EX-99.1 2 exhibit99-1erq12023.htm EX-99.1 Document

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

CENTRAL PACIFIC FINANCIAL REPORTS FIRST QUARTER EARNINGS OF $16.2 MILLION

•Net income of $16.2 million, or $0.60 per diluted share for the quarter.
•ROA of 0.87% and ROE of 13.97% for the quarter.

•Total loans of $5.56 billion increased by $1.9 million in the first quarter.
•Total deposits of $6.75 billion increased by $10.7 million in the first quarter. 66% of total deposits are FDIC-insured or fully collateralized as of March 31, 2023.
•Asset quality remains strong as nonperforming assets totaled $5.3 million, or 0.07% of total assets.
•Solid liquidity position with $198.8 million in cash on balance sheet and $2.83 billion in total other liquidity sources, including available borrowing capacity plus unpledged investment securities as of March 31, 2023.
•Board of Directors approved quarterly cash dividend of $0.26 per share.

HONOLULU, HI, April 26, 2023 – Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income for the first quarter of 2023 of $16.2 million, or fully diluted earnings per share ("EPS") of $0.60, compared to net income of $20.2 million, or EPS of $0.74 in the previous quarter and net income of $19.4 million. or EPS of $0.70 in the year-ago quarter.

"We are pleased with our first quarter financial results, highlighted by stable deposit balances, continued solid asset quality and strong liquidity and capital positions," said Arnold Martines, President and Chief Executive Officer. "Despite the recent events affecting the national banking industry, Central Pacific Bank remains financially strong and committed to supporting our customers and community."

Earnings Highlights
Net interest income for the first quarter of 2023 was $54.2 million, which decreased by $2.1 million, or 3.7% from the previous quarter, and increased by $3.3 million, or 6.4% from the year-ago quarter. The sequential quarter decrease in net interest income is primarily due to increases in average balances and rates paid on interest-bearing deposits and borrowings, which outpaced the increases in average loan balances and asset yields.



Central Pacific Financial Reports First Quarter Earnings of $16.2 Million
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Net interest margin ("NIM") for the first quarter of 2023 was 3.08%, which decreased by 9 basis points ("bps") from the previous quarter and increased by 11 bps from the year-ago quarter. The sequential quarter decrease in NIM is primarily due to higher rates paid on deposits and borrowings, which outpaced the increase in asset yields. Additional information on average balances, interest income and expenses and yields and rates is presented in Table 4.

In the first quarter of 2023, the Company recorded a provision for credit losses of $1.9 million, compared to a provision of $0.6 million in the previous quarter and a release of credit loss reserves of $3.2 million in the year-ago quarter.

Other operating income for the first quarter of 2023 totaled $11.0 million, compared to $11.6 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 $0.9 million, partially offset by higher income from fiduciary activities of $0.3 million. Additional information on other operating income is presented in Table 3.

Other operating expense for the first quarter of 2023 totaled $42.1 million, compared to $40.4 million in the previous quarter and $38.2 million in the year-ago quarter. The increase in other operating expense was primarily due to higher computer software expense of $0.6 million, higher net occupancy expense of $0.5 million and a higher FDIC insurance assessment of $0.5 million (included in other), partially offset by lower salaries and employee benefits expense of $0.7 million. Additional information on other operating expense is presented in Table 3.

The efficiency ratio for the first quarter of 2023 was 64.58%, compared to 59.56% in the previous quarter and 63.16% in the year-ago quarter.

The effective tax rate for the first quarter of 2023 was 23.8%, compared to 24.9% in the previous quarter and 23.7% in the year-ago quarter.

Balance Sheet Highlights
Total assets at March 31, 2023 of $7.52 billion increased by $88.5 million, or 1.2% from $7.43 billion at December 31, 2022, and increased by $222.4 million, or 3.0% from $7.30 billion at March 31, 2022.

Total loans, net of deferred fees and costs, at March 31, 2023 of $5.56 billion increased by $1.9 million from $5.56 billion at December 31, 2022, and increased by $382.6 million, or 7.4% from $5.17 billion at March 31, 2022. Loans by type and geographic distribution are summarized in Table 5.

