T
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
£
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Hawaii
|
99-0212597
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
Large
accelerated filer T
|
Accelerated
filer £
|
Non-accelerated
filer £
|
Smaller
reporting company £
|
Part
I.
|
Financial
Information
|
Item
I.
|
Financial
Statements (Unaudited)
|
Consolidated
Balance Sheets
September
30, 2008 and December 31, 2007
|
|
Consolidated
Statements of Operations
Three
and nine months ended September 30, 2008 and 2007
|
|
Consolidated
Statements of Cash Flows
Nine
months ended September 30, 2008 and 2007
|
|
Notes
to Consolidated Financial Statements
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
Item
4.
|
Controls
and Procedures
|
Part
II.
|
Other
Information
|
Item
1.
|
Legal
Proceedings
|
Item
1A.
|
Risk
Factors
|
Item
2.
|
Unregistered
Sales of Equity and Use of Proceeds
|
Item
3.
|
Defaults
Upon Senior Securities
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
Item
5.
|
Other
Information
|
Item
6.
|
Exhibits
|
Signatures
|
|
Exhibit
Index
|
CENTRAL
PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED
BALANCE SHEETS
|
|||||||
(Unaudited)
|
|||||||
September
30,
|
December
31,
|
||||||
(Dollars
in thousands)
|
2008
|
2007
|
|||||
Assets
|
|||||||
Cash
and due from banks
|
$ | 68,293 | $ | 79,088 | |||
Interest-bearing
deposits in other banks
|
133 | 241 | |||||
Federal
funds sold
|
12,000 | 2,800 | |||||
Investment
securities:
|
|||||||
Available
for sale
|
779,016 | 835,130 | |||||
Held
to maturity (fair value of $23,896 at September 30, 2008 and $46,077 at
December 31, 2007)
|
23,968 | 46,124 | |||||
Total
investment securities
|
802,984 | 881,254 | |||||
Loans
held for sale
|
36,470 | 37,572 | |||||
Loans
and leases
|
4,080,266 | 4,141,705 | |||||
Less
allowance for loan and lease losses
|
100,227 | 92,049 | |||||
Net
loans and leases
|
3,980,039 | 4,049,656 | |||||
Premises
and equipment, net
|
81,918 | 82,841 | |||||
Accrued
interest receivable
|
22,591 | 26,041 | |||||
Investment
in unconsolidated subsidiaries
|
16,104 | 17,404 | |||||
Other
real estate
|
11,590 | - | |||||
Goodwill
|
152,820 | 244,702 | |||||
Other
intangible assets
|
43,519 | 39,972 | |||||
Bank-owned
life insurance
|
134,200 | 131,454 | |||||
Federal
Home Loan Bank stock
|
48,797 | 48,797 | |||||
Income
tax receivable
|
41,608 | 1,488 | |||||
Other
assets
|
51,238 | 37,076 | |||||
Total
assets
|
$ | 5,504,304 | $ | 5,680,386 | |||
Liabilities
and Shareholders' Equity
|
|||||||
Deposits:
|
|||||||
Noninterest-bearing
demand
|
$ | 596,907 | $ | 665,034 | |||
Interest-bearing
demand
|
457,906 | 461,175 | |||||
Savings
and money market
|
1,067,690 | 1,178,855 | |||||
Time
|
1,654,569 | 1,697,655 | |||||
Total
deposits
|
3,777,072 | 4,002,719 | |||||
Short-term
borrowings
|
278,205 | 16,000 | |||||
Long-term
debt
|
881,534 | 916,019 | |||||
Minority
interest
|
10,055 | 13,104 | |||||
Other
liabilities
|
47,367 | 58,141 | |||||
Total
liabilities
|
4,994,233 | 5,005,983 | |||||
Shareholders'
equity:
|
|||||||
Preferred
stock, no par value, authorized 1,000,000 shares, none
issued
|
- | - | |||||
Common
stock, no par value, authorized 100,000,000 shares, issued and
outstanding
|
|||||||
28,729,933
shares at September 30, 2008 and 28,756,647 shares at December 31,
2007
|
403,117 | 403,304 | |||||
Surplus
|
55,639 | 54,669 | |||||
Retained
earnings
|
63,489 | 222,644 | |||||
Accumulated
other comprehensive loss
|
(12,174 | ) | (6,214 | ) | |||
Total
shareholders' equity
|
510,071 | 674,403 | |||||
Total
liabilities and shareholders' equity
|
$ | 5,504,304 | $ | 5,680,386 | |||
See
accompanying notes to consolidated financial statements.
