EX-99.1 2 exhibit99-1erq22020.htm EX-99.1 Document

Exhibit 99.1
ex99logoa2811.jpg
 
  FOR IMMEDIATE RELEASE
   
Investor Contact:Ian TanakaMedia Contact:Dean Kawamura
 VP, Treasury ManagerVP, Community Development Manager
 (808) 544-3646(808) 544-3642
 ian.tanaka@cpb.bankdean.kawamura@cpb.bank
 
NEWS RELEASE

CENTRAL PACIFIC FINANCIAL CORP. REPORTS RESULTS FOR SECOND QUARTER 2020


•Net income of $9.9 million, or fully diluted EPS of $0.35 for the second quarter, compared to net income of $8.3 million, or fully diluted EPS of $0.29 for the first quarter.

•Strong pre-tax pre-provision earnings of $23.5 million for the second quarter, compared to $19.4 million in the year-ago quarter and $20.5 million in the first quarter.

•Supported over 7,200 small businesses with SBA Paycheck Protection Program ("PPP") loan originations totaling $556.9 million, which largely contributed to the increase in total loans of $491.4 million, or 10.9% sequentially, and $756.3 million, or 17.8% year-over-year.

•Core deposits increased by $719.3 million, or 16.7% sequentially, and $925.2 million, or 22.6% year-over-year. The deposit of PPP funds into both new and existing deposit accounts largely contributed to the increase in core deposits.

•Cost of average total deposits of 0.20% in the second quarter declined by 16 basis points from the first quarter.

•We continue to execute on our RISE2020 initiative while navigating the challenging current landscape.

•Board of Directors declared a quarterly cash dividend of $0.23 per share.


HONOLULU, HI, July 29, 2020 – Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank, today reported net income in the second quarter of 2020 of $9.9 million, or fully diluted earnings per share ("EPS") of $0.35, compared to net income in the second quarter of 2019 of $13.5 million, or EPS of $0.47, and net income in the first quarter of 2020 of $8.3 million, or EPS of $0.29. Our operating results continue to be impacted by a higher provision for credit loss expense due to deteriorating economic conditions brought on by the current COVID-19 pandemic. During the second quarter of 2020, the Company recorded a provision for credit loss expense of $10.6 million, compared to $1.4 million in the second quarter of 2019 and $9.3 million in the first quarter of 2020.



Central Pacific Financial Corp. Reports Results for Second Quarter 2020
Page 2

"Central Pacific is strong and well-positioned to manage through the challenging operating environment. Our credit quality, capital and liquidity are solid, which enables us to support our customers and the community during this time of great need," said Paul Yonamine, Chairman and Chief Executive Officer.

"Through the Paycheck Protection Program, we’ve been able to help save thousands of local jobs in our community. We are proud of our employees that stepped up during this tremendous effort and continue to work diligently to help our customers navigate the current challenges," said Catherine Ngo, President.

On July 28, 2020, the Company's Board of Directors declared a quarterly cash dividend of $0.23 per share on its outstanding common shares. The dividend will be payable on September 15, 2020 to shareholders of record at the close of business on August 31, 2020.

Earnings Highlights
Net interest income for the second quarter of 2020 was $49.3 million, compared to $45.4 million in the year-ago quarter and $47.8 million in the previous quarter. Net interest margin for the second quarter of 2020 was 3.26%, compared to 3.33% in the year-ago quarter and 3.43% in the previous quarter. The increases in net interest income from the year-ago and sequential quarters were due to growth in the loan portfolio, primarily attributable to loans originated under the Paycheck Protection Program ("PPP"), combined with lower rates paid on interest-bearing liabilities, partially offset by lower yields earned on the loan and investment securities portfolios. Net interest income for the second quarter of 2020 included $2.5 million in PPP net interest income and net loan fees, which are accreted into income over the term of the loans and accelerated when the loans are forgiven or paid-off. The declines in net interest margin, yields earned on the loans and investment securities portfolios and rates paid on interest-bearing liabilities from the year-ago and sequential quarters is primarily attributable to the five rate cuts by the Federal Reserve from August 2019 through March 2020. During the quarter, the Company had an average PPP loan balance of $379.9 million, which earned approximately 2.61% in net interest income and net loan fees.

Other operating income for the second quarter of 2020 totaled $10.7 million, compared to $10.1 million in the year-ago quarter and $8.9 million in the previous quarter. The increase in other operating income from the year-ago quarter was primarily due to higher mortgage banking income of $1.9 million and higher income from bank-owned life insurance of $0.5 million. These increases were partially offset by lower other service charges and fees of $1.0 million and lower service charges on deposit accounts of $0.9 million as certain service charges were suspended during the quarter to support our customers through the pandemic. In addition, there was less transactional activity due to the pandemic. The increase in other operating income from the previous quarter was primarily due to higher mortgage banking income of $3.2 million, combined with higher income from bank-owned life insurance of $1.4 million, partially offset by lower other service charges and fees of $2.0 million and lower service charges on deposit accounts of $0.9 million. The lower other charges and fees was primarily due to $1.3 million in income related to an interest rate swap recognized in the previous quarter, combined with the aforementioned suspension of service charges and lower transaction activity. The higher mortgage banking income compared to the year-ago and sequential quarters was primarily due to higher gains on sales of residential mortgage loans of $3.6 million and $3.8 million, respectively, partially offset by higher amortization of mortgage servicing rights of $1.1 million and $0.1 million, respectively, and lower net servicing fees of $0.6 million and $0.2 million, respectively. The higher amortization of mortgage servicing rights was primarily attributable to the recent decline in market interest rates. The higher income from bank-owned life insurance compared to the year-ago and sequential quarters was primarily attributable to current quarter gains in the equity markets.

Other operating expense for the second quarter of 2020 totaled $36.4 million, which increased from $36.1 million in the year-ago quarter and increased from $36.2 million in the previous quarter. The increase from the year-ago quarter was primarily due to higher legal and professional services of $0.5 million and higher computer software expense of $0.5 million, partially offset by lower entertainment and promotions of $0.9 million (included in other). The lower entertainment and promotions was primarily due to expenses related to a core deposit gathering campaign in the year-ago quarter. The increase from the previous quarter was primarily due to higher salaries and employee benefits of $0.3 million and higher legal and professional services of $0.2 million, partially offset by lower advertising expense of $0.2 million.