Total deposits at March 31, 2023 of $6.75 billion increased by $10.7 million or 0.2% from $6.74 billion at December 31, 2022, and increased by $147.9 million, or 2.2% from $6.60 billion at March 31, 2022. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.97 billion at March 31, 2023, and decreased by $103.3 million, or 1.7% from December 31, 2022. Average rates paid on total deposits during the first quarter of 2023 was 0.61%, compared to 0.41% in the previous quarter and 0.06% in the year-ago quarter. At March 31, 2023, approximately 66% of the Company's total deposits were FDIC-insured or fully collateralized. Core deposit and total deposit balances are summarized in Table 6.

At March 31, 2023, the Company had $198.8 million in cash on balance sheet and $2.83 billion in total other liquidity sources, including available borrowing capacity plus unpledged investment securities.

Asset Quality
Nonperforming assets at March 31, 2023 totaled $5.3 million, or 0.07% of total assets, and remained relatively unchanged from December 31, 2022 and March 31, 2022. Additional information on nonperforming assets, past due and restructured loans is presented in Table 7.

Net charge-offs in the first quarter of 2023 totaled $2.3 million, compared to net charge-offs of $1.7 million in the previous quarter, and net charge-offs of $0.4 million in the year-ago quarter. Annualized net charge-offs as a percentage of average loans was 0.16%, 0.12% and 0.03% during the three months ended March 31, 2023, December 31, 2022 and March 31, 2022, respectively.

The allowance for credit losses, as a percentage of total loans at March 31, 2023 was 1.14%, compared to 1.15% at December 31, 2022, and 1.25% at March 31, 2022. Additional information on net charge-offs and recoveries and the allowance for credit losses is presented in Table 8.



Central Pacific Financial Reports First Quarter Earnings of $16.2 Million
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Capital
Total shareholders' equity was $470.9 million at March 31, 2023, compared to $452.9 million and $486.3 million at December 31, 2022 and March 31, 2022, respectively. The increase in shareholders' equity from the previous quarter was primarily due to net income of $16.2 million and a decline in unrealized losses on our available-for-sale investment securities portfolio which flow through accumulated other comprehensive loss.

During the first quarter of 2023, the Company repurchased 101,760 shares of common stock, at a total cost of $2.2 million, or an average cost per share of $21.67. As of March 31, 2023, $23.8 million remained available for repurchase under the Company's share repurchase program. In March 2023, the Company temporarily suspended share repurchases while market conditions continue to be evaluated.

At March 31, 2023, the Company's leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 8.6%, 11.5%, 13.6%, and 10.6%, respectively, compared to 8.5%, 11.3%, 13.5%, and 10.5%, respectively, at December 31, 2022.

On April 25, 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 June 15, 2023 to shareholders of record at the close of business on May 31, 2023.

During the quarter, CPB was named Lender of the Year (Category 2), by the Small Business Administration. In January 2023, the Bank also launched its unique Friendship Floor, a newly-remodeled co-working hub on the third floor of Central Pacific Plaza, with eight conference rooms and 80 hybrid workspaces and other conveniences to promote employee engagement.

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 1-833-470-1428 (access code: 500446). A playback of the call will be available through May 26, 2023 by dialing 1-866-813-9403 (access code: 402781) 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 $7.52 billion in assets as of March 31, 2023. Central Pacific Bank, its primary subsidiary, operates 27 branches and 61 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 First Quarter Earnings of $16.2 Million
Page 4

