Central Pacific Financial Corp. Surveillance Report
Company Profile
Central Pacific Financial Corp. (NYSE: CPF) (“Central Pacific” or “the company”) is the BHC for main subsidiary, Central Pacific Bank (“the bank” or “CPB”), which operates 27 branches across Hawaii, predominantly on the island of Oahu.
The Hawaiian banking market is highly concentrated, with the top four local banks controlling ~92% of deposits; CPB ranks 4th with a 12% share. Management characterizes HI as deposit-rich but asset-generation poor, contributing to slower loan growth than much of the U.S. Accordingly, CPF has expanded mainland CRE lending, which along with other mainland lending represents ~17% of loans, with a current target of 15%–20%. Locally, CPF remains focused on market share gains in areas where it can differentiate from larger peers, including homeownership and small business relationships. Beyond its balanced retail and commercial deposit base, CPF benefits from ~$1 billion of Asia-related deposits, from both Japan and South…
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