Breaking Down Central Pacific Financial Corp. (CPF) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments in Central Pacific Financial Corp. (CPF)? As of December 31, 2024, CPF had approximately $7.47 billion in assets. In 2024, the corporation reported a net income of $53.4 million, or $1.97 per diluted share, for the full year. But how healthy is CPF really, and what does it mean for your investment decisions moving forward? Dive in to uncover key insights into CPF's financial standing, from strategic repositioning estimated to improve annual net interest income by $2.7 million beginning in 2025, to adjusted net income (non-GAAP) of $63.4 million, or $2.34 per diluted share for the full year 2024.

Central Pacific Financial Corp. (CPF) Revenue Analysis

Understanding Central Pacific Financial Corp.'s (CPF) revenue streams is crucial for investors seeking to assess the financial health and stability of the company. A detailed analysis of where CPF generates its income, how those sources have performed over time, and the factors influencing these trends provides valuable insights.

Central Pacific Financial Corp. primarily generates revenue through:

• Net Interest Income: This is the difference between the interest income earned from loans and investments and the interest expenses incurred on deposits and borrowings.
• Non-Interest Income: This includes fees for services, gains from the sale of loans, and other income sources.

Analyzing the specific contributions of these segments and their year-over-year performance offers a clearer understanding of CPF's financial trajectory. The following table illustrates a hypothetical breakdown of CPF's revenue streams, focusing on key components and their respective contributions. Note that this is a hypothetical example for illustrative purposes.

Year-over-year revenue growth rate is a critical indicator of CPF's performance. Examining historical trends reveals the company's ability to increase its revenue over time. For example, if CPF's total revenue increased from $220 million in the previous fiscal year to $240 million in the current fiscal year, the year-over-year revenue growth rate would be approximately 9.09%. This growth rate is calculated as: ((Current Year Revenue - Previous Year Revenue) / Previous Year Revenue) 100. Analyzing this trend over several years provides a comprehensive view of CPF's revenue performance.

Significant changes in revenue streams can signal shifts in CPF's business strategy or market conditions. For instance, a substantial increase in service fees might indicate a successful push to expand fee-based services, while a decline in net interest income could reflect changes in interest rates or loan demand. Monitoring these changes is essential for understanding the evolving dynamics of CPF's revenue generation. Understanding Central Pacific Financial Corp.'s goals and values can provide additional context; review the Mission Statement, Vision, & Core Values of Central Pacific Financial Corp. (CPF).

Central Pacific Financial Corp. (CPF) Profitability Metrics

Assessing Central Pacific Financial Corp.'s (CPF) profitability involves examining several key metrics that provide insights into the company's financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins, which are crucial for understanding how effectively CPF generates profit from its revenue and manages its expenses. Analyzing these figures over time and comparing them against industry averages helps investors gauge CPF's competitive positioning and long-term sustainability. Here's a detailed look into these aspects:

When evaluating profitability, it’s essential to consider various margins that reflect different stages of the income statement:

• Gross Profit Margin: This indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). It shows how efficiently CPF manages its production costs relative to its revenue.
• Operating Profit Margin: This margin reveals the percentage of revenue left after deducting both COGS and operating expenses. It reflects the company's ability to generate profit from its core operations, excluding interest and taxes.
• Net Profit Margin: The net profit margin is the percentage of revenue that remains as net income after all expenses, including interest and taxes, are deducted. This is the bottom-line profitability measure, showing the actual profit CPF earns per dollar of revenue.

Analyzing trends in these profitability metrics over several periods offers valuable insights. For example, consistent improvement in the gross profit margin may suggest enhanced cost management or pricing strategies. A rising operating profit margin could indicate better operational efficiencies, while a steady or increasing net profit margin demonstrates the company's overall financial health and its ability to convert revenue into profit effectively. By comparing these trends with those of industry peers, investors can better assess CPF's relative performance and identify potential areas of strength or weakness.

Operational efficiency is critical to maintaining and improving profitability. Effective cost management directly impacts gross margins, as lower production costs translate into higher gross profits. Monitoring gross margin trends can reveal how well CPF controls its expenses related to producing services. Additionally, managing operating expenses, such as administrative and marketing costs, is vital for boosting the operating profit margin. A company that can efficiently manage its costs and maintain or improve its gross margin is likely to demonstrate strong and sustainable profitability.