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. 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 "believes," "plans," "anticipates," "expects," "intends," "forecasts," "hopes," "targeting," "continue," "remain," "will," "should," "estimates," "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 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; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; cybersecurity and data privacy breaches and the consequence therefrom; 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 Ended
(Dollars in thousands, Mar 31,Dec 31,Sep 30,Jun 30,Mar 31,
except for per share amounts)20232022202220222022
CONDENSED INCOME STATEMENT   
Net interest income$54,196 $56,285 $55,365 $52,978 $50,935 
Provision (credit) for credit losses 1,852 571 362 989 (3,195)
Total other operating income11,009 11,601 9,629 17,138 9,551 
Total other operating expense 42,107 40,434 41,998 45,349 38,205 
Income tax expense5,059 6,700 5,919 6,184 6,038 
Net income16,187 20,181 16,715 17,594 19,438 
Basic earnings per common share$0.60 $0.74 $0.61 $0.64 $0.70 
Diluted earnings per common share0.60 0.74 0.61 0.64 0.70 
Dividends declared per common share0.26 0.26 0.26 0.26 0.26 
PERFORMANCE RATIOS     
Return on average assets (ROA) [1]0.87 %1.09 %0.91 %0.96 %1.06 %
Return on average shareholders’ equity (ROE) [1]13.97 18.30 14.49 14.93 14.44 
Average shareholders’ equity to average assets6.23 5.97 6.30 6.45 7.34 
Efficiency ratio [2]64.58 59.56 64.62 64.68 63.16 
Net interest margin (NIM) [1]3.08 3.17 3.17 3.05 2.97 
Dividend payout ratio [3]43.33 35.14 42.62 40.63 37.14 
SELECTED AVERAGE BALANCES     
Average loans, including loans held for sale$5,525,988 $5,498,800 $5,355,088 $5,221,300 $5,114,260 
Average interest-earning assets7,112,377 7,103,841 6,991,773 6,982,556 6,933,007 
Average assets7,443,767 7,389,712 7,320,751 7,309,939 7,341,850 
Average deposits6,655,660 6,673,922 6,535,321 6,626,462 6,581,593 
Average interest-bearing liabilities4,820,660 4,708,045 4,538,893 4,442,172 4,429,114 
Average shareholders’ equity463,556 441,084 461,328 471,420 538,601 
[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 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,
20232022202220222022
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp.
Leverage capital ratio8.6 %8.5 %8.7 %8.6 %8.5 %
Tier 1 risk-based capital ratio11.5 11.3 11.5 11.6 11.9 
Total risk-based capital ratio13.6 13.5 13.7 13.9 14.2 
Common equity tier 1 capital ratio10.6 10.5 10.6 10.7 10.9 
Central Pacific Bank
Leverage capital ratio9.0 9.0 9.1 9.0 9.0 
Tier 1 risk-based capital ratio12.0 11.9 12.2 12.2 12.6 
Total risk-based capital ratio13.2 13.1 13.4 13.5 13.8 
Common equity tier 1 capital ratio12.0 11.9 12.2 12.2 12.6 


Mar 31,Dec 31,Sep 30,Jun 30,Mar 31,
(dollars in thousands, except for per share amounts)20232022202220222022
BALANCE SHEET   
Total loans, net of deferred fees and costs$5,557,397 $5,555,466 $5,422,212 $5,301,633 $5,174,837 
Total assets7,521,247 7,432,763 7,337,631 7,299,178 7,298,819 
Total deposits6,746,968 6,736,223 6,556,434 6,622,061 6,599,031 
Long-term debt155,920 105,859 105,799 105,738 105,677 
Total shareholders’ equity470,926 452,871 438,468 455,100 486,328 
Total shareholders’ equity to total assets6.26 %6.09 %5.98 %6.23 %6.66 %
ASSET QUALITY     
Allowance for credit losses (ACL)$63,099 $63,738 $64,382 $65,211 $64,754 
Nonaccrual loans5,313 5,251 4,220 4,983 5,336 
Non-performing assets (NPA)5,313 5,251 4,220 4,983 5,336 
ACL to total loans1.14 %1.15 %1.19 %1.23 %1.25 %
ACL to nonaccrual loans1,187.63 %1,213.83 %1,525.64 %1,308.67 %1,213.53 %
NPA to total assets0.07 %0.07 %0.06 %0.07 %0.07 %
PER SHARE OF COMMON STOCK OUTSTANDING     
Book value per common share$17.44 $16.76 $16.08 $16.57 $17.63 
Closing market price per common share17.90 20.28 20.69 21.45 27.90 