The efficiency ratio for the second quarter of 2020 was 60.76%, compared to 65.09% in the year-ago quarter and 63.90% in the previous quarter.

In the second quarter of 2020, the Company recorded income tax expense of $3.0 million, compared to $4.4 million in the year-ago quarter and $2.8 million in the previous quarter. The effective tax rate for the second quarter of 2020 was 23.0%, compared to 24.6% in the year-ago quarter and 25.3% in the previous quarter. The decrease in the effective tax rate was primarily due to higher tax-exempt bank-owned life insurance income in the current quarter, compared to the year-ago and sequential quarters.


Central Pacific Financial Corp. Reports Results for Second Quarter 2020
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Balance Sheet Highlights
Total assets at June 30, 2020 of $6.63 billion increased by $713.0 million, or 12.0% from June 30, 2019, and increased by $524.4 million, or 8.6% from March 31, 2020.
 
Total loans at June 30, 2020 of $5.00 billion increased by $756.3 million, or 17.8%, and $491.4 million, or 10.9% from June 30, 2019 and March 31, 2020, respectively. The year-over-year increase in total loans was driven by the origination of PPP loans totaling $526.4 million, net of deferred fees and costs, combined with broad-based growth in almost all other loan categories. The sequential quarter increase in total loans was primarily due to PPP loans and an increase in residential mortgage loans of $25.0 million, partially offset by decreases in other commercial and consumer loans.

Total deposits at June 30, 2020 of $5.79 billion increased by $817.8 million, or 16.4% from June 30, 2019, and increased by $658.6 million, or 12.8% from March 31, 2020.  The sequential quarter increase in total deposits was primarily attributable to the increases in noninterest-bearing demand deposits of $420.5 million, savings and money market deposits of $252.5 million and interest-bearing demand deposits of $49.0 million. This increase was offset by a decrease in total time deposits of $63.3 million. Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $5.02 billion at June 30, 2020.  This represents an increase of $925.2 million, or 22.6% from June 30, 2019, and $719.3 million, or 16.7% from March 31, 2020. The deposit of PPP funds into both new and existing deposit accounts largely contributed to the increase in core deposits. The Company's loan-to-deposit ratio was 86.4% at June 30, 2020, compared to 85.3% at June 30, 2019 and 87.9% at March 31, 2020.

Asset Quality
Nonperforming assets at June 30, 2020 totaled $4.7 million, or 0.07% of total assets, compared to $1.3 million, or 0.02% of total assets at June 30, 2019, and $3.6 million, or 0.06% of total assets at March 31, 2020. During the second quarter of 2020, the Company had $1.8 million in additions to nonperforming loans.

Loans delinquent for 90 days or more still accruing interest totaled $1.2 million at June 30, 2020, compared to $0.3 million and $1.6 million at June 30, 2019 and March 31, 2020, respectively.

Loan payment forbearances or deferrals were made for borrowers impacted by the COVID-19 pandemic with loan balances totaling $567.9 million or 12.7% of the total loan portfolio, excluding PPP loans, as of June 30, 2020.

Net charge-offs in the second quarter of 2020 totaled $2.9 million, compared to net charge-offs of $0.4 million in the year-ago quarter, and net charge-offs of $1.2 million in the previous quarter.

In the second quarter of 2020, the Company recorded a provision for credit losses on loans of $10.6 million, compared to a provision of $1.4 million in the year-ago quarter and a provision of $9.3 million in the previous quarter. In addition, the Company recorded a provision for off-balance sheet credit exposures (included in other operating expense) of $0.6 million, compared to a provision of $0.5 million in the year-ago quarter and a provision of $1.8 million in the previous quarter. The increase in the provision for credit losses from the year-ago and sequential quarters was primarily due to negative economic conditions brought on by the COVID-19 pandemic. The allowance for credit losses, as a percentage of total loans at June 30, 2020 was 1.35%, compared to 1.14% at June 30, 2019 and 1.32% at March 31, 2020. Excluding the PPP loans, the allowance for credit losses, as a percentage of total loans at June 30, 2020 was 1.50%.
 
Capital
Total shareholders' equity was $544.3 million at June 30, 2020, compared to $515.7 million and $533.8 million at June 30, 2019 and March 31, 2020, respectively.

The Company maintained its strong capital position and its capital ratios continue to exceed the levels required to be considered a "well-capitalized" institution for regulatory purposes under Basel III. At June 30, 2020, the Company's leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 8.9%, 12.5%, 13.6%, and 11.4%, respectively, compared to 9.5%, 12.3%, 13.4%, and 11.3%, respectively, at March 31, 2020.



Central Pacific Financial Corp. Reports Results for Second Quarter 2020
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Conference Call
The Company's management will host a conference call today at 1:00 p.m. Eastern Time (7:00 a.m. Hawaii Time) to discuss the quarterly results. Individuals are encouraged to listen to the live webcast of the presentation by visiting the investor relations page of the Company's website at http://ir.centralpacificbank.com. Alternatively, investors may participate in the live call by dialing 1-877-505-7644. A playback of the call will be available through August 29, 2020 by dialing 1-877-344-7529 (passcode: 10146483) and on the Company's website. Information which may be discussed in the conference call is provided in an earnings supplement presentation on the Company's website at http://ir.centralpacificbank.com.

About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $6.6 billion in assets.  Central Pacific Bank, its primary subsidiary, operates 35 branches (nine of which are temporarily closed to protect the health and well-being of the Company's employees and customers from COVID-19) and 76 ATMs in the state of Hawaii, as of June 30, 2020.  For additional information, please visit the Company's website at http://www.cpb.bank.
 

