Conferencia de resultados del T3 de 2026 de Central Pacific Financial (CPF): el NIM se expande y el BPA alcanza los $0.88

Puntos clave

• Central Pacific Financial Corp. registró un beneficio neto de 22,8 millones de dólares, o 0,88 dólares por acción diluida, en el tercer trimestre de 2026, lo que supone un aumento frente a los 20,8 millones de dólares y 0,80 dólares del trimestre anterior.
• El margen de intereses aumentó un 2,6% intertrimestral y un 5,2% interanual hasta los 64,5 millones de dólares. El margen neto de interés se amplió al 3,62%, lo que representa un aumento de 5 puntos básicos respecto al trimestre anterior y de 13 puntos básicos en términos interanuales.
• El total de préstamos se situó en 5.310 millones de dólares, manteniéndose prácticamente estable frente al trimestre anterior. La nueva producción financiada registró un tipo medio ponderado del 6,26%, frente al 5,72% de los saldos amortizados.
• Los depósitos alcanzaron un total de 6.660 millones de dólares, lo que supone un descenso del 0,5% intertrimestral, pero un aumento del 1,3% interanual. Un descenso de 49,2 millones de dólares en los depósitos a plazo de mayor coste ayudó a mantener el coste medio total de los depósitos en el 0,90%.
• La calidad de los activos se mantuvo sólida. Los activos morosos bajaron a 14 millones de dólares, o el 0,19% del activo total, mientras que la ratio de préstamos criticados mejoró hasta el 1,81% desde el 2,34%.
• La dirección prevé que el margen neto de interés del cuarto trimestre de 2026 se sitúe en el rango medio del 3,60% y que los otros ingresos operativos sean de aproximadamente 13 millones de dólares.

Datos financieros principales

Rendimiento comercial y operativo

Los saldos de los préstamos se mantuvieron relativamente estables, pero la composición de la cartera continuó desplazándose hacia las hipotecas comerciales a tipo variable y los préstamos a la construcción. Estas categorías sustituyeron a las hipotecas residenciales a tipo fijo de menor rendimiento, a los préstamos al consumo y a los créditos con garantía hipotecaria, lo que mejoró el posicionamiento del banco ante los tipos de interés.

La producción financiada, excluyendo la actividad de crédito rotativo, ascendió a aproximadamente 229 millones de dólares, frente a los 204 millones de dólares de amortización. La producción del tercer trimestre se dividió casi por igual entre Hawái y el continente. Los préstamos en el continente representaban el 18% del saldo total al cierre del trimestre.

La dirección identificó aproximadamente 224 millones de dólares repartidos en 71 oportunidades de préstamos cuyo cierre está programado para el cuarto trimestre, al tiempo que enfatizó que esta cartera de proyectos no constituye un pronóstico. Más de un tercio de ese volumen en dólares se contabilizó en octubre.

La producción de hipotecas residenciales se situó en aproximadamente un tercio de su nivel habitual debido a los elevados tipos a largo plazo. La dirección está evaluando los préstamos con garantía hipotecaria como una vía potencial para reducir la amortización, dado que muchos clientes mantienen primeras hipotecas a tipos bajos.

La estructura de los depósitos mejoró al reducirse los depósitos a plazo de mayor coste en 49,2 millones de dólares. Esto se vio compensado en parte por un crecimiento de 15,7 millones de dólares en depósitos a la vista remunerados y de 21,6 millones de dólares en saldos de ahorro y del mercado monetario. La sociedad indicó que no contaba con depósitos intermediados y describió su base de depósitos como diversificada, granular y basada en relaciones con los clientes.

Durante el trimestre, CPF adquirió aproximadamente 294.000 acciones por 11,2 millones de dólares a un precio medio de unos 38 dólares. La autorización restante era de 22 millones de dólares. El consejo de administración también aumentó el dividendo en efectivo del cuarto trimestre un 3,3%, hasta los 0,31 dólares por acción.