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)20232022202220222022
ASSETS   
Cash and due from financial institutions$108,535 $97,150 $116,365 $108,389 $83,947 
Interest-bearing deposits in other financial institutions90,247 14,894 22,332 22,741 118,183 
Investment securities:  
Available-for-sale debt securities, at fair value687,188 671,794 686,681 787,373 1,199,482 
Held-to-maturity debt securities, at amortized cost; fair value of: $599,300 at March 31, 2023, $596,780 at December 31, 2022, $590,880 at September 30, 2022, $635,565 at June 30, 2022, and $329,503 at March 31, 2022658,596 664,883 662,827 663,365 329,507 
Total investment securities1,345,784 1,336,677 1,349,508 1,450,738 1,528,989 
Loans held for sale— 1,105 1,701 535 4,677 
Loans, net of deferred fees and costs5,557,397 5,555,466 5,422,212 5,301,633 5,174,837 
Less: allowance for credit losses63,099 63,738 64,382 65,211 64,754 
Loans, net of allowance for credit losses5,494,298 5,491,728 5,357,830 5,236,422 5,110,083 
Premises and equipment, net93,761 91,634 89,979 88,664 79,455 
Accrued interest receivable20,473 20,345 18,134 17,146 16,423 
Investment in unconsolidated entities45,953 46,641 36,769 37,341 31,092 
Mortgage servicing rights8,943 9,074 9,216 9,369 9,480 
Bank-owned life insurance168,244 167,967 167,761 167,202 167,407 
Federal Home Loan Bank ("FHLB") stock11,960 9,146 13,546 8,943 8,943 
Right of use lease asset34,237 34,985 35,978 36,978 38,435 
Other assets98,812 111,417 118,512 114,710 101,705 
Total assets$7,521,247 $7,432,763 $7,337,631 $7,299,178 $7,298,819 
LIABILITIES     
Deposits:     
Noninterest-bearing demand$2,028,087 $2,092,823 $2,138,083 $2,282,967 $2,269,562 
Interest-bearing demand1,386,913 1,453,167 1,441,302 1,444,566 1,433,284 
Savings and money market2,184,675 2,199,028 2,194,991 2,214,146 2,197,647 
Time1,147,293 991,205 782,058 680,382 698,538 
Total deposits6,746,968 6,736,223 6,556,434 6,622,061 6,599,031 
FHLB advances and other short-term borrowings25,000 5,000 115,000 — — 
Long-term debt, net of unamortized debt issuance costs of: $627 at March 31, 2023, $688 at December 31, 2022, $748 at September 30, 2022, $809 at June 30, 2022 and $870 at March 31, 2022155,920 105,859 105,799 105,738 105,677 
Lease liability35,076 35,889 36,941 38,037 39,610 
Other liabilities87,357 96,921 84,989 78,242 68,123 
Total liabilities7,050,321 6,979,892 6,899,163 6,844,078 6,812,441 
EQUITY
Shareholders' equity:     
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022— — — — — 
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,005,545 at March 31, 2023, 27,025,070 at December 31, 2022, 27,262,879 at September 30, 2022, 27,463,562 at June 30, 2022, and 27,584,929 at March 31, 2022405,866 408,071 412,994 417,862 421,153 
Additional paid-in capital101,188 101,346 100,426 98,977 98,270 
Retained earnings96,600 87,438 74,301 64,693 54,252 
Accumulated other comprehensive loss(132,728)(143,984)(149,253)(126,432)(87,347)
Total shareholders' equity470,926 452,871 438,468 455,100 486,328 
Non-controlling interest— — — — 50 
Total equity470,926 452,871 438,468 455,100 486,378 
Total liabilities and equity$7,521,247 $7,432,763 $7,337,631 $7,299,178 $7,298,819 



