In the fourth quarter of 2024, Central Pacific Financial Corp (NYSE: CPF) demonstrated robust financial performance, with notable improvements in net interest margin and core deposit growth. The company reported a net income of $11.3 million or $0.42 per diluted share for Q4 2024. Adjusted net income, excluding investment securities loss, stood at $19 million or $0.70 per diluted share. For the full year, the net income was $53.4 million or $1.97 per diluted share, while adjusted net income reached $63.4 million or $2.34 per diluted share. Despite challenges, including a $9.9 million pretax loss from investment repositioning, CPF showed resilience and strategic foresight, setting the stage for significant income accretion in 2025.

The fourth quarter of 2024 marked a period of strategic adjustments for CPF. The bank achieved a net interest income of $55.8 million, reflecting a sequential increase of $1.9 million. A key highlight was the expansion of the net interest margin to 3.17%, up by 10 basis points from the previous quarter. This improvement underscores CPF's effective management of its balance sheet and its ability to capitalize on favorable market conditions. Additionally, total deposits grew by $61 million, driven by a substantial core deposit growth of $74.2 million. Loan portfolio growth also saw a modest increase of $9.8 million or 0.2% sequentially, signaling cautious optimism about future lending opportunities.

The company's proactive approach to managing its investment portfolio led to an anticipated $9.9 million pretax loss due to repositioning. However, this move is expected to yield substantial benefits in the coming year. CFO David Morimoto highlighted that the team has been successful in growing core deposits while reducing total deposit costs. Seasonal DDA deposits contributed significantly to this growth, but the bank's market position and relationship-building efforts have been equally crucial. Chairman, President, and CEO Arnold Martines expressed confidence in loan growth prospects, particularly in the commercial and commercial real estate segments, where demand remains healthy. The addition of new lending team members further supports these growth plans for 2025.

CPF's credit quality remained stable, with net charge-offs increasing slightly to 29 basis points on annualized average loans. Nonperforming assets stood at $11 million or 15 basis points of total assets, indicating well-secured positions. The allowance for credit loss was set at $59.2 million or 1.11% of outstanding loans, ensuring adequate coverage against potential risks. Ralph Mesick, Chief Risk Officer, noted that recent credit issues were isolated incidents, and consumer charge-offs have decreased, with improving past due trends. The bank's cautious optimism extends to its outlook for credit costs in 2025.

Reflecting its strengthening financial position, CPF declared a quarterly cash dividend of $0.27 per share, marking a $0.01 increase from the previous quarter. The company also authorized a share repurchase program of up to $30 million for 2025. These actions underscore CPF's commitment to enhancing shareholder value and capital strength. Overall, the fourth quarter results indicate that CPF is well-positioned to leverage Hawaii's resilient economy, characterized by strong construction, military spending, and an improving tourism sector, to drive future growth and profitability.