EX-99.1 2 exhibit99-1erq32023.htm EX-99.1 Document

Exhibit 99.1
cpfmidnight.jpg
 
  FOR IMMEDIATE RELEASE
   
Investor Contact:Ian TanakaMedia Contact:Tim Sakahara
 SVP, Treasury ManagerAVP, Corporate Communications Manager
 (808) 544-3646(808) 544-5125
 ian.tanaka@cpb.banktim.sakahara@cpb.bank
 
NEWS RELEASE

CENTRAL PACIFIC FINANCIAL REPORTS THIRD QUARTER EARNINGS OF $13.1 MILLION

•Net income of $13.1 million, or $0.49 per diluted share for the quarter.
•ROA of 0.70%, ROE of 10.95% and NIM of 2.88% for the quarter.
•Total loans of $5.51 billion decreased by $12.0 million in the third quarter.
•Ratio of nonperforming assets to total assets of 0.09% at September 30, 2023.
•Total deposits of $6.87 billion increased by $69.0 million in the third quarter. Total deposit cost was 1.08% in the third quarter.
•Solid liquidity position with $438.7 million in cash on balance sheet and $2.47 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities at September 30, 2023.
•Ratio of total available sources of liquidity to uninsured and uncollateralized deposits of 122% at September 30, 2023.
•Board of Directors approved quarterly cash dividend of $0.26 per share.

HONOLULU, HI, October 25, 2023 – Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $13.1 million, or fully diluted earnings per share ("EPS") of $0.49 for the third quarter of 2023, compared to net income of $14.5 million, or EPS of $0.53 in the previous quarter and net income of $16.7 million, or EPS of $0.61 in the year-ago quarter.

Pre-provision net revenue ("PPNR"), or net income excluding provision for credit losses and income taxes, totaled $22.4 million in the third quarter of 2023, compared to PPNR of $23.3 million in the previous quarter and $23.0 million in the year-ago quarter.

"In the third quarter, Central Pacific continued our focus on maintaining strong liquidity and capital given the ongoing market uncertainties," said Arnold Martines, President and Chief Executive Officer. "We are pleased with our success in growing our deposit portfolio while managing our total deposit costs. Our asset quality remained strong, our loan portfolio is well-diversified and we continue to effectively manage our expenses. Finally, we remain committed to supporting the communities impacted by the Lahaina wildfires through financial and in-kind support to aid recovery efforts."

Earnings Highlights
Net interest income was $51.9 million for the third quarter of 2023, which decreased by $0.8 million, or 1.5% from the previous quarter, and decreased by $3.4 million, or 6.2% from the year-ago quarter. The sequential quarter decrease in net interest income was primarily due to higher average balances and rates paid on interest-bearing deposits, which outpaced the higher average yield earned on loans.


Central Pacific Financial Reports Third Quarter Earnings of $13.1 Million
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Net interest margin ("NIM") was 2.88% for the third quarter of 2023, which decreased by 8 basis points ("bps") from the previous quarter and decreased by 29 bps from the year-ago quarter. The sequential quarter decrease in NIM was primarily due to higher average rates paid on deposits, which outpaced the higher average yield earned on loans.

The Company recorded a provision for credit losses of $4.9 million in the third quarter of 2023, compared to a provision of $4.3 million in the previous quarter and a provision of $0.4 million in the year-ago quarter. The provision in the third quarter consisted of a provision for credit losses on loans of $4.5 million and a provision for credit losses on off-balance sheet credit exposures of $0.4 million.

Other operating income totaled $10.0 million for the third quarter of 2023, compared to $10.4 million in the previous quarter and $9.6 million in the year-ago quarter. The decrease from the previous quarter was primarily due to lower income from bank-owned life insurance of $0.8 million, partially offset by higher other service charges and fees of $0.2 million and higher income from fiduciary activities of $0.2 million.

Other operating expense totaled $39.6 million for the third quarter of 2023, compared to $39.9 million in the previous quarter and $42.0 million in the year-ago quarter. Lower salaries and employee benefits of $1.8 million was partially offset by higher net occupancy of $0.4 million, higher directors' deferred compensation plan expense (included in other) of $0.3 million, higher armored car expense (included in other) of $0.2 million, and a net loss on sale of loans (included in other) of $0.2 million.

The efficiency ratio was 63.91% for the third quarter of 2023, compared to 63.17% in the previous quarter and 64.62% in the year-ago quarter.

The effective tax rate was 24.9% for the third quarter of 2023, compared to 23.6% in the previous quarter and 26.2% in the year-ago quarter.