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)20232022202220222022
Interest income:   
Interest and fees on loans$58,269 $56,682 $51,686 $46,963 $44,949 
Interest and dividends on investment securities:
Taxable investment securities7,336 7,104 6,933 7,035 6,969 
Tax-exempt investment securities790 776 805 807 816 
Dividend income on investment securities— — — — 21 
Interest on deposits in other financial institutions277 370 107 191 72 
Dividend income on FHLB stock136 105 138 68 59 
Total interest income66,808 65,037 59,669 55,064 52,886 
Interest expense:     
Interest on deposits:     
Demand363 333 217 144 112 
Savings and money market3,386 2,488 1,054 317 329 
Time6,264 4,063 1,092 490 469 
Interest on short-term borrowings761 393 660 2 — 
Interest on long-term debt1,838 1,475 1,281 1,133 1,041 
Total interest expense12,612 8,752 4,304 2,086 1,951 
Net interest income54,196 56,285 55,365 52,978 50,935 
Provision (credit) for credit losses1,852 571 362 989 (3,195)
Net interest income after provision (credit) for credit losses52,344 55,714 55,003 51,989 54,130 
Other operating income:     
Mortgage banking income526 667 831 1,140 1,172 
Service charges on deposit accounts2,111 2,172 2,138 2,026 1,861 
Other service charges and fees4,985 4,972 4,955 4,610 4,488 
Income from fiduciary activities1,321 1,058 1,165 1,188 1,154 
Net gain on sales of investment securities— — — 8,506 — 
Income from bank-owned life insurance1,291 2,187 167 (1,028)539 
Other775 545 373 696 337 
Total other operating income11,009 11,601 9,629 17,138 9,551 
Other operating expense:     
Salaries and employee benefits22,023 22,692 22,778 22,369 20,942 
Net occupancy4,474 3,998 4,743 4,448 3,774 
Equipment946 996 1,085 1,075 1,082 
Communication778 696 712 744 806 
Legal and professional services2,886 2,677 2,573 2,916 2,626 
Computer software4,606 3,996 4,138 3,624 3,082 
Advertising933 701 1,150 1,150 1,150 
Other5,461 4,678 4,819 9,023 4,743 
Total other operating expense42,107 40,434 41,998 45,349 38,205 
Income before income taxes21,246 26,881 22,634 23,778 25,476 
Income tax expense5,059 6,700 5,919 6,184 6,038 
Net income$16,187 $20,181 $16,715 $17,594 $19,438 
Per common share data:     
Basic earnings per share$0.60 $0.74 $0.61 $0.64 $0.70 
Diluted earnings per share0.60 0.74 0.61 0.64 0.70 
Cash dividends declared0.26 0.26 0.26 0.26 0.26 
Basic weighted average shares outstanding26,999,138 27,134,970 27,356,614 27,516,284 27,591,390 
Diluted weighted average shares outstanding27,122,012 27,303,249 27,501,212 27,676,619 27,874,924 
Note: Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period.