|
CENTRAL
PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
|
||||||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||||||||
(Unaudited)
|
||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||
September
30,
|
September
30,
|
|||||||||||||
(Amounts
in thousands, except per share data)
|
2008
|
2007
|
2008
|
2007
|
||||||||||
Interest
income:
|
||||||||||||||
Interest
and fees on loans and leases
|
$ | 64,224 | $ | 78,325 | $ | 200,195 | $ | 231,561 | ||||||
Interest
and dividends on investment securities:
|
||||||||||||||
Taxable
interest
|
8,696 | 8,386 | 27,275 | 25,964 | ||||||||||
Tax-exempt
interest
|
1,351 | 1,343 | 4,156 | 4,071 | ||||||||||
Dividends
|
7 | 83 | 42 | 176 | ||||||||||
Interest
on deposits in other banks
|
4 | 82 | 11 | 156 | ||||||||||
Interest
on Federal funds sold and securities purchased under agreements to
resell
|
33 | 125 | 76 | 244 | ||||||||||
Dividends
on Federal Home Loan Bank stock
|
171 | 73 | 464 | 195 | ||||||||||
Total
interest income
|
74,486 | 88,417 | 232,219 | 262,367 | ||||||||||
Interest
expense:
|
||||||||||||||
Interest
on deposits:
|
||||||||||||||
Demand
|
251 | 139 | 567 | 418 | ||||||||||
Savings
and money market
|
3,171 | 6,321 | 9,936 | 18,773 | ||||||||||
Time
|
10,932 | 17,925 | 37,367 | 51,182 | ||||||||||
Interest
on short-term borrowings
|
1,583 | 302 | 5,863 | 1,110 | ||||||||||
Interest
on long-term debt
|
7,965 | 10,900 | 25,661 | 31,484 | ||||||||||
Total
interest expense
|
23,902 | 35,587 | 79,394 | 102,967 | ||||||||||
Net
interest income
|
50,584 | 52,830 | 152,825 | 159,400 | ||||||||||
Provision
for loan and lease losses
|
22,900 | 21,200 | 144,972 | 24,800 | ||||||||||
Net
interest income after provision for loan and lease losses
|
27,684 | 31,630 | 7,853 | 134,600 | ||||||||||
Other
operating income:
|
||||||||||||||
Service
charges on deposit accounts
|
3,702 | 3,581 | 10,756 | 10,488 | ||||||||||
Other
service charges and fees
|
3,501 | 3,281 | 10,626 | 10,052 | ||||||||||
Income
from fiduciary activities
|
945 | 968 | 2,940 | 2,583 | ||||||||||
Equity
in earnings of unconsolidated subsidiaries
|
103 | 169 | 517 | 593 | ||||||||||
Fees
on foreign exchange
|
142 | 149 | 448 | 541 | ||||||||||
Investment
securities gains
|
12 | - | 265 | - | ||||||||||
Loan
placement fees
|
201 | 248 | 567 | 790 | ||||||||||
Net
gain on sales of residential loans
|
1,807 | 1,116 | 5,846 | 3,886 | ||||||||||
Income
from bank-owned life insurance
|
888 | 1,861 | 3,603 | 4,075 | ||||||||||
Other
|
409 | 379 | 2,352 | 1,434 | ||||||||||
Total
other operating income
|
11,710 | 11,752 | 37,920 | 34,442 | ||||||||||
Other
operating expense:
|
||||||||||||||
Salaries
and employee benefits
|
17,558 | 16,240 | 53,570 | 49,534 | ||||||||||
Net
occupancy
|
3,261 | 2,624 | 9,380 | 7,721 | ||||||||||
Equipment
|
1,420 | 1,255 | 4,248 | 3,810 | ||||||||||
Amortization
of other intangible assets
|
1,237 | 1,162 | 3,687 | 3,542 | ||||||||||
Communication
expense
|
1,155 | 1,032 | 3,365 | 3,118 | ||||||||||
Legal
and professional services
|
3,209 | 2,223 | 8,237 | 6,660 | ||||||||||
Computer
software expense
|
865 | 869 | 2,537 | 2,561 | ||||||||||
Advertising
expense
|
1,016 | 661 | 2,398 | 1,919 | ||||||||||
Goodwill
impairment
|
- | - | 94,279 | - | ||||||||||
Foreclosed
asset expense
|
83 | - | 6,657 | - | ||||||||||