Balance Sheet Highlights
Total assets of $7.64 billion at September 30, 2023 increased by $70.3 million, or 0.9% from $7.57 billion at June 30, 2023, and increased by $300.3 million, or 4.1% from $7.34 billion at September 30, 2022. The Company had $438.7 million in cash on its balance sheet and $2.47 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities at September 30, 2023. Total available sources of liquidity as a percentage of uninsured and uncollateralized deposits was 122% at September 30, 2023.

Total loans, net of deferred fees and costs, of $5.51 billion at September 30, 2023 decreased by $12.0 million, or 0.2% from $5.52 billion at June 30, 2023, and increased by $86.5 million, or 1.6% from $5.42 billion at September 30, 2022. Average yields earned on loans during the third quarter of 2023 was 4.49%, compared to 4.37% in the previous quarter and 3.84% in the year-ago quarter.

Total deposits of $6.87 billion at September 30, 2023 increased by $69.0 million or 1.0% from $6.81 billion at June 30, 2023, and increased by $318.3 million, or 4.9% from $6.56 billion at September 30, 2022. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.99 billion at September 30, 2023, and increased by $8.6 million, or 0.1% from $5.98 billion at June 30, 2023. Average rates paid on total deposits during the third quarter of 2023 was 1.08%, compared to 0.84% in the previous quarter and 0.14% in the year-ago quarter. At September 30, 2023, approximately 65% of the Company's total deposits were FDIC-insured or fully collateralized.

Asset Quality
Nonperforming assets totaled $6.7 million, or 0.09% of total assets at September 30, 2023, compared to $11.1 million, or 0.15% of total assets at June 30, 2023 and $4.2 million, or 0.06% of total assets at September 30, 2022. The decline in nonperforming assets from the previous quarter was primarily attributable to two Hawaii construction loans to a single borrower totaling $4.9 million that were paid off in full.

Net charge-offs totaled $3.9 million in the third quarter of 2023, compared to net charge-offs of $3.4 million in the previous quarter, and net charge-offs of $1.6 million in the year-ago quarter. Annualized net charge-offs as a percentage of average loans was 0.28%, 0.24% and 0.12% during the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, respectively.

The allowance for credit losses, as a percentage of total loans was 1.17% at September 30, 2023, compared to 1.16% at June 30, 2023, and 1.19% at September 30, 2022.


Central Pacific Financial Reports Third Quarter Earnings of $13.1 Million
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Capital
Total shareholders' equity was $468.6 million at September 30, 2023, compared to $476.3 million and $438.5 million at June 30, 2023 and September 30, 2022, respectively.

During the third quarter of 2023, the Company repurchased 4,500 shares of common stock, at a total cost of $0.1 million, or an average cost per share of $16.07. During the nine months ended September 30, 2023, the Company repurchased 130,010 shares of common stock, at a total cost of $2.6 million, or an average cost per share of $20.24. As of September 30, 2023, $23.4 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 8.7%, 11.9%, 14.1%, and 11.0%, respectively, at September 30, 2023, compared to 8.7%, 11.8%, 13.9%, and 10.9%, respectively, at June 30, 2023.

On October 24, 2023, 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 December 15, 2023 to shareholders of record at the close of business on November 30, 2023.

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 1-888-510-2553 (access code: 9816541). A playback of the call will be available through November 24, 2023 by dialing 1-800-770-2030 (access code: 9816541) 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 $7.64 billion in assets as of September 30, 2023. Central Pacific Bank, its primary subsidiary, operates 27 branches and 58 ATMs in the State of Hawaii. For additional information, please visit the Company's website at http://www.cpb.bank.


