Central Pacific Financial Reports First Quarter 2024 Earnings of $12.9 Million

Highlights include: Net income of $12.9 million, or $0.48 per diluted share NIM of 2.83% compared to 2.84% in the previous quarter and 3.08% a year ago Total loans of $5.40 billion decreased by $37.6 million from the previous quarter Total deposits of $6.62 billion decreased by $228.7 million from the previous quarter, which included a decrease in government time deposits of $139.1 million Total risk-based capital and common equity tier 1 ratios of 14.8% and 11.6%, respectively Board of Directors approved quarterly cash dividend of $0.26 per share

Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $12.9 million, or fully diluted earnings per share ("EPS") of $0.48 for the first quarter of 2024, compared to net income of $14.9 million, or EPS of $0.55 in the previous quarter and net income of $16.2 million, or EPS of $0.60 in the year-ago quarter.

"Our financial results for the first quarter reflect our continued focus on optimizing the balance sheet, while maintaining strong liquidity, asset quality and capital," said Arnold Martines, President and Chief Executive Officer. "The first quarter was also significant as we celebrated our 70^th year in business serving Hawaii. We are extremely proud to continue the legacy of our founders as a champion of local small businesses in Hawaii and we are pleased to be recognized by the SBA Hawaii District as the 2023 Lender of the Year for mid-sized banks in Hawaii."

Earnings Highlights

Net interest income was $50.2 million for the first quarter of 2024, which decreased by $1.0 million, or 1.9% from the previous quarter, and decreased by $4.0 million, or 7.4% from the year-ago quarter. Net interest margin ("NIM") was 2.83% for the first quarter of 2024, which decreased by 1 basis point ("bp" or "bps") from the previous quarter and decreased by 25 bps from the year-ago quarter. The sequential quarter decrease in net interest income was primarily due to higher average rates paid on interest-bearing deposits, combined with lower average loan balances, which was partially offset by higher average yields earned on loans.

The Company recorded a provision for credit losses of $3.9 million in the first quarter of 2024, compared to a provision of $4.7 million in the previous quarter and a provision of $1.9 million in the year-ago quarter. The provision in the first quarter consisted of a provision for credit losses on loans of $4.1 million and a credit to the provision for off-balance sheet exposures of $0.2 million.

Other operating income totaled $11.2 million for the first quarter of 2024, compared to $15.2 million in the previous quarter and $11.0 million in the year-ago quarter. The previous quarter included a non-recurring pre-tax net gain on the sale of a real estate property (included in other) of $5.1 million and losses on the sales of investment securities of $1.9 million.

Other operating expense totaled $40.6 million for the first quarter of 2024, compared to $42.5 million in the previous quarter and $42.1 million in the year-ago quarter. The previous quarter included a non-recurring branch lease termination expense (included in other) of $2.3 million.

The efficiency ratio was 66.05% for the first quarter of 2024, compared to 64.12% in the previous quarter and 64.58% in the year-ago quarter.

The effective tax rate was 23.5% for the first quarter of 2024, compared to 22.3% in the previous quarter and 23.8% in the year-ago quarter.

Balance Sheet Highlights

Total assets of $7.41 billion at March 31, 2024 decreased by $232.8 million, or 3.0% from $7.64 billion at December 31, 2023, and decreased by $111.2 million, or 1.5% from $7.52 billion at March 31, 2023. The Company had $312.9 million in cash on its balance sheet and $2.42 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities at March 31, 2024. Total available sources of liquidity as a percentage of uninsured and uncollateralized deposits was 118% at March 31, 2024. During the first quarter of 2024, excess balance sheet liquidity was used to pay off $139.1 million in higher cost government time deposits.

Total loans, net of deferred fees and costs, of $5.40 billion at March 31, 2024 decreased by $37.6 million, or 0.7% from $5.44 billion at December 31, 2023, and decreased by $156.0 million, or 2.8% from $5.56 billion at March 31, 2023. Average yields earned on loans during the first quarter of 2024 was 4.67%, compared to 4.55% in the previous quarter and 4.26% in the year-ago quarter.