Below is a hypothetical table illustrating how these metrics might be analyzed (Note: Since real-time specific financial data up to April 2025 is unavailable, the following data is purely illustrative):

This hypothetical data suggests a positive trend in CPF's profitability, with consistent improvements across all margins. Such trends would typically be viewed favorably by investors. Remember to always refer to the most recent financial statements and industry benchmarks for an accurate and up-to-date assessment.

For more insights into Central Pacific Financial Corp.'s financial health, check out: Breaking Down Central Pacific Financial Corp. (CPF) Financial Health: Key Insights for Investors

Central Pacific Financial Corp. (CPF) Debt vs. Equity Structure

Understanding Central Pacific Financial Corp.'s (CPF) approach to financing growth through debt and equity is crucial for investors. This involves examining the company's debt levels, debt-to-equity ratio, and any recent financing activities.

As of the end of the 2024 fiscal year, Central Pacific Financial Corp. (CPF) demonstrates the following debt structure:

• Long-term Debt: Central Pacific Financial Corp. (CPF) carries a significant amount of long-term debt, which is used to fund its long-term investments and operations.
• Short-term Debt: Central Pacific Financial Corp. (CPF) also utilizes short-term debt, which helps manage immediate financial obligations and working capital needs.

The debt-to-equity ratio is a key metric for evaluating a company's financial leverage. It indicates how much debt a company is using to finance its assets relative to the value of shareholders' equity. A lower debt-to-equity ratio generally suggests a more financially stable company.

Central Pacific Financial Corp.'s (CPF) debt-to-equity ratio can be evaluated as follows:

• Debt-to-Equity Ratio: Central Pacific Financial Corp.'s (CPF) debt-to-equity ratio is 0.21, which is lower than the industry average of 0.71. This indicates that Central Pacific Financial Corp. (CPF) relies less on debt financing compared to its peers, suggesting a more conservative financial approach.

Recent financing activities, such as debt issuances, credit ratings, and refinancing, can provide insights into Central Pacific Financial Corp.'s (CPF) financial strategy and health.

• Recent Debt Issuances: Central Pacific Financial Corp. (CPF) has not issued any new debt.
• Credit Ratings: Central Pacific Financial Corp. (CPF) holds a credit rating from Standard & Poor's of BBB-

Balancing debt and equity is essential for sustainable growth. Too much debt can increase financial risk, while too little debt might limit growth opportunities. Central Pacific Financial Corp. (CPF) strategically manages its capital structure to optimize financial flexibility and shareholder value.

• Central Pacific Financial Corp. (CPF) balances debt financing and equity funding by maintaining a lower debt-to-equity ratio compared to its industry peers. This approach allows the company to minimize financial risk and maintain financial stability.

Here’s a summary of Central Pacific Financial Corp.'s (CPF) debt and equity structure:

Explore more about Central Pacific Financial Corp. (CPF) and its investors here: Exploring Central Pacific Financial Corp. (CPF) Investor Profile: Who’s Buying and Why?

Central Pacific Financial Corp. (CPF) Liquidity and Solvency

Understanding Central Pacific Financial Corp.'s financial health requires a close examination of its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency assesses its ability to meet long-term obligations.

To assess Central Pacific Financial Corp.’s liquidity, we can consider the current and quick ratios. These ratios provide insights into whether the company has enough liquid assets to cover its short-term liabilities. For the fiscal year 2024, Central Pacific Financial Corp. reported a current ratio of 0.72. A ratio below 1 may indicate potential liquidity issues. The quick ratio, which excludes inventories, was not found in the provided search results. Further analysis of working capital trends is essential to understand the fluctuations and management of Central Pacific Financial Corp.'s current assets and liabilities.

Analyzing the cash flow statements provides a clearer picture of Central Pacific Financial Corp.'s liquidity. The cash flow statement is divided into three main sections:

• Operating Activities: This section shows the cash generated or used from the company's core business operations.
• Investing Activities: This reflects cash flow from the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E).
• Financing Activities: This includes cash flow from debt, equity, and dividends.

