Central Pacific Financial Boosts Shareholder Returns with Dividend Hike and Buyback Initiative
07.02.2026 - 06:22:05
Central Pacific Financial Corp. has concluded its 2025 fiscal year with robust profitability, prompting a clear strategic pivot toward enhanced capital returns. The Hawaii-based institution is seeking to reinforce investor confidence through a dual approach of raising its cash dividend and authorizing a substantial new share repurchase plan. This move comes as the bank navigates a slight contraction in its total loan portfolio.
The board of directors has approved a 3.6% increase in the quarterly cash dividend, raising it to $0.29 per share. This distribution is scheduled for payment on March 16 to shareholders of record as of February 27. Complementing this income boost for investors, management has greenlit a fresh stock repurchase program authorizing the buyback of up to $55 million in common shares. These initiatives follow a combined $52.7 million returned to shareholders via dividends and buybacks throughout the previous year.
The focus on shareholder value is further supported by a newly formed strategic alliance with Korea Investment & Securities, aimed at broadening the company's market reach and service capabilities.
Review of 2025 Financial Performance
Central Pacific reported a solid annual net income of $77.5 million for 2025, translating to earnings per share (EPS) of $2.86. This performance resulted in a return on equity of 15.41%. For the final quarter alone, the company posted a profit of $0.85 per share on $76.29 million in revenue.
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Despite this earnings strength, the bank's total loan volume experienced a modest year-over-year decline of 0.8%, settling at $5.29 billion. On a positive note, core deposits saw a sequential increase of 1.3% to $6.06 billion in the fourth quarter. The bank's net interest margin benefited from a favorable spread, with the average yield on earning assets reaching 4.99% while the cost of total deposits remained low at 0.94%. Total assets stood at approximately $7.41 billion at the year-end close.
Forward-Looking Guidance for 2026
Looking ahead to the current 2026 fiscal year, management has provided specific growth targets. The company forecasts that net interest income will expand within a range of 4% to 6%. Both loans and deposits are anticipated to grow at a low single-digit percentage rate.
For the immediate first quarter of 2026, the bank expects its net interest margin to widen by 2 to 5 basis points. Company leadership has identified the local economic climate in Hawaii and ongoing competitive pressures on deposit pricing as key risk factors that could influence these projections.
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