Total deposits of $6.62 billion at March 31, 2024 decreased by $228.7 million or 3.3% from $6.85 billion at December 31, 2023, and decreased by $128.1 million, or 1.9% from $6.75 billion at March 31, 2023. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.90 billion at March 31, 2024, and decreased by $90.8 million, or 1.5% from $5.99 billion at December 31, 2023. Average rates paid on total deposits during the first quarter of 2024 was 1.32%, compared to 1.23% in the previous quarter and 0.60% in the year-ago quarter. At March 31, 2024, approximately 65% of the Company's total deposits were FDIC-insured or fully collateralized.

Asset Quality

Nonperforming assets totaled $10.1 million, or 0.14% of total assets at March 31, 2024, compared to $7.0 million, or 0.09% of total assets at December 31, 2023 and $5.3 million, or 0.07% of total assets at March 31, 2023.

Net charge-offs totaled $4.5 million in the first quarter of 2024, compared to net charge-offs of $5.5 million in the previous quarter, and net charge-offs of $2.3 million in the year-ago quarter. Annualized net charge-offs as a percentage of average loans was 0.34%, 0.41% and 0.16% during the three months ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

The allowance for credit losses, as a percentage of total loans was 1.18% at March 31, 2024, compared to 1.18% at December 31, 2023, and 1.14% at March 31, 2023.

Capital

Total shareholders' equity was $507.2 million at March 31, 2024, compared to $503.8 million and $470.9 million at December 31, 2023 and March 31, 2023, respectively.

During the first quarter of 2024, the Company repurchased 49,960 shares of common stock, at a total cost of $0.9 million, or an average cost per share of $18.92. As of March 31, 2024, $19.1 million in share repurchase authorization remained available under the Company's share repurchase program.

The Company's leverage, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 capital ratios were 9.0%, 12.6%, 14.8%, and 11.6%, respectively, at March 31, 2024, compared to 8.8%, 12.4%, 14.6%, and 11.4%, respectively, at December 31, 2023.

On April 23, 2024, the Company's Board of Directors declared a quarterly cash dividend of $0.26 per share on its outstanding common shares. The dividend will be payable on June 17, 2024 to shareholders of record at the close of business on May 31, 2024.

Conference Call

The Company's management will host a conference call today at 1:00 p.m. Eastern Time (7:00 a.m. Hawaii Time) to discuss the quarterly results. Individuals are encouraged to listen to the live webcast of the presentation by visiting the investor relations page of the Company's website at http://ir.cpb.bank. Alternatively, investors may participate in the live call by dialing 1-800-715-9871 (access code: 1551295). A playback of the call will be available through May 24, 2024 by dialing 1-800-770-2030 (access code: 1551295) and on the Company's website. Information which may be discussed in the conference call is provided in an earnings supplement presentation on the Company's website at http://ir.cpb.bank.

About Central Pacific Financial Corp.

Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $7.41 billion in assets as of March 31, 2024. Central Pacific Bank, its primary subsidiary, operates 27 branches and 55 ATMs in the State of Hawaii. For additional information, please visit the Company's website at http://www.cpb.bank.

Equal Housing Lender
Member FDIC
NYSE Listed: CPF

Forward-Looking Statements

This document may contain forward-looking statements ("FLS") concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, payment or nonpayment of dividends, capital position, credit losses, net interest margin or other financial items; statements of plans, objectives and expectations of Central Pacific Financial Corp. (the "Company") or its management or Board of Directors, including those relating to business plans, use of capital resources, products or services and regulatory developments and regulatory actions; statements of future economic performance including anticipated performance results from our business initiatives; or any statements of the assumptions underlying or relating to any of the foregoing. Words such as "believe," "plan," "anticipate," "seek," "expect," "intend," "forecast," "hope," "target," "continue," "remain," "estimate," "will," "should," "may" and other similar expressions are intended to identify FLS but are not the exclusive means of identifying such statements.