Previsiones de la dirección

• Margen neto de interés del 4T: La dirección prevé que el NIM se sitúe en el rango medio del 3,60%. La reprefijación de activos debería seguir siendo favorable, pero unos tipos de depósito más elevados podrían compensar parte del beneficio.
• Otros ingresos operativos del 4T: Aproximadamente 13 millones de dólares, sujetos a la volatilidad del mercado que afecta a los ingresos del seguro de vida propiedad del banco (BOLI).
• Gastos operativos para todo el año: La dirección prevé un crecimiento de entre el 2% y el 2,5%, en la parte baja de su rango de estimaciones anterior. Se espera que los gastos del 4T aumenten estacionalmente debido a los incentivos y a las actividades de cierre de ejercicio.
• Tipo impositivo efectivo normalizado: Aproximadamente entre el 22% y el 24%, con posible variabilidad derivada de los ingresos por BOLI. Las previsiones no incluyen posibles deducciones fiscales adicionales.
• Beta de los depósitos: La dirección prevé una beta total de los depósitos de alrededor del 24%, o de aproximadamente el 33% para los depósitos remunerados.
• Ratio de préstamos sobre depósitos: La ratio actual es de alrededor del 80%, frente al rango objetivo de la dirección de entre el 80% y el 85%.
• Recompra de acciones: La dirección prevé en general que las recompras del 4T se mantengan a un ritmo similar al del 3T, en función del crecimiento de los préstamos, las condiciones operativas, la valoración, el AOCI y la ratio de capital ordinario tangible.

Riesgos y aspectos a vigilar

Los tipos de interés más altos durante más tiempo siguen presionando la banca hipotecaria residencial y podrían aumentar los costes de los depósitos a medida que se fortalezca el crecimiento de los préstamos. Aproximadamente 410 millones de dólares en certificados de depósito, o cerca del 40% de la cartera de CD, vencen en el cuarto trimestre. Su tipo medio ponderado de amortización es de alrededor del 2,7%, en comparación con un tipo nuevo combinado estimado de aproximadamente el 3,0%.

Los ingresos por BOLI y los gastos de retribución diferida siguen siendo sensibles a la volatilidad de los mercados de renta variable. La dirección también está supervisando más de cerca el crédito al consumo debido a las condiciones macroeconómicas y a los elevados tipos de interés.

Otros riesgos identificados incluyen conflictos geopolíticos, el precio del petróleo, la inflación, las condiciones de viaje y el aumento de la actividad de tormentas en Hawái. La dirección señaló que los efectos recientes de las tormentas fueron puntuales y no provocaron impactos significativos en la empresa ni en sus clientes.

Puntos destacados de la sesión de preguntas y respuestas con analistas

La dirección afirmó que la concesión de préstamos en el continente complementa, en lugar de sustituir, la franquicia de Hawái. La producción en lo que va de año fue de aproximadamente 380 millones de dólares en Hawái y de 310 millones de dólares en el continente, aunque la amortización siguió siendo mayor en Hawái al tratarse de una cartera de mayor tamaño.

La sociedad está priorizando la rentabilidad económica de los préstamos sobre el crecimiento del balance, centrándose en una mejor fijación de precios, una menor duración, la diversificación y una selección crediticia disciplinada. El flujo de caja trimestral de los valores es de unos 30 millones de dólares, y las nuevas compras ofrecen un aumento del rendimiento (yield pickup) de entre 225 y 250 puntos básicos. La amortización trimestral de préstamos es de unos 200 millones de dólares, con rendimientos de sustitución aproximadamente entre 50 y 60 puntos básicos más altos.

La dirección prevé que un mayor crecimiento neto de los préstamos requerirá una captación adicional de depósitos, lo que podría significar que el coste actual de los depósitos esté cerca de un mínimo. Sin embargo, la empresa espera que dicho crecimiento de la financiación siga siendo positivo para el beneficio (accretive).

Las tendencias crediticias mejoraron durante el trimestre. La dirección afirmó que el 91% de los préstamos criticados estaban garantizados por bienes inmuebles con sólidas ratios de préstamo sobre valor (LTV), mientras que la cartera de consumo sigue siendo la principal área a la que se presta atención adicional.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Good morning and good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Central Pacific Financial Corp. Third Quarter 2026 Earnings Call. [Operator Instructions]. This call is being recorded and will be available for replay shortly after its completion on the company's website at www.cpb.bank.