Loss
on sales of commercial real estate loans
|
203 | - | 1,874 | - | ||||||||||
Write
down of assets
|
100 | - | 22,524 | - | ||||||||||
Other
|
7,358 | 5,487 | 16,452 | 14,495 | ||||||||||
Total
other operating expense
|
37,465 | 31,553 | 229,208 | 93,360 | ||||||||||
Income
(loss) before income taxes
|
1,929 | 11,829 | (183,435 | ) | 75,682 | |||||||||
Income
tax expense (benefit)
|
(1,112 | ) | 2,722 | (41,876 | ) | 25,424 | ||||||||
Net
income (loss)
|
$ | 3,041 | $ | 9,107 | $ | (141,559 | ) | $ | 50,258 | |||||
Per
share data:
|
||||||||||||||
Basic
earnings (loss) per share
|
$ | 0.11 | $ | 0.30 | $ | (4.94 | ) | $ | 1.65 | |||||
Diluted
earnings (loss) per share
|
0.11 | 0.30 | (4.94 | ) | 1.64 | |||||||||
Cash
dividends declared
|
0.10 | 0.25 | 0.60 | 0.73 | ||||||||||
Shares
used in computation:
|
||||||||||||||
Basic
shares
|
28,665 | 30,192 | 28,668 | 30,480 | ||||||||||
Diluted
shares
|
28,699 | 30,378 | 28,668 | 30,707 | ||||||||||
See
accompanying notes to consolidated financial
statements.
|
CENTRAL
PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||
(Unaudited)
|
|||||||
Nine
Months Ended September 30,
|
|||||||
(Dollars
in thousands)
|
2008
|
2007
|
|||||
Cash
flows from operating activities:
|
|||||||
Net
income (loss)
|
$ | (141,559 | ) | $ | 50,258 | ||
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities:
|
|||||||
Provision
for loan and lease losses
|
144,972 | 24,800 | |||||
Depreciation
and amortization
|
5,964 | 5,303 | |||||
Goodwill
impairment
|
94,279 | - | |||||
Write
down of assets
|
22,524 | - | |||||
Foreclosed
asset expense
|
6,657 | - | |||||
Amortization
of other intangible assets
|
3,687 | 3,542 | |||||
Net
amortization of investment securities
|
1,074 | 1,591 | |||||
Share-based
compensation
|
1,764 | 2,920 | |||||
Net
gain on investment securities
|
(265 | ) | - | ||||
Deferred
income tax benefit
|
(11,889 | ) | (6,521 | ) | |||
Net
gain on sales of residential loans
|
(5,846 | ) | (3,886 | ) | |||
Loss
on sale of commercial real estate loans
|
1,874 | - | |||||
Proceeds
from sales of trading securities
|
4,986 | - | |||||
Proceeds
from sales of loans held for sale
|
1,147,478 | 688,923 | |||||
Originations
of loans held for sale
|
(973,176 | ) | (689,756 | ) | |||
Tax
benefits from share-based compensation
|
(40 | ) | (10 | ) | |||
Equity
in earnings of unconsolidated subsidiaries
|
(517 | ) | (593 | ) | |||
Increase
in cash surrender value of bank-owned life insurance
|
(3,589 | ) | (4,124 | ) | |||
Increase
in income tax receivable
|
(40,120 | ) | (2,283 | ) | |||
Net
change in other assets and liabilities
|
(9,630 | ) | (2,178 | ) | |||
Net
cash provided by operating activities
|
248,628 | 67,986 | |||||
Cash
flows from investing activities:
|
|||||||
Proceeds
from maturities of and calls on investment securities available for
sale
|
413,915 | 520,640 | |||||
Proceeds
from sales of investment securities available for sale
|
10,735 | - | |||||
Purchases
of investment securities available for sale
|
(369,131 | ) | (485,956 | ) | |||
Proceeds
from maturities of and calls on investment securities held to
maturity
|
21,648 | 17,657 | |||||
Proceeds
from sales of investment securities held to maturity
|
454 | - | |||||
Net
loan originations
|
(435,078 | ) | (220,098 | ) | |||
Purchase