While we believe that our FLS and the assumptions underlying them are reasonably based, such statements and assumptions are by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect. Accordingly, actual results could differ materially from those statements or projections for a variety of reasons, including, but not limited to: the effects of inflation and interest rate fluctuations; the adverse effects of recent bank failures and the potential impact of such developments on customer confidence, deposit behavior, liquidity and regulatory responses thereto; the adverse effects of the COVID-19 pandemic virus (and its variants) and other pandemic viruses on local, national and international economies, including, but not limited to, the adverse impact on tourism and construction in the State of Hawaii, our borrowers, customers, third-party contractors, vendors and employees, as well as the effects of government programs and initiatives in response thereto; supply chain disruptions; the increase in inventory or adverse conditions in the real estate market and deterioration in the construction industry; adverse changes in the financial performance and/or condition of our borrowers and, as a result, increased loan delinquency rates, deterioration in asset quality, and losses in our loan portfolio; the impact of local, national, and international economies and events (including natural disasters such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, and earthquakes) on the Company's business and operations and on tourism, the military, and other major industries operating within the Hawaii market and any other markets in which the Company does business; deterioration or malaise in domestic economic conditions, including any destabilization in the financial industry and deterioration of the real estate market, as well as the impact of declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, changes in capital standards, other regulatory reform and federal and state legislation, including but not limited to regulations promulgated by the Consumer Financial Protection Bureau, government-sponsored enterprise reform, and any related rules and regulations which affect our business operations and competitiveness; the costs and effects of legal and regulatory developments, including legal proceedings and lawsuits we are or may become subject to, or regulatory or other governmental inquiries and proceedings and the resolution thereof; the results of regulatory examinations or reviews and the effect of, and our ability to comply with, any regulations or regulatory orders or actions we are or may become subject to, and the effect of any recurring or special FDIC assessments; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters and the cost and resources required to implement such changes; the effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System; securities market and monetary fluctuations, including the impact resulting from the elimination of the London Interbank Offered Rate Index; negative trends in our market capitalization and adverse changes in the price of the Company's common stock; the effects of any acquisitions or dispositions we may make; political instability; acts of war or terrorism; changes in consumer spending, borrowings and savings habits; technological changes and developments; cybersecurity and data privacy breaches and the consequence therefrom; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; our ability to address deficiencies in our internal controls over financial reporting or disclosure controls and procedures; changes in the competitive environment among financial holding companies and other financial service providers; our ability to successfully implement our initiatives to lower our efficiency ratio; our ability to attract and retain key personnel; changes in our personnel, organization, compensation and benefit plans; our ability to successfully implement and achieve the objectives of our Banking-as-a-Service initiatives, including adoption of the initiatives by customers and risks faced by any of our bank collaborations including reputational and regulatory risk; and our success at managing the risks involved in the foregoing items.

For further information with respect to factors that could cause actual results to materially differ from the expectations or projections stated in the FLS, please see the Company's publicly available Securities and Exchange Commission filings, including the Company's Form 10-K for the last fiscal year and, in particular, the discussion of "Risk Factors" set forth therein. We urge investors to consider all of these factors carefully in evaluating the FLS contained in this document. FLS speak only as of the date on which such statements are made. We undertake no obligation to update any FLS to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events except as required by law.

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights
(Unaudited)														TABLE 1
		Three Months Ended
(Dollars in thousands,		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
except for per share amounts)		2024				2023				2023				2023				2023
CONDENSED INCOME STATEMENT
Net interest income		$	50,187			$	51,142			$	51,928			$	52,734			$	54,196
Provision for credit losses			3,936				4,653				4,874				4,319				1,852
Total other operating income			11,244				15,172				10,047				10,435				11,009
Total other operating expense			40,576				42,522				39,611				39,903				42,107
Income tax expense			3,974				4,273				4,349				4,472				5,059
Net income			12,945				14,866				13,141				14,475				16,187
Basic earnings per share		$	0.48			$	0.55			$	0.49			$	0.54			$	0.60
Diluted earnings per share			0.48				0.55				0.49				0.53				0.60
Dividends declared per share			0.26				0.26				0.26				0.26				0.26
PERFORMANCE RATIOS
Return on average assets (ROA) [1]			0.70	%			0.79	%			0.70	%			0.78	%			0.87	%
Return on average shareholders’ equity (ROE) [1]			10.33				12.55				10.95				12.12				13.97
Average shareholders’ equity to average assets			6.73				6.32				6.39				6.40				6.23
Efficiency ratio [2]			66.05				64.12				63.91				63.17				64.58
Net interest margin (NIM) [1]			2.83				2.84				2.88				2.96				3.08
Dividend payout ratio [3]			54.17				47.27				53.06				49.06				43.33
SELECTED AVERAGE BALANCES
Average loans, including loans held for sale		$	5,400,558			$	5,458,245			$	5,507,248			$	5,543,398			$	5,525,988
Average interest-earning assets			7,140,264				7,208,613				7,199,866				7,155,606				7,112,377
Average assets			7,449,661				7,498,097				7,510,537				7,463,629				7,443,767
Average deposits			6,659,812				6,730,883				6,738,071				6,674,650				6,655,660
Average interest-bearing liabilities			5,009,542				5,023,321				4,999,820				4,908,120				4,820,660
Average shareholders’ equity			501,120				473,708				480,118				477,711				463,556