I'd like to turn the call over to Mr. Jayrald Rabago, Senior Strategic Financial Officer. Please go ahead.

Jayrald Rabago

Thank you, Erica, and thank you all for joining us today to review Central Pacific Financial Corp.'s financial results for the third quarter of 2026. Joining me this morning are Arnold Martines, Chairman, President and Chief Executive Officer; David Morimoto, Vice Chair and Chief Operating Officer; Ralph Mesick, Vice Chair; Dayna Matsumoto, Executive Vice President and Chief Financial Officer; and Anna Hu, Executive Vice President and Chief Credit Officer.

Before we begin, I would like to remind everyone that our earnings release and supplemental slides are available on our Investor Relations website at ir.cbb.bank. During today's call, management may make forward-looking statements. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. For a complete discussion of these risks, please refer to Slide 2 of our presentation.

With that, I will turn the call over to our Chairman, President and CEO, Arnold Martines.

Arnold Martines

Thank you, Jayrald, and hello to everyone joining us today. We delivered solid third quarter results driven by higher net interest income, disciplined expense management and continued balance sheet strength.

Our net interest margin expanded, supported by higher earning asset yields and stable deposit costs. Diluted earnings per share rose 21% compared with last year's third quarter results, which were adjusted to exclude onetime expenses.

Our performance reflects the resilience of our relationship-focused banking model and provides a sound foundation as we move into the fourth quarter. Our strategy remains focused on delivering sustainable returns as a high-performing bank while supporting our customers, communities and shareholders.

We continue to invest in talent, automation and data capabilities to support future operating efficiencies. At the same time, continued productivity gains and thoughtful resource allocation are helping us generate positive operating leverage.

Turning to the broader environment. Hawaii's economy remains resilient despite slower growth in the recent months due to storm-related travel disruptions. Through the first 8 months of 2026, visitor arrivals increased 1.8% and spending rose 4.1% compared with the prior year. Hawaii's unemployment rate remained low at 2.8% in September compared with 4.2% nationally.

Statewide nonfarm employment increased by 1,300 jobs year-over-year, including 700 jobs added in the construction industry, which continues to be a bright spot in the Hawaii economy. We continue to monitor external risks, including the geopolitical conflict and effects on oil prices, inflation and visitors to our state as well as impacts from the elevated storm activity Hawaii is experiencing this year.

We are committed to supporting our community as restoration and cleanup efforts continue. Overall, impacts were fortunately isolated, and we don't see any material impacts on our business or our customers.

With that, I will turn the call over to Dayna.

Dayna Matsumoto

Thank you, Arnold. We are pleased to report another solid quarter of earnings, reflecting the continued execution and diligence of our teams. For the third quarter, net income was $22.8 million or $0.88 per diluted share compared with $20.8 million or $0.80 per diluted share in the prior quarter.

Return on average assets was 1.22% and return on average equity was 15.28%. Our profitability metrics continue to trend favorably in line with our focus on high performance. Net interest income totaled $64.5 million for the quarter, up $1.6 million or 2.6% from the prior quarter and up $3.2 million or 5.2% from the year ago quarter.

Net interest margin increased 5 basis points from the prior quarter and 13 basis points from the year ago quarter to 3.62%. The sequential quarter increase in net interest income and margin was primarily driven by higher yields on loans and investment securities. Average loan yield increased 5 basis points to 5.01%, while the average rate paid on total deposits remained stable at 90 basis points. We continue to benefit from earning asset repricing and disciplined funding management.

Our balance sheet sensitivity position is neutral to slightly asset sensitive. Therefore, we are well positioned in the current rate environment. Fed rate hikes are modestly favorable as we've reduced our fixed rate asset exposures and we expect deposit pricing and betas to remain manageable.

For the fourth quarter, we expect NIM to be in the mid 3.60% range. Total other operating income was $12.4 million for the quarter compared with $14.6 million in the prior quarter. The sequential decrease was primarily due to a $2.4 million decline in our bank-owned life insurance income related to continued equity market volatility.