of loan portfolio
|
- | (10,496 | ) | ||||
Proceeds
from sales of loans originated for investment
|
111,471 | - | |||||
Proceeds
from sales of securitized residential mortgage loans
|
20,838 | - | |||||
Proceeds
from sale of other real estate
|
2,000 | - | |||||
Proceeds
from bank-owned life insurance
|
843 | 1,364 | |||||
Purchase
of bank-owned life insurance
|
- | (25,000 | ) | ||||
Purchases
of premises and equipment
|
(5,041 | ) | (8,136 | ) | |||
Distributions
from unconsolidated subsidiaries
|
656 | 596 | |||||
Contributions
to unconsolidated subsidiaries
|
(846 | ) | (5,294 | ) | |||
Acquisition
of businesses and minority interests
|
(6,738 | ) | - | ||||
Net
cash used in investing activities
|
(234,274 | ) | (214,723 | ) | |||
Cash
flows from financing activities:
|
|||||||
Net
increase (decrease) in deposits
|
(225,647 | ) | 97,776 | ||||
Proceeds
from long-term debt
|
30,000 | 150,000 | |||||
Repayments
of long-term debt
|
(64,111 | ) | (73,046 | ) | |||
Net
increase (decrease) in short-term borrowings
|
262,205 | (7,063 | ) | ||||
Cash
dividends paid
|
(17,240 | ) | (22,274 | ) | |||
Tax
benefits from share-based compensation
|
40 | 10 | |||||
Repurchases
of common stock
|
(1,824 | ) | (31,075 | ) | |||
Proceeds
from issuance of common stock and stock option exercises
|
520 | 2,261 | |||||
Net
cash provided by (used in) financing activities
|
(16,057 | ) | 116,589 | ||||
Net
decrease in cash and cash equivalents
|
(1,703 | ) | (30,148 | ) | |||
Cash
and cash equivalents at beginning of period
|
82,129 | 135,648 | |||||
Cash
and cash equivalents at end of period
|
$ | 80,426 | $ | 105,500 | |||
Supplemental
disclosure of cash flow information:
|
|||||||
Cash
paid during the period for:
|
|||||||
Interest
|
$ | 85,751 | $ | 100,488 | |||
Income
taxes
|
13,798 | 24,711 | |||||
Cash
received during the period for:
|
|||||||
Income
taxes
|
1,820 | - | |||||
Supplemental
disclosure of noncash investing and financing activities:
|
|||||||
Net
change in common stock held by directors' deferred compensation
plan
|
$ | 73 | $ | 33 | |||
Net
reclassification of loans to other real estate
|
17,490 | - | |||||
Net
transfer of loans to loans held for sale
|
167,354 | - | |||||
Securitization
of residential mortgage loans into trading mortgage backed
securities
|
4,995 | - | |||||
Securitization
of residential mortgage loans into available for sale mortgage backed
securities
|
10,936 | - | |||||
See
accompanying notes to consolidated financial statements.
|
·
|
SFAS
157 – Statement of Financial Accounting Standards No. 157, “Fair
Value Measurements,”
|
·
|
SFAS
159 – Statement of Financial Accounting Standards No. 159, “The Fair
Value Option for Financial Assets and Financial
Liabilities,”
|
·
|
EITF
06-10 – Emerging Issues Task Force Issue No. 06-10, “Accounting for
Deferred Compensation and Postretirement Benefit Aspects of Collateral
Assignment Split-Dollar Life Insurance Arrangements,”
and
|
·
|
SAB
109 – Staff Accounting Bulletin No. 109, “Written Loan Commitments
Recorded at Fair Value Through
Earnings.”
|
Gross
|
Gross
|
|
||||||||||||
Amortized
|
unrealized
|
unrealized
|
Estimated
|
|||||||||||
cost
|
gains
|
losses
|
fair
value
|
|||||||||||
(Dollars
in thousands)
|
||||||||||||||
September
30, 2008
|
||||||||||||||
Held to
Maturity
|
||||||||||||||
U.S.