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Central Pacific Financial Reports Third Quarter Earnings of $13.1 Million
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Forward-Looking Statements ("FLS")
This document may contain FLS concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, the 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," "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 rising interest rates; 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 ongoing pandemic variants) 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; 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; our ability to achieve the objectives of our RISE2020 initiative; our ability to successfully implement and achieve the objectives of our Banking-as-a-Service ("BaaS") initiatives, including adoption of the initiatives by customers and risks faced by any of our bank collaborations including reputational and regulatory risk; the impact of local, national, and international economies and events (including natural disasters such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, earthquakes and pandemic viruses and diseases) 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 (the "Dodd-Frank 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 (the "CFPB"), 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; ability to successfully implement our initiatives to lower our efficiency ratio; 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 (the "FRB" or the "Federal Reserve"); securities market and monetary fluctuations, including the replacement of the London Interbank Offered Rate ("LIBOR") Index and the impact on our loans and debt which are tied to that index and uncertainties regarding potential alternative reference rates, including the Secured Overnight Financing Rate ("SOFR"); negative trends in our market capitalization and adverse changes in the price of the Company's common stock; political instability; acts of war or terrorism; changes in consumer spending, borrowings and savings habits; cybersecurity and data privacy breaches and the consequence therefrom; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; the ability to address deficiencies in our internal controls over financial reporting or disclosure controls and procedures; technological changes and developments; changes in the competitive environment among financial holding companies and other financial service providers; 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 ("PCAOB"), the Financial Accounting Standards Board ("FASB") and other accounting standard setters and the cost and resources required to implement such changes; our ability to attract and retain key personnel; changes in our personnel, organization, compensation and benefit plans; 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 EndedNine Months Ended
(Dollars in thousands, Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,Sep 30,
except for per share amounts)2023202320232022202220232022
CONDENSED INCOME STATEMENT     
Net interest income$51,928 $52,734 $54,196 $56,285 $55,365 $158,858 $159,278 
Provision (credit) for credit losses 4,874 4,319 1,852 571 362 11,045 (1,844)
Total other operating income10,047 10,435 11,009 11,601 9,629 31,491 36,318 
Total other operating expense 39,611 39,903 42,107 40,434 41,998 121,621 125,552 
Income tax expense4,349 4,472 5,059 6,700 5,919 13,880 18,141 
Net income13,141 14,475 16,187 20,181 16,715 43,803 53,747 
Basic earnings per share$0.49 $0.54 $0.60 $0.74 $0.61 $1.62 $1.96 
Diluted earnings per share0.49 0.53 0.60 0.74 0.61 1.62 1.94 
Dividends declared per share0.26 0.26 0.26 0.26 0.26 0.78 0.78 
PERFORMANCE RATIOS       
Return on average assets (ROA) [1]0.70 %0.78 %0.87 %1.09 %0.91 %0.78 %0.98 %
Return on average shareholders’ equity (ROE) [1]10.95 12.12 13.97 18.30 14.49 12.33 14.62 
Average shareholders’ equity to average assets6.39 6.40 6.23 5.97 6.30 6.34 6.69 
Efficiency ratio [2]63.91 63.17 64.58 59.56 64.62 63.89 64.19 
Net interest margin (NIM) [1]2.88 2.96 3.08 3.17 3.17 2.98 3.06 
Dividend payout ratio [3]53.06 49.06 43.33 35.14 42.62 48.15 40.21 
SELECTED AVERAGE BALANCES       
Average loans, including loans held for sale$5,507,248 $5,543,398 $5,525,988 $5,498,800 $5,355,088 $5,525,476 $5,231,098 
Average interest-earning assets7,199,866 7,155,606 7,112,377 7,103,841 6,991,773 7,156,270 6,969,326 
Average assets7,510,537 7,463,629 7,443,767 7,389,712 7,320,751 7,472,890 7,323,596 
Average deposits6,738,071 6,674,650 6,655,660 6,673,922 6,535,321 6,689,762 6,580,502 
Average interest-bearing liabilities4,999,820 4,908,120 4,820,660 4,708,045 4,538,893 4,910,190 4,470,461 
Average shareholders’ equity480,118 477,711 463,556 441,084 461,328 473,856 490,140 
[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)
 Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
20232023202320222022
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp.
Leverage ratio8.7 %8.7 %8.6 %8.5 %8.7 %
Tier 1 risk-based capital ratio11.9 11.8 11.5 11.3 11.5 
Total risk-based capital ratio14.1 13.9 13.6 13.5 13.7 
Common equity tier 1 capital ratio11.0 10.9 10.6 10.5 10.6 
Central Pacific Bank
Leverage ratio9.1 9.1 9.0 9.0 9.1 
Tier 1 risk-based capital ratio12.4 12.3 12.0 11.9 12.2 
Total risk-based capital ratio13.7 13.5 13.2 13.1 13.4 
Common equity tier 1 capital ratio12.4 12.3 12.0 11.9 12.2 


Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
(dollars in thousands, except for per share amounts)20232023202320222022
BALANCE SHEET   
Total loans, net of deferred fees and costs$5,508,710 $5,520,683 $5,557,397 $5,555,466 $5,422,212 
Total assets7,637,924 7,567,592 7,521,247 7,432,763 7,337,631 
Total deposits6,874,745 6,805,737 6,746,968 6,736,223 6,556,434 
Long-term debt156,041 155,981 155,920 105,859 105,799 
Total shareholders’ equity468,598 476,279 470,926 452,871 438,468 
Total shareholders’ equity to total assets6.14 %6.29 %6.26 %6.09 %5.98 %
ASSET QUALITY     
Allowance for credit losses (ACL)$64,517 $63,849 $63,099 $63,738 $64,382 
Nonaccrual loans6,652 11,061 5,313 5,251 4,220 
Non-performing assets (NPA)6,652 11,061 5,313 5,251 4,220 
Ratio of ACL to total loans1.17 %1.16 %1.14 %1.15 %1.19 %
Ratio of NPA to total assets0.09 %0.15 %0.07 %0.07 %0.06 %
PER SHARE OF COMMON STOCK OUTSTANDING     
Book value per common share$17.33 $17.61 $17.44 $16.76 $16.08 
Closing market price per common share16.68 15.71 17.90 20.28 20.69 



