Investment Thesis
Central Pacific Financial shows strong net income growth (45.1% YoY) and positive free cash flow, but is hampered by critically low returns (ROE 3.5%, ROA 0.3%), troubling interest coverage of 0.4x indicating operating income cannot service debt, and potential data quality issues in applying traditional metrics to banking sector financials.
Strengths
- Strong net income growth of 45.1% year-over-year with positive momentum
- Conservative debt-to-equity ratio of 0.13x indicates disciplined leverage
- Positive free cash flow of $17.3M provides financial flexibility
Risks
- Interest coverage ratio of 0.4x is severely concerning—operating income cannot cover interest expenses, signaling debt servicing stress
- Extremely low return on equity (3.5%) and return on assets (0.3%) suggest inefficient capital deployment despite earnings growth
- Data quality concerns: traditional income statement metrics may not accurately reflect banking operations; revenue figure of $11.6M appears inconsistent with $7.5B asset base
Key Metrics to Watch
- Interest coverage ratio trends and debt service capacity
- Return on equity trajectory toward industry benchmarks (typically 8-12% for healthy banks)
- Net interest margin and non-interest income composition
Financial Metrics
Revenue
11.6M
Net Income
20.7M
EPS (Diluted)
$0.78
Free Cash Flow
17.3M
Total Assets
7.5B
Cash
406.6M
Profitability Ratios
Gross Margin
N/A
Operating Margin
232.5%
Net Margin
179.1%
ROE
3.5%
ROA
0.3%
FCF Margin
149.2%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.13x
Debt/Assets
92.1%
Interest Coverage
0.37x
Long-term Debt
76.5M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T14:47:58.875660 |
Data as of: 2026-03-31 |
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