Government sponsored entities debt securities
|
$ | 8,623 | $ | 7 | $ | - | $ | 8,630 | ||||||
U.S.
Government sponsored entities mortgage-backed securities
|
7,261 | 4 | (104 | ) | 7,161 | |||||||||
States
and political subdivisions
|
8,084 | 21 | - | 8,105 | ||||||||||
Total
|
$ | 23,968 | $ | 32 | $ | (104 | ) | $ | 23,896 | |||||
Available for
Sale
|
||||||||||||||
U.S.
Government sponsored entities debt securities
|
$ | 99,061 | $ | 315 | $ | (1,378 | ) | $ | 97,998 | |||||
U.S.
Government sponsored entities mortgage-backed securities
|
446,695 | 2,569 | (2,627 | ) | 446,637 | |||||||||
States
and political subdivisions
|
129,357 | 602 | (3,552 | ) | 126,407 | |||||||||
Privately-issued
mortgage-backed securities
|
113,786 | - | (6,737 | ) | 107,049 | |||||||||
Other
|
1,026 | - | (101 | ) | 925 | |||||||||
Total
|
$ | 789,925 | $ | 3,486 | $ | (14,395 | ) | $ | 779,016 | |||||
December
31, 2007
|
||||||||||||||
Held to
Maturity
|
||||||||||||||
U.S.
Government sponsored entities debt securities
|
$ | 26,844 | $ | - | $ | (68 | ) | $ | 26,776 | |||||
U.S.
Government sponsored entities mortgage-backed securities
|
9,637 | 9 | (41 | ) | 9,605 | |||||||||
States
and political subdivisions
|
9,643 | 53 | - | 9,696 | ||||||||||
Total
|
$ | 46,124 | $ | 62 | $ | (109 | ) | $ | 46,077 | |||||
Available for
Sale
|
||||||||||||||
U.S.
Government sponsored entities debt securities
|
$ | 79,563 | $ | 539 | $ | - | $ | 80,102 | ||||||
U.S.
Government sponsored entities mortgage-backed securities
|
484,012 | 1,644 | (2,229 | ) | 483,427 | |||||||||
States
and political subdivisions
|
147,559 | 1,251 | (672 | ) | 148,138 | |||||||||
Privately-issued
mortgage-backed securities
|
123,499 | 401 | (1,167 | ) | 122,733 | |||||||||
Other
|
898 | - | (168 | ) | 730 | |||||||||
Total
|
$ | 835,531 | $ | 3,835 | $ | (4,236 | ) | $ | 835,130 |
September
30, 2008
|
||||||
Amortized
|
Estimated
|
|||||
cost
|
fair
value
|
|||||
(Dollars
in thousands)
|
||||||
Held
to Maturity
|
||||||
Due
in one year or less
|
$ | 11,498 | $ | 11,518 | ||
Due
after one year through five years
|
1,064 | 1,072 | ||||
Due
after five years through ten years
|
922 | 922 | ||||
Due
after ten years
|
3,223 | 3,223 | ||||
Mortgage-backed
securities
|
7,261 | 7,161 | ||||
Total
|
$ | 23,968 | $ | 23,896 | ||
Available
for Sale
|
||||||
Due
in one year or less
|
$ | 5,408 | $ | 5,460 | ||
Due
after one year through five years
|
60,902 | 61,324 | ||||
Due
after five years through ten years
|
112,387 | 110,922 | ||||
Due
after ten years
|
49,721 | 46,699 | ||||
Mortgage-backed
securities
|
560,481 | 553,686 | ||||
Other
|
1,026 | 925 | ||||
Total
|
$ | 789,925 | $ | 779,016 |
Less
than 12 months
|
12
months or longer
|
Total
|
||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||
Description of
Securities
|
Fair
Value
|
Losses
|
Fair
Value
|
Losses
|
Fair
Value
|
Losses
|
||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
At September 30,
2008:
|
||||||||||||||||||||||||
U.S.
