Central Pacific Financial Notches Gain on $125 Million Share Buyback

Jacob Harper |

The Honolulu-based bank Central Pacific Financial (CPF) ended the week with a solid gain after announcing a major share buyback program designed to increase shareholder value. The company’s stock had had a rough month leading up to the announcement, making the buyback that much moiré welcome.

The shares will be repurchased in a rolling Dutch auction. CPF President explained that this method, which values shares between $18 and $21, offers “an efficient way to sell all or some of their shares without the potential disruption in share price from market sales."

A rolling Dutch auction will allow shareholders some flexibility in selling. The method allows shareholders to indicate how many shares and at what price, or prices, they wish to tender their shares of the company.

Investors in Central Pacific have been on quite a ride over the last several years. While most all financial institutions were hit hard during the global recession, Central Pacific’s woes were especially pronounced. The company’s shares topped $787 apiece at the beginning of 2007 before tanking spectacularly.

The government was forced to bail out Central Pacific in January 2009 to keep them from going insolvent. After Central Pacific briefly recovery following the bailout, shares once again tumbled, and have since languished in the $10 to $20 range.

In 2012 it was announced that the US Treasury had provided $135 million in TARP funds, and was only able to recover $74 million, thus posting a $61 million in losses. Since then, Central Pacific has made strides to once again become profitable and return value to stockholders.

The buyback includes $68.8 million worth of shares from private investors, and $52.2 million from its two largest shareholders, Carlyle Financial Services Harbor L.P. and ACMO-CPF, LLC.

Central Pacific operates 35 branches throuhgout Hawaii. On Feb.  21 shares of Central Pacific climbed 6.29 percent to hit $19.76 a share.

operates 35 branches and 112 ATMs in the state of Hawaii, - See more at: http://www.noodls.com/view/26AA417C20872662BF2481AEAFAF0B5D5211F5D9#sthash.Zu65J9cP.dpufOn Feb. 21 shares of Central Pacific climbed 6.29 percent to hit $19.76 a share.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CPF Central Pacific Financial Corp 23.00 -0.39 -1.67 182,319

Comments

Emerging Growth

Robix Environmental Technologies Inc.

The Corporation is an "industrial products/technology" company, which has developed an oil spill recovery vessel with the capability to recover oil not only in rough and debris laden sea conditions…

Private Markets

Snapchat

Snapchat is the fastest way to share a moment with friends. The mobile app, allows users to not only share photos with friends but also control how long they can…

Almond Smart Home Router by Securifi

Securifi sells user friendly touch screen routers that also have support for IoT/home automation.Securifi’s Almond revolutionized wireless router setup with its easy to use Touchscreen Interface in 2012. Now our…

Events

2016 Marcum MicroCap Conference

The Marcum MicroCap Conference is dedicated to providing a forum where publicly traded companies with less than $500 million in market capitalization can network with the investment community. The 2016…

Learn more