Q1 2026 Central Pacific Financial Corp Earnings Call Transcript
Key Points
- Central Pacific Financial Corp (CPF) reported a strong start to 2026 with solid earnings performance and growth in both loans and deposits.
- The company maintained strong credit quality and operated from a position of capital strength, reflecting the durability and organic earnings power of the franchise.
- CPF was named the Hawaii-US Small Business Administration Lender of the Year for 2025, marking the 17th time it has received this recognition.
- Hawaii's economy showed resilience with increased visitor arrivals and spending, and a low unemployment rate of 2.3%.
- The company declared a second quarter cash dividend of $0.29 per share and repurchased approximately 321,000 shares, demonstrating a commitment to returning capital to shareholders.
- Total other operating income declined by $2.6 million from the prior quarter, impacted by equity market volatility and lower levels of fee income in mortgage banking and wealth areas.
- The average loan portfolio yield decreased from 4.99% to 4.93% due to the impact of the fourth quarter fed rate cuts.
- Total other operating expense was $43.7 million, with expectations for expenses to increase over the year.
- The company experienced an uptick in criticized loans, primarily due to one commercial relationship, although it was not seen as a systemic issue.
- CPF's net interest margin guidance for the second quarter is projected to remain relatively flat, reflecting competitive pressures on spreads and new loan yields.
Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the Central Pacific Financial Corp first quarter 2026 earnings conference call. (Operator Instructions). This call is being recorded and will be available for replay shortly after its completion on the company's website at www.cpb.bank.
I'd now like to turn the call over to Mr. Jayrald Rabago, Senior Strategic Financial Officer. Please go ahead.
Thank you, Rob, and thank you all for joining us today as we review Central Pacific Financial Corp's financial results of the first quarter of 2026. Joining me this morning are Arnold Martines, Chairman, President and Chief Executive Officer; David Morimoto, Vice Chairman and Chief Operating Officer; Ralph Mesick, Senior Executive Vice President and Chief Risk Officer and Dayna Matsumoto, Executive Vice President and Chief Financial Officer.
We have prepared a supplemental slide
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