Total other operating expense was $44.8 million for the quarter compared with $46.2 million in the prior quarter. The sequential quarter decrease was primarily attributable to a $1.2 million reduction in salaries and employee benefits and a $1.0 million reduction in other expenses, both related to lower deferred compensation expenses driven by market volatility and offset by lower BOLI income.

The efficiency ratio improved to 58.3% from 59.6% in the prior quarter and continues to drive towards high performance with our ongoing focus on positive operating leverage. During the quarter, we repurchased approximately 294,000 shares for $11.2 million at an average price of about $38 per share.

At quarter end, $22 million remained available under our share repurchase authorization. Given our strong earnings, the Board increased the fourth quarter cash dividend by 3.3% to $0.31 per share. We continue to maintain a healthy capital position and remain committed to optimizing capital to enhance long-term shareholder value.

I will now turn the call over to Ralph.

Ralph Mesick

Thank you, Dayna. We continue to focus our lending activities on strengthening the earnings profile of the bank while maintaining pricing and credit discipline. We target good quality credit and emphasize sponsorship, structure and returns over volume.

Total loans ended the quarter at $5.31 billion, up approximately $5 million from the prior quarter and down approximately $54 million from a year ago. Average loans were essentially unchanged at $5.3 billion. While overall balances were relatively stable, portfolio mix continued to evolve, improving our interest rate position of our balance sheet.

As we've seen in previous quarters, growth in variable rate commercial mortgage and construction lending is replacing lower-yielding fixed rate residential mortgage, consumer and home equity loans. Funded production, excluding revolving activity, totaled approximately $229 million against $204 million of runoff. New production carried a weighted average rate of 6.26% compared with 5.72% on runoff balances, resulting in positive spread replacement.

From a geographic perspective, third quarter production was about 50% from Hawaii and 50% from the Mainland. At quarter end, Mainland loans represented 18% of total balances. Mainland balances increased by approximately $50 million during the quarter, while Hawaii balances declined by approximately $45 million.

In Hawaii, our emphasis remains on relationship-based lending that supports building deeper customer relationships. These types of relationships generate operating accounts and treasury management services as well as personal banking opportunities.

On the Mainland, we continue to selectively deploy excess funding, which will enhance portfolio diversification and increase risk-adjusted returns. Looking ahead, we are encouraged by pipeline activity. We have approximately $224 million in loan volume across 71 opportunities in the processing stages scheduled for fourth quarter closings.

I would emphasize that this represents scheduled pipeline activity rather than a forecast. The actual pull-through and timing of closings may differ, but we booked more than 1/3 of that production in dollars during the month of October.

Finally, we're well aware of the uncertainty and headwinds impacting the local and national economy, but continue to be biased towards business development and growth. We'll be intentional and disciplined in this pursuit, allocating capital to opportunities that strengthen the earnings power of the bank and the resilience of our balance sheet.

And with that, I'll turn the call over to David.

David Morimoto

Thank you, Ralph. Total deposits ended the quarter at $6.66 billion, down $31.9 million or 0.5% from the prior quarter and up $86.2 million or 1.3% from the prior year.

The quarterly decline was due to a $49.2 million reduction in higher cost time deposits. This was partially offset by growth of $15.7 million in interest-bearing demand deposits and $21.6 million in savings and money market balances.

On an average balance basis, noninterest-bearing deposits increased $10.9 million, while savings and money market balances increased $39.2 million, reflecting our continued focus on primary operating accounts and deeper customer relationships.

Our deposit franchise continues to reflect the strength of our consumer, business and international relationships. Deposits remain well diversified and granular, supported by long-tenured customers, low reliance on public time deposits and no broker deposits. We also continue to invest in the customer experience and operating efficiency across our digital, branch, data and operations platforms.

Recent work on our customer relationship management and data platform initiatives are strengthening service, insight and scalability. Our focus remains on new customer acquisition, increasing primary relationships and connecting our full range of capabilities to serve customers more fully.

With that, I'll turn the call over to Anna.

Anna Hu

Thank you, David. Asset quality remained strong at quarter end. Nonperforming assets declined to $14 million or 19 basis points of total assets, while net charge-offs remained flat at $2.7 million or 20 basis points of average loans.