Government sponsored entities
|
||||||||||||||||||||||||
debt
securities
|
$ | 37,629 | $ | (1,378 | ) | $ | - | $ | - | $ | 37,629 | $ | (1,378 | ) | ||||||||||
U.S.
Government sponsored entities
|
||||||||||||||||||||||||
mortgage-backed
securities
|
211,190 | (1,848 | ) | 35,800 | (883 | ) | 246,990 | (2,731 | ) | |||||||||||||||
States
and political subdivisions
|
61,234 | (3,518 | ) | 2,084 | (34 | ) | 63,318 | (3,552 | ) | |||||||||||||||
Privately
issued mortgage backed-securities
|
52,414 | (4,988 | ) | 54,635 | (1,749 | ) | 107,049 | (6,737 | ) | |||||||||||||||
Other
|
925 | (101 | ) | - | - | 925 | (101 | ) | ||||||||||||||||
Total
temporarily impaired securities
|
$ | 363,392 | $ | (11,833 | ) | $ | 92,519 | $ | (2,666 | ) | $ | 455,911 | $ | (14,499 | ) | |||||||||
At December 31,
2007:
|
||||||||||||||||||||||||
U.S.
Government sponsored entities
|
||||||||||||||||||||||||
debt
securities
|
$ | - | $ | - | $ | 26,776 | $ | (68 | ) | $ | 26,776 | $ | (68 | ) | ||||||||||
U.S.
Government sponsored entities
|
||||||||||||||||||||||||
mortgage-backed
securities
|
44,436 | (93 | ) | 200,045 | (2,177 | ) | 244,481 | (2,270 | ) | |||||||||||||||
States
and political subdivisions
|
21,479 | (348 | ) | 25,013 | (324 | ) | 46,492 | (672 | ) | |||||||||||||||
Privately
issued mortgage backed-securities
|
20 | - | 81,307 | (1,167 | ) | 81,327 | (1,167 | ) | ||||||||||||||||
Other
|
730 | (168 | ) | - | - | 730 | (168 | ) | ||||||||||||||||
Total
temporarily impaired securities
|
$ | 66,665 | $ | (609 | ) | $ | 333,141 | $ | (3,736 | ) | $ | 399,806 | $ | (4,345 | ) |
September
30,
|
December
31,
|
||||||
2008
|
2007
|
||||||
(Dollars
in thousands)
|
|||||||
Commercial,
financial and agricultural
|
$ | 375,389 | $ | 385,521 | |||
Real
estate:
|
|||||||
Construction
|
1,113,110 | 1,226,138 | |||||
Mortgage
- residential
|
1,098,849 | 1,036,702 | |||||
Mortgage
- commercial
|
1,250,491 | 1,243,383 | |||||
Consumer
|
191,947 | 209,166 | |||||
Leases
|
60,204 | 53,303 | |||||
4,089,990 | 4,154,213 | ||||||
Unearned
income
|
(9,724 | ) | (12,508 | ) | |||
Total
loans and leases
|
$ | 4,080,266 | $ | 4,141,705 |
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||
September
30,
|
September
30,
|
||||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||||
(Dollars
in thousands)
|
|||||||||||||||
Balance,
beginning of period
|
$ | 86,050 | $ | 51,409 | $ | 92,049 | $ | 52,280 | |||||||
Provision
for loan and lease losses
|
22,900 | 21,200 | 144,972 | 24,800 | |||||||||||
108,950 | 72,609 | 237,021 | 77,080 | ||||||||||||
Charge-offs
|
(9,141 | ) | (835 | ) | (138,208 | ) | (6,513 | ) | |||||||
Recoveries
|
418 | 743 | 1,414 | 1,950 | |||||||||||
Net
charge-offs
|
(8,723 | ) | (92 | ) | (136,794 | ) | (4,563 | ) | |||||||
Balance,
end of period
|
$ | 100,227 | $ | 72,517 | $ | 100,227 | $ | 72,517 |
Hawaii
|
Commercial
|
||||||||||
Market
|
Real
Estate
|
Total
|
|||||||||
(Dollars
