific Financial Corp.'s recent performance was negatively driven by a decline in net income, which fell 22% year-over-year to $11.3 million in Q4 2024. The company's fully diluted earnings per share (EPS) also declined to $0.42, down from $0.55 in the year-ago quarter. Despite beating earnings estimates, the decrease in EPS and net income may have contributed to the company's recent performance.

1.c. Company Highlights

2. Central Pacific Financial Corp. Delivers Strong Q3 2025 Results

Central Pacific Financial Corp. reported a net income of $18.6 million or $0.69 per diluted share for the third quarter of 2025, with adjusted net income coming in at $19.7 million or $0.73 per diluted share, slightly missing analyst estimates of $0.74. The company's net interest income rose 2.5% to $61.3 million, driven by a net interest margin of 3.49%. Revenue growth was accompanied by a Return on Assets (ROA) of 1.01% and a Return on Equity (ROE) of 12.89%, indicating a strong profitability profile. The actual EPS of $0.73 is a key metric that reflects the company's ability to generate earnings for its shareholders.

Publication Date: Nov -04

📋 Highlights
  • Net Income Growth: Q3 net income reached $18.6M ($0.69/share) with adjusted net income at $19.7M ($0.73/share).
  • Balance Sheet Expansion: Deposit growth of $33M brought total deposits to $6.6B, driven by rising noninterest-bearing deposits.
  • Share Repurchase Activity: Repurchased 78,000 shares for $2.3M, leaving $23M remaining under the authorization.
  • Dividend Increase: Fourth-quarter dividend raised by 3.7% to $0.28/share, reflecting confidence in capital returns.
  • Loan Growth Strategy: Mainland-driven Q3 loan growth (industrial/multifamily) expected to balance with Hawaii market contributions in 2026.

Balance Sheet Growth and Capital Management

The company's balance sheet growth strategy continues to focus on deepening customer relationships and increasing market share within its core Hawaii market. Total deposits reached $6.6 billion, with a growth of $33 million during the quarter, and average noninterest-bearing deposits continued to grow. The company repurchased approximately 78,000 shares at a total cost of $2.3 million and has $23 million remaining repurchase authorization. The Board also increased the fourth quarter dividend by 3.7% to $0.28 per share, highlighting the company's commitment to returning capital to shareholders.

Loan Growth and Credit Quality

Loan growth was led by Mainland activity, particularly in the industrial and multifamily sectors, although the company anticipates a more balanced contribution between Mainland and Hawaii markets moving forward. The company's risk appetite is informed by its strategic goal of delivering acceptable risk-adjusted returns while maintaining a high level of solvency. Credit risk is measured and evaluated against expected results and established guidelines and limits, with credit costs staying within an expected range and the level of NPAs, past due loans, and criticized assets remaining low.

Valuation and Outlook

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.33, and a Dividend Yield of 3.69%, the stock appears to be reasonably valued. The company's guidance on deposit growth in 2026 and expectations of increased loan demand, particularly in Hawaii, as rates decline, are positive indicators for future growth. Analysts estimate revenue growth at 5.9% for next year, suggesting a positive outlook for the company's financial performance. As the company continues to execute on its strategies, investing in technology and people to drive efficiencies, it is well-positioned to deliver long-term value for its shareholders.

3. NewsRoom

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CPB (NYSE:CPF) Shares Cross Above Two Hundred Day Moving Average – Here’s What Happened

Dec -02

Source: defenseworld.net

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Meet 33 Ideal "Safer" November Small/MidCap Value DiviBuys Of The S&P600

Nov -26

Source: seekingalpha.com

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Central Pacific Financial Corp. (CPF) Q3 2025 Earnings Call Transcript

Oct -29

Source: seekingalpha.com

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Compared to Estimates, Central Pacific Financial (CPF) Q3 Earnings: A Look at Key Metrics

Oct -29

Source: zacks.com

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Central Pacific Financial (CPF) Lags Q3 Earnings Estimates

Oct -29

Source: zacks.com

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Central Pacific Financial Reports Third Quarter 2025 Earnings of $18.6 Million

Oct -29

Source: businesswire.com

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Central Pacific Financial Corp. Announces Conference Call to Discuss Third Quarter 2025 Financial Results

Oct -15

Source: businesswire.com

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Central Pacific Financial (CPF) Now Trades Above Golden Cross: Time to Buy?

Aug -26

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.77%)

6. Segments

Banking and Related Activities

Expected Growth: 4.77%

Central Pacific Financial Corp.'s 4.77% growth in Banking and Related Activities is driven by increased loan demand, improved asset quality, and expanded deposit base. Additionally, strategic cost management, enhanced digital banking capabilities, and a favorable interest rate environment have contributed to the segment's growth.

7. Detailed Products

Consumer Banking

Provides personal banking services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

Offers financial solutions for businesses, including cash management, commercial lending, and treasury management services.

Wealth Management

Provides investment and wealth management services, including brokerage, trust, and investment advisory services.

Mortgage Banking

Originates, sells, and services residential mortgage loans, as well as offers home equity loans and lines of credit.

Treasury Management

Provides cash management and treasury services, including account management, payment processing, and risk management solutions.

8. Central Pacific Financial Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Central Pacific Financial Corp. operates in a highly competitive market, but the threat of substitutes is mitigated by the company's strong brand recognition and customer loyalty.

Bargaining Power Of Customers

Central Pacific Financial Corp. has a large customer base, but the bargaining power of customers is high due to the availability of alternative financial services.

Bargaining Power Of Suppliers

Central Pacific Financial Corp. has a diversified supplier base, which reduces the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is moderate due to the regulatory barriers and capital requirements in the financial services industry.

Intensity Of Rivalry

The financial services industry is highly competitive, and Central Pacific Financial Corp. faces intense rivalry from established players and new entrants.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 24.02%
Debt Cost 6.85%
Equity Weight 75.98%
Equity Cost 9.52%
WACC 8.88%
Leverage 31.61%

11. Quality Control: Central Pacific Financial Corp. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Yield: 6.0

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A-Score: 6.7/10

Value: 6.6

Growth: 5.0

Quality: 7.0

Yield: 8.0

Momentum: 6.0

Volatility: 7.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

30.42$

Current Price

30.42$

Potential

-0.00%

Expected Cash-Flows