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)TABLE 2
 
 Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
(Dollars in thousands, except share data)20232023202320222022
ASSETS   
Cash and due from financial institutions$108,818 $129,071 $108,535 $97,150 $116,365 
Interest-bearing deposits in other financial institutions329,913 181,913 90,247 14,894 22,332 
Investment securities:  
Available-for-sale debt securities, at fair value625,253 664,071 687,188 671,794 686,681 
Held-to-maturity debt securities, at amortized cost; fair value of: $531,887 at September 30, 2023, $581,222 at June 30, 2023, $599,300 at March 31, 2023, $596,780 at December 31, 2022, and $590,880 at September 30, 2022640,053 649,946 658,596 664,883 662,827 
Total investment securities1,265,306 1,314,017 1,345,784 1,336,677 1,349,508 
Loans held for sale, at fair value— 2,593 — 1,105 1,701 
Loans, net of deferred fees and costs5,508,710 5,520,683 5,557,397 5,555,466 5,422,212 
Less: allowance for credit losses64,517 63,849 63,099 63,738 64,382 
Loans, net of allowance for credit losses5,444,193 5,456,834 5,494,298 5,491,728 5,357,830 
Premises and equipment, net97,378 96,479 93,761 91,634 89,979 
Accrued interest receivable21,529 20,463 20,473 20,345 18,134 
Investment in unconsolidated entities42,523 45,218 45,953 46,641 36,769 
Mortgage servicing rights8,797 8,843 8,943 9,074 9,216 
Bank-owned life insurance168,543 168,136 168,244 167,967 167,761 
Federal Home Loan Bank of Des Moines ("FHLB") stock10,995 10,960 11,960 9,146 13,546 
Right-of-use lease assets32,294 33,247 34,237 34,985 35,978 
Other assets107,635 99,818 98,812 111,417 118,512 
Total assets$7,637,924 $7,567,592 $7,521,247 $7,432,763 $7,337,631 
LIABILITIES     
Deposits:     
Noninterest-bearing demand$1,969,523 $2,009,387 $2,028,087 $2,092,823 $2,138,083 
Interest-bearing demand1,345,843 1,359,978 1,386,913 1,453,167 1,441,302 
Savings and money market2,209,550 2,184,652 2,184,675 2,199,028 2,194,991 
Time1,349,829 1,251,720 1,147,293 991,205 782,058 
Total deposits6,874,745 6,805,737 6,746,968 6,736,223 6,556,434 
FHLB advances and other short-term borrowings— — 25,000 5,000 115,000 
Long-term debt, net of unamortized debt issuance costs of: $506 at September 30, 2023, $566 at June 30, 2023, $627 at March 31, 2023, $688 at December 31, 2022 and $748 at September 30, 2022156,041 155,981 155,920 105,859 105,799 
Lease liabilities33,186 34,111 35,076 35,889 36,941 
Other liabilities105,354 95,484 87,357 96,921 84,989 
Total liabilities7,169,326 7,091,313 7,050,321 6,979,892 6,899,163 
EQUITY
Shareholders' equity:     
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022, and September 30, 2022— — — — — 
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,043,169 at September 30, 2023, 27,045,792 at June 30, 2023, 27,005,545 at March 31, 2023, 27,025,070 at December 31, 2022, and 27,262,879 at September 30, 2022405,439 405,511 405,866 408,071 412,994 
Additional paid-in capital102,550 101,997 101,188 101,346 100,426 
Retained earnings110,156 104,046 96,600 87,438 74,301 
Accumulated other comprehensive loss(149,547)(135,275)(132,728)(143,984)(149,253)
Total shareholders' equity468,598 476,279 470,926 452,871 438,468 
Total liabilities and equity$7,637,924 $7,567,592 $7,521,247 $7,432,763 $7,337,631 