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
March 31, 2023December 31, 2022March 31, 2022
 AverageAverage AverageAverage AverageAverage 
(Dollars in thousands)BalanceYield/RateInterestBalanceYield/RateInterestBalanceYield/RateInterest
ASSETS
Interest-earning assets:         
Interest-bearing deposits in other financial institutions$24,957 4.51 %$277 $38,610 3.80 %$370 $157,861 0.18 %$72 
Investment securities, excluding valuation allowance:
Taxable1,395,985 2.10 7,336 1,399,627 2.03 7,104 1,489,538 1.88 6,990 
Tax-exempt [1]153,067 2.61 1,000 156,079 2.52 982 163,352 2.53 1,033 
Total investment securities1,549,052 2.15 8,336 1,555,706 2.08 8,086 1,652,890 1.94 8,023 
Loans, including loans held for sale5,525,988 4.26 58,269 5,498,800 4.10 56,682 5,114,260 3.54 44,949 
Federal Home Loan Bank stock12,380 4.40 136 10,725 3.90 105 7,996 2.98 59 
Total interest-earning assets7,112,377 3.80 67,018 7,103,841 3.66 65,243 6,933,007 3.09 53,103 
Noninterest-earning assets331,390   285,871   408,843   
Total assets$7,443,767   $7,389,712   $7,341,850   
LIABILITIES AND EQUITY
Interest-bearing liabilities:        
Interest-bearing demand deposits$1,415,155 0.10 %$363 $1,441,787 0.09 %$333 $1,425,303 0.03 %$112 
Savings and money market deposits2,182,942 0.63 3,386 2,209,166 0.45 2,488 2,212,426 0.06 329 
Time deposits up to $250,000341,396 2.22 1,870 311,639 1.50 1,174 223,661 0.28 156 
Time deposits over $250,000689,432 2.58 4,394 595,133 1.93 2,889 462,087 0.28 313 
Total interest-bearing deposits4,628,925 0.88 10,013 4,557,725 0.60 6,884 4,323,477 0.09 910 
Federal Home Loan Bank advances and other short-term borrowings64,462 4.79 761 44,491 3.51 393 — — — 
Long-term debt127,273 5.86 1,838 105,829 5.53 1,475 105,637 4.00 1,041 
Total interest-bearing liabilities4,820,660 1.06 12,612 4,708,045 0.74 8,752 4,429,114 0.18 1,951 
Noninterest-bearing deposits2,026,735   2,116,197   2,258,116   
Other liabilities132,816   124,386   115,971   
Total liabilities6,980,211   6,948,628   6,803,201   
Shareholders’ equity463,556   441,084   538,601   
Non-controlling interest—   —   48   
Total equity463,556   441,084   538,649   
Total liabilities and equity$7,443,767   $7,389,712   $7,341,850   
Net interest income  $54,406   $56,491   $51,152 
Interest rate spread2.74 %2.92 %2.91 %
Net interest margin 3.08 %  3.17 %  2.97 % 
[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)20232022202220222022
HAWAII:     
Commercial, financial and agricultural:
SBA Paycheck Protection Program$1,821 $2,555 $5,208 $19,469 $43,380 
Other375,158 383,665 358,805 367,676 407,559 
Real estate:
Construction154,303 150,208 138,724 134,103 122,329 
Residential mortgage1,941,230 1,940,999 1,923,068 1,890,783 1,874,048 
Home equity743,908 739,380 719,399 698,209 676,326 
Commercial mortgage1,030,086 1,029,708 1,002,874 994,405 927,241 
Consumer342,922 346,789 347,388 341,213 337,188 
Total loans, net of deferred fees and costs4,589,428 4,593,304 4,495,466 4,445,858 4,388,071 
Allowance for credit losses(44,062)(45,169)(47,814)(51,374)(51,521)
Loans, net of allowance for credit losses$4,545,366 $4,548,135 $4,447,652 $4,394,484 $4,336,550 
U.S. MAINLAND: [1]     
Commercial, financial and agricultural:
SBA Paycheck Protection Program$— $— $— $712 $851 
Other179,906 160,282 158,474 156,567 136,857 
Real estate:
Construction27,171 16,515 12,872 10,935 988 
Commercial mortgage331,546 333,367 332,872 309,230 316,258 
Consumer429,346 451,998 422,528 378,331 331,812 
Total loans, net of deferred fees and costs967,969 962,162 926,746 855,775 786,766 
Allowance for credit losses(19,037)(18,569)(16,568)(13,837)(13,233)
Loans, net of allowance for credit losses$948,932 $943,593 $910,178 $841,938 $773,533 
TOTAL:     
Commercial, financial and agricultural:
SBA Paycheck Protection Program$1,821 $2,555 $5,208 $20,181 $44,231 
Other555,064 543,947 517,279 524,243 544,416 
Real estate:
Construction181,474 166,723 151,596 145,038 123,317 
Residential mortgage1,941,230 1,940,999 1,923,068 1,890,783 1,874,048 
Home equity743,908 739,380 719,399 698,209 676,326 
Commercial mortgage1,361,632 1,363,075 1,335,746 1,303,635 1,243,499 
Consumer772,268 798,787 769,916 719,544 669,000 
Total loans, net of deferred fees and costs5,557,397 5,555,466 5,422,212 5,301,633 5,174,837 
Allowance for credit losses(63,099)(63,738)(64,382)(65,211)(64,754)
Loans, net of allowance for credit losses$5,494,298 $5,491,728 $5,357,830 $5,236,422 $5,110,083 
[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)20232022202220222022
Noninterest-bearing demand$2,028,087 $2,092,823 $2,138,083 $2,282,967 $2,269,562 
Interest-bearing demand1,386,913 1,453,167 1,441,302 1,444,566 1,433,284 
Savings and money market2,184,675 2,199,028 2,194,991 2,214,146 2,197,647 
Time deposits less than $100,000188,289 181,547 153,238 129,103 132,712 
Other time deposits $100,000 to $250,000183,861 148,601 108,723 84,840 87,838 
Core deposits5,971,825 6,075,166 6,036,337 6,155,622 6,121,043 
Government time deposits360,501 290,057 195,057 165,000 188,000 
Other time deposits greater than $250,000414,642 371,000 325,040 301,439 289,988 
Total time deposits greater than $250,000775,143 661,057 520,097 466,439 477,988 
Total deposits$6,746,968 $6,736,223 $6,556,434 $6,622,061 $6,599,031 