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Central Pacific Financial Corp. Reports Results for Second Quarter 2020
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Forward-Looking Statements
This document may contain forward-looking statements concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, the payment or nonpayment of dividends, capital position, credit losses, net interest margin or other financial items; statements of plans, objectives and expectations of Central Pacific Financial Corp. or its management or Board of Directors, including those relating to business plans, use of capital resources, products or services and regulatory developments and regulatory actions; statements of future economic performance including anticipated performance results from our RISE2020 initiative; or any statements of the assumptions underlying or relating to any of the foregoing. Words such as "believes," "plans," "anticipates," "expects," "intends," "forecasts," "hopes," "targeting," "continue," "remain," "will," "should," "estimates," "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

While we believe that our forward-looking statements and the assumptions underlying them are reasonably based, such statements and assumptions are by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect. Accordingly, actual results could differ materially from those statements or projections for a variety of reasons, including, but not limited to: the adverse effects of the COVID-19 pandemic virus on local, national and international economies, including, but not limited to, the adverse impact on tourism and construction in the State of Hawaii, our borrowers, customers, third-party contractors, vendors and employees as well as the effects of government programs and initiatives in response to COVID-19; the increase in inventory or adverse conditions in the real estate market and deterioration in the construction industry; adverse changes in the financial performance and/or condition of our borrowers and, as a result, increased loan delinquency rates, deterioration in asset quality, and losses in our loan portfolio; our ability to successfully implement our RISE2020 initiative; the impact of local, national, and international economies and events (including natural disasters such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, earthquakes and pandemic virus and disease, including COVID-19) on the Company's business and operations and on tourism, the military, and other major industries operating within the Hawaii market and any other markets in which the Company does business; deterioration or malaise in domestic economic conditions, including any destabilization in the financial industry and deterioration of the real estate market, as well as the impact of declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), changes in capital standards, other regulatory reform and federal and state legislation, including but not limited to regulations promulgated by the Consumer Financial Protection Bureau (the "CFPB"), government-sponsored enterprise reform, and any related rules and regulations which affect our business operations and competitiveness; the costs and effects of legal and regulatory developments, including legal proceedings or regulatory or other governmental inquiries and proceedings and the resolution thereof, the results of regulatory examinations or reviews and the effect of, and our ability to comply with, any regulatory orders or actions we are or may become subject to; ability to successfully implement our initiatives to lower our efficiency ratio; the effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System (the "FRB" or the "Federal Reserve"); inflation, interest rate, securities market and monetary fluctuations, including the anticipated replacement of the London Interbank Offered Rate ("LIBOR") Index and the impact on our loans and debt which are tied to that index; negative trends in our market capitalization and adverse changes in the price of the Company's common stock; political instability; acts of war or terrorism; pandemic virus and disease, including COVID-19; changes in consumer spending, borrowings and savings habits; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; cybersecurity and data privacy breaches and the consequence therefrom; the ability to address deficiencies in our internal controls over financial reporting or disclosure controls and procedures; technological changes and developments; changes in the competitive environment among financial holding companies and other financial service providers; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board ("FASB") and other accounting standard setters and the cost and resources required to implement such changes; our ability to attract and retain key personnel; changes in our organization, compensation and benefit plans; and our success at managing the risks involved in the foregoing items.

For further information with respect to factors that could cause actual results to materially differ from the expectations or projections stated in the forward-looking statements, please see the Company's publicly available Securities and Exchange Commission filings, including the Company's Form 10-K for the last fiscal year and, in particular, the discussion of "Risk Factors" set forth therein. We urge investors to consider all of these factors carefully in evaluating the forward-looking statements contained in this Form 8-K. Forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events except as required by law.





CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights
(Unaudited)TABLE 1
 
 Three Months EndedSix Months Ended
(Dollars in thousands, June 30,March 31,December 31,September 30,June 30,June 30,
except for per share amounts)2020202020192019201920202019
CONDENSED INCOME STATEMENT     
Net interest income$49,259  $47,830  $47,934  $45,649  $45,378  $97,089  $90,491  
Provision for credit losses [1]10,640  9,329  2,098  1,532  1,404  19,969  2,687  
Net interest income after provision for credit losses [1]38,619  38,501  45,836  44,117  43,974  77,120  87,804  
Total other operating income10,692  8,886  9,768  10,266  10,094  19,578  21,767  
Total other operating expense36,427  36,240  36,242  34,934  36,107  72,667  70,455  
Income before taxes12,884  11,147  19,362  19,449  17,961  24,031  39,116  
Income tax expense2,967  2,821  5,165  4,895  4,427  5,788  9,545  
Net income9,917  8,326  14,197  14,554  13,534  18,243  29,571  
Basic earnings per common share$0.35  $0.30  $0.50  $0.51  $0.47  $0.65  $1.03  
Diluted earnings per common share0.35  0.29  0.50  0.51  0.47  0.65  1.03  
Dividends declared per common share0.23  0.23  0.23  0.23  0.23  0.46  0.44  
PERFORMANCE RATIOS       
Return on average assets (ROA) [2]0.61 %0.55 %0.95 %0.99 %0.92 %0.58 %1.01 %
Return on average shareholders’ equity (ROE) [2]7.34  6.21  10.70  11.11  10.73  6.77  11.84  
Average shareholders’ equity to average assets8.36  8.93  8.87  8.87  8.62  8.64  8.57  
Efficiency ratio [1] [3]60.76  63.90  62.81  62.48  65.09  62.29  62.76  
Net interest margin (NIM) [2]3.26  3.43  3.43  3.30  3.33  3.34  3.33  
Dividend payout ratio [4]65.71  79.31  46.00  45.10  48.94  70.77  42.72  
SELECTED AVERAGE BALANCES       
Average loans, including loans held for sale$4,902,905  $4,462,347  $4,412,247  $4,293,455  $4,171,558  $4,682,626  $4,127,917  
Average interest-earning assets6,073,361  5,621,043  5,595,142  5,527,532  5,485,977  5,847,202  5,475,237  
Average assets6,468,129  6,007,237  5,978,797  5,907,207  5,856,465  6,237,592  5,833,326  
Average deposits5,614,595  5,121,696  4,998,897  4,987,414  4,977,781  5,368,056  4,978,124  
Average interest-bearing liabilities4,082,699  3,917,332  3,947,924  3,920,304  3,897,619  4,000,016  3,859,784  
Average shareholders’ equity540,802  536,721  530,464  524,083  504,749  538,762  499,720  


CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights
(Unaudited)TABLE 1 (CONTINUED)

 June 30,March 31,December 31,September 30,June 30,
(dollars in thousands)20202020201920192019
REGULATORY CAPITAL   
Central Pacific Financial Corp.   
Leverage capital$571,976  $567,947  $568,529  $561,478  $556,403  
Tier 1 risk-based capital571,976  567,947  568,529  561,478  556,403  
Total risk-based capital622,393  618,504  617,772  611,076  606,567  
Common equity tier 1 capital521,976  517,947  518,529  511,478  506,403  
Central Pacific Bank
Leverage capital559,461  556,895  556,077  550,913  544,480  
Tier 1 risk-based capital559,461  556,895  556,077  550,913  544,480  
Total risk-based capital609,811  607,402  605,320  600,511  594,644  
Common equity tier 1 capital559,461  556,895  556,077  550,913  544,480  
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp.
Leverage capital ratio8.9 %9.5 %9.5 %9.5 %9.5 %
Tier 1 risk-based capital ratio12.5  12.3  12.6  12.6  12.7  
Total risk-based capital ratio13.6  13.4  13.6  13.7  13.9  
Common equity tier 1 capital ratio11.4  11.3  11.5  11.5  11.6  
Central Pacific Bank
Leverage capital ratio8.7  9.3  9.3  9.4  9.3  
Tier 1 risk-based capital ratio12.2  12.1  12.3  12.4  12.5  
Total risk-based capital ratio13.3  13.2  13.4  13.5  13.6  
Common equity tier 1 capital ratio12.2  12.1  12.3  12.4  12.5  

June 30,March 31,December 31,September 30,June 30,
(dollars in thousands, except for per share amounts)20202020201920192019
BALANCE SHEET   
Total loans, net of deferred fees and costs$5,003,438  $4,511,998  $4,449,540  $4,367,862  $4,247,113  
Total assets6,632,972  6,108,548  6,012,672  5,976,716  5,920,006  
Total deposits5,794,685  5,136,069  5,120,023  5,037,659  4,976,849  
Long-term debt167,491  101,547  101,547  101,547  101,547  
Total shareholders’ equity544,271  533,781  528,520  525,227  515,695  
Total shareholders’ equity to total assets8.21 %8.74 %8.79 %8.79 %8.71 %
ASSET QUALITY     
Allowance for credit losses ("ACL") [1]$67,339  $59,645  $47,971  $48,167  $48,267  
Non-performing assets4,741  3,647  1,719  1,360  1,258  
ACL to total loans [1]1.35 %1.32 %1.08 %1.10 %1.14 %
ACL to total loans, excluding PPP loans [1]1.50 %1.32 %1.08 %1.10 %1.14 %
ACL to non-performing assets [1]1,420.35 %1,635.45 %2,790.63 %3,541.69 %3,836.80 %
PER SHARE OF COMMON STOCK OUTSTANDING     
Book value per common share$19.33  $18.99  $18.68  $18.47  $18.05  
[1] The Company adopted ASU 2016-13, "Financial Instruments-Credit Losses" ("CECL"), effective January 1, 2020 using the modified retrospective approach. Results for the reporting periods beginning after January 1, 2020 are presented under CECL, while prior period amounts continue to be reported under previous GAAP.
[2] ROA, ROE and ROTE are annualized based on a 30/360 day convention. Annualized net interest income and expense in the NIM calculation are based on the day count interest payment conventions at the interest-earning asset or interest-bearing liability level (i.e. 30/360, actual/actual).
[3] Efficiency ratio is defined as total operating expense divided by total revenue (net interest income and total other operating income).
[4] Dividend payout ratio is defined as dividends declared per share divided by diluted earnings per share.




CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)TABLE 2
 
 June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands, except share data)20202020201920192019
ASSETS   
Cash and due from financial institutions$102,132  $81,972  $78,418  $87,395  $83,534  
Interest-bearing deposits in other financial institutions41,201  11,021  24,554  7,803  15,173  
Investment securities:  
Available-for-sale debt securities, at fair value1,168,594  1,184,023  1,126,983  1,186,875  1,254,743  
Equity securities, at fair value1,209  1,002  1,127  1,058  1,034  
Total investment securities1,169,803  1,185,025  1,128,110  1,187,933  1,255,777  
Loans held for sale10,443  3,910  9,083  7,016  6,848  
Loans, net of deferred fees and costs5,003,438  4,511,998  4,449,540  4,367,862  4,247,113  
Less allowance for credit losses [1]67,339  59,645  47,971  48,167  48,267  
Loans, net of allowance for credit losses4,936,099  4,452,353  4,401,569  4,319,695  4,198,846  
Premises and equipment, net55,032  50,447  46,343  44,095  43,600  
Accrued interest receivable19,590  16,851  16,500  16,220  17,260  
Investment in unconsolidated subsidiaries16,428  16,721  17,115  17,001  17,247  
Other real estate owned—  100  164  466  276  
Mortgage servicing rights12,771  13,345  14,718  15,058  15,266  
Bank-owned life insurance161,758  159,637  159,656  158,939  158,294  
Federal Home Loan Bank ("FHLB") stock9,229  18,109  14,983  17,183  17,824  
Right of use lease asset50,039  51,198  52,348  52,588  53,678  
Other assets48,447  47,859  49,111  45,324  36,383  
Total assets$6,632,972  $6,108,548  $6,012,672  $5,976,716  $5,920,006  
LIABILITIES AND SHAREHOLDERS' EQUITY     
Deposits:     
Noninterest-bearing demand$1,851,012  $1,430,540  $1,450,532  $1,399,200  $1,351,190  
Interest-bearing demand1,067,483  1,018,508  1,043,010  998,037  1,002,706  
Savings and money market1,945,744  1,693,280  1,600,028  1,593,738  1,573,805  
Time930,446  993,741  1,026,453  1,046,684  1,049,148  
Total deposits5,794,685  5,136,069  5,120,023  5,037,659  4,976,849  
FHLB advances and other short-term borrowings—  222,000  150,000  205,000  221,000  
Long-term debt167,491  101,547  101,547  101,547  101,547  
Lease liability50,440  51,541  52,632  52,807  53,829  
Other liabilities76,050  63,561  59,950  54,476  51,086  
Total liabilities6,088,666  5,574,718  5,484,152  5,451,489  5,404,311  
Shareholders' equity:     
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, and June 30, 2019—  —  —  —  —  
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 28,154,159 at June 30, 2020, 28,115,353 at March 31, 2020, 28,289,257 at December 31, 2019, 28,441,341 at September 30, 2019, and 28,567,777 at June 30, 2019442,699  442,853  447,602  452,278  456,293  
Additional paid-in capital93,007  92,284  91,611  90,604  89,724  
Accumulated deficit [1](16,986) (20,428) (19,102) (26,782) (34,780) 
Accumulated other comprehensive income (loss)25,551  19,072  8,409  9,127  4,458  
Total shareholders' equity544,271  533,781  528,520  525,227  515,695  
Non-controlling interest35  49  —  —  —  
Total equity544,306  533,830  528,520  525,227  515,695  
Total liabilities and shareholders' equity$6,632,972  $6,108,548  $6,012,672  $5,976,716  $5,920,006  
[1] The Company adopted ASU 2016-13, "Financial Instruments-Credit Losses" ("CECL"), effective January 1, 2020 using the modified retrospective approach. Results for the reporting periods beginning after January 1, 2020 are presented under CECL, while prior period amounts continue to be reported under previous GAAP.




CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES 
Consolidated Statements of Income 
(Unaudited)TABLE 3

 Three Months EndedSix Months Ended
 June 30,March 31,December 31,September 30,June 30,June 30,
(Dollars in thousands, except per share data)2020202020192019201920202019
Interest income:     
Interest and fees on loans$45,915  $46,204  $47,488  $45,861  $45,540  $92,119  $89,308  
Interest and dividends on investment securities:
Taxable investment securities6,310  6,757  6,486  7,178  7,530  13,067  15,790  
Tax-exempt investment securities599  668  656  708  814  1,267  1,680  
Dividend income on investment securities17  17  17  14  14  34  32  
Interest on deposits in other financial institutions3  36  54  33  46  39  114  
Dividend income on FHLB stock106  132  456  186  161  238  322  
Total interest income52,950  53,814  55,157  53,980  54,105  106,764  107,246  
Interest expense:       
Interest on deposits:       
Demand114  176  202  207  199  290  391  
Savings and money market567  1,118  1,253  1,549  1,507  1,685  2,298  
Time2,124  3,268  3,653  4,432  4,867  5,392  9,959  
Interest on short-term borrowings74  508  1,139  1,130  1,123  582  2,016  
Interest on long-term debt812  914  976  1,013  1,031  1,726  2,091  
Total interest expense3,691  5,984  7,223  8,331  8,727  9,675  16,755  
Net interest income49,259  47,830  47,934  45,649  45,378  97,089  90,491  
Provision for credit losses10,640  9,329  2,098  1,532  1,404  19,969  2,687  
Net interest income after provision for credit losses38,619  38,501  45,836  44,117  43,974  77,120  87,804  
Other operating income:       
Mortgage banking income3,566  337  1,410  1,994  1,708  3,903  3,281  
Service charges on deposit accounts1,149  2,050  2,159  2,125  2,041  3,199  4,122  
Other service charges and fees2,916  4,897  4,095  3,894  3,909  7,813  7,124  
Income from fiduciary activities1,270  1,297  1,175  1,126  1,129  2,567  2,094  
Equity in earnings of unconsolidated subsidiaries104  26  92  86  71  130  79  
Net gain (loss) on sales of investment securities—  —  —  36  —  —  —  
Income from bank-owned life insurance1,424  (19) 594  645  914  1,405  1,866  
Net gain (loss) on sales of foreclosed assets(6) —  (162) 17  —  (6) —  
Other (refer to Table 4)269  298  405  343  322  567  3,201  
Total other operating income10,692  8,886  9,768  10,266  10,094  19,578  21,767  
Other operating expense:       
Salaries and employee benefits20,622  20,347  21,207  20,631  20,563  40,969  40,452  
Net occupancy3,645  3,672  3,619  3,697  3,525  7,317  6,983  
Equipment1,043  1,097  1,142  1,067  1,138  2,140  2,144  
Communication expense774  837  906  1,008  903  1,611  1,637  
Legal and professional services2,238  2,028  2,123  1,933  1,728  4,266  3,298  
Computer software expense3,035  2,943  2,942  2,713  2,560  5,978  5,157  
Advertising expense923  1,092  527  711  712  2,015  1,423  
Foreclosed asset expense—  67  28  15  49  67  208  
Other (refer to Table 4)4,147  4,157  3,748  3,159  4,929  8,304  9,153  
Total other operating expense36,427  36,240  36,242  34,934  36,107  72,667  70,455  
Income before income taxes12,884  11,147  19,362  19,449  17,961  24,031  39,116  
Income tax expense2,967  2,821  5,165  4,895  4,427  5,788  9,545  
Net income$9,917  $8,326  $14,197  $14,554  $13,534  $18,243  $29,571  
Per common share data:       
Basic earnings per share$0.35  $0.30  $0.50  $0.51  $0.47  $0.65  $1.03  
Diluted earnings per share0.35  0.29  0.50  0.51  0.47  0.65  1.03  
Cash dividends declared0.23  0.23  0.23  0.23  0.23  0.46  0.44  
Basic weighted average shares outstanding28,040,802  28,126,400  28,259,294  28,424,898  28,546,564  28,083,602  28,651,852  
Diluted weighted average shares outstanding28,095,230  28,277,753  28,448,243  28,602,338  28,729,510  28,190,132  28,847,786  
Note: Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period.




CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES 
Other Operating Income and Other Operating Expense - Detail 
(Unaudited)TABLE 4

The following table sets forth the components of other operating income - other for the periods indicated:

 Three Months EndedSix Months Ended
 June 30,March 31,December 31,September 30,June 30,June 30,
(Dollars in thousands)2020202020192019201920202019
Other operating income - other:
Income recovered on nonaccrual loans previously charged-off$37  $23  $80  $73  $85  $60  $167  
Other recoveries26  40  36  42  26  66  52  
Commissions on sale of checks56  81  75  75  79  137  159  
Gain on sale of MasterCard stock—  —  —  —  —  —  2,555  
Other150  154  214  153  132  304  268  
Total other operating income - other$269  $298  $405  $343  $322  $567  $3,201  

The following table sets forth the components of other operating expense - other for the periods indicated:

 Three Months EndedSix Months Ended
 June 30,March 31,December 31,September 30,June 30,June 30,
(Dollars in thousands)2020202020192019201920202019
Other operating expense - other:
Charitable contributions$10  $187  $122  $230  $175  $197  $329  
FDIC insurance assessment475  —  —  5  362  475  863  
Miscellaneous loan expenses399  300  361  274  317  699  611  
ATM and debit card expenses584  634  672  660  620  1,218  1,270  
Armored car expenses229  294  186  220  211  523  409  
Entertainment and promotions165  280  495  323  1,023  445  1,253  
Stationery and supplies220  248  305  240  279  468  504  
Directors’ fees and expenses196  241  246  242  238  437  480  
Directors' deferred compensation plan expense103  (1,483) 148  (155) 133  (1,380) 568  
Provision (credit) for residential mortgage loan repurchase losses—  —  —  —  (403) —  (403) 
Provision for off-balance sheet credit exposures573  1,798  (160) (465) 487  2,371  654  
Other1,193  1,658  1,373  1,585  1,487  2,851  2,615  
Total other operating expense - other$4,147  $4,157  $3,748  $3,159  $4,929  $8,304  $9,153  
Note: Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period.




CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES 
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent) 
(Unaudited)TABLE 5

 Three Months EndedThree Months EndedThree Months Ended
June 30, 2020March 31, 2020June 30, 2019
 AverageAverage AverageAverage AverageAverage 
(Dollars in thousands)BalanceYield/RateInterestBalanceYield/RateInterestBalanceYield/RateInterest
ASSETS
Interest-earning assets:         
Interest-bearing deposits in other financial institutions$15,777  0.10 %$3  $11,082  1.29 %$36  $8,002  2.34 %$46  
Investment securities, excluding valuation allowance:
Taxable1,042,441  2.43  6,327  1,027,695  2.64  6,774  1,147,759  2.63  7,544  
Tax-exempt100,485  3.02  758  105,330  3.21  845  142,660  2.89  1,030  
Total investment securities1,142,926  2.48  7,085  1,133,025  2.69  7,619  1,290,419  2.66  8,574  
Loans, including loans held for sale4,902,905  3.76  45,915  4,462,347  4.16  46,204  4,171,558  4.37  45,540  
Federal Home Loan Bank stock11,753  3.62  106  14,589  3.61  132  15,998  4.02  161  
Total interest-earning assets6,073,361  3.51  53,109  5,621,043  3.85  53,991  5,485,977  3.97  54,321  
Noninterest-earning assets394,768    386,194    370,488    
Total assets$6,468,129    $6,007,237    $5,856,465    
LIABILITIES AND EQUITY
Interest-bearing liabilities:        
Interest-bearing demand deposits$1,056,885  0.04 %$114  $1,013,795  0.07 %$176  $962,402  0.08 %$199  
Savings and money market deposits1,856,621  0.12  567  1,651,751  0.27  1,118  1,577,437  0.38  1,507  
Time deposits under $100,000161,874  0.65  261  164,274  0.70  284  173,556  0.70  305  
Time deposits $100,000 and over807,276  0.93  1,863  846,152  1.42  2,984  907,330  2.02  4,562  
Total interest-bearing deposits3,882,656  0.29  2,805  3,675,972  0.50  4,562  3,620,725  0.73  6,573  
Federal Home Loan Bank advances and other short-term borrowings63,104  0.48  74  139,813  1.46  508  175,347  2.57  1,123  
Long-term debt136,939  2.38  812  101,547  3.62  914  101,547  4.07  1,031  
Total interest-bearing liabilities4,082,699  0.36  3,691  3,917,332  0.61  5,984  3,897,619  0.90  8,727  
Noninterest-bearing deposits1,731,939    1,445,724    1,357,056    
Other liabilities112,687    107,458    97,041    
Total liabilities5,927,325    5,470,514    5,351,716    
Shareholders’ equity540,802    536,721    504,749    
Non-controlling interest2    2    —    
Total equity540,804    536,723    504,749    
Total liabilities and equity$6,468,129    $6,007,237    $5,856,465    
Net interest income  $49,418    $48,007    $45,594  
Interest rate spread3.15 %3.24 %3.07 %
Net interest margin 3.26 %  3.43 %  3.33 % 




CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES 
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent) 
(Unaudited)TABLE 6