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES 
Consolidated Statements of Income 
(Unaudited)TABLE 3
 Three Months EndedNine Months Ended
 Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,Sep 30,
(Dollars in thousands, except per share data)2023202320232022202220232022
Interest income:     
Interest and fees on loans$62,162 $60,455 $58,269 $56,682 $51,686 $180,886 $143,598 
Interest and dividends on investment securities:
Taxable investment securities7,016 7,145 7,336 7,104 6,933 21,497 20,937 
Tax-exempt investment securities709 727 790 776 805 2,226 2,428 
Dividends on investment securities— — — — — — 21 
Interest on deposits in other financial institutions2,412 877 277 370 107 3,566 370 
Dividend income on FHLB stock113 120 136 105 138 369 265 
Total interest income72,412 69,324 66,808 65,037 59,669 208,544 167,619 
Interest expense:       
Interest on deposits:       
Demand460 411 363 333 217 1,234 473 
Savings and money market6,464 4,670 3,386 2,488 1,054 14,520 1,700 
Time11,268 8,932 6,264 4,063 1,092 26,464 2,051 
Interest on short-term borrowings— 378 761 393 660 1,139 662 
Interest on long-term debt2,292 2,199 1,838 1,475 1,281 6,329 3,455 
Total interest expense20,484 16,590 12,612 8,752 4,304 49,686 8,341 
Net interest income51,928 52,734 54,196 56,285 55,365 158,858 159,278 
Provision (credit) for credit losses4,874 4,319 1,852 571 362 11,045 (1,844)
Net interest income after provision (credit) for credit losses47,054 48,415 52,344 55,714 55,003 147,813 161,122 
Other operating income:       
Mortgage banking income765 690 526 667 831 1,981 3,143 
Service charges on deposit accounts2,193 2,137 2,111 2,172 2,138 6,441 6,025 
Other service charges and fees5,203 4,994 4,985 4,972 4,955 15,182 14,053 
Income from fiduciary activities1,234 1,068 1,321 1,058 1,165 3,623 3,507 
Net (loss) gain on sales of investment securities(135)— — — — (135)8,506 
Income from bank-owned life insurance379 1,185 1,291 2,187 167 2,855 (322)
Other408 361 775 545 373 1,544 1,406 
Total other operating income10,047 10,435 11,009 11,601 9,629 31,491 36,318 
Other operating expense:       
Salaries and employee benefits19,015 20,848 22,023 22,692 22,778 61,886 66,089 
Net occupancy4,725 4,310 4,474 3,998 4,743 13,509 12,965 
Equipment1,112 932 946 996 1,085 2,990 3,242 
Communication809 791 778 696 712 2,378 2,262 
Legal and professional services2,359 2,469 2,886 2,677 2,573 7,714 8,115 
Computer software4,473 4,621 4,606 3,996 4,138 13,700 10,844 
Advertising968 942 933 701 1,150 2,843 3,450 
Other6,150 4,990 5,461 4,678 4,819 16,601 18,585 
Total other operating expense39,611 39,903 42,107 40,434 41,998 121,621 125,552 
Income before income taxes17,490 18,947 21,246 26,881 22,634 57,683 71,888 
Income tax expense4,349 4,472 5,059 6,700 5,919 13,880 18,141 
Net income$13,141 $14,475 $16,187 $20,181 $16,715 $43,803 $53,747 
Per common share data:       
Basic earnings per share$0.49 $0.54 $0.60 $0.74 $0.61 $1.62 $1.96 
Diluted earnings per share0.49 0.53 0.60 0.74 0.61 1.62 1.94 
Cash dividends declared0.26 0.26 0.26 0.26 0.26 0.78 0.78 
Basic weighted average shares outstanding27,042,762 27,024,043 26,999,138 27,134,970 27,356,614 27,022,141 27,487,237 
Diluted weighted average shares outstanding27,079,484 27,071,478 27,122,012 27,303,249 27,501,212 27,081,541 27,666,197 