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Nonperforming Assets, Past Due and Restructured Loans
(Unaudited)TABLE 7
 Mar 31,Dec 31,Sep 30,Jun 30,Mar 31,
(Dollars in thousands)20232022202220222022
Nonaccrual loans:
Commercial, financial and agricultural - Other$264 $297 $277 $333 $293 
Real estate:
Residential mortgage3,445 3,808 2,771 3,490 3,804 
Home equity712 570 584 592 820 
Commercial mortgage77 — — — — 
Consumer815 576 588 568 419 
Total nonaccrual loans5,313 5,251 4,220 4,983 5,336 
Other real estate owned ("OREO"):     
Real estate:  
Residential mortgage— — — — — 
Total OREO— — — — — 
Total nonperforming assets ("NPAs")5,313 5,251 4,220 4,983 5,336 
Loans delinquent for 90 days or more still accruing interest:     
Commercial, financial and agricultural:
SBA PPP— 13 — — — 
Other— 26 669 309 592 
Real estate:  
Residential mortgage— 559 503 — 111 
Consumer1,908 1,240 623 842 621 
Total loans delinquent for 90 days or more still accruing interest1,908 1,838 1,795 1,151 1,324 
Restructured loans still accruing interest:     
Real estate:  
Residential mortgage1,376 1,845 2,030 2,006 2,751 
Commercial mortgage846 886 925 965 1,004 
Consumer54 62 69 76 83 
Total restructured loans still accruing interest2,276 2,793 3,024 3,047 3,838 
Total NPAs and loans delinquent for 90 days or more and restructured loans still accruing interest$9,497 $9,882 $9,039 $9,181 $10,498 
Total nonaccrual loans as a percentage of total loans0.10 %0.09 %0.08 %0.09 %0.10 %
Total NPAs as a percentage of total loans and OREO0.10 %0.09 %0.08 %0.09 %0.10 %
Total NPAs and loans delinquent for 90 days or more still accruing interest as a percentage of total loans and OREO0.13 %0.13 %0.11 %0.12 %0.13 %
Total NPAs, loans delinquent for 90 days or more and restructured loans still accruing interest as a percentage of total loans and OREO0.17 %0.18 %0.17 %0.17 %0.20 %
Quarter-to-quarter changes in NPAs:    
Balance at beginning of quarter$5,251 $4,220 $4,983 $5,336 $5,881 
Additions1,626 2,162 1,072 1,881 1,659 
Reductions:  
Payments(857)(198)(329)(285)(1,598)
Return to accrual status(15)(44)(616)(979)(38)
Charge-offs, valuation and other adjustments(692)(889)(890)(970)(568)
Total reductions(1,564)(1,131)(1,835)(2,234)(2,204)
Balance at end of quarter$5,313 $5,251 $4,220 $4,983 $5,336 



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)20232022202220222022
Allowance for credit losses ("ACL"):   
ACL at beginning of period$63,738 $64,382 $65,211 $64,754 $68,097 
Provision (credit) for credit losses on loans1,615 1,032 731 1,456 (2,931)
Charge-offs:
Commercial, financial and agricultural - Other779 678 550 487 254 
Consumer2,686 1,881 1,912 1,390 1,216 
Total charge-offs3,465 2,559 2,462 1,877 1,470 
Recoveries:   
Commercial, financial and agricultural - Other250 210 220 215 350 
Real estate:
Construction— — 14 62 — 
Residential mortgage53 133 14 36 112 
Home equity— — 36 — — 
Consumer908 540 618 565 596 
Total recoveries1,211 883 902 878 1,058 
Net charge-offs
2,254 1,676 1,560 999 412 
ACL at end of period$63,099 $63,738 $64,382 $65,211 $64,754 
Average loans, net of deferred fees and costs$5,525,988 $5,498,800 $5,355,088 $5,221,300 $5,114,260 
Annualized ratio of net charge-offs to average loans0.16 %0.12 %0.12 %0.08 %0.03 %