Executive Summary

Q4 2024 GAAP EPS was $0.42 (net income $11.3M), impacted by a $9.9M pre-tax loss from an investment portfolio repositioning; non-GAAP adjusted EPS was $0.70 with NIM expanding 10 bps to 3.17% and core deposits +$74.2M QoQ .
The securities repositioning is expected to add ~$2.7M to annual NII and ~4 bps to NIM with an estimated earn-back of ~3.5 years, setting up further margin improvement; December MTD NIM was 3.29% with deposit costs down to 1.14% .
Balance sheet trends were constructive: core deposits rose to $6.04B, total deposits +$61M QoQ, and total loans decline narrowed (down 0.2% QoQ); credit stayed solid with NPAs at 0.15% of assets and ACL/loans at 1.11% .
Capital return stepped up: dividend raised 3.8% to $0.27 and a new $30M buyback authorized for 2025; CPB also became a Federal Reserve member bank (effective Jan 24, 2025) .
Wall Street (S&P Global) quarterly consensus for EPS and revenue was unavailable at the time of analysis (API limit), so we cannot quantify a beat/miss this quarter; qualitatively, margin and core funding trends were better than feared and are key stock catalysts into 2025 [Values retrieved from S&P Global unavailable due to access limits].

What Went Well and What Went Wrong

What Went Well

NIM and funding costs: NIM rose to 3.17% (+10 bps QoQ) as average deposit costs fell 11 bps to 1.21%; December MTD NIM was 3.29% and deposit cost 1.14% .
Core deposit growth and mix: Core deposits increased $74.2M QoQ to $6.04B; total deposits +$61M QoQ with favorable DDA growth (seasonal DDA +~$40M) and lower reliance on government time deposits .
Strategic repositioning for future earnings: Sold $106.5M of lower-yield AFS securities (2.1% yield) and reinvested at ~4.9%, expected to add ~$2.7M annual NII and ~4 bps NIM (earn-back ~3.5 years) .

What Went Wrong

GAAP earnings optics: The $9.9M pre-tax securities loss suppressed GAAP EPS ($0.42 vs $0.70 non-GAAP), and the efficiency ratio rose to 75.65% (64.65% adjusted) .
Modest loan contraction and asset quality normalization: Loans fell 0.2% QoQ (now $5.33B) and NPAs rose YoY to $11.0M (0.15% of assets), with NCOs at 29 bps annualized (two idiosyncratic C&I credits contributed ~$0.6M) .
Lower noninterest income: Other operating income fell to $2.6M, driven by the securities loss; adjusted OOI would have been $12.6M without the repositioning .

Financial Results

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Total Revenue ($MM)	$66.31	$63.26 (51.92 + 11.34)	$66.59 (53.85 + 12.73)	$58.40 (55.77 + 2.62)
Net Interest Income ($MM)	$51.14	$51.92	$53.85	$55.77
Other Operating Income ($MM)	$15.17	$12.12	$12.73	$2.62
Net Income ($MM)	$14.87	$15.82	$13.31	$11.35
Diluted EPS ($)	$0.55	$0.58	$0.49	$0.42
NIM (%)	2.84%	2.97%	3.07%	3.17%
Efficiency Ratio (%)	64.12%	64.26%	70.12%	75.65%

Notes: Total revenue shown as NII + other operating income; Q2/Q3/Q4 values per CPF tables .

Non-GAAP (for context):

Adjusted EPS: Q3 2024 $0.58; Q4 2024 $0.70 .
Adjusted efficiency ratio: Q3 2024 65.51%; Q4 2024 64.65% .

Balance sheet and funding

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Total Loans ($MM)	$5,438.98	$5,383.64	$5,342.61	$5,332.85
Total Deposits ($MM)	$6,847.59	$6,582.46	$6,583.01	$6,644.01
Core Deposits ($MM)	$5,986.20	$5,912.17	$5,966.03	$6,040.20
Avg Deposit Cost (%)	1.22%	1.33%	1.32%	1.21%

Credit KPIs

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
NPAs ($MM)	$7.01	$10.26	$11.60	$11.02
NPAs / Assets (%)	0.09%	0.14%	0.16%	0.15%
ACL / Loans (%)	1.18%	1.16%	1.15%	1.11%
Net Charge-offs ($MM)	$5.54	$3.76	$3.62	$3.82
NCOs / Avg Loans (annualized)	0.41%	0.28%	0.27%	0.29%

Deposit mix (period-end)

Category ($MM)	Q3 2024	Q4 2024
Noninterest-bearing Demand	$1,838.01	$1,888.94
Interest-bearing Demand	$1,255.38	$1,338.72
Savings & Money Market	$2,336.32	$2,329.17
Time ≤ $250k	$536.32	$483.38
Other Time > $250k	$492.22	$500.69
Government Time	$124.76	$103.11
Total Deposits	$6,583.01	$6,644.01

Estimates versus actuals

Metric	Consensus (S&P Global)	Actual Q4 2024
EPS ($)	N/A	$0.42
Total Revenue ($MM)	N/A	$58.40