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES 
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent) 
(Unaudited)TABLE 4
 Three Months EndedThree Months EndedThree Months Ended
September 30, 2023June 30, 2023September 30, 2022
 AverageAverage AverageAverage AverageAverage 
(Dollars in thousands)BalanceYield/RateInterestBalanceYield/RateInterestBalanceYield/RateInterest
ASSETS
Interest-earning assets:         
Interest-bearing deposits in other financial institutions$177,780 5.38 %$2,412 $69,189 5.08 %$877 $19,802 2.14 %$107 
Investment securities:
Taxable1,354,039 2.07 7,016 1,379,319 2.07 7,145 1,445,781 1.92 6,934 
Tax-exempt [1]149,824 2.40 897 151,979 2.42 920 158,052 2.57 1,018 
Total investment securities1,503,863 2.10 7,913 1,531,298 2.11 8,065 1,603,833 1.98 7,952 
Loans, including loans held for sale5,507,248 4.49 62,162 5,543,398 4.37 60,455 5,355,088 3.84 51,686 
FHLB stock10,975 4.09 113 11,721 4.10 120 13,050 4.23 138 
Total interest-earning assets7,199,866 4.01 72,600 7,155,606 3.89 69,517 6,991,773 3.41 59,883 
Noninterest-earning assets310,671   308,023   328,978   
Total assets$7,510,537   $7,463,629   $7,320,751   
LIABILITIES AND EQUITY
Interest-bearing liabilities:        
Interest-bearing demand deposits$1,339,294 0.14 %$460 $1,367,878 0.12 %$411 $1,450,434 0.06 %$217 
Savings and money market deposits2,209,835 1.16 6,464 2,172,680 0.86 4,670 2,208,037 0.19 1,054 
Time deposits up to $250,000449,844 3.38 3,827 390,961 2.98 2,907 228,707 0.42 245 
Time deposits over $250,000844,842 3.49 7,441 790,864 3.06 6,025 443,178 0.76 847 
Total interest-bearing deposits4,843,815 1.49 18,192 4,722,383 1.19 14,013 4,330,356 0.22 2,363 
FHLB advances and other short-term borrowings— — — 29,791 5.09 378 102,777 2.55 660 
Long-term debt156,005 5.83 2,292 155,946 5.65 2,199 105,760 4.80 1,281 
Total interest-bearing liabilities4,999,820 1.63 20,484 4,908,120 1.36 16,590 4,538,893 0.38 4,304 
Noninterest-bearing deposits1,894,256   1,952,267   2,204,965   
Other liabilities136,343   125,531   115,565   
Total liabilities7,030,419   6,985,918   6,859,423   
Shareholders’ equity480,118   477,711   461,328   
Non-controlling interest—   —   —   
Total equity480,118   477,711   461,328   
Total liabilities and equity$7,510,537   $7,463,629   $7,320,751   
Net interest income  $52,116   $52,927   $55,579 
Interest rate spread2.38 %2.53 %3.03 %
Net interest margin 2.88 %  2.96 %  3.17 % 
[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 
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent) 
(Unaudited)TABLE 5
 Nine Months EndedNine Months Ended
September 30, 2023September 30, 2022
 AverageAverage AverageAverage 
(Dollars in thousands)BalanceYield/RateInterestBalanceYield/RateInterest
ASSETS
Interest-earning assets:      
Interest-bearing deposits in other financial institutions$91,202 5.23 %$3,566 $94,076 0.53 %$370 
Investment securities:
Taxable1,376,294 2.08 21,497 1,473,989 1.90 20,958 
Tax-exempt [1]151,611 2.48 2,818 160,144 2.56 3,073 
Total investment securities1,527,905 2.12 24,315 1,634,133 1.96 24,031 
Loans, including loans held for sale5,525,476 4.37 180,886 5,231,098 3.67 143,598 
FHLB stock11,687 4.21 369 10,019 3.53 265 
Total interest-earning assets7,156,270 3.90 209,136 6,969,326 3.22 168,264 
Noninterest-earning assets316,620   354,270   
Total assets$7,472,890   $7,323,596   
LIABILITIES AND EQUITY
Interest-bearing liabilities:      
Interest-bearing demand deposits$1,373,831 0.12 %$1,234 $1,437,034 0.04 %$473 
Savings and money market deposits2,188,585 0.89 14,520 2,208,449 0.10 1,700 
Time deposits up to $250,000394,464 2.92 8,604 223,343 0.33 548 
Time deposits over $250,000775,615 3.08 17,860 461,180 0.44 1,503 
Total interest-bearing deposits4,732,495 1.19 42,218 4,330,006 0.13 4,224 
FHLB advances and other short-term borrowings31,182 4.88 1,139 34,756 2.55 662 
Long-term debt146,513 5.78 6,329 105,699 4.37 3,455 
Total interest-bearing liabilities4,910,190 1.35 49,686 4,470,461 0.25 8,341 
Noninterest-bearing deposits1,957,267   2,250,496   
Other liabilities131,577   112,478   
Total liabilities6,999,034   6,833,435   
Shareholders’ equity473,856   490,140   
Non-controlling interest—   21   
Total equity473,856   490,161   
Total liabilities and equity$7,472,890   $7,323,596   
Net interest income  $159,450   $159,923 
Interest rate spread2.55 %2.97 %
Net interest margin 2.98 %  3.06 % 
[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 6
 Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
(Dollars in thousands)20232023202320222022
HAWAII:     
Commercial and industrial:
Small Business Administration Paycheck Protection Program ("SBA PPP")$1,410 $1,565 $1,821 $2,555 $5,208 
Other405,023 373,036 375,158 383,665 358,805 
Real estate:
Construction174,057 168,012 154,303 150,208 138,724 
Residential mortgage1,930,740 1,942,906 1,941,230 1,940,999 1,923,068 
Home equity753,980 750,760 743,908 739,380 719,399 
Commercial mortgage1,045,625 1,037,826 1,030,086 1,029,708 1,002,874 
Consumer338,248 327,790 342,922 346,789 347,388 
Total loans, net of deferred fees and costs4,649,083 4,601,895 4,589,428 4,593,304 4,495,466 
Less: Allowance for credit losses48,105 44,828 44,062 45,169 47,814 
Loans, net of allowance for credit losses$4,600,978 $4,557,067 $4,545,366 $4,548,135 $4,447,652 
U.S. MAINLAND: [1]     
Commercial and industrial:
Other157,373 170,557 179,906 160,282 158,474 
Real estate:
Construction37,455 32,807 27,171 16,515 12,872 
Commercial mortgage319,802 329,736 331,546 333,367 332,872 
Consumer344,997 385,688 429,346 451,998 422,528 
Total loans, net of deferred fees and costs859,627 918,788 967,969 962,162 926,746 
Less: Allowance for credit losses16,412 19,021 19,037 18,569 16,568 
Loans, net of allowance for credit losses$843,215 $899,767 $948,932 $943,593 $910,178 
TOTAL:     
Commercial and industrial:
SBA PPP$1,410 $1,565 $1,821 $2,555 $5,208 
Other562,396 543,593 555,064 543,947 517,279 
Real estate:
Construction211,512 200,819 181,474 166,723 151,596 
Residential mortgage1,930,740 1,942,906 1,941,230 1,940,999 1,923,068 
Home equity753,980 750,760 743,908 739,380 719,399 
Commercial mortgage1,365,427 1,367,562 1,361,632 1,363,075 1,335,746 
Consumer683,245 713,478 772,268 798,787 769,916 
Total loans, net of deferred fees and costs5,508,710 5,520,683 5,557,397 5,555,466 5,422,212 
Less: Allowance for credit losses64,517 63,849 63,099 63,738 64,382 
Loans, net of allowance for credit losses$5,444,193 $5,456,834 $5,494,298 $5,491,728 $5,357,830 
[1] U.S. Mainland includes territories of the United States.