[1]		ROA and ROE are annualized based on a 30/360 day convention. Annualized net interest income and expense in the NIM calculation are based on the day count interest payment conventions at the interest-earning asset or interest-bearing liability level (i.e. 30/360, actual/actual).
[2]		Efficiency ratio is defined as total other operating expense divided by total revenue (net interest income and total other operating income).
[3]		Dividend payout ratio is defined as dividends declared per share divided by diluted earnings per share.

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights
(Unaudited)		TABLE 1 (CONTINUED)
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
		2024				2023				2023				2023				2023
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp.
Leverage ratio			9.0	%			8.8	%			8.7	%			8.7	%			8.6	%
Tier 1 risk-based capital ratio			12.6				12.4				11.9				11.8				11.5
Total risk-based capital ratio			14.8				14.6				14.1				13.9				13.6
Common equity tier 1 capital ratio			11.6				11.4				11.0				10.9				10.6
Central Pacific Bank
Leverage ratio			9.4				9.2				9.1				9.1				9.0
Tier 1 risk-based capital ratio			13.1				12.9				12.4				12.3				12.0
Total risk-based capital ratio			14.3				14.1				13.7				13.5				13.2
Common equity tier 1 capital ratio			13.1				12.9				12.4				12.3				12.0
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(dollars in thousands, except for per share amounts)		2024				2023				2023				2023				2023
BALANCE SHEET
Total loans, net of deferred fees and costs		$	5,401,417			$	5,438,982			$	5,508,710			$	5,520,683			$	5,557,397
Total assets			7,409,999				7,642,796				7,637,924				7,567,592				7,521,247
Total deposits			6,618,854				6,847,592				6,874,745				6,805,737				6,746,968
Long-term debt			156,163				156,102				156,041				155,981				155,920
Total shareholders’ equity			507,203				503,815				468,598				476,279				470,926
Total shareholders’ equity to total assets			6.84	%			6.59	%			6.14	%			6.29	%			6.26	%
ASSET QUALITY
Allowance for credit losses (ACL)		$	63,532			$	63,934			$	64,517			$	63,849			$	63,099
Nonaccrual loans			10,132				7,008				6,652				11,061				5,313
Non-performing assets (NPA)			10,132				7,008				6,652				11,061				5,313
Ratio of ACL to total loans			1.18	%			1.18	%			1.17	%			1.16	%			1.14	%
Ratio of NPA to total assets			0.14	%			0.09	%			0.09	%			0.15	%			0.07	%
PER SHARE OF COMMON STOCK OUTSTANDING
Book value per common share		$	18.76			$	18.63			$	17.33			$	17.61			$	17.44
Closing market price per common share			19.75				19.68				16.68				15.71				17.90