 Six Months EndedSix Months Ended
June 30, 2020June 30, 2019
 AverageAverage AverageAverage 
(Dollars in thousands)BalanceYield/RateInterestBalanceYield/RateInterest
ASSETS
Interest-earning assets:      
Interest-bearing deposits in other financial institutions$13,430  0.59 %$39  $9,682  2.38 %$114  
Investment securities, excluding valuation allowance:
Taxable1,035,068  2.53  13,101  1,174,596  2.69  15,822  
Tax-exempt102,907  3.12  1,604  147,899  2.88  2,127  
Total investment securities1,137,975  2.58  14,705  1,322,495  2.71  17,949  
Loans, including loans held for sale4,682,626  3.95  92,119  4,127,917  4.35  89,308  
Federal Home Loan Bank stock13,171  3.61  238  15,143  4.26  322  
Total interest-earning assets5,847,202  3.67  107,101  5,475,237  3.95  107,693  
Noninterest-earning assets390,390    358,089    
Total assets$6,237,592    $5,833,326    
LIABILITIES AND EQUITY
Interest-bearing liabilities:      
Interest-bearing demand deposits$1,035,340  0.06 %$290  $956,783  0.08 %$391  
Savings and money market deposits1,754,186  0.19  1,685  1,525,425  0.30  2,298  
Time deposits under $100,000163,074  0.67  546  174,683  0.68  592  
Time deposits $100,000 and over826,714  1.18  4,846  944,796  2.00  9,367  
Total interest-bearing deposits3,779,314  0.39  7,367  3,601,687  0.71  12,648  
Federal Home Loan Bank advances and other short-term borrowings101,459  1.15  582  156,550  2.60  2,016  
Long-term debt119,243  2.91  1,726  101,547  4.15  2,091  
Total interest-bearing liabilities4,000,016  0.49  9,675  3,859,784  0.88  16,755  
Noninterest-bearing deposits1,588,742    1,376,437    
Other liabilities110,070    97,385    
Total liabilities5,698,828    5,333,606    
Shareholders’ equity538,762    499,720    
Non-controlling interest2    —    
Total equity538,764    499,720    
Total liabilities and equity$6,237,592    $5,833,326    
Net interest income  $97,426    $90,938  
Interest rate spread3.18 %3.07 %
Net interest margin 3.34 %  3.33 % 




CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Loans by Geographic Distribution
(Unaudited)TABLE 7

 June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20202020201920192019
HAWAII:     
Commercial, financial and agricultural:
SBA Paycheck Protection Program$483,827  $—  $—  $—  $—  
Other431,887  454,817  454,582  439,296  435,353  
Real estate:
Construction103,518  100,617  95,854  96,661  72,427  
Residential mortgage1,657,558  1,632,536  1,599,801  1,558,735  1,516,936  
Home equity510,962  504,686  490,734  475,565  473,151  
Commercial mortgage912,422  917,886  909,798  909,987  905,479  
Consumer350,414  367,960  373,451  369,511  353,282  
Leases—  —  —  31  52  
Total loans, net of deferred fees and costs4,450,588  3,978,502  3,924,220  3,849,786  3,756,680  
Allowance for credit losses(59,765) (51,646) (42,592) (42,286) (42,414) 
Loans, net of allowance for credit losses$4,390,823  $3,926,856  $3,881,628  $3,807,500  $3,714,266  
U.S. MAINLAND: [1]     
Commercial, financial and agricultural:
SBA Paycheck Protection Program$42,581  $—  $—  $—  $—  
Other115,971  120,507  115,722  137,316  155,130  
Real estate:
Construction—  —  —  —  —  
Residential mortgage—  —  —  —  —  
Home equity—  —  —  —  —  
Commercial mortgage217,747  221,251  213,617  223,925  187,379  
Consumer176,551  191,738  195,981  156,835  147,924  
Leases—  —  —  —  —  
Total loans, net of deferred fees and costs552,850  533,496  525,320  518,076  490,433  
Allowance for credit losses(7,574) (7,999) (5,379) (5,881) (5,853) 
Loans, net of allowance for credit losses$545,276  $525,497  $519,941  $512,195  $484,580  
TOTAL:     
Commercial, financial and agricultural:
SBA Paycheck Protection Program$526,408  $—  $—  $—  $—  
Other547,858  575,324  570,304  576,612  590,483  
Real estate:
Construction103,518  100,617  95,854  96,661  72,427  
Residential mortgage1,657,558  1,632,536  1,599,801  1,558,735  1,516,936  
Home equity510,962  504,686  490,734  475,565  473,151  
Commercial mortgage1,130,169  1,139,137  1,123,415  1,133,912  1,092,858  
Consumer526,965  559,698  569,432  526,346  501,206  
Leases—  —  —  31  52  
Total loans, net of deferred fees and costs5,003,438  4,511,998  4,449,540  4,367,862  4,247,113  
Allowance for credit losses(67,339) (59,645) (47,971) (48,167) (48,267) 
Loans, net of allowance for credit losses$4,936,099  $4,452,353  $4,401,569  $4,319,695  $4,198,846  
[1] U.S. Mainland includes territories of the United States.




CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Deposits
(Unaudited)TABLE 8
 
 June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20202020201920192019
Noninterest-bearing demand$1,851,012  $1,430,540  $1,450,532  $1,399,200  $1,351,190  
Interest-bearing demand1,067,483  1,018,508  1,043,010  998,037  1,002,706  
Savings and money market1,945,744  1,693,280  1,600,028  1,593,738  1,573,805  
Time deposits less than $100,000159,739  162,399  165,755  165,687  171,106  
Core deposits5,023,978  4,304,727  4,259,325  4,156,662  4,098,807  
Government time deposits509,927  523,343  533,088  552,470  574,825  
Other time deposits $100,000 to $250,00096,633  100,047  107,550  103,959  105,382  
Other time deposits greater than $250,000164,147  207,952  220,060  224,568  197,835  
Total time deposits $100,000 and over770,707  831,342  860,698  880,997  878,042  
Total deposits$5,794,685  $5,136,069  $5,120,023  $5,037,659  $4,976,849  




CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Nonperforming Assets, Past Due and Restructured Loans
(Unaudited)TABLE 9