in thousands)
|
|||||||||||
Balance,
beginning of period
|
$ | 150,423 | $ | 94,279 | $ | 244,702 | |||||
Additions
|
2,397 | - | 2,397 | ||||||||
Impairment
charge
|
- | (94,279 | ) | (94,279 | ) | ||||||
Balance,
end of period
|
$ | 152,820 | $ | - | $ | 152,820 |
Core
|
Mortgage
|
||||||||||||||||||
Deposit
|
Servicing
|
Customer
|
Non-Compete
|
||||||||||||||||
Premium
|
Rights
|
Relationships
|
Agreements
|
Total
|
|||||||||||||||
(Dollars
in thousands)
|
|||||||||||||||||||
Balance,
beginning of period
|
$ | 28,750 | $ | 11,222 | $ | - | $ | - | $ | 39,972 | |||||||||
Additions
|
- | 5,534 | 1,400 | 300 | 7,234 | ||||||||||||||
Amortization
|
(2,006 | ) | (1,631 | ) | (35 | ) | (15 | ) | (3,687 | ) | |||||||||
Balance,
end of period
|
$ | 26,744 | $ | 15,125 | $ | 1,365 | $ | 285 | $ | 43,519 |
September
30, 2008
|
December
31, 2007
|
|||||||||||||||||||||
Gross
|
Gross
|
|||||||||||||||||||||
Carrying
|
Accumulated
|
Carrying
|
Accumulated
|
|||||||||||||||||||
Value
|
Amortization
|
Net
|
Value
|
Amortization
|
Net
|
|||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||
Core
deposit premium
|
$ | 44,642 | $ | (17,898 | ) | $ | 26,744 | $ | 44,642 | $ | (15,892 | ) | $ | 28,750 | ||||||||
Mortgage
servicing rights
|
26,054 | (10,929 | ) | 15,125 | 20,520 | (9,298 | ) | 11,222 | ||||||||||||||
Customer
relationships
|
1,400 | (35 | ) | 1,365 | - | - | - | |||||||||||||||
Non-compete
agreements
|
300 | (15 | ) | 285 | - | - | - | |||||||||||||||
$ | 72,396 | $ | (28,877 | ) | $ | 43,519 | $ | 65,162 | $ | (25,190 | ) | $ | 39,972 |
Estimated
Amortization Expense
|
||||||||||||||||||
Mortgage
|
||||||||||||||||||
Core
Deposit
|
Servicing
|
Customer
|
Non-Compete
|
|||||||||||||||
Premium
|
Rights
|
Relationships
|
Agreements
|
Total
|
||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||
2008
(remainder)
|
$ | 669 | $ | 315 | $ | 35 | $ | 15 | $ | 1,034 | ||||||||
2009
|
2,674 | 1,885 | 140 | 60 | 4,759 | |||||||||||||
2010
|
2,674 | 1,684 | 140 | 60 | 4,558 | |||||||||||||
2011
|
2,674 | 1,480 | 140 | 60 | 4,354 | |||||||||||||
2012
|
2,674 | 1,294 | 140 | 60 | 4,168 | |||||||||||||
2013
|
2,674 | 1,130 | 140 | 30 | 3,974 | |||||||||||||
Thereafter
|
12,705 | 7,337 | 630 | - | 20,672 | |||||||||||||
$ | 26,744 | $ | 15,125 | $ | 1,365 | $ | 285 | $ | 43,519 |
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||
September
30,
|
September
30,
|
||||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||||
(Dollars
in thousands)
|
|||||||||||||||
Salaries
and employee benefits
|
$ | 600 | $ | 743 | $ | 1,764 | $ | 2,920 | |||||||
Income
tax benefit
|
(240 | ) | (298 | ) | (707 | ) | (1,170 | ) | |||||||
Net
share-based compensation effect
|
$ | 360 | $ | 445 | $ | 1,057 | $ | 1,750 |
Weighted
Average
|
|||||
Shares
|
Exercise
Price
|
||||
Outstanding
at January 1, 2008
|
872,912 | $ | 27.90 | ||
Changes
during the period:
|
|||||
Granted
|
95,000 | 18.75 | |||