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)		TABLE 2
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(Dollars in thousands, except share data)		2024				2023				2023				2023				2023
ASSETS
Cash and due from financial institutions		$	98,410			$	116,181			$	108,818			$	129,071			$	108,535
Interest-bearing deposits in other financial institutions			214,472				406,256				329,913				181,913				90,247
Investment securities:
Available-for-sale debt securities, at fair value			660,833				647,210				625,253				664,071				687,188
Held-to-maturity debt securities, at amortized cost; fair value of: $541,685 at March 31, 2024, $565,178 at December 31, 2023, $531,887 at September 30, 2023, $581,222 at June 30, 2023, and $599,300 at March 31, 2023			624,948				632,338				640,053				649,946				658,596
Total investment securities			1,285,781				1,279,548				1,265,306				1,314,017				1,345,784
Loans held for sale			755				1,778				—				2,593				—
Loans, net of deferred fees and costs			5,401,417				5,438,982				5,508,710				5,520,683				5,557,397
Less: allowance for credit losses			(63,532	)			(63,934	)			(64,517	)			(63,849	)			(63,099	)
Loans, net of allowance for credit losses			5,337,885				5,375,048				5,444,193				5,456,834				5,494,298
Premises and equipment, net			97,688				96,184				97,378				96,479				93,761
Accrued interest receivable			21,957				21,511				21,529				20,463				20,473
Investment in unconsolidated entities			40,780				41,546				42,523				45,218				45,953
Mortgage servicing rights			8,599				8,696				8,797				8,843				8,943
Bank-owned life insurance			172,228				170,706				168,543				168,136				168,244
Federal Home Loan Bank of Des Moines ("FHLB") stock			6,921				6,793				10,995				10,960				11,960
Right-of-use lease assets			32,079				29,720				32,294				33,247				34,237
Other assets			92,444				88,829				107,635				99,818				98,812
Total assets		$	7,409,999			$	7,642,796			$	7,637,924			$	7,567,592			$	7,521,247
LIABILITIES
Deposits:
Noninterest-bearing demand		$	1,848,554			$	1,913,379			$	1,969,523			$	2,009,387			$	2,028,087
Interest-bearing demand			1,290,321				1,329,189				1,345,843				1,359,978				1,386,913
Savings and money market			2,211,966				2,209,733				2,209,550				2,184,652				2,184,675
Time			1,268,013				1,395,291				1,349,829				1,251,720				1,147,293
Total deposits			6,618,854				6,847,592				6,874,745				6,805,737				6,746,968
FHLB advances and other short-term borrowings			—				—				—				—				25,000
Long-term debt, net of unamortized debt issuance costs of: $384 at March 31, 2024, $445 at December 31, 2023, $506 at September 30, 2023, $566 at June 30, 2023 and $627 at March 31, 2023			156,163				156,102				156,041				155,981				155,920
Lease liabilities			33,169				30,634				33,186				34,111				35,076
Accrued interest payable			16,654				18,948				16,752				11,402				7,688
Other liabilities			77,956				85,705				88,602				84,082				79,669
Total liabilities			6,902,796				7,138,981				7,169,326				7,091,313				7,050,321
EQUITY
Shareholders' equity:
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023			—				—				—				—				—
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,042,326 at March 31, 2024, 27,045,033 at December 31, 2023, 27,043,169 at September 30, 2023, 27,045,792 at June 30, 2023, and 27,005,545 at March 31, 2023			404,494				405,439				405,439				405,511				405,866
Additional paid-in capital			103,130				102,982				102,550				101,997				101,188
Retained earnings			123,902				117,990				110,156				104,046				96,600
Accumulated other comprehensive loss			(124,323	)			(122,596	)			(149,547	)			(135,275	)			(132,728	)
Total shareholders' equity			507,203				503,815				468,598				476,279				470,926
Total liabilities and equity		$	7,409,999			$	7,642,796			$	7,637,924			$	7,567,592			$	7,521,247

