CPF - Central Pacific Financial: Margin Likely To Push Up Earnings, But Valuation Is Not Attractive

2025-05-22 20:23:19 ET

Summary

• The continued re-pricing downward of time deposits will push up the net interest margin, which will, in turn, boost the earnings.
• Loan growth will likely remain negligible because of high mortgage rates. Tourism in Hawaii is still not showing any negative effects of the trade war.
• I'm raising the provision expense estimate and therefore reducing my EPS to $2.30 from my previous estimate of $2.40.
• My total expected return is negative, which includes a good dividend yield of 4.0%.

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