Exercised
|
(1,000 | ) | 9.24 | ||
Expired
|
(2,564 | ) | 26.82 | ||
Forfeited
|
(42,499 | ) | 34.81 | ||
Outstanding
at September 30, 2008
|
921,849 | 26.66 |
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||
September
30,
|
September
30,
|
||||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||||
Expected
volatility
|
- | % | 30.9 | % | 32.0 | % | 33.1 | % | |||||||
Risk
free interest rate
|
- | % | 4.5 | % | 2.8 | % | 4.5 | % | |||||||
Expected
dividends
|
- | % | 3.6 | % | 5.4 | % | 2.9 | % | |||||||
Expected
life (in years)
|
- | 6.5 | 6.5 | 7.4 | |||||||||||
Weighted
average fair value
|
$ | - | $ | 7.57 | $ | 3.47 | $ | 11.20 |
Weighted
Average
|
|||||
Grant
Date
|
|||||
Shares
|
Fair
Value
|
||||
Nonvested
at January 1, 2008
|
44,620 | $ | 34.87 | ||
Changes
during the period:
|
|||||
Forfeited
|
(2,500 | ) | 36.95 | ||
Nonvested
at September 30, 2008
|
42,120 | 34.74 |
Weighted
Average
|
|||||
Grant
Date
|
|||||
Shares
|
Fair
Value
|
||||
Nonvested
at January 1, 2008
|
45,957 | $ | 34.74 | ||
Changes
during the period:
|
|||||
Granted
|
97,907 | 18.88 | |||
Vested
|
(44,670 | ) | 34.77 | ||
Forfeited
|
(1,287 | ) | 33.86 | ||
Nonvested
at September 30, 2008
|
97,907 | 18.88 |
Nine
Months Ended
|
|||||||
September
30,
|
|||||||
2008
|
2007
|
||||||
Expected
volatility
|
32.0 | % | 31.7 | % | |||
Risk
free interest rate
|
2.8 | % | 4.5 | % | |||
Expected
dividends
|
5.3 | % | 2.8 | % | |||
Expected
life (in years)
|
6.5 | 6.5 | |||||
Weighted
average fair value
|
$ | 3.50 | $ | 10.49 |
Weighted
Average
|
|||||
Shares
|
Exercise
Price
|
||||
Outstanding
at January 1, 2008
|
56,549 | $ | 35.00 | ||
Changes
during the period:
|
|||||
Granted
|
210,963 | 18.88 | |||
Vested
|
(21,368 | ) | 34.41 | ||
Forfeited
|
(8,166 | ) | 35.57 | ||
Outstanding
at September 30, 2008
|
237,978 | 20.74 |
September
30,
|
December
31,
|
||||||
2008
|
2007
|
||||||
(Dollars
in thousands)
|
|||||||
Unrealized
holding losses on available-for-sale investment securities
|
$ | (10,909 | ) | $ | (401 | ) | |
Pension
adjustments
|
(9,409 | ) | (9,973 | ) | |||
Tax
effect
|
8,144 | 4,160 | |||||
Accumulated
other comprehensive loss, net of tax
|
$ | (12,174 | ) | $ | (6,214 | ) |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||
September
30,
|
September
30,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||
(Dollars
in thousands)
|
||||||||||||||
Net
income (loss)
|
$ | 3,041 | $ | 9,107 | $ | (141,559 | ) | $ | 50,258 | |||||
Unrealized
gain (loss) on investment securities, net of taxes
|
(3,095 | ) | 5,871 | (6,297 | ) | 2,793 | ||||||||
Unrealized
gain on derivatives, net of taxes
|
5,050 | - | - | - | ||||||||||
Pension
adjustments, net of taxes
|
113 | 165 | 337 | 493 | ||||||||||
Comprehensive
income (loss)
|
$ | 5,109 | $ | 15,143 | $ | (147,519 | ) | $ | 53,544 |
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||
September
30,
|
September
30,
|
||||||||||||||
2008
|