Criticized loan ratio improved to 181 basis points of total loans from 234 basis points in the prior quarter. 91% of criticized loans are real estate secured with strong loan-to-value ratios. The allowance for credit losses was $59.8 million or 1.13% of total loans, relatively stable from 1.14% in the prior quarter. The provision for credit losses totaled $1.9 million for the quarter.

Overall, our credit quality remains strong with our lending and credit risk strategy focused on diversification, consistent underwriting standards, strong collateral and on stable segments and industries that we have solid expertise in.

I will now turn the call back to Arnold for closing comments.

Arnold Martines

Thank you, Anna. To summarize, we are pleased with our third quarter earnings performance, which continued to trend favorably and reflect the strong execution of our team. These results position us to serve our customers well, support prudent growth and navigate the ongoing market uncertainties with discipline.

I want to thank our employees for their continued commitment to our customers and our communities. Thank you also to our customers, shareholders and our broader community for your ongoing support. We are now happy to answer your questions.

Operator

[Operator Instructions]. Your first question comes from the line of David Feaster with Raymond James.

Preguntas y respuestas

David Feaster

I wanted to start on the growth side. It sounds like demand is holding up well. Pipelines are doing all right, and it sounds like you're still pulling things through. I'm just curious, how is demand from your perspective? Like I mean, as you talk to your clients about higher rates, have you seen any shift in demand? Are you concerned at all about anything starting to fall out of the pipeline?

And then just touch on the paydown activity. It sounds like that's really been the biggest inhibitor to faster growth, but just wanted to get your sense on that side.

Ralph Mesick

Yes, David, this is Ralph. I would say in terms of the forecast, the best forecast we have right now is what we have in the pipeline and the pipeline looks fairly healthy. As you probably are aware, we do underwrite loans to the higher rate environment.

We also look at that relative to our asset monitoring of our portfolio. I would say in terms of activity, Mainland lending is really supplementing not replacing the Hawaii franchise. We generated, I think, about $380 million in production in Hawaii this year against about, say, $310 million in the Mainland. And then the runoff is greater in Hawaii because it's basically a larger portfolio.

David Feaster

Okay. And when I look at it, it's -- a lot of the runoff is in kind of the resi mortgage and home equity lines. Could you touch on the mortgage market and the housing market from your perspective? How much of that is intentional and strategic, just kind of optimizing the loan book and rotating towards more CRE and commercial? And just again, kind of how you're seeing pricing trending today?

David Morimoto

David, it's David. On the first mortgage side, residential mortgage, obviously, that faces a lot of headwinds just because of the rate environment. So no different than the rest of the industry. And with the recent rise in longer-term rates, it's going to continue to face headwinds.

I think it's running at about 1/3 of what it normally would have been running on as far as production and we expect that to continue. The home equity is a potential opportunity. It is a product that we are taking a harder look at and seeing if there's opportunity to at least diminish the runoff, if not have some net growth in that portfolio.

As people have -- a lot of people have first mortgages at very low interest rates, they're not looking to refi that. So the way that they can access their equity is through the home equity product.

Ralph Mesick

I would add, David, that we're really trying to improve the economics of our loan portfolio, not really just pursuing balance sheet growth. So what you're going to see, I think, and what you've seen our priorities are better pricing, shorter duration, some diversification. And then I'd say continued sort of, I'd say, disciplined credit selection.

David Feaster

Okay. Okay. And maybe on the other side of the balance sheet, right? I mean, touching on funding, it's pretty impressive what you are able to do. I mean, reducing CDs, able to replace that with some core deposits, keep deposit costs flat. Could you just touch on how do you think about core deposit growth as we look forward? How pricing is trending and just kind of the competitive landscape for funding on the islands?

David Morimoto

David, it's David again. First off, I want to thank the teams. The teams have been doing an exceptional job with continuing to build core deposits, and that's what's led us to be able to keep -- to manage deposit costs over time. I think as we look forward, we are expecting strengthening loan growth, net loan growth and as a result, that likely will cause total deposit costs to -- this might be a trough going forward.