 June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20202020201920192019
Nonaccrual loans (including loans held for sale): [1]
Commercial, financial and agricultural$934  $667  $467  $—  $—  
Real estate:
Residential mortgage3,215  2,287  979  799  738  
Home equity538  545  92  95  244  
Consumer54  48  17  —  —  
Total nonaccrual loans4,741  3,547  1,555  894  982  
Other real estate owned ("OREO"):     
Real estate:  
Residential mortgage—  —  —  302  276  
Home equity—  100  164  164  —  
Total OREO—  100  164  466  276  
Total nonperforming assets ("NPAs")4,741  3,647  1,719  1,360  1,258  
Loans delinquent for 90 days or more still accruing interest: [1]     
Real estate:  
Residential mortgage726  1,221  724  —  —  
Consumer444  352  286  235  267  
Total loans delinquent for 90 days or more still accruing interest1,170  1,573  1,010  235  267  
Restructured loans still accruing interest: [1]     
Commercial, financial and agricultural172  113  135  157  178  
Real estate:  
Residential mortgage5,290  5,431  5,502  6,717  6,831  
Commercial mortgage1,888  1,709  1,839  1,985  2,097  
Consumer145  —  —  —  —  
Total restructured loans still accruing interest7,495  7,253  7,476  8,859  9,106  
Total NPAs and loans delinquent for 90 days or more and restructured loans still accruing interest$13,406  $12,473  $10,205  $10,454  $10,631  
Total nonaccrual loans as a percentage of total loans0.09 %0.08 %0.03 %0.02 %0.02 %
Total NPAs as a percentage of total loans and OREO0.09 %0.08 %0.04 %0.03 %0.03 %
Total NPAs and loans delinquent for 90 days or more still accruing interest as a percentage of total loans and OREO0.12 %0.12 %0.06 %0.04 %0.04 %
Total NPAs and loans delinquent for 90 days or more and restructured loans still accruing interest as a percentage of total loans and OREO0.27 %0.28 %0.23 %0.24 %0.25 %
Quarter-to-quarter changes in NPAs:    
Balance at beginning of quarter$3,647  $1,719  $1,360  $1,258  $3,338  
Additions1,771  2,056  695  112  —  
Reductions:  
Payments(367) (60) (34) (51) (2,055) 
Return to accrual status(123) —  —  (2) (25) 
Sales of NPAs(94) —  (302) —  —  
Charge-offs, valuation and other adjustments(93) (68) —  43  —  
Total reductions(677) (128) (336) (10) (2,080) 
Balance at end of quarter$4,741  $3,647  $1,719  $1,360  $1,258  
[1] Section 4013 of the CARES Act and the revised Interagency Statement are being applied to loan modfications related to the COVID-19 pandemic as eligible and applicable. These loan modifications are not included in the delinquent, nonaccrual or restructured loan balances presented above.




CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Allowance for Credit Losses on Loans
(Unaudited)TABLE 10
 
 Three Months EndedSix Months Ended
 June 30,March 31,December 31,September 30,June 30,June 30,
(Dollars in thousands)2020202020192019201920202019
Allowance for credit losses ("ACL"):     
ACL at beginning of period$59,645  $47,971  $48,167  $48,267  $47,267  $47,971  $47,916  
Adoption of ASU 2016-13—  3,566  —  —  —  3,566  —  
Adjusted ACL at beginning of period59,645  51,537  48,167  48,267  47,267  51,537  47,916  
Provision for credit losses10,640  9,329  2,098  1,532  1,404  19,969  2,687  
Charge-offs: 
Commercial, financial and agricultural1,103  437  379  797  839  1,540  1,302  
Real estate:
Residential mortgage52  —  —  —  —  52  —  
Home equity—  —  —  5  —  —  —  
Consumer2,626  2,217  2,723  1,832  1,459  4,843  3,710  
Total charge-offs3,781  2,654  3,102  2,634  2,298  6,435  5,012  
Recoveries:     
Commercial, financial and agricultural305  342  264  362  315  647  548  
Real estate:
Construction—  131  6  6  592  131  598  
Residential mortgage20  181  26  104  372  201  394  
Home equity—  31  —  24  9  31  18  
Commercial mortgage1  2  —  —  25  3  25  
Consumer509  746  512  506  581  1,255  1,093  
Total recoveries835  1,433  808  1,002  1,894  2,268  2,676  
Net charge-offs (recoveries)2,946  1,221  2,294  1,632  404  4,167  2,336  
ACL at end of period$67,339  $59,645  $47,971  $48,167  $48,267  $67,339  $48,267  
Average loans, net of deferred fees and costs$4,902,905  $4,462,347  $4,412,247  $4,293,455  $4,171,558  $4,682,626  $4,127,917  
Annualized ratio of net charge-offs to average loans0.24 %0.11 %0.21 %0.15 %0.04 %0.18 %0.11 %
Ratio of ACL to total loans1.35 %1.32 %1.08 %1.10 %1.14 %1.35 %1.14 %
Ratio of ACL to total loans, excluding PPP loans1.50 %1.32 %1.08 %1.10 %1.14 %1.50 %1.14 %




CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)TABLE 11
 
The Company believes that pre-tax, pre-provision earnings, a non-GAAP financial measure, is useful as a tool to help evaluate the ability to provide for credit costs through operations. The following table sets forth a reconciliation of our pre-tax pre-provision earnings for each of the dates indicated:

Three Months EndedSix Months Ended
June 30,March 31,December 31,September 30,June 30,June 30,
(Dollars in thousands)2020202020192019201920202019
Net income$9,917  $8,326  $14,197  $14,554  $13,534  $18,243  $29,571  
Add: Income tax expense2,967  2,821  5,165  4,895  4,427  5,788  9,545  
Income before taxes12,884  11,147  19,362  19,449  17,961  24,031  39,116  
Add: Provision for credit losses10,640  9,329  2,098  1,532  1,404  19,969  2,687  
Pre-tax pre-provision earnings$23,524  $20,476  $21,460  $20,981  $19,365  $44,000  $41,803  

The following table sets forth a reconciliation of the ratios of our allowance for credit losses to total loans and total loans, excluding PPP loans, for each of the dates indicated:

June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20202020201920192019
Allowance for credit losses ("ACL")$67,339  $59,645  $47,971  $48,167  $48,267  
Total loans$5,003,438  $4,511,998  $4,449,540  $4,367,862  $4,247,113  
SBA Paycheck Protection Program ("PPP loans")526,408  —  —  —  —  
Total loans, excluding PPP loans$4,477,030  $4,511,998  4,449,540  4,367,862  $4,247,113  
Ratio of ACL to total loans1.35 %1.32 %1.08 %1.10 %1.14 %
Ratio of ACL to total loans, excluding PPP loans1.50 %1.32 %1.08 %1.10 %1.14 %