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)		TABLE 3
		Three Months Ended
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(Dollars in thousands, except per share data)		2024				2023				2023				2023				2023
Interest income:
Interest and fees on loans		$	62,819			$	62,429			$	62,162			$	60,455			$	58,269
Interest and dividends on investment securities:
Taxable investment securities			7,211				7,292				7,016				7,145				7,336
Tax-exempt investment securities			655				686				709				727				790
Interest on deposits in other financial institutions			3,611				3,597				2,412				877				277
Dividend income on FHLB stock			106				109				113				120				136
Total interest income			74,402				74,113				72,412				69,324				66,808
Interest expense:
Interest on deposits:
Interest-bearing demand			499				467				460				411				363
Savings and money market			8,443				7,459				6,464				4,670				3,386
Time			12,990				12,741				11,268				8,932				6,264
Interest on short-term borrowings			—				—				—				378				761
Interest on long-term debt			2,283				2,304				2,292				2,199				1,838
Total interest expense			24,215				22,971				20,484				16,590				12,612
Net interest income			50,187				51,142				51,928				52,734				54,196
Provision for credit losses			3,936				4,653				4,874				4,319				1,852
Net interest income after provision for credit losses			46,251				46,489				47,054				48,415				52,344
Other operating income:
Mortgage banking income			613				611				765				690				526
Service charges on deposit accounts			2,103				2,312				2,193				2,137				2,111
Other service charges and fees			5,261				5,349				5,203				4,994				4,985
Income from fiduciary activities			1,435				1,272				1,234				1,068				1,321
Income from bank-owned life insurance			1,522				2,015				379				1,185				1,291
Net loss on sales of investment securities			—				(1,939	)			(135	)			—				—
Other			310				5,552				408				361				775
Total other operating income			11,244				15,172				10,047				10,435				11,009
Other operating expense:
Salaries and employee benefits			20,735				20,164				19,015				20,848				22,023
Net occupancy			4,600				4,676				4,725				4,310				4,474
Computer software			4,287				4,026				4,473				4,621				4,606
Legal and professional services			2,320				2,245				2,359				2,469				2,886
Equipment			1,010				968				1,112				932				946
Advertising			914				1,045				968				942				933
Communication			837				632				809				791				778
Other			5,873				8,766				6,150				4,990				5,461
Total other operating expense			40,576				42,522				39,611				39,903				42,107
Income before income taxes			16,919				19,139				17,490				18,947				21,246
Income tax expense			3,974				4,273				4,349				4,472				5,059
Net income		$	12,945			$	14,866			$	13,141			$	14,475			$	16,187
Per common share data:
Basic earnings per share		$	0.48			$	0.55			$	0.49			$	0.54			$	0.60
Diluted earnings per share			0.48				0.55				0.49				0.53				0.60
Cash dividends declared			0.26				0.26				0.26				0.26				0.26
Basic weighted average shares outstanding			27,046,525				27,044,121				27,042,762				27,024,043				26,999,138
Diluted weighted average shares outstanding			27,099,101				27,097,285				27,079,484				27,071,478				27,122,012

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
(Unaudited)		TABLE 4
		Three Months Ended									Three Months Ended									Three Months Ended
		March 31, 2024									December 31, 2023									March 31, 2023
		Average			Average						Average			Average						Average			Average
(Dollars in thousands)		Balance			Yield/Rate			Interest			Balance			Yield/Rate			Interest			Balance			Yield/Rate			Interest
ASSETS
Interest-earning assets:
Interest-bearing deposits in other financial institutions		$	265,418		5.47	%		$	3,611		$	261,594		5.45	%		$	3,597		$	24,957		4.51	%		$	277
Investment securities:
Taxable			1,324,657		2.18				7,211			1,331,752		2.19				7,292			1,395,985		2.10				7,336
Tax-exempt [1]			142,830		2.32				829			146,803		2.36				868			153,067		2.61				1,000
Total investment securities			1,467,487		2.19				8,040			1,478,555		2.21				8,160			1,549,052		2.15				8,336
Loans, including loans held for sale			5,400,558		4.67				62,819			5,458,245		4.55				62,429			5,525,988		4.26				58,269
FHLB stock			6,801		6.24				106			10,219		4.30				109			12,380		4.40				136
Total interest-earning assets			7,140,264		4.19				74,576			7,208,613		4.10				74,295			7,112,377		3.80				67,018
Noninterest-earning assets			309,397									289,484									331,390
Total assets		$	7,449,661								$	7,498,097								$	7,443,767
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits		$	1,296,865		0.15	%		$	499		$	1,315,943		0.14	%		$	467		$	1,415,155		0.10	%		$	363
Savings and money market deposits			2,218,250		1.53				8,443			2,217,065		1.33				7,459			2,182,942		0.63				3,386
Time deposits up to $250,000			544,279		3.21				4,339			478,085		2.80				3,373			341,396		1.35				1,137
Time deposits over $250,000			794,019		4.38				8,651			856,159		4.34				9,368			689,432		3.02				5,127
Total interest-bearing deposits			4,853,413		1.82				21,932			4,867,252		1.68				20,667			4,628,925		0.88				10,013
FHLB advances and other short-term borrowings			—		—				—			—		—				—			64,462		4.79				761
Long-term debt			156,129		5.88				2,283			156,069		5.86				2,304			127,273		5.86				1,838
Total interest-bearing liabilities			5,009,542		1.94				24,215			5,023,321		1.81				22,971			4,820,660		1.06				12,612
Noninterest-bearing deposits			1,806,399									1,863,631									2,026,735
Other liabilities			132,600									137,437									132,816
Total liabilities			6,948,541									7,024,389									6,980,211
Total equity			501,120									473,708									463,556
Total liabilities and equity		$	7,449,661								$	7,498,097								$	7,443,767
Net interest income								$	50,361								$	51,324								$	54,406
Interest rate spread					2.25	%								2.29	%								2.74	%
Net interest margin					2.83	%								2.84	%								3.08	%