If we start to see loan growth, we'll look to start growing our deposits and that may result in slight increases in total deposit costs. Having said all of that, that is what we're looking to do, and that will be accretive growth. So I would think that's how we're looking at the deposit side. We've been very deliberate about our managing of our deposit base because of the lack -- not lack, but the minimal amount of loan growth. But going forward, we think that's going to change.

Operator

The next question comes from the line of Matthew Clark with Piper Sandler.

Matthew Clark

Just along those lines, maybe, Dayna, if you had the spot rate on deposits at the end of September. And just thinking through the beta, assuming we get maybe a rate hike in December and March. I think on the way down, you were about 35% for interest-bearing. Do you think you can kind of -- do you think you do something similar? Or do you think you can do a little better than that on the way up?

Dayna Matsumoto

Sure. Matthew, thanks for the question. On the spot rate for the month of September, our total deposit cost was 91 basis points, so starting to tick up slightly there. As far as the betas, we believe we can manage the deposit repricing beta in a favorable range, similar to what we've experienced in the last couple of cycles. So I'm expecting a total deposit beta of around 24% or about 33% on total interest-bearing deposits. Our depositors are relationship-based, sticky and generally less rate sensitive overall. So I feel good that we can manage the beta in a reasonable range.

Matthew Clark

Great. And then just on the CD side, down this quarter. It sounded like some of it was higher cost. Can you just update us on the amount of CDs you have maturing here in the fourth quarter and the roll-off and roll-on rates that you anticipate?

Dayna Matsumoto

Sure. In the fourth quarter, we have about $410 million of CD maturity. That's about 40% of our portfolio. That's running off at a weighted average rate of about 2.7%. And I believe our new CD rates on a blended basis, I estimate it to be approximately 3.0%. So a nominal rise in our CD costs going forward, but we can manage through that.

Matthew Clark

Got it. Okay. That's helpful. And then on the fee and expense run rate, I apologize if I missed it in your prepared comments if you spoke to kind of a run rate going forward, but just trying to think of a normalized fee income and noninterest expense run rate for the fourth quarter when you kind of distill the BOLI noise.

Dayna Matsumoto

Sure, Matthew. On the fee income side, when we carve out that BOLI noise, like you said, our noninterest income continues to do well on the wealth side. Our teams have been successful there growing the business. Mortgage banking, though, will be under pressure in this current higher for longer rate environment.

So considering these factors, I'm expecting that our total other operating income to be generally flattish year-over-year, but it will depend on further market volatility impacting our BOLI. And then just for the fourth quarter, if you're looking at that specifically, probably in about the $13 million range.

And then on expenses, Matthew, our -- we continue to manage our expense base well. And like I said, our objective is to consistently deliver positive operating leverage. The guidance for the full year, I updated it to expect an increase of about 2% to 2.5% this year, which is on the low end of the range that I had previously guided to.

In the fourth quarter, we do typically see some seasonal step-up in expenses related to incentives and some other year-end activities. And then as you know, our deferred compensation expense continues to be volatile, but we assume that it will normalize in the fourth quarter.

Operator

Our next question comes from the line of Andrew Liesch with StoneX Financial.

Your next question comes from the line of Kelly Motta with KBW.

Kelly Motta

It was a nice clean quarter. I feel like most of mine have been taken at this point. I guess as you look ahead, it seems like growth has been a little bit more muted with more coming from the Mainland. I'm wondering if you can supplement kind of what you're seeing in natural Hawaii for maybe more Mainland growth coming on. I'm just wondering how you guys are viewing that portion of the business.

Ralph Mesick

Kelly, I think I got your question. You were a little soft, but I think right now, we're running about 50-50 between Hawaii and the Mainland. And I think just through this first month of the quarter, that's kind of the mix right now. So again, if we continue to run off some of the fixed rate long-duration assets, we're probably going to see fairly muted growth.

Kelly Motta

Got it. That's helpful. And maybe just a housekeeping item for Dayna. Dayna, do you have your expected tax rate? It came in a little higher than where it was for the quarter?