For the fiscal year 2024, Central Pacific Financial Corp. had net cash provided by operating activities of $62.4 million, net cash used for investing activities of $10.9 million, and net cash used for financing activities of $43.2 million. The positive cash flow from operations indicates the company's ability to generate cash from its core business, which is a positive sign. However, the use of cash in investing and financing activities suggests investments in long-term assets and returning capital to shareholders or debt holders.

Here's a summary of Central Pacific Financial Corp.'s cash flow activities for 2024:

Potential liquidity concerns may arise if Central Pacific Financial Corp. faces challenges in maintaining positive cash flow from operations or if it has significant upcoming debt maturities. However, the company's ability to generate cash from its operations is a significant strength.

More information about the company, can be found here: Mission Statement, Vision, & Core Values of Central Pacific Financial Corp. (CPF).

Central Pacific Financial Corp. (CPF) Valuation Analysis

Determining whether Central Pacific Financial Corp. (CPF) is overvalued or undervalued requires analyzing several key financial metrics and market data. Here's a breakdown:

Price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios

• P/E Ratio: As of April 2025, CPF's P/E ratio is around 10.64 - 14.08. Comparing this to the 5-year quarterly average of 9.8 and the last 4 quarters average of 10.7, the current P/E ratio is higher.
• P/B Ratio: The Price-to-Book (P/B) ratio for CPF is approximately 1.21 - 1.47 as of April 2025.
• EV/EBITDA: CPF's EV/EBITDA ratio is around 8.15.

Stock price trends over the last 12 months (or longer)

• As of April 17, 2025, the closing price for CPF was $25.11.
• The 52-week range is $18.61 - $33.25.
• Year-to-date (YTD) performance as of April 2025 was -13.08%.
• The stock has shown a 31.17% increase over the last year.

Dividend yield and payout ratios (if applicable)

• Dividend Yield: CPF's dividend yield is approximately 4.30% - 4.35% as of April 2025.
• Annual Dividend: The annual dividend is $1.047 - $1.05 per share.
• Payout Ratio: The payout ratio is around 53.15% - 53.3%, indicating that over half of the earnings are paid out as dividends.

Analyst consensus on stock valuation (buy, hold, or sell)

• The analyst consensus for Central Pacific Financial Corp is a Moderate Buy.
• The average price target from analysts is $32.00, suggesting a potential upside of approximately 33.22% from the current price of $24.02.
• Currently, there are 4 Buy Ratings, 0 Hold Ratings, and 0 Sell Ratings.

Here's a summary table of key valuation metrics:

Based on Peter Lynch Fair Value, as of March 31, 2025, the intrinsic value of Central Pacific Financial Corp. (CPF) is $16.19. With a current market price of $26.93, the upside is -39.87%, suggesting the stock may be overvalued.

To gain more insights, check out: Breaking Down Central Pacific Financial Corp. (CPF) Financial Health: Key Insights for Investors

Central Pacific Financial Corp. (CPF) Risk Factors

Central Pacific Financial Corp. (CPF) faces a variety of internal and external risks that could impact its financial health. These risks span industry competition, regulatory changes, and broader market conditions. Understanding these factors is crucial for investors assessing the company's stability and growth potential. For further insights into the company's strategic direction, refer to: Mission Statement, Vision, & Core Values of Central Pacific Financial Corp. (CPF).

Here's an overview of key risks:

• Industry Competition: The financial services industry is highly competitive. Central Pacific Financial Corp. (CPF) competes with other banks, credit unions, and non-bank financial institutions. Increased competition can put pressure on interest rates, reduce loan volumes, and impact profitability.
• Regulatory Changes: Banks are subject to extensive regulation. Changes in laws and regulations can increase compliance costs, limit business activities, and affect capital requirements. For example, changes in capital adequacy ratios or consumer protection laws can have a significant impact.
• Market Conditions: Economic downturns, changes in interest rates, and fluctuations in real estate values can all affect Central Pacific Financial Corp. (CPF)'s financial performance. Rising interest rates can reduce demand for loans, while a decline in real estate values can increase the risk of loan defaults.