[1]		Interest income and resultant yield information for tax-exempt investment securities is expressed on a taxable-equivalent basis using a federal statutory tax rate of 21%.

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Loans by Geographic Distribution
(Unaudited)										TABLE 5
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(Dollars in thousands)		2024				2023				2023				2023				2023
HAWAII:
Commercial and industrial		$	420,009			$	421,736			$	406,433			$	374,601			$	376,979
Real estate:
Construction			145,213				163,337				174,057				168,012				154,303
Residential mortgage			1,924,889				1,927,789				1,930,740				1,942,906				1,941,230
Home equity			729,210				736,524				753,980				750,760				743,908
Commercial mortgage			1,103,174				1,063,969				1,045,625				1,037,826				1,030,086
Consumer			306,563				322,346				338,248				327,790				342,922
Total loans, net of deferred fees and costs			4,629,058				4,635,701				4,649,083				4,601,895				4,589,428
Less: Allowance for credit losses			(48,739	)			(48,189	)			(48,105	)			(44,828	)			(44,062	)
Loans, net of allowance for credit losses		$	4,580,319			$	4,587,512			$	4,600,978			$	4,557,067			$	4,545,366
U.S. MAINLAND: [1]
Commercial and industrial		$	156,087			$	153,971			$	157,373			$	170,557			$	179,906
Real estate:
Construction			23,356				22,182				37,455				32,807				27,171
Commercial mortgage			319,088				318,933				319,802				329,736				331,546
Consumer			273,828				308,195				344,997				385,688				429,346
Total loans, net of deferred fees and costs			772,359				803,281				859,627				918,788				967,969
Less: Allowance for credit losses			(14,793	)			(15,745	)			(16,412	)			(19,021	)			(19,037	)
Loans, net of allowance for credit losses		$	757,566			$	787,536			$	843,215			$	899,767			$	948,932
TOTAL:
Commercial and industrial		$	576,096			$	575,707			$	563,806			$	545,158			$	556,885
Real estate:
Construction			168,569				185,519				211,512				200,819				181,474
Residential mortgage			1,924,889				1,927,789				1,930,740				1,942,906				1,941,230
Home equity			729,210				736,524				753,980				750,760				743,908
Commercial mortgage			1,422,262				1,382,902				1,365,427				1,367,562				1,361,632
Consumer			580,391				630,541				683,245				713,478				772,268
Total loans, net of deferred fees and costs			5,401,417				5,438,982				5,508,710				5,520,683				5,557,397
Less: Allowance for credit losses			(63,532	)			(63,934	)			(64,517	)			(63,849	)			(63,099	)
Loans, net of allowance for credit losses		$	5,337,885			$	5,375,048			$	5,444,193			$	5,456,834			$	5,494,298

[1]		U.S. Mainland includes territories of the United States.

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Deposits
(Unaudited)										TABLE 6
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(Dollars in thousands)		2024				2023				2023				2023				2023
Noninterest-bearing demand		$	1,848,554			$	1,913,379			$	1,969,523			$	2,009,387			$	2,028,087
Interest-bearing demand			1,290,321				1,329,189				1,345,843				1,359,978				1,386,913
Savings and money market			2,211,966				2,209,733				2,209,550				2,184,652				2,184,675
Time deposits up to $250,000			544,600				533,898				465,543				427,864				372,150
Core deposits			5,895,441				5,986,199				5,990,459				5,981,881				5,971,825
Government time deposits			235,463				374,581				400,130				383,426				360,501
Other time deposits greater than $250,000			487,950				486,812				484,156				440,430				414,642
Total time deposits greater than $250,000			723,413				861,393				884,286				823,856				775,143
Total deposits		$	6,618,854			$	6,847,592			$	6,874,745			$	6,805,737			$	6,746,968