Dayna Matsumoto

Sure, Kelly. On the tax rate, so the increase this quarter was due to less tax-exempt BOLI income as well as higher pretax book income. Going forward, I would expect our normalized ETR to be around 22% to 24%. The BOLI income has been volatile, so that could impact it. And then I'll lastly note that we are evaluating some potential additional tax credits, which would be favorable to our tax rate. But right now, I'm not building it into the guidance.

Operator

Your next question comes from the line of Andrew Liesch with StoneX Financial.

Andrew Liesch

Okay. No, my question is really just on the margin guide. I mean I see the repricing engine that's still flowing through, hear the asset sensitivity or the modest asset sensitivity. So why wouldn't the guide be closer to the high 3.60s rather than the mid-3.60s?

Dayna Matsumoto

Andrew, it's Dayna. So on the go-forward margin, you're correct about the factors that are -- will be favorable to the margin going forward. We will continue to have the positive asset back book cash flow repricing benefits on both the loans and the securities.

And then our balance sheet sensitivity, as I noted earlier, is neutral to slightly asset sensitive. So there could be a slight net positive for us there. But I will note loan yields are going up. But on the deposit side, those rates will also be going up, offsetting some of those benefits.

So those are the factors that are kind of influencing our margin outlook. Yes, as we head into next year, I think there is more potential upside on the margin to the extent we are able to drive more loan growth and assuming that pricing remains rational, but we're not providing guidance for 2027 at this point.

Operator

Your next question comes from the line of Liam Coohill with Hovde Group.

Liam Coohill

So to touch on deposits one more time, great to see the replacement of some higher cost funding in the quarter for some lower cost core deposits. But I was wondering, is there a loan-to-deposit ratio you're targeting as we're thinking about potential loan growth in the future and funding that with deposits?

Dayna Matsumoto

Liam, this is Dayna. On the loan-to-deposit ratio, we're currently at about 80%. Our target range, I would say, is about 80% to 85%. So we're on the lower end of that. I think that gives us a lot of flexibility to grow the balance sheet, and we plan to do that in a profitable way.

Liam Coohill

That's very helpful. Let's jump to credit quickly. Are there any verticals where you're watching dynamics more closely? I mean it looks like credit improved pretty nicely in the quarter, but just curious if you have any thoughts there.

Anna Hu

I think -- Liam, this is Anna. Where we're primarily focused on is just paying attention a little bit more to the consumer market, just given the macroeconomic market conditions, the higher interest rates for longer. Yes, it's mostly the consumer side.

Liam Coohill

That makes sense. And final question for me, just more of a housekeeping item. Moving forward, do you expect share repurchases likely continue in your current levels?

Dayna Matsumoto

Liam, I can take that one. This is Dayna. So we do have the repurchase program with some authorization left, as I noted. This does give us flexibility, which we like. It's a low-risk source of value. But as I've said in prior quarters, the level of repurchases in any given quarter, it will continue to be dynamic and informed by several factors, including loan growth opportunities, the operating environment, other risk considerations, our valuation as well as we are watching our AOCI and TCE ratio. But with all of that said, as of now, I generally expect we will continue share repurchases at a roughly similar pace in the fourth quarter as we did in the third quarter.

Operator

Your next question comes from the line of Matthew Clark with Piper Sandler.

Matthew Clark

Since we're digging into the margin a little bit more there in the Q&A, Dayna, can you just remind us of the securities cash flows that are coming off the portfolio roll off and expected roll-on rates?

And then same thing on the loan side. I think the payoffs and new production, roughly, I think, a 50 basis point pickup there, but just also want to think through the back book repricing on the loan side.

Dayna Matsumoto

Sure, Matthew. On the securities portfolio, the cash flows on a quarterly basis is about $30 million a quarter. And we've been getting about, I'd say, 225 to 250 basis points yield pickup on our new securities purchases. On the loan portfolio, it's about $200 million in total quarterly runoff. And as you mentioned, it is being replaced at weighted average yields that are around 50 to 60 basis points higher.

Operator

[Operator Instructions]. There are no further questions at this time. I will now turn the call back to Mr. Jayrald Rabago.

Jayrald Rabago

Thank you, everyone, for joining us today and for your continued interest in Central Pacific Financial Corp. We look forward to speaking with you again next quarter.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.