Operational, financial, and strategic risks are often highlighted in Central Pacific Financial Corp. (CPF)'s earnings reports and filings. These may include:

• Credit Risk: The risk that borrowers will default on their loans is a primary concern for any bank. Central Pacific Financial Corp. (CPF) must carefully manage its loan portfolio to minimize credit losses.
• Interest Rate Risk: Changes in interest rates can affect a bank's net interest income (the difference between income from loans and expenses on deposits). Central Pacific Financial Corp. (CPF) needs to manage its assets and liabilities to mitigate this risk.
• Liquidity Risk: The risk that a bank will not have enough cash to meet its obligations. Central Pacific Financial Corp. (CPF) must maintain sufficient liquidity to cover deposit withdrawals and other cash needs.
• Cybersecurity Risk: Banks are increasingly vulnerable to cyberattacks. A successful attack can result in financial losses, reputational damage, and legal liabilities. Central Pacific Financial Corp. (CPF) must invest in robust cybersecurity measures to protect its systems and data.

Mitigation strategies and plans are essential for managing these risks. Central Pacific Financial Corp. (CPF) may employ various strategies, such as:

• Diversification: Diversifying its loan portfolio across different industries and geographic regions can reduce credit risk.
• Hedging: Using financial instruments to hedge against interest rate risk.
• Stress Testing: Conducting stress tests to assess the bank's ability to withstand adverse economic conditions.
• Compliance Programs: Implementing robust compliance programs to ensure adherence to laws and regulations.

Below is an example of a table illustrating potential risks and mitigation strategies:

Central Pacific Financial Corp. (CPF) Growth Opportunities

Central Pacific Financial Corp. (CPF) exhibits several key growth drivers that investors should consider. These encompass strategic initiatives, market dynamics, and financial performance indicators that collectively shape the company's potential trajectory.

Several factors could influence Central Pacific Financial Corp.'s future growth:

• Market Expansion: CPF could benefit from expanding its presence in existing markets or entering new geographic areas within Hawaii.
• Strategic Partnerships: Collaborations with other financial institutions or businesses could broaden CPF's service offerings and customer base.
• Digital Innovation: Investing in digital banking technologies and online services can enhance customer experience and attract a younger demographic.
• Loan Growth: Increasing loan origination volume, particularly in key sectors like real estate and small business, can drive revenue growth.

To assess Central Pacific Financial Corp.'s (CPF) potential, one can analyze its financial forecasts and strategic initiatives. While specific future revenue growth projections and earnings estimates require up-to-date financial analyst reports, examining past performance and current strategies provides valuable insights.

Key areas to consider:

• Revenue Growth: Look for trends in net interest income, fee income, and overall revenue growth.
• Earnings Per Share (EPS): Analyze EPS growth as an indicator of profitability and efficiency.
• Strategic Initiatives: Evaluate the impact of new products, services, or market expansions on future earnings.

Strategic initiatives and partnerships play a crucial role in Central Pacific Financial Corp.'s (CPF) growth strategy. These collaborations can unlock new opportunities, expand market reach, and enhance service offerings.

Examples of strategic initiatives include:

• Technology Investments: Implementing advanced banking platforms and digital solutions to improve customer experience and operational efficiency.
• Community Engagement: Participating in local community development programs to build brand loyalty and attract new customers.
• Partnerships with Fintech Companies: Collaborating with innovative fintech firms to offer specialized financial products and services.

Central Pacific Financial Corp.'s (CPF) competitive advantages are crucial for sustaining growth and maintaining market share. These advantages can include:

• Strong Local Presence: Deep roots in the Hawaiian community and a strong understanding of local market dynamics.
• Customer Relationships: Building long-term relationships with customers based on trust and personalized service.
• Efficient Operations: Maintaining efficient operations and cost management to improve profitability.

Here's a look at some key financial data from Central Pacific Financial Corp. (CPF) based on their 2024 fiscal year:

To gain more insight into Central Pacific Financial Corp.'s values, review: Mission Statement, Vision, & Core Values of Central Pacific Financial Corp. (CPF).