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Deposits
(Unaudited)TABLE 7
 
 Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
(Dollars in thousands)20232023202320222022
Noninterest-bearing demand deposits$1,969,523 $2,009,387 $2,028,087 $2,092,823 $2,138,083 
Interest-bearing demand deposits1,345,843 1,359,978 1,386,913 1,453,167 1,441,302 
Savings and money market deposits2,209,550 2,184,652 2,184,675 2,199,028 2,194,991 
Time deposits up to $250,000465,543 427,864 372,150 330,148 261,961 
Core deposits5,990,459 5,981,881 5,971,825 6,075,166 6,036,337 
Government time deposits400,130 383,426 360,501 290,057 195,057 
Other time deposits greater than $250,000484,156 440,430 414,642 371,000 325,040 
Total time deposits greater than $250,000884,286 823,856 775,143 661,057 520,097 
Total deposits$6,874,745 $6,805,737 $6,746,968 $6,736,223 $6,556,434 



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Nonperforming Assets and Accruing Loans 90+ Days Past Due
(Unaudited)TABLE 8
 Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
(Dollars in thousands)20232023202320222022
Nonaccrual loans:
Commercial and industrial:
Other$352 $319 $264 $297 $277 
Real estate:
Construction— 4,851 — — — 
Residential mortgage4,949 4,385 3,445 3,808 2,771 
Home equity677 797 712 570 584 
Commercial mortgage77 77 77 — — 
Consumer597 632 815 576 588 
Total nonaccrual loans6,652 11,061 5,313 5,251 4,220 
Other real estate owned ("OREO")— — — — — 
Total nonperforming assets ("NPAs")6,652 11,061 5,313 5,251 4,220 
Accruing loans 90+ days past due:     
Commercial and industrial:
SBA PPP— — — 13 — 
Other— — — 26 669 
Real estate:  
Residential mortgage794 959 — 559 503 
Home equity— 133 — — — 
Consumer2,120 2,207 1,908 1,240 623 
Total accruing loans 90+ days past due2,914 3,299 1,908 1,838 1,795 
Total NPAs and accruing loans 90+ days past due$9,566 $14,360 $7,221 $7,089 $6,015 
Ratio of total nonaccrual loans to total loans0.12 %0.20 %0.10 %0.09 %0.08 %
Ratio of total NPAs to total loans and OREO0.12 %0.20 %0.10 %0.09 %0.08 %
Ratio of total NPAs and accruing loans 90+ days past due to total loans and OREO0.17 %0.26 %0.13 %0.13 %0.11 %
Quarter-to-quarter changes in NPAs:    
Balance at beginning of quarter$11,061 $5,313 $5,251 $4,220 $4,983 
Additions2,311 7,105 1,609 2,162 1,072 
Reductions:  
Payments(5,718)(290)(505)(198)(329)
Return to accrual status(207)(212)(14)(44)(616)
Net charge-offs, valuation and other adjustments(795)(855)(1,028)(889)(890)
Total reductions(6,720)(1,357)(1,547)(1,131)(1,835)
Balance at end of quarter$6,652 $11,061 $5,313 $5,251 $4,220 