Note: S&P Global consensus data was unavailable due to access limits at the time of analysis; beat/miss cannot be determined. Values retrieved from S&P Global unavailable due to access limits.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share (quarterly)	Q1 2025	$0.26 (Q4 2024)	$0.27 (declared Jan 28, 2025)	Raised
Share repurchase authorization	2025	Prior program (remaining $19.1M as of 9/30/24)	New $30M authorization for 2025	Increased / new program
Other operating expense run-rate	Near-term (Q1 2025)	Not previously specified	~$42.5–$43.5M per quarter	New run-rate
Effective tax rate	2025+	22–24% (Q3 commentary)	21–23% going forward	Lowered
Net interest margin	2025 trajectory	Long-term range 2.80–3.30% discussed previously	Cautiously higher; Dec MTD NIM 3.29%	Improving trajectory (qualitative)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
NIM trajectory	Guided 3.00–3.10% near-term; swap contributing; deposit costs stable	3.07%; guided 3.10–3.20% next 1–2 qtrs	3.17%; Dec MTD 3.29%; optimism to exceed prior range	Improving
Deposit costs/competition	Total deposit cost ~1.33%; core growth focus	Cost 1.32%; promo CDs down with Fed cuts	Cost 1.21%; Dec 1.14%; core DDA growth (seasonal ~$40M)	Improving
Loan growth outlook	Slower demand; expect modest 2H growth	Demand muted; pipeline building into 2025	Pipeline “very healthy”; growth expected in C&I and CRE in 2025	Turning positive
Credit quality	NCOs 28 bps; NPAs 0.14% assets	NCOs 27 bps; NPAs 0.16%	NCOs 29 bps; NPAs 0.15%; idiosyncratic C&I items	Stable/benign
Capital/returns	No buybacks; dividend $0.26	No buybacks; flexible for repurchases	Dividend to $0.27; new $30M buyback	More shareholder-friendly
Macro Hawaii	Construction/defense strong; tourism lagging Japan	Similar tone; Kahului branch opened	Construction strong; unemployment 3%; tourism improving	Gradual improvement

Management Commentary

CEO on 2024 and setup: “Key contributors to our success in 2024 included strong NIM expansion and core deposit growth, along with very healthy levels of liquidity, asset quality and capital.”
CFO on repositioning: “We sold $106.5 million in securities… recognized a pretax loss of $9.9 million… projected to increase prospective annualized net interest income by $2.7 million and net interest margin by 4 basis points.”
CFO on margin trajectory: “December month-to-date NIM was 3.29%, loan yield 4.95%, and total deposit cost… 1.14%... we’re cautiously optimistic that the margin will be higher.”
CRO on credit: “Net charge-offs were $3.8 million or 29 basis points… increase came from losses on 2 credits in the C&I segment totaling $600,000… consumer net charge-offs trend lower.”
CEO on growth: “We began to see loan opportunities pick up… pipeline for Q1 is very healthy… growth in commercial and commercial real estate.”

Q&A Highlights

Loan growth pacing and mix: Management expects 2025 loan growth led by C&I and CRE as proactive banker outreach and added lenders translate into a “very healthy” Q1 pipeline .
Deposits and funding costs: Strong execution drove core deposit growth and lower costs; seasonality aided DDA by ~$40M in Q4; management still sees further funding-side opportunities .
Expense outlook and operating leverage: Near-term other operating expense guided to ~$42.5–$43.5M per quarter, with positive operating leverage expected in 2025 as revenues outpace expenses .
Margin runway: Team believes prior 2.80–3.30% NIM range may be conservative after two quarters of 10 bps sequential gains; December MTD NIM 3.29% .
Credit details: Q4 increase in NCOs partly due to two idiosyncratic C&I items; consumer credit trends improving from the 2023 peak .

Estimates Context

S&P Global consensus estimates for Q4 2024 EPS and revenue were unavailable at the time of analysis due to an access limit, so a beat/miss versus Street cannot be quantified this quarter. Values retrieved from S&P Global unavailable due to access limits.

Key Takeaways for Investors

Margin momentum is real and broadening: deposit costs fell 11 bps and repositioning adds ~4 bps, with December MTD NIM at 3.29%—positioning CPF to potentially exceed its prior 3.30% high-end range in 2025 .
Core funding strength remains a differentiator: +$74.2M QoQ core deposits, total deposit cost 1.21% (Dec 1.14%) supports spread resilience versus peers in a competitive market .
Loan growth inflecting: pipeline “very healthy” with focus on C&I and CRE; even modest net growth layered on current repricing tailwinds is accretive to NIM .
Credit is benign and well reserved: NPAs at 0.15% of assets, ACL/loans at 1.11%, and NCOs elevated modestly by isolated C&I items—no systemic issues flagged .
Sharper capital return profile: dividend up to $0.27 and a new $30M buyback point to confidence in earnings/capital build; Fed membership streamlines oversight .
Near-term expense discipline: OOE run-rate ~$42.5–$43.5M provides visibility for positive operating leverage as NII grows faster than costs .
Trading setup: With improving margin trajectory, core funding defensibility, and rising capital returns, CPF’s narrative skews positively into 2025; watch quarterly NIM progression, core DDA trends, and loan growth realization to gauge upside durability .

Additional Relevant Press Releases (Q4 window)

Conference call details (Jan 15): earnings release and webcast logistics .
Board addition (Jan 28): Appointment of Dr. Diane Paloma to CPF and CPB Boards .

CENTRAL PACIFIC FINANCIAL CORP (CPF)·Q4 2024 Earnings Summary