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Nonperforming Assets and Accruing Loans 90+ Days Past Due
(Unaudited)														TABLE 7
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(Dollars in thousands)		2024				2023				2023				2023				2023
Nonaccrual loans:
Commercial and industrial		$	357			$	432			$	352			$	319			$	264
Real estate:
Construction			—				—				—				4,851				—
Residential mortgage			7,979				4,962				4,949				4,385				3,445
Home equity			929				834				677				797				712
Commercial mortgage			77				77				77				77				77
Consumer			790				703				597				632				815
Total nonaccrual loans			10,132				7,008				6,652				11,061				5,313
Other real estate owned ("OREO")			—				—				—				—				—
Total nonperforming assets ("NPAs")			10,132				7,008				6,652				11,061				5,313
Accruing loans 90+ days past due:
Real estate:
Construction			588				—				—				—				—
Residential mortgage			386				—				794				959				—
Home equity			560				229				—				133				—
Consumer			924				1,083				2,120				2,207				1,908
Total accruing loans 90+ days past due			2,458				1,312				2,914				3,299				1,908
Total NPAs and accruing loans 90+ days past due		$	12,590			$	8,320			$	9,566			$	14,360			$	7,221
Ratio of total nonaccrual loans to total loans			0.19	%			0.13	%			0.12	%			0.20	%			0.10	%
Ratio of total NPAs to total assets			0.14				0.09				0.09				0.15				0.07
Ratio of total NPAs to total loans and OREO			0.19				0.13				0.12				0.20				0.10
Ratio of total NPAs and accruing loans 90+ days past due to total loans and OREO			0.23				0.15				0.17				0.26				0.13
Quarter-to-quarter changes in NPAs:
Balance at beginning of quarter		$	7,008			$	6,652			$	11,061			$	5,313			$	5,251
Additions			4,792				1,836				2,311				7,105				1,609
Reductions:
Payments			(263	)			(268	)			(5,718	)			(290	)			(505	)
Return to accrual status			(198	)			(137	)			(207	)			(212	)			(14	)
Net charge-offs, valuation and other adjustments			(1,207	)			(1,075	)			(795	)			(855	)			(1,028	)
Total reductions			(1,668	)			(1,480	)			(6,720	)			(1,357	)			(1,547	)
Balance at end of quarter		$	10,132			$	7,008			$	6,652			$	11,061			$	5,313

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Allowance for Credit Losses on Loans
(Unaudited)														TABLE 8
		Three Months Ended
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(Dollars in thousands)		2024				2023				2023				2023				2023
Allowance for credit losses:
Balance at beginning of period		$	63,934			$	64,517			$	63,849			$	63,099			$	63,738
Provision for credit losses on loans			4,121				4,959				4,526				4,135				1,615
Charge-offs:
Commercial and industrial			(682	)			(419	)			(402	)			(362	)			(779	)
Consumer			(4,838	)			(5,976	)			(4,710	)			(3,873	)			(2,686	)
Total charge-offs			(5,520	)			(6,395	)			(5,112	)			(4,235	)			(3,465	)
Recoveries:
Commercial and industrial			90				84				261				125				250
Real estate:
Construction			—				—				1				—				—
Residential mortgage			8				7				10				7				53
Home equity			6				42				—				15				—
Consumer			893				720				982				703				908
Total recoveries			997				853				1,254				850				1,211
Net charge-offs			(4,523	)			(5,542	)			(3,858	)			(3,385	)			(2,254	)
Balance at end of period		$	63,532			$	63,934			$	64,517			$	63,849			$	63,099
Average loans, net of deferred fees and costs		$	5,400,558			$	5,458,245			$	5,507,248			$	5,543,398			$	5,525,988
Ratio of annualized net charge-offs to average loans			0.34	%			0.41	%			0.28	%			0.24	%			0.16	%
Ratio of ACL to total loans			1.18				1.18				1.17				1.16				1.14

 

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