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Allowance for Credit Losses on Loans
(Unaudited)TABLE 9
 
 Three Months EndedNine Months Ended
 Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,Sep 30,
(Dollars in thousands)2023202320232022202220232022
Allowance for credit losses:     
Balance at beginning of period$63,849 $63,099 $63,738 $64,382 $65,211 $63,738 $68,097 
Provision (credit) for credit losses on loans4,526 4,135 1,615 1,032 731 10,276 (744)
Charge-offs: 
Commercial and industrial:
Other402 362 779 678 550 1,543 1,291 
Consumer4,710 3,873 2,686 1,881 1,912 11,269 4,518 
Total charge-offs5,112 4,235 3,465 2,559 2,462 12,812 5,809 
Recoveries:     
Commercial and industrial:
Other261 125 250 210 220 636 785 
Real estate:
Construction1 — — — 14 1 76 
Residential mortgage10 7 53 133 14 70 162 
Home equity— 15 — — 36 15 36 
Consumer982 703 908 540 618 2,593 1,779 
Total recoveries1,254 850 1,211 883 902 3,315 2,838 
Net charge-offs
3,858 3,385 2,254 1,676 1,560 9,497 2,971 
Balance at end of period$64,517 $63,849 $63,099 $63,738 $64,382 $64,517 $64,382 
Average loans, net of deferred fees and costs$5,507,248 $5,543,398 $5,525,988 $5,498,800 $5,355,088 $5,525,476 $5,231,098 
Ratio of annualized net charge-offs to average loans0.28 %0.24 %0.16 %0.12 %0.12 %0.23 %0.08 %
Ratio of ACL to total loans1.17 %1.16 %1.14 %1.15 %1.19 %1.17 %1.19 %



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)TABLE 10

The Company uses certain non-GAAP financial measures in addition to our GAAP results to provide useful information for evaluating our cash operating performance, ability to service debt, compliance with debt covenants and measurement against competitors. This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be comparable to similarly entitled measures reported by other companies.

The Company believes that pre-provision net revenue ("PPNR"), a non-GAAP financial measure, is useful as a tool to help evaluate the ability to provide for credit costs through operations. The following tables set forth a reconciliation of our PPNR and our PPNR to average assets for each of the periods indicated:

Three Months EndedNine Months Ended
Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,Sep 30,
(Dollars in thousands)2023202320232022202220232022
Net income$13,141 $14,475 $16,187 $20,181 $16,715 $43,803 $53,747 
Add: Income tax expense4,349 4,472 5,059 6,700 5,919 13,880 18,141 
Pre-tax income17,490 18,947 21,246 26,881 22,634 57,683 71,888 
Add: Provision (credit) for credit losses4,874 4,319 1,852 571 362 11,045 (1,844)
PPNR$22,364 $23,266 $23,098 $27,452 $22,996 $68,728 $70,044 

Three Months EndedNine Months Ended
Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,Sep 30,
(Dollars in thousands)2023202320232022202220232022
Net income$13,141 $14,475 $16,187 $20,181 $16,715 $43,803 $53,747 
Net income (annualized)52,564 57,900 64,748 80,724 66,860 58,404 71,663 
PPNR22,364 23,266 23,098 27,452 22,996 68,728 70,044 
PPNR (annualized)89,456 93,064 92,392 109,808 91,984 91,637 93,392 
Average assets7,510,537 7,463,629 7,443,767 7,389,712 7,320,751 7,472,890 7,323,596 
Return on average assets ("ROA")0.70 %0.78 %0.87 %1.09 %0.91 %0.78 %0.98 %
PPNR to average assets1.19 %1.25 %1.24 %1.49 %1.26 %1.23 %1.28 %