Merger Pending, Dividends Rise
Pacific Financial Reports Q2 Earnings Ahead of Banner Merger; Central Pacific Boosts Dividend After Strong Performance
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Key Points
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Banner Corporation and Pacific Financial announced on April 30, 2026 a definitive merger agreement under which Banner will acquire Pacific Financial in an all-stock transaction; Pacific Financial shareholders will receive 0.2633 Banner shares for each Pacific Financial share.
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Pacific Financial declared a quarterly cash dividend on July 15, 2026, payable August 14, 2026 to shareholders of record August 4, 2026; the dividend was unchanged from the prior quarter.
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Central Pacific Financial repurchased 321,858 shares of common stock for a total cost of $11.3 million in the quarter and the board authorized a third quarter cash dividend of $0.30 per share, up 3.4% from the prior quarter.
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Central Pacific Financial reported second-quarter 2026 net interest income of $62.8 million, up 2.4% from the prior quarter and 5.1% year over year, with net interest margin at 3.57% (up 4 basis points).
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CPF's assets totaled about $7.50 billion, loans $5.31 billion, deposits $6.70 billion, with core deposits up 2.8% year over year and average deposit rate around 0.90%.
Two Pacific Northwest and Hawaii-based banks posted solid second-quarter 2026 earnings this week. Pacific Financial reported $2.9 million in net income, or $0.29 per diluted share, while its planned merger with Banner Corporation moves forward, according to Stock Titan. Meanwhile, Central Pacific Financial earned $20.8 million, or $0.80 per diluted share, and raised its quarterly dividend 3.4%.
The two reports highlight different strategic paths: Pacific Financial is preparing to be absorbed by a larger rival in an all-stock deal, while Central Pacific Financial is returning cash to shareholders and buying back stock as a standalone bank.
Banner Deal Will Swap Each PFLC Share for 0.2633 Banner Shares
Banner Corporation and Pacific Financial announced a definitive merger agreement on April 30, 2026. Under the deal, Banner will acquire Pacific Financial in an all-stock transaction. Each Pacific Financial share will convert into 0.2633 shares of Banner stock, according to Stock Titan. No cash changes hands — it is a pure share swap.
Pacific Financial noted that non-interest expenses rose during the quarter partly because of costs tied to the pending merger. Net interest income also climbed. The bank's board declared a quarterly cash dividend of $0.15 per share on July 15, 2026. It is payable August 14 to shareholders on record as of August 4. The dividend held flat from the prior quarter, per Market Screener.
Pacific Financial Posts $2.9M Profit as Merger Costs Climb
Pacific Financial's $2.9 million net income for Q2 2026 reflects a bank managing a major transition. Higher net interest income helped drive results. But merger-related expenses also pushed non-interest costs up during the period, according to Market Screener. The $0.29 per diluted share result shows the bank remains profitable even as it prepares for the Banner acquisition.
The unchanged $0.15 dividend signals stability for shareholders waiting for the deal to close. Pacific Financial trades on the OTCQX market under the ticker PFLC. No timeline for deal completion was specified in the earnings release, per Stock Titan.
Central Pacific Grows Net Interest Income 5.1% Year Over Year
Central Pacific Financial had a strong quarter on its own. Net interest income — the money a bank earns on loans minus what it pays on deposits — hit $62.8 million. That is up 2.4% from Q1 2026 and up 5.1% from a year ago, according to TipRanks. Its net interest margin rose 4 basis points to 3.57%. A basis point equals one-hundredth of a percentage point.
The bank's total assets stood at about $7.50 billion. Loans reached $5.31 billion and deposits hit $6.70 billion. Core deposits — the stable, everyday accounts banks rely on — grew 2.8% year over year. The average deposit rate was about 0.90%, per Stock Titan. Return on average assets came in at 1.12% and return on equity hit 13.94%.
CPF Raises Dividend, Buys Back $11.3M in Stock, Wins Top Awards
Central Pacific Financial returned significant cash to shareholders in Q2. The company repurchased 321,858 shares for a total cost of $11.3 million, per Stock Titan. Its board then approved a third-quarter cash dividend of $0.30 per share — a 3.4% increase from the prior quarter. Nasdaq reported that the company's revenue rose 6.4% for the period compared to a year ago.
The bank also earned outside recognition during the quarter. CPF received top Hawaii bank rankings from both TIME and Forbes in their Best Bank awards. The bank's parent is Central Pacific Bank, and it operates in a competitive Hawaii market. Despite that competition, the earnings growth and capital returns show the bank is in strong shape heading into the second half of 2026.
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